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| author | Roger Frank <rfrank@pglaf.org> | 2025-10-14 20:09:44 -0700 |
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| committer | Roger Frank <rfrank@pglaf.org> | 2025-10-14 20:09:44 -0700 |
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diff --git a/38194-h/38194-h.htm b/38194-h/38194-h.htm new file mode 100644 index 0000000..886b4ea --- /dev/null +++ b/38194-h/38194-h.htm @@ -0,0 +1,58712 @@ +<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" + "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> + +<html xmlns="http://www.w3.org/1999/xhtml"> + <head> + <meta http-equiv="Content-Type" content="text/html;charset=iso-8859-1" /> + <title> + The Project Gutenberg eBook of An Inquiry into the Nature and Causes of the Wealth of Nations, by Adam Smith. + </title> + <style type="text/css"> + + p { margin-top: .5em; + text-align: justify; + text-indent: 1.5em; + margin-bottom: .5em; + } + h1,h2,h3,h4,h5,h6 { + text-align: center; /* all headings centered */ + clear: both; + } + hr { width: 33%; + margin-top: 2em; + margin-bottom: 2em; + margin-left: auto; + margin-right: auto; + clear: both; + } + + table {margin-left: auto; margin-right: auto; border-style: solid; border-color: black;} + + body{margin-left: 10%; + margin-right: 10%; + } + + .pagenum { /* uncomment the next line for invisible page numbers */ + /* visibility: hidden; */ + position: absolute; + left: 92%; + font-size: smaller; + text-align: right; + } /* page numbers */ + + .ft30 {font-size: 280%;} + .ft20 {font-size: 180%;} + .td {padding-right: 2em;} + .fracpart {padding-right: 0em; text-align: right;} + .blockquot{margin-top: 2em; margin-bottom: 2em; font-size: 85%;} + .listquot {margin-top: 2em; margin-bottom: 2em;} + .pblockquot{margin-left: 10%; margin-right: 10%;} + .sidenote {width: 20%; padding-bottom: .5em; padding-top: .5em; + padding-left: .5em; padding-right: .5em; margin-left: 1em; + float: right; clear: right; margin-top: 1em; + font-size: smaller; color: black; background: #eeeeee; border: dashed 1px;} + + .bb {border-bottom: solid 1px;} + .bl {border-left: solid 2px;} + .bt {border-top: solid 2px;} + .br {border-right: solid 2px;} + .bbox {border: solid 1px;} + .bbox1 {border: solid 1px; width: 75%; margin-right: auto; margin-left: auto;} + + .hangidt {text-indent: -2em; margin-left: 4em; font-size: 85%;} + .capidt {text-indent: -2em; margin-left: 2em; font-size: 115%;} + .center {text-align: center; text-indent: 0em;} + .noidt { text-indent: 0em;} + .smcap {font-variant: small-caps;} + .u {text-decoration: underline;} + .oline {text-decoration: overline;} + + .caption {font-weight: bold;} + .i2 {padding-left: 2em; text-align: left;} + .i4 {padding-left: 4em; text-align: left;} + + .figcenter {margin: auto; text-align: center;} + + .figleft {float: left; clear: left; margin-left: 0; margin-bottom: 1em; margin-top: + 1em; margin-right: 1em; padding: 0; text-align: center;} + + .figright {float: right; clear: right; margin-left: 1em; margin-bottom: 1em; + margin-top: 1em; margin-right: 0; padding: 0; text-align: center;} + + .footnotes {border: dashed 1px;} + .footnote {margin-left: 10%; margin-right: 10%; font-size: 0.9em;} + .footnote .label {position: absolute; right: 82%; text-align: right;} + .fnanchor {vertical-align: super; font-size: .8em; text-decoration: none;} + + .poem {margin-left:10%; margin-right:10%; text-align: left; text-indent: 0em;} + .notebox {border: solid 2px; padding: 1em; margin-left: 15%; margin-right: 15%; background: #CCCCB2; font-size: 85%;} + + </style> + </head> +<body> + + +<pre> + +The Project Gutenberg EBook of An Inquiry Into the Nature and Causes of +the Wealth of Nations, by Adam Smith and Germain Garnier + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: An Inquiry Into the Nature and Causes of the Wealth of Nations + +Author: Adam Smith + Germain Garnier + +Release Date: December 3, 2011 [EBook #38194] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK AN INQUIRY INTO THE NATURE *** + + + + +Produced by Jeff G. and the Online Distributed Proofreading +Team at http://www.pgdp.net (This book was produced from +scanned images of public domain material from the Google +Print project.) + + + + + + +</pre> + + +<p> </p> +<p> </p> + +<h3>HARVARD<br /> +COLLEGE<br /> +LIBRARY</h3> + +<p> </p> +<p> </p> +<div class="bbox1"> + +<h5>AN</h5> +<h3>INQUIRY INTO THE NATURE AND CAUSES</h3> +<h6>OF THE</h6> +<h1>WEALTH OF NATIONS.</h1> + +<h5>BY</h5> +<h2>ADAM SMITH LL.D. F.R.S.</h2> +<h3>WITH A LIFE OF THE AUTHOR.</h3> + + +<h6>ALSO,</h6> + +<h5>A VIEW OF THE DOCTRINE OF SMITH, COMPARED WITH THAT OF THE FRENCH ECONOMISTS;<br /> +WITH A METHOD OF FACILITATING THE STUDY OF HIS WORKS;<br /> +FROM THE FRENCH OF M. GARNIER.</h5> + + + +<h4>COMPLETE IN ONE VOLUME</h4> + + +<h3>London:</h3> + +<h3>T. NELSON AND SONS, PATERNOSTER ROW;<br /> +<small>AND EDINBURGH.</small></h3> + +<h5>MDCCCLII.</h5> +</div> +<p> </p> + + +<p> </p> + +<h2>CONTENTS</h2> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary=""> +<tr><td align='left'></td><td align='right'><small><i>Page</i></small></td></tr> +<tr><td align='left'>Life of the Author</td><td align='right'><a href="#Page_i">i</a></td></tr> +<tr><td align='left'>Short View of the Doctrine of Smith, compared with that of the French Economists</td><td align='right'><a href="#Page_xvii">xvii</a></td></tr> +<tr><td align='left'>Introduction</td><td align='right'><a href="#Page_1">1</a></td></tr> +<tr><td align='center' colspan='2'><a href="#BOOK_I"><b>BOOK I.</b></a></td></tr> +<tr><td align='left' colspan='2'><small>OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.</small></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. I.</small></td></tr> +<tr><td align='left'>Of the Division of Labour</td><td align='right'><a href="#Page_2">2</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. II.</small></td></tr> +<tr><td align='left'>Of the Principle which gives occasion to the Division of Labour</td><td align='right'><a href="#Page_6">6</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. III.</small></td></tr> +<tr><td align='left'>That the Division of Labour is limited by the Extent of the Market</td><td align='right'><a href="#Page_8">8</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IV.</small></td></tr> +<tr><td align='left'>Of the Origin and Use of Money</td><td align='right'><a href="#Page_9">9</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. V.</small></td></tr> +<tr><td align='left'>Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money</td><td align='right'><a href="#Page_12">12</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VI.</small></td></tr> +<tr><td align='left'>Of the Component Parts of the Price of Commodities</td><td align='right'><a href="#Page_20">20</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VII.</small></td></tr> +<tr><td align='left'>Of the Natural and Market Price of Commodities</td><td align='right'><a href="#Page_23">23</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VIII.</small></td></tr> +<tr><td align='left'>Of the Wages of Labour</td><td align='right'><a href="#Page_27">27</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IX.</small></td></tr> +<tr><td align='left'>Of the Profits of Stock</td><td align='right'><a href="#Page_36">36</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. X.</small></td></tr> +<tr><td align='left'>Of Wages and Profit in the different Employments of Labour and Stock</td><td align='right'><a href="#Page_41">41</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Inequalities arising from the Nature of the Employments themselves</td><td align='right'>ib.</td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Inequalities occasioned by the Policy of Europe</td><td align='right'><a href="#Page_50">50</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. XI.</small></td></tr> +<tr><td align='left'>Of the Rent of Land</td><td align='right'><a href="#Page_60">60</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Of the Produce of Land which always affords Rent</td><td align='right'><a href="#Page_61">61</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Of the Produce of Land which sometimes does, and sometimes does not, afford Rent</td><td align='right'><a href="#Page_68">68</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> III. Of the Variations in the Proportion between the respective Values of that sort of Produce which always affords Rent, and of that which sometimes does, and sometimes does not, afford Rent</td><td align='right'><a href="#Page_74">74</a></td></tr> +<tr><td class='i2'>Digression concerning the Variations in the Value of Silver during the course of the four last centuries</td><td align='right'>ib.</td></tr> +<tr><td class='i4'>First Period</td><td align='right'>ib.</td></tr> +<tr><td class='i4'>Second Period</td><td align='right'><a href="#Page_81">81</a></td></tr> +<tr><td class='i4'>Third Period</td><td align='right'>ib.</td></tr> +<tr><td class='i2'>Variations in the Proportion between the respective Values of Gold and Silver</td><td align='right'><a href="#Page_89">89</a></td></tr> +<tr><td class='i2'>Grounds of the Suspicion that the Value of Silver still continues to decrease</td><td align='right'><a href="#Page_91">91</a></td></tr> +<tr><td class='i2'>Different Effects of the Progress of Improvement upon the real Price of three different sorts of rude Produce</td><td align='right'>ib.</td></tr> +<tr><td class='i4'>First Sort</td><td align='right'><a href="#Page_92">92</a></td></tr> +<tr><td class='i4'>Second Sort</td><td align='right'>ib.</td></tr> +<tr><td class='i4'>Third Sort</td><td align='right'><a href="#Page_97">97</a></td></tr> +<tr><td class='i2'>Conclusion of the Digression concerning the Variations in the Value of Silver</td><td align='right'><a href="#Page_101">101</a></td></tr> +<tr><td class='i2'>Effects of the Progress of Improvement upon the real Price of Manufactures</td><td align='right'><a href="#Page_103">103</a></td></tr> +<tr><td class='i2'>Conclusion of the Chapter</td><td align='right'><a href="#Page_105">105</a></td></tr> +<tr><td align='center' colspan='2'><a href="#BOOK_II"><b>BOOK II.</b></a></td></tr> +<tr><td align='center' colspan='2'><small>OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK.</small></td></tr> +<tr><td align='left'>Introduction</td><td align='right'><a href="#Page_111">111</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. I.</small></td></tr> +<tr><td align='left'>Of the Division of Stock</td><td align='right'><a href="#Page_112">112</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. II.</small></td></tr> +<tr><td align='left'>Of Money considered as a particular Branch of the general Stock of the Society, or of the Expense of maintaining the National Capital</td><td align='right'><a href="#Page_115">115</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. III.</small></td></tr> +<tr><td align='left'>Of the Accumulation of Capital, or of productive and unproductive Labour</td><td align='right'><a href="#Page_135">135</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IV.</small></td></tr> +<tr><td align='left'>Of Stock lent at Interest</td><td align='right'><a href="#Page_144">144</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. V.</small></td></tr> +<tr><td align='left'>Of the different Employment of Capitals</td><td align='right'><a href="#Page_147">147</a></td></tr> +<tr><td align='center' colspan='2'><a href="#BOOK_III"><b>BOOK III.</b></a></td></tr> +<tr><td align='center' colspan='2'><small>OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS.</small></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. I.</small></td></tr> +<tr><td align='left'>Of the Natural Progress of Opulence</td><td align='right'><a href="#Page_155">155</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. II.</small></td></tr> +<tr><td align='left'>Of the Discouragement of Agriculture in the ancient States of Europe, after the fall of the Roman Empire</td><td align='right'><a href="#Page_157">157</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. III.</small></td></tr> +<tr><td align='left'>Of the Rise and Progress of Cities and Towns, after the fall of the Roman Empire</td><td align='right'><a href="#Page_162">162</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IV.</small></td></tr> +<tr><td align='left'>How the Commerce of the Towns contributed to the Improvement of the Country</td><td align='right'><a href="#Page_167">167</a></td></tr> +<tr><td align='center' colspan='2'><a href="#BOOK_IV"><b>BOOK IV.</b></a></td></tr> +<tr><td align='center' colspan='2'><small>OF THE SYSTEMS OF POLITICAL ECONOMY.</small></td></tr> +<tr><td align='left'>Introduction</td><td align='right'><a href="#Page_173">173</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. I.</small></td></tr> +<tr><td align='left'>Of the Principle of the Commercial or Mercantile system</td><td align='right'>ib.</td></tr> +<tr><td align='center' colspan='2'><small>CHAP. II.</small></td></tr> +<tr><td align='left'>Of Restraints upon the Importation from Foreign Countries, of such Goods as can be produced at Home</td><td align='right'><a href="#Page_183">183</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. III.</small></td></tr> +<tr><td align='left'>Of the extraordinary Restraints upon the Importation of Goods of almost all kinds, from those Countries with which the Balance is supposed to be disadvantageous</td><td align='right'><a href="#Page_192">192</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Of the Unreasonableness of those Restraints, even upon the Principles of the Commercial System</td><td align='right'>ib.</td></tr> +<tr><td class='i4'>Digression concerning Banks of Deposit, particularly concerning that of Amsterdam</td><td align='right'><a href="#Page_194">194</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Of the Unreasonableness of these extraordinary Restraints, upon other Principles</td><td align='right'><a href="#Page_199">199</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IV.</small></td></tr> +<tr><td align='left'>Of Drawbacks</td><td align='right'><a href="#Page_203">203</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. V.</small></td></tr> +<tr><td align='left'>Of Bounties</td><td align='right'><a href="#Page_205">205</a></td></tr> +<tr><td align='left'>Digression concerning the Corn Trade and Corn Laws</td><td align='right'><a href="#Page_213">213</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VI.</small></td></tr> +<tr><td align='left'>Of Treaties of Commerce</td><td align='right'><a href="#Page_222">222</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VII.</small></td></tr> +<tr><td align='left'>Of Colonies</td><td align='right'><a href="#Page_227">227</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Of the Motives for establishing new Colonies</td><td align='right'>ib.</td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Causes of the Prosperity of new Colonies</td><td align='right'><a href="#Page_231">231</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> 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</td><td align='right'><a href="#Page_243">243</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. VIII.</small></td></tr> +<tr><td align='left'>Conclusion of the Mercantile System</td><td align='right'><a href="#Page_266">266</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. IX.</small></td></tr> +<tr><td align='left'>Of the Agricultural Systems, or of those Systems of Political Economy which represent the Produce of Land as either the sole or the principal Source of the Revenue and Wealth of every Country</td><td align='right'><a href="#Page_275">275</a></td></tr> +<tr><td align='center' colspan='2'><small><a href="#APPENDIX">APPENDIX.</a></small></td></tr> +<tr><td align='left'>Account of Herring Busses fitted out in Scotland, the Amount of the Cargoes and the Bounties on them</td><td align='right'><a href="#Page_287">287</a></td></tr> +<tr><td align='left'>Account of Foreign Salt imported into Scotland, and of Scotch Salt delivered duty free, for the Herring Fishery</td><td align='right'><a href="#Page_288">288</a></td></tr> +<tr><td align='center' colspan='2'><a href="#BOOK_V"><b>BOOK V.</b></a></td></tr> +<tr><td align='center' colspan='2'><small>OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH.</small></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. I.</small></td></tr> +<tr><td align='left'>Of the Expenses of the Sovereign or Commonwealth</td><td align='right'><a href="#Page_289">289</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Of the Expense of Defence</td><td align='right'>ib.</td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Of the Expense of Justice</td><td align='right'><a href="#Page_297">297</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> III. Of the Expense of Public Works and Public Institutions</td><td align='right'><a href="#Page_302">302</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> I. Of the Public Works and Institutions for facilitating the Commerce of Society.—1st, For facilitating the general Commerce of the Society.—2d, For facilitating particular Branches of Commerce</td><td align='right'><a href="#Page_303">303</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> II. Of the Expense of the Institutions for the Education of Youth</td><td align='right'><a href="#Page_318">318</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> III. Of the Expense of the Institutions for the Instruction of People of all Ages</td><td align='right'><a href="#Page_330">330</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> IV. Of the Expense of supporting the Dignity of the Sovereign</td><td align='right'><a href="#Page_342">342</a></td></tr> +<tr><td class='i2'>Conclusion of the Chapter</td><td align='right'>ib.</td></tr> +<tr><td align='center' colspan='2'><small>CHAP. II.</small></td></tr> +<tr><td align='left'>Of the Sources of the general or Public Revenue of the Society</td><td align='right'><a href="#Page_343">343</a></td></tr> +<tr><td class='i2'><span class="smcap">Part</span> I. Of the Funds or Sources of Revenue which may particularly belong to the Sovereign or Commonwealth</td><td align='right'>ib.</td></tr> +<tr><td class='i2'><span class="smcap">Part</span> II. Of Taxes</td><td align='right'><a href="#Page_347">347</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> I. Taxes upon rent; Taxes upon the Rent of Land</td><td align='right'><a href="#Page_348">348</a></td></tr> +<tr><td class='i4'>Taxes which are proportioned, not to the Rent, but to the Produce of Land</td><td align='right'><a href="#Page_352">352</a></td></tr> +<tr><td class='i4'>Taxes upon the Rent of Houses</td><td align='right'><a href="#Page_354">354</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> II. Taxes upon Profit, or upon the Revenue arising from Stock</td><td align='right'><a href="#Page_357">357</a></td></tr> +<tr><td class='i4'>Taxes upon the Profit of particular Employments</td><td align='right'><a href="#Page_359">359</a></td></tr> +<tr><td class='i4'><span class="smcap">Appendix</span> to Articles I. and II.—Taxes upon the Capital Value of Lands, Houses, and Stock</td><td align='right'><a href="#Page_362">362</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> III. Taxes upon the Wages of Labour</td><td align='right'><a href="#Page_365">365</a></td></tr> +<tr><td class='i4'><span class="smcap">Art.</span> IV. Taxes which, it is intended, should fall indifferently upon every different Species of Revenue</td><td align='right'><a href="#Page_366">366</a></td></tr> +<tr><td class='i4'>Capitation Taxes</td><td align='right'><a href="#Page_367">367</a></td></tr> +<tr><td class='i4'>Taxes upon consumable Commodities</td><td align='right'><a href="#Page_368">368</a></td></tr> +<tr><td align='center' colspan='2'><small>CHAP. III.</small></td></tr> +<tr><td align='left'>Of Public Debts</td><td align='right'><a href="#Page_385">385</a></td></tr> +</table></div> + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_i" id="Page_i">[Pg i]</a></span></p> +<h3>SHORT ACCOUNT</h3> +<h5>OF THE</h5> +<h2>LIFE AND WRITINGS</h2> +<h5>OF</h5> +<h3>DR. ADAM SMITH</h3> + + +<p>Adam Smith, the celebrated author of 'An Inquiry into the Nature +and Causes of the Wealth of Nations,' was born in the town of Kirkaldy, +on the 5th of June 1723. His father, at an early period of life, +practised as a writer to the signet in Edinburgh, and officiated as private +secretary to the Earl of Loudon, during the time his Lordship +was principal secretary of state in Scotland, and keeper of the great +seal; but afterwards settled at Kirkaldy, where, for some time before +his death, he held the office of comptroller of the customs. He died a +few months before the birth of his son.</p> + +<p>The constitution of young Smith, during infancy, was so sickly as to +require all the care and solicitude of his surviving parent, whose only +child he was. The duty which thus devolved on his mother, it is allowed, +she discharged in the most ample manner; and, indeed, carried +her indulgence so far as to have drawn on herself, it has been said, +some degree of blame. But it certainly does not appear that any bad +consequences resulted, on this occasion, from unbounded parental +fondness; nor can it be said, that any permanent disadvantage was +felt by the retirement, and even seclusion, which long-continued weakness +rendered necessary. To the inability of young Smith to engage +in the active sports of his early companions, we ought, perhaps, to trace +the foundation of those habits, and love of retirement, which distinguished +him, in a peculiar manner, during a long life<a name="FNanchor_1_1" id="FNanchor_1_1"></a><a href="#Footnote_1_1" class="fnanchor">[1]</a>.</p> + +<p>We are informed that Smith received the rudiments of education at +the grammar-school of Kirkaldy; and, at that time, attracted some<span class='pagenum'><a name="Page_ii" id="Page_ii">[Pg ii]</a></span> +notice by his passion for books, and by the extraordinary powers of +his memory. He was also observed, even at this early period of life, +to have contracted those habits of absence in company, and of talking +to himself, for which he was afterwards so remarkable.</p> + +<p>In 1737, he was sent to the university of Glasgow, where, it is said, +he evinced an uncommon partiality for the study of mathematics +and natural philosophy. Being designed for the English church, +he left that place in about three years, and entered, in 1740, an exhibitioner +on Snell's foundation, at Baliol college, Oxford. But to this +celebrated seminary he acknowledged very slender obligations. He +had, however, attained a solid foundation of knowledge, and also the +precious habits of attention, and the most industrious application. +Here he diligently pursued his favourite speculations in private, interrupted +only by the regular calls of scholastic discipline. He cultivated, +with the greatest assiduity and success, the study of the languages, +both ancient and modern; and formed an intimate acquaintance +with the works of the poets of his own country, as well as with those of +Greece and Rome, France and Italy. Of the turns and delicacies +of the English tongue, it has been observed, he then gained such a critical +knowledge, as was scarcely to be expected from his northern +education. With the view of improving his style, he employed himself +in frequent translations, particularly from the French; a practice which +he used to recommend to all who cultivate the art of writing. His +modest deportment, and his secret studies, however, provoked, it has +been said, the jealousy or the suspicion of his superiors. It has been +mentioned, that the heads of the college having thought proper to visit +his chamber, found him engaged in perusing Hume's Treatise of +Human Nature, then recently published. This the reverend inquisitors +seized, while they severely reprimanded the young philosopher.</p> + +<p>After a residence of seven years at Oxford, he returned, against the +wishes of his friends, to Kirkaldy, the place of his nativity, where +he lived for some time with his mother, without determining on any +fixed plan of life; Mr. Smith having thus chosen to forego every +prospect of church preferment, rather than do violence to his conscience +by preaching a particular system of tenets.</p> + +<p>In 1748, being then in the twenty-fifth year of his age, he took up +his residence in the capital of Scotland, when he first entered into +public life, by delivering lectures, under the patronage of Lord Kames, +on rhetoric and the belles lettres, which he continued for two years. +These lectures were never published; but the substance of them appears +to have been afterwards communicated to Dr. Blair, as he acknowledges, +in his Lectures, to have been indebted to Dr. Smith for a +manuscript treatise, from which he had taken several ideas in the +eighteenth lecture, on the general characters of style, particularly the +plain and the simple; and also the characters of those English authors +belonging to the several classes in that and the following lecture.</p> + +<p>In 1751, he was chosen professor of logic in the university of Glasgow. +Of the manner in which he discharged the duties of this important +situation, it would be difficult now to present a more satisfactory +account than that which has been given by one of his own pupils<span class='pagenum'><a name="Page_iii" id="Page_iii">[Pg iii]</a></span> +'In the professorship of logic,' it is observed, 'Mr. Smith soon saw +the necessity of departing widely from the plan that had been followed +by his predecessors, and of directing the attention of his pupils to +studies of a more interesting and useful nature than the logic and metaphysics +of the schools. Accordingly, after exhibiting a general view +of the powers of the mind, and explaining so much of the ancient logic +as was requisite to gratify curiosity, with respect to an artificial +mode of reasoning, which had once occupied the universal attention of +the learned, he dedicated all the rest of his time to the delivery of a +system of rhetoric and belles lettres.'</p> + +<p>During the following year, he was nominated professor of moral +philosophy in the same university. By this appointment he was peculiarly +gratified, and the duties of it he was well fitted to discharge, +as it embraced the study of his favourite science, political economy, +many of the doctrines of which, even then, had been familiarised to +his mind. After entering on the duties of his new situation, he appears +to have turned his attention to the division of the science of +morals, which he was induced to divide into four parts. The <i>first</i> +contained Natural Theology, in which he considered the proofs of the +being and attributes of God, and those principles of the human mind +upon which religion is founded. The <i>second</i> comprehended Ethics, +strictly so called. In the <i>third</i>, he treated, at more length, of that +branch of morality which relates to Justice, and which, being susceptible +of precise and accurate rules, is capable of a more systematic demonstration. +In the <i>fourth</i>, he examined these political regulations +which are founded upon Expediency, and which are calculated to increase +the riches, the power, and the prosperity of a state.</p> + +<p>His lectures on these subjects were always distinguished by a luminous +division of the subject, and by fulness and variety of illustration; +and as they were delivered in a plain unaffected manner, they were +well calculated to afford pleasure as well as instruction. They, accordingly, +excited a degree of interest, and gave rise to a spirit of inquiry +in the great commercial city of Glasgow, from which the most +favourable consequences resulted. His reputation extended so widely, +that, on his account alone, a considerable number of students, from +different parts of the country, were attracted to the university of that +city; and the science which he taught became so popular, that even +the trifling peculiarities in his pronunciation and manner of speaking, +were often objects of imitation.</p> + +<p>During the time Mr. Smith was thus successfully engaged in his +academical labours, he was gradually laying the foundation of a more +extensive reputation. In the year 1759, he published his 'Theory of +Moral Sentiments, or An Essay towards an Analysis of the Principles +by which Men naturally judge concerning the Conduct and Character, +first of their Neighbours, and afterwards of Themselves.' This work +was founded on the second division of his lectures, and was divided +into six parts:—The propriety of action: Merit and demerit, or the +objects of reward and punishment: The foundation of our judgments +concerning our own sentiments and conduct, and of the sense of duty:<span class='pagenum'><a name="Page_iv" id="Page_iv">[Pg iv]</a></span> +The effect of utility upon the sentiment of approbation: The influence +of custom and fashion upon the sentiments of moral approbation and +disapprobation: And, lastly, The character of virtue. To these were +added, a brief view of the different systems of ancient and modern +philosophy, which is universally acknowledged to be the most candid +and luminous that has yet appeared.</p> + +<p>This Essay soon attracted a great share of the public attention, by +the ingenuity of the reasonings, and the perspicuity with which they +were displayed. The principle on which it is founded may be said to +be, That the primary objects of our moral perceptions are the actions +of other men; and that our moral judgments, with respect to our +own conduct, are only applications to ourselves of decisions which we +have already passed on the conduct of others. With this doctrine the +author thinks all the most celebrated theories of morality coincide in +part, and from some partial view of it he apprehends they are all derived. +To the same work was subjoined a short treatise on the first +formation of language, and considerations on the different genius of +those which were original and compounded.</p> + +<p>The Theory of Moral Sentiments, immediately on its publication, +procured a splendid reputation to the author, and led to a change in +his situation in life, that was to him no less pleasing in itself, than +gratifying from the means by which it was brought about. But the +following lively letter to him, at that time, from his friend Mr. Hume, +dated London, 12th April, 1759, will best show the manner in which +this work was received, and the influence which it had in deciding on +the future life of its author:—</p> + +<div class="blockquot"><p>'I give you thanks for the agreeable present of your Theory. Wedderburn +and I made presents of our copies to such of our acquaintances as we thought +good judges, and proper to spread the reputation of the book. I sent one to +the Duke of Argyll, to Lord Lyttleton, Horace Walpole, Soame Jenyns, and +Burke, an Irish gentleman, who wrote lately a very pretty treatise on the +sublime, Millar desired my permission to send one, in your name, to Dr. +Warburton. I have delayed writing to you till I could tell you something of +the success of the book, and could prognosticate, with some probability, +whether it should be finally damned to oblivion, or should be registered in the +temple of immortality. Though it has been published only a few weeks, I +think there appear already such strong symptoms, that I can almost venture +to foretel its fate. It is, in short, this——But I have been interrupted in my +letter, by a foolish, impertinent visit of one who has lately come from Scotland. +He tells me, that the university of Glasgow intend to declare Rouet's +office vacant, upon his going abroad with Lord Hope. I question not but you +will have our friend Fergusson in your eye, in case another project for procuring +him a place in the university of Edinburgh should fail. Fergusson has very +much polished and improved his treatise on Refinement, and with some amendments, +it will make an admirable book, and discovers an elegant and a singular +genius. The Epigoniad, I hope, will do; but it is somewhat up-hill work. +As I doubt not but you consult the reviewers sometimes at present, you will +see in the Critical Review a letter upon that poem, and I desire you to employ +your conjectures in finding out the author. Let me see a sample of +your skill in knowing hands, by your guessing at the person. I am afraid of +Lord Kames's Law Tracts. A man might as well think of making a fine sauce<span class='pagenum'><a name="Page_v" id="Page_v">[Pg v]</a></span> +by a mixture of wormwood and aloes, as an agreeable composition by joining +metaphysics and Scotch law. However, the book, I believe, has merit, +though few people will take the pains of diving into it. But to return to your +book and its success in this town, I must tell you——A plague of interruptions! +I ordered myself to be denied; and yet here is one that has broke +in upon me again. He is a man of letters, and we have had a good deal of +literary conversation. You told me that you was curious of literary anecdotes, +and therefore I shall inform you of a few that have come to my knowledge. +I believe I have mentioned to you already Helvetius's book <i>De +l'Esprit</i>. It is worth your reading, not for its philosophy, which I do not +highly value, but for its agreeable composition. I had a letter from him a +few days ago, wherein he tells me that my name was much oftener in the +manuscript, but that the censor of books at Paris obliged him to strike it out. +Voltaire has lately published a small work, called <i>Candide, ou l'Optimisme</i> +I shall give a detail of it——But what is all this to my book? say you.——My +dear Mr. Smith, have patience; compose yourself to tranquillity; show +yourself a philosopher in practice as well as profession; think on the emptiness, +and rashness, and futility of the common judgments of men; how little +they are regulated by reason in any subject, much more in philosophical subjects, +which so far exceed the comprehension of the vulgar.</p> + +<p class="poem"> +<span style="margin-left: 1em;">——Non si quid turbida Roma</span><br /> +Elevat, accedas; examenve improbum in illa<br /> +Castiges trutina; nec te quæsiveris extra.<br /> +</p> + +<p class="noidt">A wise man's kingdom is his own breast, or if he ever looks farther, it +will only be to the judgment of a select few, who are free from prejudices, +and capable of examining his work. Nothing, indeed, can be a stronger presumption +of falsehood than the approbation of the multitude; and Phocion, +you know, always suspected himself of some blunder when he was attended +with the applauses of the populace.</p> + +<p>'Supposing, therefore, that you have duly prepared yourself for the worst, +by all these reflections, I proceed to tell you the melancholy news,—that your +book has been very unfortunate; for the public seem disposed to applaud it +extremely. It was looked for by the foolish people with some impatience and +the mob of literati are beginning already to be very loud in its praises. Three +bishops called yesterday at Millar's shop, in order to buy copies, and to ask +questions about the author. The bishop of Peterborough said he had passed +the evening in a company where he heard it extolled above all books in the +world. The Duke of Argyll is more decisive than he uses to be in its favour +I suppose he either considers it as an exotic, or thinks the author will be +serviceable to him in the Glasgow elections. Lord Lyttleton says, that +Robertson, and Smith, and Bower, are the glories of English literature. Oswald +protests, he does not know whether he has reaped more instruction or +entertainment from it. But you may easily judge what reliance can be put +on his judgment, who has been engaged all his life in public business, and +who never sees any faults in his friends. Millar exults, and brags that two +thirds of the edition are already sold, and that he is now sure of success. You +see what a son of the earth that is, to value books only by the profit they +bring him. In that view, I believe, it may prove a very good book.</p> + +<p>'Charles Townsend, who passes for the cleverest fellow in England, is so +taken with the performance, that he said to Oswald, he would put the Duke +or Buccleugh under the author's care, and would make it worth his while to +accept of that charge. As soon as I heard this, I called on him twice with<span class='pagenum'><a name="Page_vi" id="Page_vi">[Pg vi]</a></span> +a view of talking with him about the matter, and of convincing him of the +propriety of sending that young nobleman to Glasgow; for I could not hope, +that he could offer you any terms which would tempt you to renounce your +professorship. But I missed him. Mr. Townsend passes for being a little +uncertain in his resolutions; so, perhaps, you need not build much on this +sally.</p> + +<p>'In recompense for so many mortifying things, which nothing but truth +could have extorted from me, and which I could easily have multiplied to a +greater number, I doubt not but you are so good a christian as to return good +for evil, and to flatter my vanity, by telling me, that all the godly in Scotland +abuse me for my account of John Knox and the reformation.'</p></div> + +<p>Mr. Smith having completed, and given to the world his system of +ethics, that subject afterwards occupied but a small part of his lectures. +His attention was now chiefly directed to the illustration of +those other branches of science which he taught; and, accordingly, he +seems to have taken up the resolution, even at that early period, of +publishing an investigation into the principles of what he considered +to be the only other branch of Moral Philosophy,—Jurisprudence, the +subject of which formed the third division of his lectures. At the +conclusion of the Theory of Moral Sentiments, after treating of the +importance of a system of Natural Jurisprudence, and remarking that +Grotius was the first, and perhaps the only writer, who had given any +thing like a system of those principles which ought to run through, +and be the foundation of the law of nations, Mr. Smith promised, in +another discourse, to give an account of the general principles of law +and government, and of the different revolutions they have undergone +in the different ages and periods of society, not only in what concerns +justice, but in what concerns police, revenue, and arms, and whatever +else is the object of law.</p> + +<p>Four years after the publication of this work, and after a residence +of thirteen years in Glasgow, Mr. Smith, in 1763, was induced to relinquish +his professorship, by an invitation from the Hon. Mr. Townsend, +who had married the Duchess of Buccleugh, to accompany the +young Duke, her son, in his travels. Being indebted for this invitation +to his own talents alone, it must have appeared peculiarly flattering +to him. Such an appointment was, besides, the more acceptable, +as it afforded him a better opportunity of becoming acquainted with +the internal policy of other states, and of completing that system of +political economy, the principles of which he had previously delivered +in his lectures, and which it was then the leading object of his studies +to perfect.</p> + +<p>Mr. Smith did not, however, resign his professorship till the day +after his arrival in Paris, in February 1764. He then addressed the +following letter to the Right Honourable Thomas Millar, lord advocate +of Scotland, and then rector of the college of Glasgow:—</p> + +<div class="blockquot"><p>'<span class="smcap">My Lord</span>,—I take this first opportunity after my arrival in this place, +which was not till yesterday, to resign my office into the hands of your lordship, +of the dean of faculty, of the principal of the college, and of all my other +most respectable and worthy colleagues. Into your and their hands, +there<span class='pagenum'><a name="Page_vii" id="Page_vii">[Pg vii]</a></span>fore, I do resign my office of professor of moral philosophy in the university of +Glasgow, and in the college thereof, with all the emoluments, privileges, and +advantages, which belong to it. I reserve, however, my right to the salary +for the current half-year, which commenced at the 10th of October, for one +part of my salary, and at Martinmas last for another; and I desire that this +salary may be paid to the gentleman who does that part of my duty which I +was obliged to leave undone, in the manner agreed on between my very worthy +colleagues before we parted. I never was more anxious for the good of +the college than at this moment; and I sincerely wish, that whoever is my +successor, he may not only do credit to the office by his abilities, but be a +comfort to the very excellent men with whom he is likely to spend his life, by +the probity of his heart and the goodness of his temper.'</p></div> + +<p>His lordship having transmitted the above to the professors, a meeting +was held; on which occasion the following honourable testimony +of the sense they entertained of the worth of their former colleague +was entered in their minutes:—</p> + +<div class="blockquot"><p>'The meeting accept of Dr. Smith's resignation in terms of the above letter; +and the office of professor of moral philosophy in this university is therefore +hereby declared to be vacant. The university at the same time, cannot +help expressing their sincere regret at the removal of Dr. Smith, whose distinguished +probity and amiable qualities procured him the esteem and affection +of his colleagues; whose uncommon genius, great abilities, and extensive +learning, did so much honour to this society. His elegant and ingenious +Theory of Moral Sentiments having recommended him to the esteem of men +of taste and literature throughout Europe, his happy talents in illustrating +abstracted subjects, and faithful assiduity in communicating useful knowledge, +distinguished him as a professor, and at once afforded the greatest pleasure, +and the most important instruction, to the youth under his care.'</p></div> + +<p>In the first visit that Mr. Smith and his noble pupil made to Paris, +they only remained ten or twelve days; after which, they proceeded +to Thoulouse, where, during a residence of eighteen months, Mr. Smith +had an opportunity of extending his information concerning the internal +policy of France, by the intimacy in which he lived with some of +the members of the parliament. After visiting several other places in +the south of France, and residing two months at Geneva, they returned +about Christmas to Paris. Here Mr. Smith ranked among his +friends many of the highest literary characters, among whom were +several of the most distinguished of those political philosophers who +were denominated Economists.</p> + +<p>Before Mr. Smith left Paris, he received a flattering letter from the +unfortunate Duke of Rochefoucault, with a copy of a new edition of +the Maxims of his grandfather. Notwithstanding the unfavourable +manner in which the opinions of the author of that work were mentioned +in the Theory of Moral Sentiments, the Duke informed Mr. +Smith, on this occasion, that he had been prevented only from finishing +a translation, which he had begun, of his estimable system of morals, +into French, by the knowledge of having been anticipated in the +design. He also observed, that some apology might be made for his +ancestor, when it was considered, that he formed his opinions of man<span class='pagenum'><a name="Page_viii" id="Page_viii">[Pg viii]</a></span>kind +in two of the worst situations of life,—a court and a camp. +The last communication Mr. Smith had with this nobleman was in +1789, when he gave him to understand, that he would no longer rank +the name of Rochefoncault with that of the author of the Fable of the +Bees; and, accordingly, in the first edition that was afterwards published +of the Theory of Moral Sentiments, this promised alteration +was made.</p> + +<p>The next ten years of his life, after his arrival from the continent, +Mr. Smith passed with his mother at Kirkaldy, though he occasionally, +during that time, visited London and Edinburgh. Mr. Hume, who +considered a town as the proper scene for a man of letters, made many +attempts to prevail on him to leave his retirement.</p> + +<p>At length, in the beginning of the year 1776, Mr. Smith accounted +to the world for his long retreat, by the publication of his 'Inquiry +into the Nature and Causes of the Wealth of Nations.' This work +chiefly comprehended the subject of the fourth and last division of his +lectures, namely, those political regulations that have their origin in +expediency. For about twenty years of his life, his attention had +been chiefly devoted to the study of subjects connected with the +science of political economy. His long residence in the mercantile +city of Glasgow afforded him opportunities of deriving information, in +many particulars, from the best sources; his travels on the continent +contributed to extend his knowledge, and correct many of those misapprehensions +of life and manners which the best descriptions of them +are found to convey; and the intimacy in which he lived with some +of the leaders of the sect of economists, and other writers on the subject +of political economy, could not fail to assist him in methodizing +his speculations, and of adding to the soundness of his conclusions.—After +his arrival in this country, he wanted nothing more than leisure, +to arrange his materials, and prepare them for publication: and for +this purpose he passed in retirement the subsequent ten years.</p> + +<p>The great aim of Mr. Smith's Inquiry, the fruit of so much research, +and the work of so many years, is, as Professor Stewart observes, to +direct the policy of nations with respect to one most important class +of its laws,—those which form its system of political economy: 'and +he has unquestionably,' the same eloquent writer adds, 'had the merit +of presenting to the world the most comprehensive and perfect work +that has yet appeared on the general principles of any branch of legislation.'</p> + +<p>'A great and leading object of Mr. Smith's speculations,' as Mr. +Stewart also observes, 'is to demonstrate, that the most effectual plan +for advancing a people to greatness, is to maintain that order of things +which nature has pointed out, by allowing every man, as long as he +observes the rules of justice, to pursue his own interest in his own +way, and to bring both his industry and his capital into the freest +competition with these of his fellow citizens.'</p> + +<p>Several authors, in this country, had before written on commercial +affairs, but Mr. Smith was the first who reduced to a regular form +and order the information that was to be obtained on that subject, and +deduced from it the policy which an enlightened commercial nation<span class='pagenum'><a name="Page_ix" id="Page_ix">[Pg ix]</a></span> +ought to adopt. The successful manner in which he has treated this +unlimited freedom of trade, as well as some others, and his able exposure +of the errors of the commercial system, have rendered the science of +which he treats highly interesting to the great body of the people; and +a spirit of inquiry, on every branch of political economy, has, in consequence, +been excited, which promises now, more than ever, to be attended +with the most beneficial effects. This intricate science, the +most important to the interests of mankind though long neglected, Dr. +Smith has had the merit of advancing so far, as to lay a foundation, on +which, it may safely be said, investigation may for a long time proceed.</p> + +<p>It has frequently been alleged, that Dr. Smith was indebted for a +large portion of the reasonings in his Inquiry to the French economists, +and that the coincidence between some branches of his doctrine and +theirs, particularly those which relate to freedom of trade and the +powers of labour, is more than casual. But Professor Stewart has +ably vindicated him from this charge, and established his right to the +general principles of his doctrine, which, he thinks, were altogether original, +and the result of his own reflections. That he, however, derived +some advantage from his intimacy with Turgot, and those great men +who were at the head of the sect of economists, and, perhaps, adopted +some of their illustrations, it would be as unnecessary to deny, as it +would he far from discreditable to his talents to acknowledge.</p> + +<p>There is also a similar, or perhaps a greater coincidence between +many parts of his doctrine and the opinions of Sir James Stewart, as +detailed in his 'Inquiry into the Principles of Political Economy.' +This congruity of opinion is chiefly apparent in their respective conclusions +concerning the effects of competition,—the principles of exchangeable +value,—the relation between the interest of money and the +profit of stock,—the functions of coin,—the rise and progress of credit,—and +the sources and limits of taxation. As this author had published +his Inquiry many years before Dr. Smith's work appeared, and had, +besides, lived in great intimacy with him, there was some reason to +believe, what has been often asserted, that he possessed a just claim +to some of the doctrines contained in that work, though Dr. Smith +never once mentioned his name in any part of his work. But the +present Sir James Stewart, who has recently published a full edition +of the writings of his father, relinquishes, on his part, all such pretensions. +With the partiality of a friend, in ranking his father with +Dr. Smith, he gives it as his opinion, however, that both had, with +original powers of equal strength, drawn their knowledge from the +same source, the French economists.</p> + +<p>Dr. Mandeville has also, of late, got the credit of being the author +of those Principles of Political Economy, which have interested the +world for the last fifty years, and to him alone, it is said, not only +the English, but also the French writers, are indebted for their doctrines +in that science. In the work of this eccentric writer, there +seems, indeed, a similarity of opinion on some of the more obvious +sources of wealth, particularly in the division of labour, which Dr. +Smith investigates so fully; and in the erroneous doctrine of produc<span class='pagenum'><a name="Page_x" id="Page_x">[Pg x]</a></span>tive +and non-productive labour; and also, perhaps, on some other +points: but it would be difficult to show, that he ought, on this account, +to be considered the author of all, or even the chief part of +what has been written on the subject. On this, as well as on all +questions of a similar nature, a great diversity of opinions will subsist. +But it may be a matter of curiosity to those who are unacquainted +with his work, the Fable of the Bees, not only to trace the connection +of that author's sentiments with what is advanced by subsequent writers +on this important subject, but also to learn his peculiar notions of +morality, that attracted, at one time, so much attention. These last, +Dr. Smith says, though described by a lively and humorous, yet coarse +and rustic eloquence, which throws an air of truth and probability on +them, are, almost in every respect, erroneous.</p> + +<p>Soon after the publication of the Wealth of Nations, Mr. Smith received +the following congratulatory letter from Mr. Hume, six months +before his death, dated Edinburgh, 1st April 1776.</p> + +<div class="blockquot"><p>'<i>Euge! Belle!</i> Dear Mr. Smith—I am much pleased with your performance, +and the perusal of it has taken me from a state of great anxiety. It was a +work of so much expectation, by yourself, by your friends, and by the public, +that I trembled for its appearance; but am now much relieved; not but that +the reading of it necessarily requires so much attention, and the public is disposed +to give so little, that I shall still doubt for some time of its being at +first very popular. But it has depth, and solidity, and acuteness, and is so +much illustrated by curious facts, that it must at last take the public attention. +It is probably much improved by your last abode in London. If you +were here at my fireside, I should dispute some of your principles. But these, +and a hundred other points, are fit, only to be discussed in conversation. I +hope it will be soon, for I am in a very bad state of health, and cannot afford +a long delay.'</p></div> + +<p>The publication of this great work drew praise to its author, indeed, +from many different quarters.—Dr. Barnard, in a political epistle, +addressed to Sir Joshua Reynolds, where the characteristic qualities +of some eminent literary men of that time are brought forward, spoke +of Smith as one who would teach him how to think. Gibbon made honourable +mention of him in his Roman history; and Mr. Fox contributed, +in no small degree, to extend his reputation, by observing in the House +of Commons, that 'the way, as my learned friend Dr. Adam Smith +says, for a nation, as well as an individual, to be rich, is for both to +live within their income.'</p> + +<p>The opinion which Dr. Johnson delivered, at that time, on its being +alleged by Sir John Pringle, that a person who, like Dr. Smith, was +not practically acquainted with trade, could not be qualified to write +on that subject, may also be mentioned here, though somewhat erroneous, +as far as it respects the received doctrines of Political Economy:—'He +is mistaken,' said Johnson. 'A man who has never been engaged +in trade himself, may undoubtedly write well on trade; and +there is nothing which requires more to be illustrated by philosophy +than trade does. As to mere wealth, that is to say, money, it is clear +that one nation, or one individual, cannot increase its store but by<span class='pagenum'><a name="Page_xi" id="Page_xi">[Pg xi]</a></span> +making another poorer; but trade procures what is more valuable, the +reciprocation of the peculiar advantages of different countries. A merchant +seldom thinks of any but his own trade. To write a good book +upon it, a man must have extensive views. It is not necessary to have +practised, to write well upon a subject.'<a name="FNanchor_2_2" id="FNanchor_2_2"></a><a href="#Footnote_2_2" class="fnanchor">[2]</a></p> + +<p>On the Inquiry into the Causes of the Wealth of Nations, it only remains +farther to be observed, that its success has been every way commensurate +to its merits. It has, however, been often regretted, that +the author did not live to favour the world with his reasonings on those +important events which have taken place since 1784, when he put the +last hand to his invaluable work. That another, with competent +talents, and a mind disposed to the task, should soon appear, to treat +of these occurrences, and give a satisfactory view of the progress of the +science from that time to the present, is not to be expected. But as +the honour to be gained from a successful execution of such an undertaking +is very considerable, it is not to be wondered at that an attempt +of this kind should be made. Accordingly, Mr Playfair of London +has had the boldness to follow Smith, by endeavouring to supply, in +part, this desideratum, by adding supplementary chapters and notes to +the Treatise on the Wealth of Nations.</p> + +<p>But it is greatly to be feared, that there are few persons who have +read this improved edition, as it is called, of Dr. Smith's Inquiry, but +will still look forward to the accomplishment of the wishes they must +previously have formed, for a continuation, and probably an illustration, +of the discussions contained in that work. Leaving, therefore, +the supplementary chapters and elucidations of Mr Playfair, it must +be observed, that Dr. Smith has, on this occasion, been equally unfortunate +in a biographer. The detail of his peaceful life is almost +lost among dissertations on the wickedness of atheism and the horrors +of a revolution. But these dissertations, strangely misplaced as they +appear to be, would certainly not alone have been sufficient to attract +observation here, whatever latitude the author might have allowed to +himself on such subjects. When he goes on, however, to apologise for +Dr. Smith's acquaintance with some individuals among the economists, +and to connect the whole of that sect with those philosophers to whom +he ascribes the evils which have so long afflicted France, his opinions +become still more insupportable. It will, perhaps, be said, and with +some reason, that, in this instance, at least, the writer has followed +those alarmists, who, on any men of learning belonging to that country +being mentioned, immediately ally them to the revolutionists without +regard to difference of opinion, or distance of time.</p> + +<p>The reputation, however, of the economists is too well established to +be affected, either by the clamours of the ignorant, or the mad intemperance +of political alarmists. The doctrine of the great men who formed +the school of the economists, was, that the produce of the land is the +sole or principal source of the revenue and wealth of every country; and +this doctrine, with the manner of deriving from it the greatest possible +advantage, it is almost universally acknowledged, engaged entirely their<span class='pagenum'><a name="Page_xii" id="Page_xii">[Pg xii]</a></span> +attention. Dr. Smith, who lived in great intimacy with many of the +founders of that sect, does ample justice, on every occasion, to the +purity of their views; and indeed they, as well as himself, it has always +been said, by the impartial and well informed, were ever animated by +a zeal for the best interests of society.</p> + +<p>M. Quesnai, the first of that sect, and the author of the Economical +Table, a work of the greatest profoundness and originality, was, in +particular, represented by Mr. Smith as a man of the greatest modesty +and simplicity; and his system he pronounced, with all its imperfections, +to be the nearest approximation to the truth, of any that had +then been published on the principles of political science. His veneration +for this worthy man was even so great, that had he lived, it +was his intention to have inscribed to him the Inquiry into the Causes +of the Wealth of Nations.</p> + +<p>Nor will the memory of those illustrious men be soon forgotten, notwithstanding +the calumnies with which it has been charged. It may +safely be predicted, in the words of a highly respectable periodical +publication, that 'Those prospects of political improvements which +flattered the benevolent anticipations of the economists, will soon be recognised +as sound conclusions of science; and it will at length be acknowledged +that Turgot, Mirabeau, and Quesnai, were the friends of +mankind, and that their genius and their labours were devoted to the +refinement of social happiness and the consolidation of the political +fabric.'<a name="FNanchor_3_3" id="FNanchor_3_3"></a><a href="#Footnote_3_3" class="fnanchor">[3]</a></p> + +<p>The life of Mr. Smith, after the publication of his Inquiry, might be +said to draw towards a close. The following particulars of the last +years, are mostly extracted from Professor Stewart's Life of this incomparable +writer.</p> + +<p>After residing some time in London, he was appointed one of the +commissioners of customs in Scotland, in 1778, when he removed to +Edinburgh. He was accompanied by his mother, who, though in extreme +old age, possessed a considerable share of good health; and his +cousin, Miss Douglass, who had long resided with him at Glasgow, undertook +to superintend his domestic economy.</p> + +<p>The Duke of Buccleugh had continued to allow Mr. Smith L.300 +a-year, and the accession which he now received to his income enabled +him to live, not only with comfort and independence, but to indulge +the benevolence of his heart, in making numerous private benefactions.</p> + +<p>During the remaining period of his life, he appears to have done little +more than to discharge, with peculiar exactness, the duties of his office, +which, though they required no great exertion, were sufficient to divert +his attention from his studies. He very early felt the infirmities +of old age, but his health and strength were not greatly affected till he +was left alone, by the death of his mother, in 1784, and of his cousin +four years after. They had been the objects of his affection for more +than sixty years; and in their society he had enjoyed, from his infancy, +all that he ever knew of the endearments of a family. In return<span class='pagenum'><a name="Page_xiii" id="Page_xiii">[Pg xiii]</a></span> +for the anxious and watchful solicitude of his mother during infancy, +he had the singular good fortune of being able to show his gratitude to +her during a very long life; and it was often observed, that the nearest +avenue to his heart was through his mother.</p> + +<p>He now gradually declined till the period of his death, which happened +in 1790. His last illness, which arose from a chronic obstruction +in the bowels, was lingering and painful; but he had every consolation +to soothe it which he could desire, from the tenderest sympathy +of his friends, and from the completest resignation of his own mind.</p> + +<p>His friends had been in use to sup with him every Sunday. The +last time he received them, which was a few days before his death, +there was a pretty numerous meeting; but not being able to sit up as +usual, he retired to bed before supper. On going away, he took leave +of the company, by saying, 'I believe we must adjourn this meeting +to some other place.'</p> + +<p>In a letter addressed, in the year 1787, to the principal of the university +of Glasgow, in consequence of his being elected rector of that +learned body, a pleasing memorial remains of the satisfaction with +which he always recollected that period of his literary career, which +had been more peculiarly consecrated to his academical studies. On +that occasion he writes:—</p> + +<div class="blockquot"><p>'No preferment could have given me so much real satisfaction. No man +can owe greater obligations to a society than I do to the university of Glasgow. +They educated me; they sent me to Oxford. Soon after my return to +Scotland, they elected me one of their own members, and afterwards preferred +me to another office, to which the abilities and virtues of the never-to-be-forgotten +Dr. Hutcheson had given a superior degree of illustration. The +period of thirteen years, which I spent as a member of that society, I remember +as by far the most useful, and therefore, as by far the happiest and most +honourable period of my life; and now, after three-and-twenty years absence, +to be remembered in so very agreeable a manner by my old friends and protectors, +gives me a heart-felt joy which I cannot easily express to you.'</p></div> + +<p>Not long before the death of Smith, finding his end approach rapidly, +he gave orders to destroy all his manuscripts, excepting some detached +essays, which he entrusted to the care of his executors. With +the exception of these essays, all his papers were committed to the +flames. What were the particular contents of these papers was not +known, even to his most intimate friends. The additions to the +Theory of Moral Sentiments, most of which were composed under +severe illness, had fortunately been sent to the press in the beginning +of the preceding winter; and the author lived to see the publication of +this new edition.<a name="FNanchor_4_4" id="FNanchor_4_4"></a><a href="#Footnote_4_4" class="fnanchor">[4]</a><span class='pagenum'><a name="Page_xiv" id="Page_xiv">[Pg xiv]</a></span></p> + +<p>Some time before his last illness, when he had occasion to go to +London, he enjoined his friends, to whom he had entrusted the disposal +of his manuscripts, to destroy, in the event of his death, all the +volumes of his lectures, doing with the rest what they pleased. When +he had become weak, and saw the last period of his life approach, he +spoke to his friends again upon the same subject. They entreated him +to make his mind easy, as he might depend upon their fulfilling his +desire. Though he then seemed to be satisfied, he, some days afterwards, +begged that the volume might be immediately destroyed; which +was accordingly done.</p> + +<p>Mr. Riddell, an intimate friend of Mr. Smith, mentions, that on one +of these occasions he regretted he had done so little; 'but I meant,' he +added, 'to have done more; and there are materials in my papers +of which I could make a great deal.—But that is now out of the +question.'</p> + +<p>That the idea of destroying such unfinished works as might be in +his possession at the time of his death, was not the effect of any sudden +or hasty resolution, appears from the following letter to Mr. +Hume, written in 1773, at the time when he was preparing for a +journey to London, with the prospect of a pretty long absence from +Scotland.</p> + +<div class="blockquot"><p>'My dear friend,—As I have left the care of all my literary papers to you, +I must tell you, that except those which I carry along with me, there are +none worth the publication, but a fragment of a great work, which contains +a history of the astronomical systems that were successively in fashion down +to the time of Descartes. Whether that might not be published as a fragment +of an intended juvenile work, I leave entirely to your judgment, though I +begin to suspect myself, that there is more refinement than solidity in some +parts of it. This little work you will find in a thin folio paper book in my +back-room. All the other loose papers which you will find in that desk, or +within the glass folding-doors of a bureau, which stands in my bed-room, +together with about eighteen thin paper folio books, which you will likewise +find within the same glass folding doors, I desire may be destroyed without +any examination. Unless I die very suddenly, I shall take care that the papers +I carry with me shall he carefully sent to you.'</p></div> + +<p>But he himself long survived his friend Mr. Hume. The persons +entrusted with his remaining papers were Dr. Black and Dr. Hutton, +his executors, with whom he had long lived in habits of the closest +friendship. These gentlemen afterwards collected into a volume, such +of the writings of Dr. Smith as were fitted for publication: and they +appeared in 1795, under the title of <i>Essays on Philosophical Subjects</i>. +These essays had been composed early in life, and were designed to +illustrate the principles of the human mind, by a theoretical deduction +of the progress of the sciences and the liberal arts. The most considerable +piece in this volume is, on the principles which lead and direct +philosophical inquiries, illustrated by the history of astronomy, ancient +physics, and ancient logic and metaphysics. The others, with the exception +of an essay on the external senses, relate to the imitative and<span class='pagenum'><a name="Page_xv" id="Page_xv">[Pg xv]</a></span> +liberal arts. The contents of this volume, Mr. Smith's executors observe, +appear to be parts of a plan he once had formed for giving a +connected history of the liberal sciences and elegant arts; but which +he had been obliged to abandon, as being far too extensive; and these +parts lay beside him neglected till after his death. In them, however, +will be found that happy connection, that full and accurate expression, +and the same copiousness and facility of illustration, which are conspicuous +in the rest of his writings.</p> + +<p>As a writer, the character of Mr. Smith is so well known, that any +observation on his merits, must appear almost unnecessary. His literary +fame is circumscribed by no ordinary limits. To the voice of +his own country, is added the testimony of Europe, and, indeed, of +the civilized world. And had even only one volume of his inestimable +writings appeared, his name would have been carried down to +posterity in the first rank of those illustrious characters that adorn the +last century.</p> + +<p>In the words of Professor Stewart, it may be said, that,—of the +intellectual gifts and attainments by which he was so eminently distinguished;—of +the originality and comprehensiveness of his views; +the extent, the variety, and the correctness of his information; the +inexhaustible fertility of his invention; and the ornaments which his +rich and beautiful imagination had borrowed from classical culture;—he +has left behind him lasting monuments.</p> + +<p>One observation more may he added to what is now said on his +writings, that, whatever be the nature of his subject, he seldom misses +an opportunity of indulging his curiosity, in tracing, from the principles +of human nature, or from the circumstances of society, the origin +of the opinions and the institutions which he describes.</p> + +<p>With regard to the private character of this amiable and enlightened +philosopher, it fortunately happens, that the most certain of all testimonies +to his private worth may be found in the confidence, respect, +and attachment which followed him through all the various relations +of life. There were many peculiarities, indeed, both in his manners +and in his intellectual habits; but to those who knew him, these peculiarities, +so far from detracting from the respect which his abilities +commanded, added an irresistible charm to his conversation, and +strongly displayed the artless simplicity of his heart. The comprehensive +speculations with which he had always been occupied, and the +variety of materials which his own invention continually supplied to +his thoughts, rendered him habitually inattentive to familiar objects, +and to common occurrences. On this account, he was remarkable, +throughout the whole of life, for speaking to himself when alone, and +for being so absent in company, as, on some occasions, to exceed almost +what the fancy of a Bruyere could imagine. In company, he +was apt to be engrossed by his studies; and appeared, at times, by +the motion of his lips, as well as by his looks and gestures, to be in +the fervour of composition. It was observed, that he rarely started a +topic himself, or even fell in easily with the common dialogue of conversation. +When he did speak, however, he was somewhat apt to<span class='pagenum'><a name="Page_xvi" id="Page_xvi">[Pg xvi]</a></span> +convey his ideas in the form of a lecture; but this never proceeded +from a wish to engross the discourse, or to gratify his vanity. His +own inclination disposed him so strongly to enjoy, in silence, the +gaiety of those around him, that his friends were often led to concert +little schemes, in order to bring on the subjects most likely to interest +him.</p> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_xvii" id="Page_xvii">[Pg xvii]</a></span></p> +<h2>SHORT VIEW</h2> + +<h5>OF THE</h5> + +<h3>DOCTRINE OF SMITH, COMPARED WITH THAT OF THE<br /> +FRENCH ECONOMISTS.</h3> + +<h5>TRANSLATED FROM THE FRENCH OF M. GARNIER.</h5> + + +<p>The ancient philosophers were little accustomed to employ themselves in +the observation of those laws which regulate the distribution of riches among +the different orders of society in a nation, or in the search after the sources +of the increase of its wealth. In fact, political economy is a science of very +modern origin; for although, towards the end of the seventeenth century, +several writers, both of France and England, had begun to discuss the comparative +advantages of agriculture and commerce, yet it was not till the middle +of the eighteenth, that any thing like a complete system appeared upon +the growth and distribution of national wealth. At this period, the philosophical +Quesnai directed his attention to this very abstract subject, and became +the founder of a celebrated school, which may boast among its adherents +many distinguished men of talents and extensive knowledge.</p> + +<p>All philosophical sects owe their first origin and foundation to the discovery +of some great truth; and it is the madness inspiring their members, to deduce +every thing from this new discovery, that contributes most to their +downfal. Thus it was with the economists. They saw that the original +source of all wealth was the soil, and that the labour of its cultivation produced +not only the means of subsisting the labourer, but also a neat surplus, +which went to the increase of the existing stock: while, on the other hand, +the labour applied to the productions of the earth, the labour of manufactures +and commerce, can only add to the material a value exactly equal to that expended +during the execution of the work; by which means, in the end, this +species of labour operates no real change on the total sum of national riches. +They perceived that the landed proprietors are the first receivers of the +whole wealth of the community; and that, whatever is consumed by those +who are not possessed of land, must come, directly or indirectly, from the +former; and hence, that these receive wages from the proprietors, and that +the circulation of national wealth, is, in fact, only a succession of exchanges between +these two classes of men, the proprietors furnishing their wealth, and the +non-proprietors giving as an equivalent their labour and industry. They perceived +that a tax, being a portion of the national wealth applied to public +use, in every instance, however levied, bears finally upon the landed proprietors, +inasmuch as they are the distributors of that wealth, either by retrench<span class='pagenum'><a name="Page_xviii" id="Page_xviii">[Pg xviii]</a></span>ing +their luxuries, or by loading them with an additional expense; and that, +therefore, every tax which is not levied directly on the rude produce of the +earth, falls in the end on the landed proprietors, with a surplus produce, from +which the amount of the revenue receives no addition.</p> + +<p>These assertions are almost all incontestible, and capable of a rigorous +demonstration; and those who have attempted to shew their falsity, have, in +general, opposed them only with idle sophistry. Why, then, has this doctrine +met with so little success, and why does every day diminish its reputation? +because it agrees in no one point with the moral condition, either of +societies or of individuals; because it is continually contradicted by experience, +and by the infallible instinct of self-interest; because it does not +possess that indispensible sanction of all truths, utility. In fact, of what +consequence is it, that the labour of agriculture produces not only what covers +its own expenses, but new beings which would never have existed without +it, and that it has this advantage over the labour of manufactures and commerce? +Does it by any means follow from this, that the former kind of labour +is more profitable to the community than the latter? The real essence +of all wealth, and that which determines its value, is the necessity under +which the consumer lies to purchase it; for, in truth, there is no such thing +as wealth properly so called, nor absolute value; but the words wealth and +value are really nothing more than the co-relatives of consumption and demand. +Even the necessaries of life, in a country which is inhabited, but +incapable of commercial intercourse, will not form wealth; and to whatever +degree of civilization that country may have reached, still the same principle +will hold without alteration. If the sum of national wealth shall in any case +have exceeded the sum of demands, then a part of the former sum will +cease to bear the name of wealth, and will again be without value. In vain, +then, will agriculture multiply her produce; for the instant that it exceeds +the bounds of actual consumption, a part will lose its value; and self-interest, +that prime director of all labour and industry, seeing herself thus deceived +in her expectations, will not fail to turn her activity and efforts to another +quarter.</p> + +<p>In almost every instance, it is an idle refinement to distinguish between +the labour of those employed in agriculture, and of those employed in manufactures +and commerce; for wealth is necessarily the result of both descriptions +of labour, and consumption can no more take place independently of +the one, than it can independently of the other. It is by their simultaneous +concurrence that any thing becomes consumable, and, of course, that it +comes to constitute wealth. How then are we entitled to compare their respective +products, since it is impossible to distinguish these in the joint product, +and thus appreciate the separate value of each? The value of growing +wheat results as much from the industry of the reaper who gathers it in, of +the thrasher who separates it from the chaff and straw, of the miller and baker +who convert it successively into flour and bread, as it does from that of +the ploughman and of the sower. Without the labour of the weaver, the raw +material of flax would lose all its value, and be regarded as no way superior +to the most useless weed that grows. What then can we gain by any attempts +to determine which of these two species of labour conduces most to +the advancement of national wealth; or, are they not as idle, as if we busied +ourselves in inquiring, whether the right or the left foot is the most useful in +walking?</p> + +<p>It is true, indeed, that in every species of manufacture, the workman adds +to the value of the raw material a value exactly equal to that which was expended +during the process of manufacture; and what is the conclusion we +are to draw this? It is merely, that a certain exchange has taken place<span class='pagenum'><a name="Page_xix" id="Page_xix">[Pg xix]</a></span> +and that the food consumed by the manufacturer is now represented by the +increase of value resulting from his manual labour. Thus wool, when converted +into cloth, has gained a value precisely equal to that expended by the +manufacturer during the conversion. But, if it is shown that, without this exchange, +the wool would have remained without value, while, on the other +hand, the food of the manufacturer would have been without a consumer; +it will then appear, that this exchange has, in fact, done what is equivalent to +creating these two values, and that it has proved to the society an operation +infinitely more useful, than if an equal quantity of labour had been spent in the +increase of that rude produce, which already existed in overabundance. The +first description of labour has been truly productive; while the last would +have been altogether unproductive, since it would not have created any +value.</p> + +<p>'The soil,' say the economists, 'is the source of all wealth.' But, to prevent +this assertion from leading us into erroneous conclusions, it will be necessary +to explain it. The materials of all wealth originate primarily in the +bosom of the earth; but it is only by the aid of labour that they can ever +truly constitute wealth. The earth furnishes the means of wealth; but +wealth itself cannot possibly have any existence, unless through that industry +and labour which modifies, divides, connects, and combines the various +productions of the soil, so as to render them fit for consumption. Commerce, +indeed, regards those rude productions as real wealth; but it is only +from the consideration, that the proprietor has it always in his power to convert +them, at will, into consumable goods, by submitting them to the necessary +operations of manufacture. They possess, as yet, merely the virtual +value of a promissory-note, which passes current, because the bearer is assured +that he can, at pleasure, convert it into cash. Many gold mines, which +are well known, are not worked, because their whole produce would not cover +the incidental expenses; but the gold which they contain is, in reality, the +same with that of our coin; and yet no one would be foolish enough to call +it wealth, for there is no probability it will ever be extracted from the mine, +or purified; and, of course, it possesses no value. The wild fowl becomes +wealth the moment it is in the possession of the sportsman; while those of the +very same species, that have escaped his attempts, remain without any title +to the term.</p> + +<p>It is further, without question, true, that all who do not possess property in +land must draw their subsistence from wages received, directly or indirectly, +from the proprietors, unless they violate all rights, and become robbers. In +this respect, every service is alike; the most honourable and the most disgraceful +receives each its wages. It is certain, too, that if the circumstances +determining the rate of the various kinds of wages remain the same, that is +if the offers of service, and the demand, preserve the same proportion to each +other, after as well as before the imposition of a tax; then, of course, the +wages will continue at the same rate, and thus the tax, however imposed, will +uniformly, in the end, fall on that class in the community who furnish the +wages; so that they must suffer, either an addition to their former expenses, +or a retrenchment of those luxuries they enjoyed. And according as the tax +is less directly levied, the greater will be the burden they are subjected to; for +besides indemnifying all the other classes who have advanced the tax-money, +a further expense must be incurred, in the additional number of persons now +necessary to collect it. The natural conclusion we must draw from the theory +is, that a tax, directly levied on the neat revenue of the land proprietors, is +that which agrees best with reason and justice, and that which bears lightest +on the contributors.<span class='pagenum'><a name="Page_xx" id="Page_xx">[Pg xx]</a></span></p> + +<p>If, however, this theory should be found to throw entirely out of consideration +a multitude of circumstances, which possess a powerful influence over the +facility of collecting a tax, as well an over its consequences; and if the general +result of this influence be of far more importance than the single advantage +of a less burden; then the theory, inasmuch as it neglects a part of those +particulars which have their weight in the practice, is contradicted by this last. +And this is exactly what happens in the question respecting the comparative +advantages and inconveniencies of the two modes of levying taxes.</p> + +<p>The habit which men have acquired, of viewing money as the representation +of every thing which contributes to the support or comfort of life, makes +them naturally very unwilling to part with what portion of it they +possess, unless it be to procure some necessary or enjoyment. We spend +money with pleasure, but it requires an effort to pay a debt, and particularly +so when the value received in exchange is not very obvious to the generality, +as in the case of a tax. But by levying the tax on some object of consumption, +by thus confounding it with the price of the latter, and by making the +payment of the duty and of the price of enjoyment become one and the same +act, we render the consumer desirous to pay the impost. It is amid the profusion +of entertainments, that the duties on wine, salt, &c. are paid; the +public treasury thus finding a source of gain in the excitements to expense +produced by the extravagance and gaiety of feasts.</p> + +<p>Another advantage of the same nature, possessed by the indirect mode of +taxation, is its extreme divisibility into minute parts, and the facility which it +affords to the individual, of paying it off day by day, or even minute by minute. +Thus the mechanic, who sups on a portion of his day's wages, will +sometimes in one quarter of an hour, pay part of four or five different duties.</p> + +<p>In the plan of direct taxation, the impost appears without any disguise; it +comes upon us unexpectedly, from the imprudence so common to the bulk of +mankind, and never fails to carry with it constraint and discouragement.</p> + +<p>All these considerations are overlooked by the friends of direct taxation; +and yet their importance must be well known to all who have ever attended +to the art of governing men.</p> + +<p>But, perhaps, this is not all. An indirect tax, by increasing from time to +time the price of the objects of general consumption, when the members of +the community have contracted the habit of this consumption, renders these +objects a little more costly, and thus gives birth to that increase of labour and +industry which is now required to obtain them. But if this tax be so proportioned +as not to discourage the consumption, will it not then operate as a +universal stimulus upon the active and industrious part of the community? +Will it not incite that part to redoubled efforts, by which it may still enjoy +those luxuries which, by habit, have become almost necessaries, and, of course, +produce a further developement of the productive powers of labour, and of the +resources of industry? Are we not, in such a case, to conclude, that after the +imposition of a tax, there will exist not only the quantity of labour and industry +which was formerly requisite to procure the necessaries and habitual enjoyments +of the active class of mankind, but also such an addition to this, as +will suffice for the payment of the tax? And will not this tax, or increase of +produce required for the tax—as it is spent by the government that receives +it—will it not serve to support a new class of consumers, requiring a variety +of commodities which the impost enables them to pay? If these conjectures +are well founded, it will follow, that indirect taxation, far from having any +hurtful influence on wealth and population, must, when wisely regulated, +tend to increase and strengthen these two great foundations of national prosperity +and power. And it will tend to do this, inasmuch as it bears imme<span class='pagenum'><a name="Page_xxi" id="Page_xxi">[Pg xxi]</a></span>diately +on the body of the people, and operates on the working and industrious +class, which forms the active part of the community; while, on the +other hand, direct taxation operates solely on the idle class of landed proprietors—which +furnishes us with the characteristic difference existing between +these two modes of taxation.<a name="FNanchor_5_5" id="FNanchor_5_5"></a><a href="#Footnote_5_5" class="fnanchor">[5]</a> These hints, which seem to afford an explanation +of that most extraordinary phenomenon in political economy, viz. the +rapid and prodigious increase of wealth in those nations which are most +loaded with indirect taxes, deserve to be discussed at greater length than our +limits will allow. Enough, however, has been said to shew, that no rigorous +and purely mathematical calculation will ever enable us to appreciate the +real influence of taxes upon the prosperity of a nation. Thus, some of the +truths perceived by the economists are of little use in practice; while others +are found to be contradicted in their application, by those accessory circumstances +which were overlooked in the calculations of the theory.</p> + +<p>While this sect of philosophers filled all Europe with their speculations, an +observer of more depth and ability directed his researches to the same subject, +and laboured to establish, on a true and lasting foundation, the doctrines +of political economy.</p> + +<p>Dr. Smith succeeded in discovering a great truth,—the most fruitful in +consequences, the most useful in practice, the origin of all the principles of +the science, and one which unveiled to him all the mysteries of the growth +and distribution of wealth. This great man perceived, that the universal +agent in the creation of wealth is labour; and was thence led to analyse the +powers of this agent, and to search after the causes to which they owe their +origin and increase.</p> + +<p>The great difference between the doctrine of Smith and of the economists, +lies in the point from which they set out, in the reduction of their consequences. +The latter go back to the soil as the primary source of all wealth; +while the former regards labour as the universal agent which, in every case, +produces it. It will appear, at first sight, how very superior the school of +the Scotch professor is to that of the French philosophers, with regard to +the practical utility, as well as to the application of its precepts. Labour is +a power of which man is the machine; and, of course, the increase of this +power can only be limited by the indefinite bounds of human intelligence and +industry; and it possesses, like these faculties, a susceptibility of being directed +by design, and perfected by the aid of study. The earth, on the contrary, +if we set aside the influence which labour has over the nature and quantity +of its productions, is totally out of our power, in every respect which can render +it more or less useful—in its extent, in its situation, and in its physical +properties.</p> + +<p>Thus the science of political economy, considered according to the view +of the French economists, must be classed with the natural sciences, which +are purely speculative, and can have no other end than the knowledge of the +laws which regulate the object of their researches; while, viewed according +to the doctrine of Smith, political economy becomes connected with the +other moral sciences, which tend to ameliorate the condition of their object, +and to carry it to the highest perfection of which it is susceptible.</p> + +<p>A few words will suffice to explain the grounds of the doctrine of Smith. +The power by which a nation creates its wealth is its labour; and the quantity +of wealth created will increase in direct proportion as the power increases.<span class='pagenum'><a name="Page_xxii" id="Page_xxii">[Pg xxii]</a></span> +But the increase of this last may take place in two ways—in energy, and in +extent. Labour increases in energy, when the same quantity of labour furnishes +a more abundant product; and the two great means of effecting the +increase, or of perfecting the productive powers of labour, are the division of +labour, and the invention of such machines as shorten and facilitate the manual +operations of industry. Labour increases in extent, when the number of +those engaged in it augments in proportion to the increasing number of the +consumers, which can take place only in consequence of an increase of capitals, +and of those branches of business in which they are employed.</p> + +<p>Now, to accomplish the increase of labour in both these ways, and to conduct +it gradually to the utmost pitch of energy and extent to which it can +reach in any nation, considering the situation, the nature, and the peculiarities +of its territories, what are the exertions to be made by its government? +The subdivision of labour, and the invention and perfecting of machines. +These two great means of augmenting the energy of labour, advance in proportion +to the extent of the market, or, in other words, in proportion to the +number of exchanges which can be made, and to the ease and readiness with +which these can take place. Let the government, then, direct all its attention +to the enlargement of the market, by forming safe and convenient roads, by +the circulation of sterling coin, and by securing the faithful fulfilment of contracts; +all of which are indispensible measures, at the same time that, when +put in practice, they will never fail to attain the desired end. And the +nearer a government approaches to perfection in each of these three points, +the more certainly will it produce every possible increase of the national +market. The first of the three means is, without doubt, the most essential, +as no other expedient whatever can possibly supply its place.</p> + +<p>The gradual accumulation of capitals is a necessary consequence of the increased +productive powers of labour, and it becomes also a cause of still +farther increase in these powers; but, in proportion as this accumulation becomes +greater and greater, it serves to increase the extent of labour, inasmuch +as it multiplies the number of labourers, or the sum of national industry. +This increase, however, of the number of hands in the nation employed, +will always be regulated by the nature of the business to which the capitals +are dedicated.</p> + +<p>Under this second head of the increase of the products of labour, the +exertions of government are much more easy. In fact, it has only to refrain +from doing harm. It is only required of it, that it shall protect the natural +liberty of industry; that it shall leave open every channel into which, by its +own tendencies, industry may be carried; that government shall abandon it +to its own direction, and shall not attempt to point its efforts one way more +than another; for private interest, that infallible instinct which guides the +exertions of all industry, is infinitely better suited than any legislator to judge +of the direction which it will with most advantage follow. Let government, +then, renounce alike the system of prohibitions and of bounties; let it no +longer attempt to impede the efforts of industry by regulations, or to accelerate +her progress by rewards; let it leave in the most perfect freedom the +exertions of labour and the employment of capital; let its protecting influence +extend only to the removal of such obstacles as avarice or ignorance have +raised up to the unlimited liberty of industry and commerce;—then capitals +will naturally develope themselves, by their own movement, in those directions +which are at once most agreeable to the private interest of the capitalist, and +most favourable to the increase of the national wealth.</p> +<p><span class='pagenum'><a name="Page_xxiii" id="Page_xxiii">[Pg xxiii]</a></span></p> + +<h3>METHOD OF FACILITATING THE STUDY OF<br /> +DR. SMITH'S WORK.</h3> + +<p>Such are the results of the doctrine of Smith, and the fruits we are to reap +from his immortal work. The proofs of the principle upon which his opinions +are grounded, and the natural and easy manner in which his deductions flow +from it, give it an air of simplicity and truth, which render it no less admirable +than convincing. This simplicity, however, to be fully perceived, requires +much study and consideration; for it cannot be denied that the 'Wealth of +Nations' exhibits a striking instance of that defect for which English authors +have so often been blamed, viz. a want of method, and a neglect, in their +scientific works, of those divisions and arrangements which serve to assist the +memory of the reader, and to guide his understanding. The author seems to +have seized the pen at the moment when he was most elevated with the importance +of his subject, and with the extent of his discoveries. He begins, +by displaying before the eyes of his reader the innumerable wonders effected +by the division of labour; and with this magnificent and impressive picture, +he opens his course of instructions. He then goes back, to consider those +circumstances which give rise to or limit this division; and is led by his subject +to the definition of values—to the laws which regulate them, to the analysis +of their several elements, and to the relations subsisting between those of +different natures and origin; all of which are preliminary ideas, which ought +naturally to have been explained to the reader before exhibiting to him the complicated +instrument of the multiplication of wealth, or unveiling the prodigies +of the most powerful of its resources.</p> + +<p>On the other hand, he has often introduced long digressions, which interrupt +the thread of his discussion, and, in many cases, completely destroy +the connection of its several parts. Of this description is the digression</p> + +<div class="blockquot"><p>On the variations in the value of the precious metals during the four last centuries, with +a critical examination of the opinions that their value is decreasing—book 1, chap. xi.</p> + +<p>Upon banks of circulation and paper money—book 2, chap. ii.</p> + +<p>Upon banks of deposit, and particularly that of Amsterdam—book 4, chap. iii.</p> + +<p>Upon the advantage of seignorage in the coining of money—book 4, chap. vi.</p> + +<p>Upon the commerce of grain, and the laws regarding this trade—book 4, chap. v.</p></div> + +<p>These different treatises, although they are unquestionably the best that +have ever been written on the subjects to which they relate, are, however, so +introduced, as to distract the reader's attention—to make him lose sight of +the principal object of the work—and to lessen the general effect of it as a +whole.</p> + +<p>To remedy, as far as I am able, these inconveniencies, and to facilitate to +beginners the study of the doctrine of Smith, I have thought proper to point +out the order which appears to me most agreeable to the natural progress of +ideas, and, on this account, best calculated for the purpose of instruction.</p> + +<p>I would begin by remarking, that the whole doctrine of Smith, upon the +origin, multiplication, and distribution of wealth, is contained in his two first +books; and that the three others may be read separately, as so many detach<span class='pagenum'><a name="Page_xxiv" id="Page_xxiv">[Pg xxiv]</a></span>ed +treatises, which, no doubt, confirm and develope his opinions, but do not +by any means add to them.</p> + +<p>The third book is an historical and political discussion on the progress +which wealth would make in a country where labour and industry were left +free; and upon the different causes which have tended, in all the countries of +Europe, to reverse this progress.</p> + +<p>In the fourth book, the author has endeavoured to combat the various systems +of political economy which were popular previous to his time; and, in a +particular manner, that which is denominated the mercantile system, which +has exercised so strong an influence over the financial regulations of the European +governments, and particularly over those of England.</p> + +<p>In the fifth and last book, he considers the expenses of government; the +most equitable and convenient modes of providing for these expenses; and +lastly, public debts, and the influence they have over national prosperity.</p> + +<p>The three last books may be read and studied in the same order and arrangement +in which they were written, without any difficulty, by one who is +completely master of the general doctrine contained in the two first.</p> + +<p>I regard, then, the two first books, as a complete work, which I would divide +into three parts.</p> + +<p>The 1st relates to values in particular. It contains their definition; the +laws which regulate them; the analysis of the elements which constitute a +value, or enter into its composition; and the relations which values of different +origin bear to each other.</p> + +<p>The 2d part treats of the general mass of national wealth, which is here +divided into separate classes, according to its destination or employment.</p> + +<p>The 3d and last part explains the manner in which the growth and distribution +of national wealth takes place.</p> + + +<h4>PART FIRST.—OF VALUES IN PARTICULAR.</h4> + +<p>The essential quality which constitutes wealth, and without which it would +not be entitled to the name, is its <i>exchangeable value</i>.</p> + +<p>Exchangeable value differs from the value of utility—book 1, end of chap. iv.</p> + +<p>The relation existing between two exchangeable values, when expressed by +a value generally agreed upon, is denominated <i>price</i>.</p> + +<p>The value generally agreed on among civilized nations, is that of metals. +Motives to this preference. Origin of money—book 1, chap. iv. Relation +between money and the metal in the state of bullion—book 1, chap. v.</p> + +<p>The price in money, or <i>nominal</i> price of a thing, differs from its <i>real</i> price, +which is its valuation by the quantity of labour expended upon it, or which it +represents—ibid.</p> + +<p>Laws, according to which the price of wealth is naturally fixed; and those +accidental circumstances which occasion the actual to differ from the natural +price, and which gave rise to a distinction between the <i>natural</i> and the <i>market +price</i>—book 1, chap. vii.</p> + +<p>The price of a thing, in most cases, consists of three distinct elements—the +wages of the labour, the profit of the master who directs the labour, and +the rent of the ground that furnishes the materials on which it is erected. +There are, however, some descriptions of merchandize in which the rent forms +no part of the price; and others, in which the profit forms no part of it; but +none, in which it is not formed principally by the wages—book 1, chap. vi.</p> + +<p>Of <i>wages</i>. Laws, according to which the natural rate of wages is fixed; +accidental circumstances which cause them to vary, during a short period, +from that natural rate—book 1, chap. viii.<span class='pagenum'><a name="Page_xxv" id="Page_xxv">[Pg xxv]</a></span></p> + +<p>Of the <i>profit</i> of capitals. Laws, by which the natural right of profit is +fixed; accidental circumstances which, for a long while, increase or diminish +it beyond that rate—book 1, chap. ix.</p> + +<p>Labour and capitals tend naturally to diffuse themselves through every +species of employment; and, as certain employments are, by their nature, accompanied +with inconveniencies and difficulties which do not occur in others, +while these, on the contrary, offer some real or imaginary advantages which +are peculiar to themselves; wages and profits should rise and fall in proportion +to these advantages and disadvantages; thus forming a complete equilibrium +between the various kinds of employment. The arbitrary and oppressive +policy of Europe, in many instances, opposes the establishment of this +equilibrium, which is conformable to the order of nature—book 1, chap. x.</p> + +<p>Of the <i>rent</i> of the ground. The nature of rent: the manner in which it +enters into the price of wealth; and according to what principles it in some +cases forms an integral part of that price, while in others it does not—book 1, +chap. xi.</p> + +<div class="listquot"> +<p>Division of the rude produce of the earth into two great classes:</p> + +<p class="hangidt">1. That produce which is always necessarily disposed of in such a way as to bring a +rent to the landed proprietor.</p> + +<p class="hangidt">2. That which, according to circumstances, may be disposed of so as to bring, or so as +not to bring, a rent.</p> +</div> + +<p>The produce of the first description is derived from the ground appropriated +to furnishing subsistence for man, or for those animals which he uses as +food. The value of the produce of the ground cultivated for the support of +man, determines the value of the produce of all other ground proper for this +species of culture. This general rule allows of some exceptions. Causes of +these exceptions.</p> + +<p>The produce of the second class consists of the materials of clothing, lodging, +fuel, and the ornaments of dress and furniture. The value of this species +of produce depends on that of the first description. Some circumstances +render it possible that the produce of the second kind may be disposed of +in such a way as to furnish a rent to the landed proprietor. Principles +which regulate the proportion of the price of these products, which is formed +by the rent—book 1, chap. xi.</p> + +<p>Relation between the respective values of the produce of the first class, and +those of the produce of the second. Variations which may take place in +this relation, and the causes of such variations—ibid.</p> + +<p>Relation existing between the values of the two descriptions of rude produce +above mentioned, and the values of the produce of manufacture. Variations +which may occur in this relation—ibid.</p> + +<p>Certain kinds of rude produce, procured from very different sources, are, +however, intended for the same kind of consumption; and hence it happens, +the value of one determines and limits that of another—ibid.</p> + +<p>The relations between values of different natures vary according to the state +of society. This state is <i>improving</i>, <i>declining</i>, or <i>stationary</i>; that is to say, +society is either increasing in wealth, or falling into poverty, or remaining in +the same unchanged state of opulence.</p> + +<div class="listquot"> +<p>Of the effects of these different states of society,</p> + +<p class="hangidt">Upon the price of wages—book 1, chap. viii.</p> + +<p class="hangidt">Upon the rate of profit—book 1, chap. ix.</p> + +<p class="hangidt">Upon the value of the rude produce of the earth, and on that of the produce of manufacture—book +1, chap. xi.</p> +<p><span class='pagenum'><a name="Page_xxvi" id="Page_xxvi">[Pg xxvi]</a></span></p> +<p class="hangidt">Difference, in this respect, between the various kinds of rude produce, viz. 1. Those +which the industry of man cannot multiply: 2. Those which his industry can always +multiply in proportion to the demand: 3. Those over which human exertions +have only an uncertain or limited influence—ibid.</p> +</div> + + +<h4>PART SECOND.—OF STOCK AND ITS EMPLOYMENT.</h4> + +<div class="listquot"> +<p>Wealth, accumulated in the possession of an individual, is of two descriptions, +according to its destination or employment:</p> + +<p class="hangidt">1. That reserved for immediate consumption.</p> +<p class="hangidt">2. That employed as capital, for the production of a revenue—book 2, chap. i.</p> +</div> + +<div class="listquot"> +<p>Capital is also of two kinds:</p> + +<p class="hangidt">1. Fixed capital, which produces a revenue and still remains in the same hands</p> + +<p class="hangidt">2. Circulating capital, which yields no revenue unless it be employed in trade—book 2 +chap. i.</p> +</div> + +<div class="listquot"> +<p>The whole accumulated wealth of any community may be divided into +three parts:</p> + +<p class="hangidt">1. The fund appropriated to the immediate consumption of the proprietors of wealth.</p> +<p class="hangidt">2. The fixed capital of the community.</p> +<p class="hangidt">3. Its circulating capital.</p> +</div> + +<div class="listquot"> +<p>The <i>fixed capital</i> of the society consists,</p> + +<p class="hangidt">1. Of all machines and instruments of labour;</p> + +<p class="hangidt">2. Of all buildings and edifices erected for the purposes of industry;</p> + +<p class="hangidt">3. Of every kind of agricultural improvement which can tend to render the soil more +productive;</p> + +<p class="hangidt">4. Of the talents and skill which certain members of the community have acquired by +time and expense.</p> +</div> + +<div class="listquot"> +<p>The <i>circulating capital</i> of a community consists,</p> + +<p class="hangidt">1. In the money in circulation;</p> + +<p class="hangidt">2. In the stock of provisions in the hands both of the producers and of the merchants, +and from the sale of which they expect to derive a profit;</p> + +<p class="hangidt">3. In the materials of lodging, clothing, dress, and ornament, more or less manufactured, +which are in the hands of those who are employed in rendering them fit for +use and consumption;</p> + +<p class="hangidt">4. In the goods more completely fit for consumption, and preserved in warehouses and +shops, by merchants who propose to sell them with a profit—book 2, chap. i.</p> +</div> + + +<p>Of the relation existing between the employment of these two kinds of +capital—ibid.</p> + +<p>Of the mode in which the capital withdrawn from circulation is disposed of—ibid.</p> + +<div class="listquot"> +<p>The sources which continually renew the circulating capital, as soon as it +enters into the fixed capital, or the stock for immediate consumption, are,</p> + +<p class="hangidt">1. Lands;</p> +<p class="hangidt">2. Mines and quarries;</p> +<p class="hangidt">3. Fisheries—ibid.</p> +</div> + +<p>Of the purposes accomplished by circulating coin—book 2, chap. ii; and +the expedients which may be resorted to, in order to attain these with less +expense, and fewer of those inconveniencies to which money is subjected—ibid.</p> + +<p>Of the stock lent at interest; and of those things which regulate the proportion +that this kind of stock bears to the whole existing stock of the community. +The quantity of stock which may be lent depends in no degree upon +the quantity of money in circulation—book 2, chap. iv.<span class='pagenum'><a name="Page_xxvii" id="Page_xxvii">[Pg xxvii]</a></span></p> + +<p>Of the principles which determine the rate of interest—ibid.</p> + +<p>There exists a necessary relation between this and the price of land—ibid.</p> + + +<h4>PART THIRD—OF THE MANNER IN WHICH THE MULTIPLICATION +AND DISTRIBUTION OF WEALTH TAKES PLACE.</h4> + +<p>Wealth uniformly increases in proportion to the augmentation which the +power producing it receives, whether that be in <i>energy</i> or in <i>extent</i>—book I. +introduction.</p> + +<div class="listquot"> +<p>Labour, in which this power increases in <i>energy</i>,</p> + +<p class="hangidt">1. By the division of the parts of the same work;</p> +<p class="hangidt">2. By the invention of such machines as abridge and facilitate labour—book I, chap. i.</p> +</div> + + +<div class="listquot"> +<p>The division of labour adds to its energy,</p> + +<p class="hangidt">1. By the skill which the workman in this way acquires;</p> +<p class="hangidt">2. By the saving of time—ibid.</p> +</div> + +<p>The invention of machines is itself an effect of the division of labour—ibid.</p> + +<p>The natural disposition of mankind to exchange with each other the different +productions of their respective labours and talents, is the principle +which has given birth to the division of labour—book I, chap. ii.</p> + +<p>The division of labour must of course be limited by the extent of the market; +therefore, whatever tends to widen the market, facilitates the progress of +a nation towards opulence—book I, chap. iii.</p> + +<div class="listquot"> +<p>Labour gains in <i>extent</i>,</p> + +<p class="hangidt">1. In proportion to the accumulation of capital;</p> +<p class="hangidt">2. In proportion to the manner in which these are employed—book I, introduction.</p> +</div> + + +<p>The accumulation of capitals is hastened by the increase of the proportion +existing between the productive and unproductive consumers—book 2, chap. +iii.</p> + +<p>The proportion between these two classes of consumers is determined by +the proportion existing between that part of the annual produce destined to +the replacement of capital, and that destined for the purpose of revenue—ibid.</p> + +<p>The proportion between that part of the annual produce which goes to form +capital, and that which goes to form revenue, is great in a rich country, and +small in a poor one—ibid.</p> + +<p>In a wealthy country, the rent of land, taken absolutely, is much greater +than in a poor country; but, taken in relation to the capital employed, it is +much less—book 2, chap. iii.</p> + +<p>In a wealthy country, the whole profits of its capital are infinitely greater +than in one that is poor; although a given quantity of capital will, in a country +of the latter description, produce profits much greater than in an opulent +one—ibid.</p> + +<p>It is industry that furnishes the produce; but it is economy that places in +the capital that part of it which would otherwise have become revenue—ibid.</p> + +<p>The economy of individuals arises from a principle which is universally diffused, +and one that is continually in action; the desire of ameliorating their +condition. This principle supports the existence and increase of national +wealth, in spite of the prodigality of some individuals; and even triumphs +over the profusion and errors of governments—ibid.<span class='pagenum'><a name="Page_xxviii" id="Page_xxviii">[Pg xxviii]</a></span></p> + +<p>Of the different modes of spending money, some are more favourable than +others to the increase of national wealth—ibid.</p> + +<p>Those branches of employment which require a capital, never fail to call +forth more or less labour; and thus contribute, in a greater or less degree, to +increase the extent of national labour.</p> + +<div class="listquot"> +<p>Capital can be employed only in four ways:</p> + +<p class="hangidt">1. In cultivating and improving the earth, or, in other words, multiplying its rude produce;</p> + +<p class="hangidt">2. In supporting manufactures;</p> + +<p class="hangidt">3. In buying by the gross, to sell in the same manner;</p> + +<p class="hangidt">4. In buying by the gross, to sell by retail.</p> +</div> + + +<p>These four modes of employing capital are equally necessary to, and serve +mutually to support, each other. The first supports, beyond all comparison, +the greatest number of productive hands; the second occupies more than the +two remaining; and the fourth the fewest of any.</p> + +<p>Capital may be employed, according to the third mode, in three different +ways; each contributing in a very different degree to the support and encouragement +of national industry.</p> + +<p>When capital is employed in exchanging one description of the produce of +national industry for another, it then supports as great a portion of industry +as can be done by any capital employed in commerce.</p> + +<p>When it is employed in exchanging the produce of national for that of foreign +industry, for the purposes of home consumption, half of it goes to the +support of foreign industry; by which means, it is only of half that service to +the industry of the nation which it would have been had it been employed +another way.</p> + +<p>Lastly, when it is employed in exchanging one description of the produce of +foreign industry for another, or in what is termed the <i>carrying trade</i>, it then +serves wholly for the support and encouragement of the industry of the two +foreign nations, and adds only to the annual produce of the country the profits +of the merchant—book 2, chap. v.</p> + +<p>Self-interest, when left uncontrouled, will necessarily lead the proprietors +of capitals to prefer that species of employment which is most favourable to +national industry, because it is, at the same time, most profitable for themselves—ibid. +For, when capitals have been employed in a way different from +that suggested by the infallible instinct of self-interest, it has always been in +consequence of the peculiar circumstances of the European governments, and +of that influence which the vulgar prejudices of merchants have had over the +system of administration which these governments have adopted.</p> + +<p>The account of these circumstances, with the discussion of the errors of this +system, form the matter of the third and fourth books.</p> + +<hr style='width: 15%;' /> + +<p>Political Economy is, of all sciences, that which affords most room for +prejudices, and in which they are most liable to become deeply rooted. The +desire of improving our condition, that universal principle, which continually +acts upon every member of the community, is ever directing the thoughts of +each individual to the means of increasing his private fortune. But should +this individual ever chance to raise his views to the management of the public +money, he would naturally be led to reason from analogy, and apply to the +general interest of his country those principles which reflection and experience +have led him to regard as the best guides in the conduct of his own private<span class='pagenum'><a name="Page_xxix" id="Page_xxix">[Pg xxix]</a></span> +affairs. Thus, from attending to the fact, that money constitutes a part of +the productive stock in the fortune of an individual, and that his fortune increases +in proportion to the increase of this article, there arises that erroneous +opinion so generally received, that money is a constituent part of national +wealth, and that a country becomes rich, in proportion as it receives money +from those countries with which it has commercial connections.</p> + +<p>Merchants who have been accustomed to retire each night to their desks, to +count, with eagerness, the quantity of currency, or of good debts, which their +day's sale has produced, calculating their profits only by this result, and confident +that such a calculation has never deceived them, are naturally led to +think that the affairs of the nation must follow the same rule; and they have +been strengthened in this opinion by that unshaken confidence which a long +and never-failing experience, that has been the source of wealth and prosperity, +inspires. Hence those extravagant opinions respecting the advantages +and profits of foreign commerce, and the importance of money; hence those +absurd calculations that have been made regarding what is termed the balance +of trade, the thermometer of public prosperity; hence those systems of regulations, +and those oppressive monopolies, which are resorted to for the purpose +of making one side of the balance preponderate; hence, too, those +bloody and destructive wars, which have raged in both hemispheres, from the +period in which the road to the Indies, and to the new world, became familiar +to European nations.</p> + +<p>When we observe, that the many bloody wars that have been waged in the +different parts of the world for these two last centuries, and even the present +war, in many points of view, have had, as their principal end, the maintenance +of some monopoly, contrary even to the interest of the nation armed to protect +it; we shall feel the full importance of those benefits which the illustrious +author of the 'Wealth of Nations' has endeavoured to confer upon mankind, +by victoriously combating such strong and baneful prejudices. But we cannot +help deeply lamenting, to see how slowly, and with what difficulty, reason +in all its strength, and truth in all its clearness, regain the possession of these +territories which error and passion have so rapidly overrun.</p> + +<p>The prejudices so successfully attacked by Dr. Smith, appear again and +again, with undiminished assurance, in the tribunals of legislature, in the councils +of administration, in the cabinets of ministry, and in the writings of politicians. +They still talk of the importance of foreign and colonial commerce; +they still attempt to determine the balance of trade; they renew all the reveries +of political arithmetic, as if these questions had not been determined +by Smith, in a way which renders them no longer capable of controversy.</p> + +<p>It was in the midst of a country, the most deeply imbued with mercantile +prejudices; the most completely subjected to its prohibitory policy, that +Dr. Smith sapped the foundations of this absurd and tyrannical system; it +was at the very moment when England, in alarm, saw, with terror, the possibility +of a separation from her American colonies: it was then that he derided +the universal fear, and proudly prophesied the success of the colonists, and their +approaching independence; and that he confidently announced, what experience +has since completely affirmed, the happy consequences which this separation +and this independence, so much dreaded, would produce upon the prosperity, +both of Great Britain and her colonies—book 4, chap. vii. part 3.</p> + +<p>The wealth of communities is so intimately connected with their civil and +political existence, that the author has been drawn by his subject into numerous +other discussions, which seem more or less removed from it; and in +which we discover the same sagacity of observation, the same depth of research, +and the same force of reasoning.</p> + +<p>The advantages of a complete and permanent freedom in the corn trade<span class='pagenum'><a name="Page_xxx" id="Page_xxx">[Pg xxx]</a></span> +have never been better shown; and they have been proved by Dr. Smith, to +arise from that fruitful source of wealth, the division of labour—book 4, chap. +v.</p> + +<p>The national defence and public education, two objects of very high importance, +have also been discussed at length by our author.</p> + +<p>He proves, that, in conformity to that desire to better our condition, by +which all men are directed, and upon which the author has founded his whole +doctrine, the teacher, whose wages are a fixed salary, will have no other +end than to spare himself every trouble, and dedicate as little attention as +possible to his pupils; while he that is paid in proportion to his labour, will +naturally endeavour, by every means in his power, to increase his success, at +the same time that he confers a great advantage on his scholars and on society. +He confirms his theoretical opinions by incontestible examples—-book 5, chap. +i. part 3.</p> + +<p>The superiority of regular troops over national militia is proved in theory, +by the division of labour; and in practice, by the most remarkable facts in +history—book 5, chap. i, part 1.</p> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_1" id="Page_1">[Pg 1]</a></span></p> + +<h5>AN</h5> +<h3>INQUIRY</h3> +<h5>INTO</h5> +<h4>THE NATURE AND CAUSES</h4> +<h5>OF THE</h5> +<h2>WEALTH OF NATIONS.</h2> + +<hr style="width: 15%;" /> + +<h4>INTRODUCTION AND PLAN OF THE WORK.</h4> + + +<p>The annual labour of every nation is the +fund which originally supplies it with all the +necessaries and conveniencies of life which it +annually consumes, and which consist always +either in the immediate produce of that labour, +or in what is purchased with that produce from +other nations.</p> + +<p>According, therefore, as this produce, or +what is purchased with it, bears a greater or +smaller proportion to the number of those who +are to consume it, the nation will be better or +worse supplied with all the necessaries and +conveniencies for which it has occasion.</p> + +<p>But this proportion must in every nation +be regulated by two different circumstances: +first, by the skill, dexterity, and judgment +with which its labour is generally applied; +and, secondly, by the proportion between the +number of those who are employed in useful +labour, and that of those who are not so employed. +Whatever be the soil, climate, or extent +of territory of any particular nation, the +abundance or scantiness of its annual supply +must, in that particular situation, depend upon +those two circumstances.</p> + +<p>The abundance or scantiness of this supply, +too, seems to depend more upon the former of +those two circumstances than upon the latter. +Among the savage nations of hunters and fishers, +every individual who is able to work is +more or less employed in useful labour, and +endeavours to provide, as well as he can, the +necessaries and conveniencies of life, for himself, +and such of his family or tribe as are +either too old, or too young, or too infirm, to +go a-hunting and fishing. Such nations, however, +are so miserably poor, that, from mere +want, they are frequently reduced, or at least +think themselves reduced, to the necessity +sometimes of directly destroying, and sometimes +of abandoning their infants, their old +people, and those afflicted with lingering diseases, +to perish with hunger, or to be devoured +by wild beasts. Among civilized and thriving +nations, on the contrary, though a great +number of people do not labour at all, many +of whom consume the produce of ten times, +frequently of a hundred times, more labour +than the greater part of those who work; yet +the produce of the whole labour of the society +is so great, that all are often abundantly supplied; +and a workman, even of the lowest and +poorest order, if he is frugal and industrious, +may enjoy a greater share of the necessaries +and conveniencies of life than it is possible for +any savage to acquire.</p> + +<p>The causes of this improvement in the productive +powers of labour, and the order according +to which its produce is naturally distributed +among the different ranks and conditions +of men in the society, make the subject +of the first book of this Inquiry.</p> + +<p>Whatever be the actual state of the skill, +dexterity, and judgment, with which labour is +applied in any nation, the abundance or scantiness +of its annual supply must depend, during +the continuance of that state, upon the +proportion between the number of those who +are annually employed in useful labour, and +that of those who are not so employed. The<span class='pagenum'><a name="Page_2" id="Page_2">[Pg 2]</a></span> +number of useful and productive labourers, it +will hereafter appear, is everywhere in proportion +to the quantity of capital stock which is +employed in setting them to work, and to the +particular way in which it is so employed. +The second book, therefore, treats of the nature +of capital stock, of the manner in which +it is gradually accumulated, and of the different +quantities of labour which it puts into motion, +according to the different ways in which +it is employed.</p> + +<p>Nations tolerably well advanced as to skill, +dexterity, and judgment, in the application of +labour, have followed very different plans in +the general conduct or direction of it; and +those plans have not all been equally favourable +to the greatness of its produce. The policy +of some nations has given extraordinary +encouragement to the industry of the country; +that of others to the industry of towns. Scarce +any nation has dealt equally and impartially +with every sort of industry. Since the downfall +of the Roman empire, the policy of Europe +has been more favourable to arts, manufactures, +and commerce, the industry of towns, +than to agriculture, the industry of the country. +The circumstances which seem to have +introduced and established this policy are explained +in the third book.</p> + +<p>Though those different plans were, perhaps, +first introduced by the private interests and +prejudices of particular orders of men, without +any regard to, or foresight of, their consequences +upon the general welfare of the society; +yet they have given occasion to very +different theories of political economy; of +which some magnify the importance of that +industry which is carried on in towns, others +of that which is carried on in the country. +Those theories have had a considerable influence, +not only upon the opinions of men of +learning, but upon the public conduct of +princes and sovereign states. I have endeavoured, +in the fourth book, to explain as fully +and distinctly as I can those different theories, +and the principal effects which they have produced +in different ages and nations.</p> + +<p>To explain in what has consisted the revenue +of the great body of the people, or what +has been the nature of those funds, which, in +different ages and nations, have supplied their +annual consumption, is the object of these +four first books. The fifth and last book +treats of the revenue of the sovereign, or commonwealth. +In this book I have endeavoured +to shew, first, what are the necessary expenses +of the sovereign, or commonwealth; which of +those expenses ought to be defrayed by the +general contribution of the whole society, and +which of them, by that of some particular part +only, or of some particular members of it: +secondly, what are the different methods in +which the whole society may be made to contribute +towards defraying the expenses incumbent +on the whole society, and what are the +principal advantages and inconveniencies of +each of those methods; and, thirdly and lastly, +what are the reasons and causes which have +induced almost all modern governments to +mortgage some part of this revenue, or to +contract debts; and what have been the effects +of those debts upon the real wealth, the +annual produce of the land and labour of the +society.</p> + + + + +<hr style="width: 100%;" /> +<h2><a name="BOOK_I" id="BOOK_I"></a>BOOK I.</h2> + +<h4>OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, +AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY +DISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE.</h4> + + +<hr style="width: 15%;" /> +<h3>CHAP. I.</h3> + +<h4>OF THE DIVISION OF LABOUR.</h4> + + +<p>The greatest improvements in the productive +powers of labour, and the greater part of the +skill, dexterity, and judgment, with which it +is anywhere directed, or applied, seem to have +been the effects of the division of labour.</p> + +<p>The effects of the division of labour, in +the general business of society, will be more +easily understood, by considering in what manner +it operates in some particular manufactures. +It is commonly supposed to be carried +furthest in some very trifling ones; not +perhaps that it really is carried further in them +than in others of more importance: but in +those trifling manufactures which are destined +to supply the small wants of but a small number +of people, the whole number of workmen +must necessarily be small; and those employed +in every different branch of the work can of<span class='pagenum'><a name="Page_3" id="Page_3">[Pg 3]</a></span>ten +be collected into the same workhouse, and +placed at once under the view of the spectator. +In those great manufactures, on the contrary, +which are destined to supply the great wants +of the great body of the people, every different +branch of the work employs so great a +number of workmen, that it is impossible to +collect them all into the same workhouse. We +can seldom see more, at one time, than those +employed in one single branch. Though in +such manufactures, therefore, the work may +really be divided into a much greater number +of parts, than in those of a more trifling nature, +the division is not near so obvious, and +has accordingly been much less observed.</p> + +<p>To take an example, therefore, from a very +trifling manufacture, but one in which the division +of labour has been very often taken notice +of, the trade of a pin-maker: a workman +not educated to this business (which the division +of labour has rendered a distinct trade), +nor acquainted with the use of the machinery +employed in it (to the invention of which the +same division of labour has probably given +occasion), could scarce, perhaps, with his utmost +industry, make one pin in a day, and certainly +could not make twenty. But in the +way in which this business is now carried on, +not only the whole work is a peculiar trade, +but it is divided into a number of branches, +of which the greater part are likewise peculiar +trades. One man draws out the wire; another +straights it; a third cuts it; a fourth +points it; a fifth grinds it at the top for receiving +the head; to make the head requires +two or three distinct operations; to put it on +is a peculiar business; to whiten the pins is +another; it is even a trade by itself to put them +into the paper; and the important business of +making a pin is, in this manner, divided into +about eighteen distinct operations, which, in +some manufactories, are all performed by distinct +hands, though in others the same man will +sometimes perform two or three of them. I +have seen a small manufactory of this kind, +where ten men only were employed, and where +some of them consequently performed two or +three distinct operations. But though they +were very poor, and therefore but indifferently +accommodated with the necessary machinery, +they could, when they exerted themselves, +make among them about twelve pounds of +pins in a day. There are in a pound upwards +of four thousand pins of a middling size. +Those ten persons, therefore, could make among +them upwards of forty-eight thousand +pins in a day. Each person, therefore, making +a tenth part of forty-eight thousand pins, might +be considered as making four thousand eight +hundred pins in a day. But if they had all +wrought separately and independently, and +without any of them having been educated to +this peculiar business, they certainly could not +each of them have made twenty, perhaps not +one pin in a day; that is, certainly, not the +two hundred and fortieth, perhaps not the four +thousand eight hundredth, part of what they +are at present capable of performing, in consequence +of a proper division and combination +of their different operations.</p> + +<p>In every other art and manufacture, the effects +of the division of labour are similar to +what they are in this very trifling one, though, +in many of them, the labour can neither be so +much subdivided, nor reduced to so great a +simplicity of operation. The division of labour, +however, so far as it can be introduced, +occasions, in every art, a proportionable increase +of the productive powers of labour. +The separation of different trades and employments +from one another, seems to have taken +place in consequence of this advantage. This +separation, too, is generally carried furthest in +those countries which enjoy the highest degree +of industry and improvement; what is the +work of one man, in a rude state of society, +being generally that of several in an improved +one. In every improved society, the farmer +is generally nothing but a farmer; the manufacturer, +nothing but a manufacturer. The +labour, too, which is necessary to produce any +one complete manufacture, is almost always +divided among a great number of hands. How +many different trades are employed in each +branch of the linen and woollen manufactures, +from the growers of the flax and the wool, to +the bleachers and smoothers of the linen, or to +the dyers and dressers of the cloth! The nature +of agriculture, indeed, does not admit of +so many subdivisions of labour, nor of so complete +a separation of one business from another, +as manufactures. It is impossible to separate +so entirely the business of the grazier +from that of the corn-farmer, as the trade of +the carpenter is commonly separated from that +of the smith. The spinner is almost always +a distinct person from the weaver; but the +ploughman, the harrower, the sower of the +seed, and the reaper of the corn, are often the +same. The occasions for those different sorts +of labour returning with the different seasons +of the year, it is impossible that one man +should be constantly employed in any one of +them. This impossibility of making so complete +and entire a separation of all the different +branches of labour employed in agriculture, +is perhaps the reason why the improvement +of the productive powers of labour, in +this art, does not always keep pace with their +improvement in manufactures. The most opulent +nations, indeed, generally excel all their +neighbours in agriculture as well as in manufactures; +but they are commonly more distinguished +by their superiority in the latter +than in the former. Their lands are in general +better cultivated, and having more labour +and expense bestowed upon them, produce +more in proportion to the extent and natural +fertility of the ground. But this superiority +of produce is seldom much more than in pro<span class='pagenum'><a name="Page_4" id="Page_4">[Pg 4]</a></span>portion +to the superiority of labour and expense. +In agriculture, the labour of the rich +country is not always much more productive +than that of the poor; or, at least, it is never +so much more productive, as it commonly is +in manufactures. The corn of the rich country, +therefore, will not always, in the same +degree of goodness, come cheaper to market +than that of the poor. The corn of Poland, +in the same degree of goodness, is as cheap as +that of France, notwithstanding the superior +opulence and improvement of the latter country. +The corn of France is, in the corn-provinces, +fully as good, and in most years nearly +about the same price with the corn of England, +though, in opulence and improvement, +France in perhaps inferior to England. The +corn-lands of England, however, are better +cultivated than those of France, and the corn-lands +of France are said to be much better +cultivated than those of Poland. But though +the poor country, notwithstanding the inferiority +of its cultivation, can, in some measure, +rival the rich in the cheapness and goodness +of its corn, it can pretend to no such competition +in its manufactures, at least if those +manufactures suit the soil, climate, and situation, +of the rich country. The silks of France +are better and cheaper than those of England, +because the silk manufacture, at least under +the present high duties upon the importation +of raw silk, does not so well suit the climate +of England as that of France. But the hardware +and the coarse woollens of England are +beyond all comparison superior to those of +France, and much cheaper, too, in the same +degree of goodness. In Poland there are said +to be scarce any manufactures of any kind, a +few of those coarser household manufactures +excepted, without which no country can well +subsist.</p> + +<p>This great increase in the quantity of work, +which, in consequence of the division of labour, +the same number of people are capable +of performing, is owing to three different circumstances; +first, to the increase of dexterity +in every particular workman; secondly, to the +saving of the time which is commonly lost in +passing from one species of work to another; +and, lastly, to the invention of a great number +of machines which facilitate and abridge +labour, and enable one man to do the work +of many.</p> + +<p>First, the improvement of the dexterity of +the workmen, necessarily increases the quantity +of the work he can perform; and the division +of labour, by reducing every man's +business to some one simple operation, and +by making this operation the sole employment +of his life, necessarily increases very much the +dexterity of the workman. A common smith, +who, though accustomed to handle the hammer, +has never been used to make nails, if, +upon some particular occasion, he is obliged +to attempt it, will scarce, I am assured, be +able to make above two or three hundred +nails in a day, and those, too, very bad ones. +A smith who has been accustomed to make +nails, but whose sole or principal business has +not been that of a nailer, can seldom, with his +utmost diligence, make more than eight hundred +or a thousand nails in a day. I have +seen several boys, under twenty years of age, +who had never exercised any other trade but +that of making nails, and who, when they exerted +themselves, could make, each of them, +upwards of two thousand three hundred nails +in a day. The making of a nail, however, is +by no means one of the simplest operations. +The same person blows the bellows, stirs or +mends the fire as there is occasion, heats the +iron, and forges every part of the nail: in +forging the head, too, he in obliged to change +his tools. The different operations into which +the making of a pin, or of a metal button, is +subdivided, are all of them much more simple, +and the dexterity of the person, of whose life +it has been the sole business to perform them, +is usually much greater. The rapidity with +which some of the operations of those manufactures +are performed, exceeds what the human +hand could, by those who had never seen +them, be supposed capable of acquiring.</p> + +<p>Secondly, The advantage which is gained +by saving the time commonly lost in passing +from one sort of work to another, is much +greater than we should at first view be apt to +imagine it. It is impossible to pass very +quickly from one kind of work to another, +that is carried on in a different place, and +with quite different tools. A country weaver, +who cultivates a small farm, must loose a good +deal of time in passing from his loom to the +field, and from the field to his loom. When +the two trades can be carried on in the same +workhouse, the loss of time is, no doubt, +much less. It is, even in this case, however, +very considerable. A man commonly saunters +a little in turning his hand from one sort +of employment to another. When he first +begins the new work, he is seldom very keen +and hearty; his mind, as they say, does not +go to it, and for some time he rather trifles +than applies to good purpose. The habit of +sauntering, and of indolent careless application, +which is naturally, or rather necessarily, +acquired by every country workman who is +obliged to change his work and his tools every +half hour, and to apply his hand in twenty +different ways almost every day of his life, +renders him almost always slothful and lazy, +and incapable of any vigorous application, +even on the most pressing occasions. Independent, +therefore, of his deficiency in point +of dexterity, this cause alone must always reduce +considerably the quantity of work which +he is capable of performing.</p> + +<p>Thirdly, and lastly, everybody must be sensible +how much labour is facilitated and abridged +by the application of proper machin<span class='pagenum'><a name="Page_5" id="Page_5">[Pg 5]</a></span>ery. +It is unnecessary to give any example. +I shall only observe, therefore, that the invention +of all those machines by which labour is +to much facilitated and abridged, seems to +have been originally owing to the division of +labour. Men are much more likely to discover +easier and readier methods of attaining +any object, when the whole attention of their +minds is directed towards that single object, +than when it is dissipated among a great variety +of things. But, in consequence of the +division of labour, the whole of every man's +attention comes naturally to be directed towards +some one very simple object. It is +naturally to be expected, therefore, that some +one or other of those who are employed in +each particular branch of labour should soon +find out easier and readier methods of performing +their own particular work, wherever +the nature of it admits of such improvement. +A great part of the machines made use of in +those manufactures in which labour is most +subdivided, were originally the inventions of +common workmen, who, being each of them +employed in some very simple operation, naturally +turned their thoughts towards finding +out easier and readier methods of performing +it. Whoever has been much accustomed to +visit such manufactures, must frequently have +been shewn very pretty machines, which were +the inventions of such workmen, in order to +facilitate and quicken their own particular +part of the work. In the first fire engines, a +boy was constantly employed to open and +shut alternately the communication between +the boiler and the cylinder, according as the +piston either ascended or descended. One of +those boys, who loved to play with his companions, +observed that, by tying a string from +the handle of the valve which opened this +communication to another part of the machine, +the valve would open and shut without +his assistance, and leave him at liberty to divert +himself with his play-fellows. One of +the greatest improvements that has been made +upon this machine, since it was first invented, +was in this manner the discovery of a boy +who wanted to save his own labour.</p> + +<p>All the improvements in machinery, however, +have by no means been the inventions +of those who had occasion to use the machines. +Many improvements have been made by the +ingenuity of the makers of the machines, +when to make them became the business of a +peculiar trade; and some by that of those +who are called philosophers, or men of speculation, +whose trade it is not to do any thing, +but to observe every thing, and who, upon +that account, are often capable of combining +together the powers of the most distant and +dissimilar objects. In the progress of society, +philosophy or speculation becomes, like every +other employment, the principal or sole trade +and occupation of a particular class of citizens. +Like every other employment, too, it +is subdivided into a great number of different +branches, each of which affords occupation to +a peculiar tribe or class of philosophers; and +this subdivision of employment in philosophy, +as well as in every other business, improves +dexterity, and saves time. Each individual +becomes more expert in his own peculiar +branch, more work is done upon the whole, +and the quantity of science is considerably increased +by it.</p> + +<p>It is the great multiplication of the productions +of all the different arts, in consequence +of the division of labour, which occasions, in +a well-governed society, that universal opulence +which extends itself to the lowest ranks +of the people. Every workman has a great +quantity of his own work to dispose of beyond +what he himself has occasion for; and every +other workman being exactly in the same situation, +he is enabled to exchange a great +quantity of his own goods for a great quantity +or, what comes to the same thing, for the price +of a great quantity of theirs. He supplies +them abundantly with what they have occasion +for, and they accommodate him as amply with +what he has occasion for, and a general plenty +diffuses itself through all the different ranks +of the society.</p> + +<p>Observe the accommodation of the most +common artificer or day-labourer in a civilized +and thriving country, and you will perceive +that the number of people, of whose industry +a part, though but a small part, has been employed +in procuring him this accommodation, +exceeds all computation. The woollen coat, +for example, which covers the day-labourer, +as coarse and rough as it may appear, is the +produce of the joint labour of a great multitude +of workmen. The shepherd, the sorter +of the wool, the wool-comber or carder, the +dyer, the scribbler, the spinner, the weaver, +the fuller, the dresser, with many others, must +all join their different arts in order to complete +even this homely production. How +many merchants and carriers, besides, must +have been employed in transporting the materials +from some of those workmen to others +who often live in a very distant part of the +country? How much commerce and navigation +in particular, how many ship-builders, +sailors, sail-makers, rope-makers, must have +been employed in order to bring together the +different drugs made use of by the dyer, which +often come from the remotest corners of the +world? What a variety of labour, too, is necessary +in order to produce the tools of the +meanest of those workmen! To say nothing +of such complicated machines as the ship of +the sailor, the mill of the fuller, or even the +loom of the weaver, let us consider only what +a variety of labour is requisite in order to +form that very simple machine, the shears with +which the shepherd clips the wool. The miner, +the builder of the furnace for smelting +the ore, the feller of the timber, the burner of<span class='pagenum'><a name="Page_6" id="Page_6">[Pg 6]</a></span> +the charcoal to be made use of in the smelting-house, +the brickmaker, the bricklayer, the +workmen who attend the furnace, the millwright, +the forger, the smith, must all of them +join their different arts in order to produce +them. Were we to examine, in the same +manner, all the different parts of his dress and +household furniture, the coarse linen shirt +which he wears next his skin, the shoes which +cover his feet, the bed which he lies on, and +all the different parts which compose it, the +kitchen-grate at which he prepares his victuals, +the coals which he makes use of for that purpose, +dug from the bowels of the earth, and +brought to him, perhaps, by a long sea and a +long land-carriage, all the other utensils of his +kitchen, all the furniture of his table, the +knives and forks, the earthen or pewter plates +upon which he serves up and divides his +victuals, the different hands employed in preparing +his bread and his beer, the glass window +which lets in the heat and the light, and +keeps out the wind and the rain, with all the +knowledge and art requisite for preparing that +beautiful and happy invention, without which +these northern parts of the world could scarce +have afforded a very comfortable habitation, +together with the tools of all the different +workmen employed in producing those different +conveniencies; if we examine, I say, all +these things, and consider what a variety of +labour is employed about each of them, we +shall be sensible that, without the assistance +and co-operation of many thousands, the very +meanest person in a civilized country could +not be provided, even according to, what we +very falsely imagine, the easy and simple manner +in which he is commonly accommodated. +Compared, indeed, with the more extravagant +luxury of the great, his accommodation must +no doubt appear extremely simple and easy; +and yet it may be true, perhaps, that the accommodation +of an European prince does not +always so much exceed that of an industrious +and frugal peasant, as the accommodation of +the latter exceeds that of many an African +king, the absolute masters of the lives and +liberties of ten thousand naked savages.</p> + + +<hr style="width: 15%;" /> +<h3>CHAP. II.</h3> + +<h4>OF THE PRINCIPLE WHICH GIVES OCCASION TO +THE DIVISION OF LABOUR.</h4> + + +<p>This division of labour, from which so many +advantages are derived, is not originally the +effect of any human wisdom, which foresees +and intends that general opulence to which it +gives occasion. It is the necessary, though +very slow and gradual, consequence of a certain +propensity in human nature, which has in +view no such extensive utility; the propensity +to truck, barter, and exchange one thing for +another.</p> + +<p>Whether this propensity be one of these original +principles in human nature, of which no +further account can be given, or whether, as +seems more probable, it be the necessary consequence +of the faculties of reason and speech, +it belongs not to our present subject to inquire. +It is common to all men, and to be +found in no other race of animals, which seem +to know neither this nor any other species of +contracts. Two greyhounds, in running down +the same hare, have sometimes the appearance +of acting in some sort of concert. Each turns +her towards his companion, or endeavours to +intercept her when his companion turns her +towards himself. This, however, is not the +effect of any contract, but of the accidental +concurrence of their passions in the same object +at that particular time. Nobody ever saw +a dog make a fair and deliberate exchange of +one bone for another with another dog. Nobody +ever saw one animal, by its gestures and +natural cries signify to another, this is mine, +that yours; I am willing to give this for that. +When an animal wants to obtain something +either of a man, or of another animal, it has +no other means of persuasion, but to gain the +favour of those whose service it requires. A +puppy fawns upon its dam, and a spaniel endeavours, +by a thousand attractions, to engage +the attention of its master who is at dinner, +when it wants to be fed by him. Man sometimes +uses the same arts with his brethren, +and when he has no other means of engaging +them to act according to his inclinations, endeavours +by every servile and fawning attention +to obtain their good will. He has not +time, however, to do this upon every occasion. +In civilized society he stands at all times in +need of the co-operation and assistance of +great multitudes, while his whole life is scarce +sufficient to gain the friendship of a few persons. +In almost every other race of animals, +each individual, when it is grown up to maturity, +is entirely independent, and in its natural +state has occasion for the assistance of no +other living creature. But man has almost +constant occasion for the help of his brethren, +and it is in vain for him to expect it from their +benevolence only. He will be more likely to +prevail if he can interest their self-love in his +favour, and shew them that it is for their own +advantage to do for him what he requires of +them. Whoever offers to another a bargain +of any kind, proposes to do this. Give me +that which I want, and you shall have this +which you want, is the meaning of every +such offer; and it is in this manner that +we obtain from one another the far greater +part of those good offices which we stand +in need of. It is not from the benevolence +of the butcher, the brewer, or the baker +that we expect our dinner, but from their re<span class='pagenum'><a name="Page_7" id="Page_7">[Pg 7]</a></span>gard +to their own interest. We address ourselves, +not to their humanity, but to their self-love, +and never talk to them of our own necessities, +but of their advantages. Nobody +but a beggar chooses to depend chiefly upon +the benevolence of his fellow-citizens. Even +a beggar does not depend upon it entirely. +The charity of well-disposed people, indeed, +supplies him with the whole fund of his subsistence. +But though this principle ultimately +provides him with all the necessaries of +life which he has occasion for, it neither does +nor can provide him with them as he has occasion +for them. The greater part of his occasional +wants are supplied in the same manner +as those of other people, by treaty, by barter, +and by purchase. With the money which +one man gives him he purchases food. The +old clothes which another bestows upon him +he exchanges for other clothes which suit him +better, or for lodging, or for food, or for +money, with which he can buy either food, +clothes, or lodging, as he has occasion.</p> + +<p>As it is by treaty, by barter, and by purchase, +that we obtain from one another the +greater part of those mutual good offices which +we stand in need of, so it is this same trucking +disposition which originally gives occasion to +the division of labour. In a tribe of hunters +or shepherds, a particular person makes bows +and arrows, for example, with more readiness +and dexterity than any other. He frequently +exchanges them for cattle or for venison, with +his companions; and he finds at last that he +can, in this manner, get more cattle and venison, +than if he himself went to the field to +catch them. From a regard to his own interest, +therefore, the making of bows and +arrows grows to be his chief business, and he +becomes a sort of armourer. Another excels +in making the frames and covers of their little +huts or moveable houses. He is accustomed +to be of use in this way to his neighbours, +who reward him in the same manner with +cattle and with venison, till at last he finds it +his interest to dedicate himself entirely to this +employment, and to become a sort of house-carpenter. +In the same manner a third becomes +a smith or a brazier; a fourth, a tanner +or dresser of hides or skins, the principal +part of the clothing of savages. And thus +the certainty of being able to exchange all +that surplus part of the produce of his own labour, +which is over and above his own consumption, +for such parts of the produce of +other men's labour as he may have occasion +for, encourages every man to apply himself to +a particular occupation, and to cultivate and +bring to perfection whatever talent of genius +he may possess for that particular species of +business.</p> + +<p>The difference of natural talents in different +men, is, in reality, much less than we are +aware of; and the very different genius which +appears to distinguish men of different professions, +when grown up to maturity, is not +upon many occasions so much the cause, as +the effect of the division of labour. The +difference between the most dissimilar characters, +between a philosopher and a common +street porter, for example, seems to arise not +so much from nature, as from habit, custom, +and education. When they came into the +world, and for the first six or eight years of +their existence, they were, perhaps, very much +alike, and neither their parents nor playfellows +could perceive any remarkable difference. +About that age, or soon after, they come to +be employed in very different occupations. +The difference of talents comes then to be +taken notice of, and widens by degrees, till at +last the vanity of the philosopher is willing to +acknowledge scarce any resemblance. But +without the disposition to truck, barter, and +exchange, every man must have procured to +himself every necessary and conveniency of +life which he wanted. All must have had +the same duties to perform, and the same +work to do, and there could have been no +such difference of employment as could alone +give occasion to any great difference of talents.</p> + +<p>As it is this disposition which forms that +difference of talents, so remarkable among +men of different professions, so it is this same +disposition which renders that difference useful. +Many tribes of animals, acknowledged +to be all of the same species, derive from nature +a much more remarkable distinction of +genius, than what, antecedent to custom and +education, appears to take place among men. +By nature a philosopher is not in genius and +disposition half so different from a street porter, +as a mastiff is from a grey-hound, or a +grey-hound from a spaniel, or this last from a +shepherd's dog. Those different tribes of animals, +however, though all of the same species, +are of scarce any use to one another. The +strength of the mastiff is not in the least supported +either by the swiftness of the grey-hound, +or by the sagacity of the spaniel, or by +the docility of the shepherd's dog. The effects +of those different geniuses and talents, for +want of the power or disposition to barter and +exchange, cannot be brought into a common +stock, and do not in the least contribute to the +better accommodation and conveniency of the +species. Each animal is still obliged to support +and defend itself, separately and independently, +and derives no sort of advantage +from that variety of talents with which nature +has distinguished its fellows. Among men, +on the contrary, the most dissimilar geniuses +are of use to one another; the different produces +of their respective talents, by the general +disposition to truck, barter, and exchange, +being brought, as it were, into a common +stock, where every man may purchase whatever +part of the produce of other men's talents +he has occasion for.<span class='pagenum'><a name="Page_8" id="Page_8">[Pg 8]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. III.</h3> + +<h4>THAT THE DIVISION OF LABOUR IS LIMITED +BY THE EXTENT OF THE MARKET.</h4> + + +<p>As it is the power of exchanging that gives +occasion to the division of labour, so the extent +of this division must always be limited by +the extent of that power, or, in other words, +by the extent of the market. When the market +is very small, no person can have any encouragement +to dedicate himself entirely to +one employment, for want of the power to exchange +all that surplus part of the produce of +his own labour, which is over and above his +own consumption, for such parts of the produce +of other men's labour as he has occasion +for.</p> + +<p>There are some sorts of industry, even of +the lowest kind, which can be carried on nowhere +but in a great town. A porter, for example, +can find employment and subsistence +in no other place. A village is by much too +narrow a sphere for him; even an ordinary +market-town is scarce large enough to afford +him constant occupation. In the lone houses +and very small villages which are scattered +about in so desert a country as the highlands +of Scotland, every farmer must be butcher, +baker, and brewer, for his own family. In +such situations we can scarce expect to find +even a smith, a carpenter, or a mason, within +less than twenty miles of another of the same +trade. The scattered families that live at +eight or ten miles distance from the nearest +of them, must learn to perform themselves a +great number of little pieces of work, for +which, in more populous countries, they +would call in the assistance of these workmen. +Country workmen are almost everywhere +obliged to apply themselves to all the +different branches of industry that have so +much affinity to one another as to be employed +about the same sort of materials. A country +carpenter deals in every sort of work that +is made of wood; a country smith in every +sort of work that is made of iron. The former +is not only a carpenter, but a joiner, a +cabinet-maker, and even a carver in wood, as +well as a wheel-wright, a plough-wright, a +cart and waggon-maker. The employments +of the latter are still more various. It is impossible +there should be such a trade as even +that of a nailer in the remote and inland parts +of the highlands of Scotland. Such a workman +at the rate of a thousand nails a-day, and +three hundred working days in the year, will +make three hundred thousand nails in the +year. But in such a situation it would be +impossible to dispose of one thousand, that is, +of one day's work in the year.</p> + +<p>As by means of water-carriage, a more extensive +market is opened to every sort of industry +than what land-carriage alone can afford +it, so it is upon the sea-coast, and along +the banks of navigable rivers, that industry of +every kind naturally begins to subdivide and +improve itself, and it is frequently not till a +long time after that those improvements extend +themselves to the inland parts of the +country. A broad-wheeled waggon, attended +by two men, and drawn by eight horses, in +about six weeks time, carries and brings back +between London and Edinburgh near four +ton weight of goods. In about the same +time a ship navigated by six or eight men, +and sailing between the ports of London and +Leith, frequently carries and brings back two +hundred ton weight of goods. Six or eight +men, therefore, by the help of water-carriage, +can carry and bring back, in the same time, +the same quantity of goods between London +and Edinburgh as fifty broad-wheeled waggons, +attended by a hundred men, and drawn +by four hundred horses. Upon two hundred +tons of goods, therefore, carried by the cheapest +land-carriage from London to Edinburgh, +there must be charged the maintenance of a +hundred men for three weeks, and both the +maintenance and what is nearly equal to +maintenance the wear and tear of four hundred +horses, as well as of fifty great waggons. +Whereas, upon the same quantity of goods +carried by water, there is to be charged only +the maintenance of six or eight men, and the +wear and tear of a ship of two hundred tons +burthen, together with the value of the superior +risk, or the difference of the insurance +between land and water-carriage. Were there +no other communication between those two +places, therefore, but by land-carriage, as no +goods could be transported from the one to +other, except such whose price was very +considerable in proportion to their weight, +they could carry on but a small part of that +commerce which at present subsists between +them, and consequently could give but a small +part of that encouragement which they at +present mutually afford to each other's industry. +There could be little or no commerce +of any kind between the distant parts +of the world. What goods could bear the +expense of land-carriage between London and +Calcutta? Or if there were any so precious as +to be able to support this expense, with what +safety could they be transported through the +territories of so many barbarous nations? +Those two cities, however, at present carry on +a very considerable commerce with each other, +and by mutually affording a market, give a +good deal of encouragement to each other's +industry.</p> + +<p>Since such, therefore, are the advantages of +water-carriage, it is natural that the first improvements +of art and industry should be +made where this conveniency opens the whole +world for a market to the produce of every +sort of labour, and that they should always be<span class='pagenum'><a name="Page_9" id="Page_9">[Pg 9]</a></span> +much later in extending themselves into the +inland parts of the country. The inland parts +of the country can for a long time have no +other market for the greater part of their +goods, but the country which lies round about +them, and separates them from the sea-coast, +and the great navigable rivers. The extent +of the market, therefore, must for a long time +be in proportion to the riches and populousness +of that country, and consequently their +improvement must always be posterior to the +improvement of that country. In our North +American colonies, the plantations have constantly +followed either the sea-coast or the +banks of the navigable rivers, and have scarce +anywhere extended themselves to any considerable +distance from both.</p> + +<p>The nations that, according to the best authenticated +history, appear to have been first +civilized, were those that dwelt round the coast +of the Mediterranean sea. That sea, by far +the greatest inlet that is known in the world, +having no tides, nor consequently any waves, +except such as are caused by the wind only, +was, by the smoothness of its surface, as well +as by the multitude of its islands, and the +proximity of its neighbouring shores, extremely +favourable to the infant navigation of the +world; when, from their ignorance of the +compass, men were afraid to quit the view of +the coast, and from the imperfection of the art +of ship-building, to abandon themselves to the +boisterous waves of the ocean. To pass beyond +the pillars of Hercules, that is, to sail out of +the straits of Gibraltar, was, in the ancient +world, long considered as a most wonderful +and dangerous exploit of navigation. It was +late before even the Phœnicians and Carthaginians, +the most skilful navigators and ship-builders +of those old times, attempted it; and +they were, for a long time, the only nations +that did attempt it.</p> + +<p>Of all the countries on the coast of the Mediterranean +sea, Egypt seems to have been the +first in which either agriculture or manufactures +were cultivated and improved to any +considerable degree. Upper Egypt extends +itself nowhere above a few miles from the +Nile; and in Lower Egypt, that great river +breaks itself into many different canals, which, +with the assistance of a little art, seem to have +afforded a communication by water-carriage, +not only between all the great towns, but between +all the considerable villages, and even +to many farm-houses in the country, nearly +in the same manner as the Rhine and the +Maese do in Holland at present. The extent +and easiness of this inland navigation was +probably one of the principal causes of the +early improvement of Egypt.</p> + +<p>The improvements in agriculture and manufactures +seem likewise to have been of very +great antiquity in the provinces of Bengal in +the East Indies, and in some of the eastern +provinces of China, though the great extent +of this antiquity is not authenticated by any +histories of whose authority we, in this part +of the world, are well assured. In Bengal, +the Ganges, and several other great rivers, +form a great number of navigable canals, in +the same manner as the Nile does in Egypt. +In the eastern provinces of China, too, several +great rivers form, by their different branches, +a multitude of canals, and, by communicating +with one another, afford an inland navigation +much more extensive than that either of the +Nile or the Ganges, or, perhaps, than both of +them put together. It is remarkable, that neither +the ancient Egyptians, nor the Indians, +nor the Chinese, encouraged foreign commerce, +but seem all to have derived their great +opulence from this inland navigation.</p> + +<p>All the inland parts of Africa, and all that +part of Asia which lies any considerable way +north of the Euxine and Caspian seas, the ancient +Scythia, the modern Tartary and Siberia, +seem, in all ages of the world, to have +been in the same barbarous and uncivilized +state in which we find them at present. The +sea of Tartary is the frozen ocean, which admits +of no navigation; and though some of +the greatest rivers in the world run through +that country, they are at too great a distance +from one another to carry commerce and communication +through the greater part of it. +There are in Africa none of those great inlets, +such as the Baltic and Adriatic seas in +Europe, the Mediterranean and Euxine seas +in both Europe and Asia, and the gulfs of +Arabia, Persia, India, Bengal, and Siam, in +Asia, to carry maritime commerce into the interior +parts of that great continent; and the +great rivers of Africa are at too great a distance +from one another to give occasion to any +considerable inland navigation. The commerce, +besides, which any nation can carry on +by means of a river which does not break itself +into any great number of branches or canals, +and which runs into another territory before +it reaches the sea, can never be very considerable, +because it is always in the power of +the nations who possess that other territory to +obstruct the communication between the upper +country and the sea. The navigation of +the Danube is of very little use to the different +states of Bavaria, Austria, and Hungary, +in comparison of what it would be, if any of +them possessed the whole of its course, till it +falls into the Black sea.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IV.</h3> + +<h4>OF THE ORIGIN AND USE OF MONEY.</h4> + + +<p>When the division of labor has been once +thoroughly established, it is but a very small<span class='pagenum'><a name="Page_10" id="Page_10">[Pg 10]</a></span> +part of a man's wants which the produce of +his own labour can supply. He supplies the +far greater part of them by exchanging that +surplus part of the produce of his own labour, +which is over and above his own consumption, +for such parts of the produce of other men's +labour as he has occasion for. Every man +thus lives by exchanging, or becomes, in some +measure, a merchant, and the society itself +grows to be what is properly a commercial society.</p> + +<p>But when the division of labour first began +to take place, this power of exchanging must +frequently have been very much clogged and +embarrassed in in operations. One man, we +shall suppose, has more of a certain commodity +than he himself has occasion for, while +another has less. The former, consequently, +would be glad to dispose of, and the latter to +purchase, a part of this superfluity. But if +this latter should chance to have nothing that +the former stands in need of, no exchange can +be made between them. The butcher has +more meat in his shop than he himself can +consume, and the brewer and the baker would +each of them be willing to purchase a part of +it. But they have nothing to offer in exchange, +except the different productions of +their respective trades, and the butcher is already +provided with all the bread and beer +which he has immediate occasion for. No exchange +can, in this case, be made between +them. He cannot be their merchant, nor they +his customers; and they are all of them thus +mutually less serviceable to one another. In +order to avoid the inconveniency of such situations, +every prudent man in every period +of society, after the first establishment of the +division of labour, must naturally have endeavoured +to manage his affairs in such a +manner, as to have at all times by him, besides +the peculiar produce of his own industry, +a certain quantity of some one commodity +or other, such as he imagined few people +would be likely to refuse in exchange for the +produce of their industry. Many different +commodities, it is probable, were successively +both thought of and employed for this purpose. +In the rude ages of society, cattle are +said to have been the common instrument of +commerce; and, though they must have been +a most inconvenient one, yet, in old times, we +find things were frequently valued according +to the number of cattle which had been given +in exchange for them. The armour of Diomede, +says Homer, cost only nine oxen; but +that of Glaucus cost a hundred oxen. Salt +is said to be the common instrument of commerce +and exchanges in Abyssinia; a species +of shells in some parts of the coast of India; +dried cod at Newfoundland; tobacco in Virginia; +sugar in some of our West India colonies; +hides or dressed leather in some other +countries; and there is at this day a village +in Scotland, where it is not uncommon, I am +told, for a workman to carry nails instead of +money to the baker's shop or the ale-house.</p> + +<p>In all countries, however, men seem at last +to have been determined by irresistible reasons +to give the preference, for this employment, +to metals above every other commodity. +Metals can not only be kept with as little loss +as any other commodity, scarce any thing being +less perishable than they are, but they can +likewise, without any loss, be divided into any +number of parts, as by fusion those parts can +easily be re-united again; a quality which no +other equally durable commodities possess, and +which, more than any other quality, renders +them fit to be the instruments of commerce +and circulation. The man who wanted to buy +salt, for example, and had nothing but cattle +to give in exchange for it, must have been obliged +to buy salt to the value of a whole ox, +or a whole sheep, at a time. He could seldom +buy less than this, because what he was +to give for it could seldom be divided without +loss; and if he had a mind to buy more, he +must, for the same reasons, have been obliged +to buy double or triple the quantity, the value, +to wit, of two or three oxen, or of two or +three sheep. If, on the contrary, instead of +sheep or oxen, he had metals to give in exchange +for it, he could easily proportion the +quantity of the metal to the precise quantity +of the commodity which he had immediate occasion +for.</p> + +<p>Different metals have been made use of by +different nations for this purpose. Iron was +the common instrument of commerce among +the ancient Spartans, copper among the ancient +Romans, and gold and silver among all +rich and commercial nations.</p> + +<p>Those metals seem originally to have been +made use of for this purpose in rude bars, +without any stamp or coinage. Thus we are +told by Pliny<a name="FNanchor_6_6" id="FNanchor_6_6"></a><a href="#Footnote_6_6" class="fnanchor">[6]</a>, upon the authority of Timæus, +an ancient historian, that, till the time of +Servius Tullius, the Romans had no coined +money, but made use of unstamped bars of +copper, to purchase whatever they had occasion +for. These rude bars, therefore, performed +at this time the function of money.</p> + +<p>The use of metals in this rude state was attended +with two very considerable inconveniences; +first, with the trouble of weighing, and +secondly, with that of assaying them. In the +precious metals, where a small difference in +the quantity makes a great difference in the +value, even the business of weighing, with +proper exactness, requires at least very accurate +weights and scales. The weighing of +gold, in particular, is an operation of some +nicety. In the coarser metals, indeed, where +a small error would be of little consequence, +less accuracy would, no doubt, be necessary. +Yet we should find it excessively troublesome +if every time a poor man had occasion either<span class='pagenum'><a name="Page_11" id="Page_11">[Pg 11]</a></span> +to buy or sell a farthing's worth of goods, he +was obliged to weigh the farthing. The operation +of assaying is still more difficult, still +more tedious; and, unless part of the metal is +fairly melted in the crucible, with proper dissolvents, +any conclusion that can be drawn +from it is extremely uncertain. Before the +institution of coined money, however, unless +they went through this tedious and difficult +operation, people must always have been liable +to the grossest frauds and impositions; and +instead of a pound weight of pure silver, or +pure copper, might receive, in exchange for +their goods, an adulterated composition of the +coarsest and cheapest materials, which had, +however, in their outward appearance, been +made to resemble these metals. To prevent +such abuses, to facilitate exchanges, and thereby +to encourage all sorts of industry and commerce, +it has been found necessary, in all +countries that have made any considerable advances +towards improvement, to affix a public +stamp upon certain quantities of such particular +metals, as were in those countries commonly +made use of to purchase goods. Hence +the origin of coined money, and of those public +offices called mints; institutions exactly +of the same nature with these of the aulnagers +and stamp-masters of woollen and linen cloth. +All of them are equally meant to ascertain, +by means of a public stamp, the quantity and +uniform goodness of those different commodities +when brought to market.</p> + +<p>The first public stamps of this kind that +were affixed to the current metals, seem in +many cases to have been intended to ascertain, +what it was both most difficult and most important +to ascertain, the goodness or fineness +of the metal, and to have resembled the sterling +mark which is at present affixed to plate +and bars of silver, or the Spanish mark which +is sometimes affixed to ingots of gold, and +which, being struck only upon one side of the +piece, and not covering the whole surface, ascertains +the fineness, but not the weight of +the metal. Abraham weighs to Ephron the +four hundred shekels of silver which he had +agreed to pay for the field of Machpelah. +They are said, however, to be the current +money of the merchant, and yet are received +by weight, and not by tale, in the same manner +as ingots of gold and bars of silver are at +present. The revenues of the ancient Saxon +kings of England are said to have been paid, +not in money, but in kind, that is, in victuals +and provisions of all sorts. William the Conqueror +introduced the custom of paying them +in money. This money, however, was for a +long time, received at the exchequer, by +weight, and not by tale.</p> + +<p>The inconveniency and difficulty of weighing +those metals with exactness, gave occasion +to the institution of coins, of which the stamp, +covering entirely both sides of the piece, and +sometimes the edges too, was supposed to ascertain +not only the fineness, but the weight +of the metal. Such coins, therefore, were received +by tale, as at present, without the +trouble of weighing.</p> + +<p>The denominations of those coins seem originally +to have expressed the weight or quantity +of metal contained in them. In the time +of Servius Tullius, who first coined money at +Rome, the Roman as or pondo contained a +Roman pound of good copper. It was divided, +in the same manner as our Troyes +pound, into twelve ounces, each of which +contained a real ounce of good copper. The +English pound sterling, in the time of Edward I. +contained a pound, Tower weight, of +silver of a known fineness. The Tower +pound seems to have been something more +than the Roman pound, and something less +than the Troyes pound. This last was not +introduced into the mint of England till the +18th of Henry the VIII. The French livre +contained, in the time of Charlemagne, a +pound, Troyes weight, of silver of a known +fineness. The fair of Troyes in Champaign +was at that time frequented by all the nations +of Europe, and the weights and measures of +so famous a market were generally know +and esteemed. The Scots money pound contained, +from the time of Alexander the First +to that of Robert Bruce, a pound of silver of +the same weight and fineness with the English +pound sterling. English, French, and +Scots pennies, too, contained all of them originally +a real penny-weight of silver, the +twentieth part of an ounce, and the two +hundred-and-fortieth part of a pound. The +shilling, too, seems originally to have been +the denomination of a weight. <i>When wheat +is at twelve shillings the quarter</i>, says an ancient +statute of Henry III. <i>then wastel bread of a +farthing shall weigh eleven shillings and fourpence</i>. +The proportion, however, between +the shilling, and either the penny on the one +hand, or the pound on the other, seems not to +have been so constant and uniform as that between +the penny and the pound. During +the first race of the kings of France, the +French sou or shilling appears upon different +occasions to have contained five, twelve, +twenty, and forty pennies. Among the ancient +Saxons, a shilling appears at one time +to have contained only five pennies, and it is +not improbable that it may have been as variable +among them as among their neighbours, +the ancient Franks. From the time of Charlemagne +among the French, and from that of +William the Conqueror among the English, +the proportion between the pound, the shilling, +and the penny, seems to have been uniformly +the same as at present, though the +value of each has been very different; for in +every country of the world, I believe, the avarice +and injustice of princes and sovereign +states, abusing the confidence of their subjects, +have by degrees diminished the real quantity<span class='pagenum'><a name="Page_12" id="Page_12">[Pg 12]</a></span> +of metal, which had been originally contained +in their coins. The Roman as, in the latter +ages of the republic, was reduced to the +twenty-fourth part of its original value, and, +instead of weighing a pound, came to weigh +only half an ounce. The English pound and +penny contain at present about a third only; +the Scots pound and penny about a thirty-sixth; +and the French pound and penny about +a sixty-sixth part of their original value. By +means of those operations, the princes and sovereign +states which performed them were +enabled, in appearance, to pay their debts and +fulfil their engagements with a smaller quantity +of silver than would otherwise have been +requisite. It was indeed in appearance only; +for their creditors were really defrauded of a +part of what was due to them. All other +debtors in the state were allowed the same +privilege, and might pay with the same nominal +sum of the new and debased coin whatever +they had borrowed in the old. Such +operations, therefore, have always proved favourable +to the debtor, and ruinous to the +creditor, and have sometimes produced a +greater and more universal revolution in the +fortunes of private persons, than could have +been occasioned by a very great public calamity.</p> + +<p>It is in this manner that money has become, +in all civilized nations, the universal instrument +of commerce, by the intervention of +which goods of all kinds are bought and sold, +or exchanged for one another.</p> + +<p>What are the rules which men naturally +observe, in exchanging them either for money, +or for one another, I shall now proceed to +examine. These rules determine what may +be called the relative or exchangeable value +of goods.</p> + +<p>The word <small>VALUE</small>, it is to be observed, has +two different meanings, and sometimes expresses +the utility of some particular object, +and sometimes the power of purchasing other +goods which the possession of that object conveys. +The one may be called 'value in use;' +the other, 'value in exchange.' The things +which have the greatest value in use have frequently +little or no value in exchange; and, +on the contrary, those which have the greatest +value in exchange have frequently little or +no value in use. Nothing is more useful +than water; but it will purchase scarce any +thing; scarce any thing can be had in exchange +for it. A diamond, on the contrary, +has scarce any value in use; but a very great +quantity of other goods may frequently be had +in exchange for it.</p> + +<p>In order to investigate the principles which +regulate the exchangeable value of commodities, +I shall endeavour to shew,</p> + +<p>First, what is the real measure of this exchangeable +value; or wherein consists the +real price of all commodities.</p> + +<p>Secondly, what are the different parts of +which this real price is composed or made up.</p> + +<p>And, lastly, what are the different circumstances +which sometimes raise some or all of +these different parts of price above, and sometimes +sink them below, their natural or ordinary +rate; or, what are the causes which +sometimes hinder the market price, that is, +the actual price of commodities, from coinciding +exactly with what may be called their +natural price.</p> + +<p>I shall endeavour to explain, as fully and +distinctly as I can, those three subjects in the +three following chapters, for which I must +very earnestly entreat both the patience and +attention of the reader: his patience, in order +to examine a detail which may, perhaps, in +some places, appear unnecessarily tedious; +and his attention, in order to understand +what may perhaps, after the fullest explication +which I am capable of giving it, appear still +in some degree obscure. I am always willing +to run some hazard of being tedious, in +order to be sure that I am perspicuous; and, +after taking the utmost pains that I can to be +perspicuous, some obscurity may still appear +to remain upon a subject, in its own nature +extremely abstracted.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. V.</h3> + +<h4>OF THE REAL AND NOMINAL PRICE OF COMMODITIES, +OR OF THEIR PRICE IN LABOUR, AND +THEIR PRICE IN MONEY.</h4> + + +<p>Every man is rich or poor according to the +degree in which he can afford to enjoy the necessaries, +conveniencies, and amusements of +human life. But after the division of labour +has once thoroughly taken place, it is but a +very small part of these with which a man's +own labour can supply him. The far greater +part of them he must derive from the labour +of other people, and he must be rich or poor +according to the quantity of that labour +which he can command, or which he can afford +to purchase. The value of any commodity, +therefore, to the person who possesses it, +and who means not to use or consume it himself, +but to exchange it for other commodities, +is equal to the quantity of labour which it enables +him to purchase or command. Labour +therefore, is the real measure of the exchangeable +value of all commodities.</p> + +<p>The real price of every thing, what every +thing really costs to the man who wants to acquire +it, is the toil and trouble of acquiring +it. What every thing is really worth to the +man who has acquired it and who wants to +dispose of it, or exchange it for something<span class='pagenum'><a name="Page_13" id="Page_13">[Pg 13]</a></span> +else, is the toil and trouble which it can save +to himself, and which it can impose upon +other people. What is bought with money, +or with goods, is purchased by labour, as much +as what we acquire by the toil of our own +body. That money, or those goods, indeed, +save us this toil. They contain the value of +a certain quantity of labour, which we exchange +for what is supposed at the time to +contain the value of an equal quantity. Labour +was the first price, the original purchase-money +that was paid for all things. It was +not by gold or by silver, but by labour, that +all the wealth of the world was originally purchased; +and its value, to those who possess it, +and who want to exchange it for some new +productions, is precisely equal to the quantity +of labour which it can enable them to purchase +or command.</p> + +<p>Wealth, as Mr Hobbes says, is power. But +the person who either acquires, or succeeds to +a great fortune, does not necessarily acquire +or succeed to any political power, either civil +or military. His fortune may, perhaps, afford +him the means of acquiring both; but the +mere possession of that fortune does not necessarily +convey to him either. The power +which that possession immediately and directly +conveys to him, is the power of purchasing +a certain command over all the labour, or over +all the produce of labour which is then in the +market. His fortune is greater or less, precisely +in proportion to the extent of this power, +or to the quantity either of other men's labour, +or, what is the same thing, of the produce of +other men's labour, which it enables him to +purchase or command. The exchangeable value +of every thing must always be precisely +equal to the extent of this power which it conveys +to its owner.</p> + +<p>But though labour be the real measure of +the exchangeable value of all commodities, it +is not that by which their value is commonly +estimated. It is often difficult to ascertain +the proportion between two different quantities +of labour. The time spent in two different +sorts of work will not always alone determine +this proportion. The different degrees of hardship +endured, and of ingenuity exercised, must +likewise be taken into account. There may +be more labour in an hour's hard work, than +in two hours easy business; or in an hour's +application to a trade which it cost ten years +labour to learn, than in a month's industry, at +an ordinary and obvious employment. But +it is not easy to find any accurate measure +either of hardship or ingenuity. In exchanging, +indeed, the different productions of different +sorts of labour for one another, some +allowance is commonly made for both. It is +adjusted, however, not by any accurate measure, +but by the higgling and bargaining of the +market, according to that sort of rough equality +which, though not exact, is sufficient for +carrying on the business of common life.</p> + +<p>Every commodity, besides, is more frequently +exchanged for, and thereby compared with, +other commodities, than with labour. It is +more natural, therefore, to estimate its exchangeable +value by the quantity of some other +commodity, than by that of the labour which +it can produce. The greater part of people, +too, understand better what is meant by a +quantity of a particular commodity, than by a +quantity of labour. The one is a plain palpable +object; the other an abstract notion, which, +though it can be made sufficiently intelligible, +is not altogether so natural and obvious.</p> + +<p>But when barter ceases, and money has become +the common instrument of commerce, +every particular commodity is more frequently +exchanged for money than for any other commodity. +The butcher seldom carries his beef +or his mutton to the baker or the brewer, in +order to exchange them for bread or for beer; +but he carries them to the market, where he +exchanges them for money, and afterwards exchanges +that money for bread and for beer. +The quantity of money which he gets for them +regulates, too, the quantity of bread and beer +which he can afterwards purchase. It is more +natural and obvious to him, therefore, to estimate +their value by the quantity of money, +the commodity for which he immediately exchanges +them, than by that of bread and beer, +the commodities for which he can exchange +them only by the intervention of another commodity; +and rather to say that his butcher's +meat is worth threepence or fourpence a-pound, +than that it is worth three or four pounds of +bread, or three or four quarts of small beer. +Hence it comes to pass, that the exchangeable +value of every commodity is more frequently +estimated by the quantity of money, than by +the quantity either of labour or of any other +commodity which can be had in exchange for +it.</p> + +<p>Gold and silver, however, like every other +commodity, vary in their value; are sometimes +cheaper and sometimes dearer, sometimes of +easier and sometimes of more difficult purchase. +The quantity of labour which any particular +quantity of them can purchase or command, +or the quantity of other goods which it +will exchange for, depends always upon the +fertility or barrenness of the mines which happen +to be known about the time when such +exchanges are made. The discovery of the +abundant mines of America, reduced, in the +sixteenth century, the value of gold and silver +in Europe to about a third of what it had +been before. As it cost less labour to bring +those metals from the mine to the market, so, +when they were brought thither, they could +purchase or command less labour; and this +revolution in their value, though perhaps the +greatest, is by no means the only one of which +history gives some account. But as a measure +of quantity, such as the natural foot, fathom, +or handful, which is continually vary<span class='pagenum'><a name="Page_14" id="Page_14">[Pg 14]</a></span>ing +in its own quantity, can never be an accurate +measure of the quantity of other things; +so a commodity which is itself continually varying +in its own value, can never be an accurate +measure of the value of other commodities. +Equal quantities of labour, at all times +and places, may be said to be of equal value +to the labourer. In his ordinary state of +health, strength, and spirits; in the ordinary +degree of his skill and dexterity, he must always +lay down the same portion of his ease, +his liberty, and his happiness. The price which +he pays must always be the same, whatever +may be the quantity of goods which he receives +in return for it. Of these, indeed, it +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 which it is difficult to come at, or which +it costs much labour to acquire; and that +cheap which is to be had easily, or with very +little labour. Labour alone, therefore, never +varying in its own value, is alone the ultimate +and real standard by which the value of all +commodities can at all times and places be estimated +and compared. It is their real price; +money is their nominal price only.</p> + +<p>But though equal quantities of labour are +always of equal value to the labourer, yet to +the person who employs him they appear sometimes +to be of greater, and sometimes of smaller +value. He purchases them sometimes with +a greater, and sometimes with a smaller quantity +of goods, and to him the price of labour +seems to vary like that of all other things. It +appears to him dear in the one case, and cheap +in the other. In reality, however, it is the +goods which are cheap in the one case, and +dear in the other.</p> + +<p>In this popular sense, therefore, labour, like +commodities, may be said to have a real and +a nominal price. Its real price may be said to +consist in the quantity of the necessaries and +conveniencies of life which are given for it; +its nominal price, in the quantity of money. +The labourer is rich or poor, is well or ill rewarded, +in proportion to the real, not to the +nominal price of his labour.</p> + +<p>The distinction between the real and the +nominal price of commodities and labour is +not a matter of mere speculation, but may +sometimes be of considerable use in practice. +The same real price is always of the same value; +but on account of the variations in the +value of gold and silver, the same nominal +price is sometimes of very different values. +When a landed estate, therefore, is sold with +a reservation of a perpetual rent, if it is intended +that this rent should always be of the +same value, it is of importance to the family +in whose favour it is reserved, that it should +not consist in a particular sum of money. Its +value would in this case be liable to variations +of two different kinds: first, to those which +arise from the different quantities of gold and +silver which are contained at different times +in coin of the same denomination; and, secondly, +to those which arise from the different +values of equal quantities of gold and silver +at different times.</p> + +<p>Princes and sovereign states have frequently +fancied that they had a temporary interest +to diminish the quantity of pure metal contained +in their coins; but they seldom have +fancied that they had any to augment it. The +quantity of metal contained in the coins, I +believe of all nations, has accordingly been +almost continually diminishing, and hardly +ever augmenting. Such variations, therefore, +tend almost always to diminish the value of a +money rent.</p> + +<p>The discovery of the mines of America diminished +the value of gold and silver in Europe. +This diminution, it is commonly supposed, +though I apprehend without any certain +proof, is still going on gradually, and is +likely to continue to do so for a long time. +Upon this supposition, therefore, such variations +are more likely to diminish than to +augment the value of a money rent, even +though it should be stipulated to be paid, not +in such a quantity of coined money of such a +denomination (in so many pounds sterling, +for example), but in so many ounces, either +of pure silver, or of silver of a certain standard.</p> + +<p>The rents which have been reserved in +corn, have preserved their value much better +than those which have been reserved in money, +even where the denomination of the coin has +not been altered. By the 18th of Elizabeth, +it was enacted, that a third of the rent of all +college leases should be reserved in corn, to +be paid either in kind, or according to the +current prices at the nearest public market. +The money arising from this corn rent, though +originally but a third of the whole, is, in the +present times, according to Dr. Blackstone, +commonly near double of what arises from +the other two-thirds. The old money rents +of colleges must, according to this account, +have sunk almost to a fourth part of their ancient +value, or are worth little more than a +fourth part of the corn which they were formerly +worth. But since the reign of Philip +and Mary, the denomination of the English +coin has undergone little or no alteration, and +the same number of pounds, shillings, and +pence, have contained very nearly the same +quantity of pure silver. This degradation, +therefore, in the value of the money rents of +colleges, has arisen altogether from the degradation +in the price of silver.</p> + +<p>When the degradation in the value of silver +is combined with the diminution of the quantity +of it contained in the coin of the same +denomination, the loss is frequently still greater. +In Scotland, where the denomination of +the coin has undergone much greater alter<span class='pagenum'><a name="Page_15" id="Page_15">[Pg 15]</a></span>ations +than it ever did in England, and in +France, where it has undergone still greater +than it ever did in Scotland, some ancient +rents, originally of considerable value, have, +in this manner, been reduced almost to nothing.</p> + +<p>Equal quantities of labour will, at distant +times, be purchased more nearly with equal +quantities of corn, the subsistence of the labourer, +than with equal quantities of gold and +silver, or, perhaps, of any other commodity. +Equal quantities of corn, therefore, will, at +distant times, be more nearly of the same real +value, or enable the possessor to purchase or +command more nearly the same quantity of +the labour of other people. They will do +this, I say, more nearly than equal quantities +of almost any other commodity; for even +equal quantities of corn will not do it exactly. +The subsistence of the labourer, or the real +price of labour, as I shall endeavour to shew +hereafter, is very different upon different occasions; +more liberal in a society advancing to +opulence, than in one that is standing still, +and in one that is standing still, than in one +that is going backwards. Every other commodity, +however, will, at any particular time, +purchase a greater or smaller quantity of labour, +in proportion to the quantity of subsistence +which it can purchase at that time. A +rent, therefore, reserved in corn, 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 purchase, but to the variations +in the quantity of corn which can be purchased +by any particular quantity of that commodity.</p> + +<p>Though the real value of a corn rent, it is +to be observed, however, varies much less +from century to century than that of a money +rent, it varies much more from year to year. +The money price of labour, as I shall endeavour +to shew hereafter, does not fluctuate +from year to year with the money price of +corn, but seems to be everywhere accommodated, +not to the temporary or occasional, but +to the average or ordinary price of that necessary +of life. The average or ordinary price +of corn, again is regulated, as I shall likewise +endeavour to shew hereafter, by the value of +silver, by the richness or barrenness of the +mines which supply the market with that +metal, or by the quantity of labour which +must be employed, and consequently of corn +which must be consumed, in order to bring +any particular quantity of silver from the +mine to the market. But the value of silver, +though it sometimes varies greatly from century +to century, seldom varies much from year +to year, but frequently continues the same, or +very nearly the same, for half a century or a +century together. The ordinary or average +money price of corn, therefore, may, during +so long a period, continue the same, or very +nearly the same, too, and along with it the +money price of labour, provided, at least, the +society continues, in other respects, in the +same, or nearly in the same, condition. In +the mean time, the temporary and occasional +price of corn may frequently be double one +year of what it had been the year before, or +fluctuate, for example, from five-and-twenty +to fifty shillings the quarter. But when corn +is at the latter price, not only the nominal, +but the real value of a corn rent, will be +double of what it is when at the former, or +will command double the quantity either of +labour, or of the greater part of other commodities; +the money price of labour, and along +with it that of most other things, continuing +the same during all these fluctuations.</p> + +<p>Labour, therefore, it appears evidently, is +the only universal, as well as the only accurate, +measure of value, or the only standard +by which we can compare the values of different +commodities, at all times, and at all +places. We cannot estimate, it is allowed, +the real value of different commodities from +century to century by the quantities of silver +which were given for them. We cannot estimate +it from year to year by the quantities +of corn. By the quantities of labour, we can, +with the greatest accuracy, estimate it, both +from century to century, and from year to +year. From century to century, corn is a +better measure than silver, because, from century +to century, equal quantities of corn will +command the same quantity of labour more +nearly than equal quantities of silver. From +year to year, on the contrary, silver is a better +measure than corn, because equal quantities +of it will more nearly command the same +quantity of labour.</p> + +<p>But though, in establishing perpetual rents, +or even in letting very long leases, it may be +of use to distinguish between real and nominal +price; it is of none in buying and selling, +the more common and ordinary transactions +of human life.</p> + +<p>At the same time and place, the real and +the nominal price of all commodities are exactly +in proportion to one another. The more +or less money you get for any commodity, in +the London market, for example, the more or +less labour it will at that time and place enable +you to purchase or command. At the +same time and place, therefore, money is the +exact measure of the real exchangeable value +of all commodities. It is so, however, at the +same time and place only.</p> + +<p>Though at distant places there is no regular +proportion between the real and the money +price of commodities, yet the merchant who +carries goods from the one to the other, has +nothing to consider but the money price, or +the difference between the quantity of silver +for which he buys them, and that for which<span class='pagenum'><a name="Page_16" id="Page_16">[Pg 16]</a></span> +he is likely to sell them. Half an ounce of +silver at Canton in China may command a +greater quantity both of labour and of the necessaries +and conveniencies of life, than an +ounce at London. A commodity, therefore, +which sells for half an ounce of silver at Canton, +may there be really dearer, of more real +importance to the man who possesses it there, +than a commodity which sells for an ounce at +London is to the man who possesses it at +London. If a London merchant, however, +can buy at Canton, for half an ounce of silver, +a commodity which he can afterwards +sell at London for an ounce, he gains a hundred +per cent. by the bargain, just as much as +if an ounce of silver was at London exactly of +the same value as at Canton. It is of no importance +to him that half an ounce of silver at +Canton would have given him the command +of more labour, and of a greater quantity of +the necessaries and conveniencies of life than +an ounce can do at London. An ounce at +London will always give him the command +of double the quantity of all these, which half +an ounce could have done there, and this is +precisely what he wants.</p> + +<p>As it is the nominal or money price of +goods, therefore, which finally determines the +prudence or imprudence of all purchases and +sales, and thereby regulates almost the whole +business of common life in which price is concerned, +we cannot wonder that it should have +been so much more attended to than the real +price.</p> + +<p>In such a work as this, however, it may +sometimes be of use to compare the different +real values of a particular commodity at different +times and places, or the different degrees +of power over the labour of other people +which it may, upon different occasions, +have given to those who possessed it. We +must in this case compare, not so much the +different quantities of silver for which it was +commonly sold, as the different quantities of +labour which those different quantities of silver +could have purchased. But the current +prices of labour, at distant times and places, +can scarce ever be known with any degree of +exactness. Those of corn, though they have +in few places been regularly recorded, are in +general better known, and have been more +frequently taken notice of by historians and +other writers. We must generally, therefore, +content ourselves with them, not as being always +exactly in the same proportion as the +current prices of labour, but as being the +nearest approximation which can commonly +be had to that proportion. I shall hereafter +have occasion to make several comparisons of +this kind.</p> + +<p>In the progress of industry, commercial +nations have found it convenient to coin several +different metals into money; gold for +larger payments, silver for purchases of moderate +value, and copper, or some other coarse +metal, for those of still smaller consideration. +They have always, however, considered one of +those metals as more peculiarly the measure +of value than any of the other two; and this +preference seems generally to have been given +to the metal which they happen first to make +use of as the instrument of commerce. Having +once begun to use it as their standard, +which they must have done when they had no +other money, they have generally continued +to do so even when the necessity was not the +same.</p> + +<p>The Romans are said to have had nothing +but copper money till within five years before +the first Punic war<a name="FNanchor_7_7" id="FNanchor_7_7"></a><a href="#Footnote_7_7" class="fnanchor">[7]</a>, when they first began +to coin silver. Copper, therefore, appears +to have continued always the measure +of value in that republic. At Rome all accounts +appear to have been kept, and the +value of all estates to have been computed, +either in <i>asses</i> or in <i>sestertii</i>. The <i>as</i> was always +the denomination of a copper coin. +The word <i>sestertius</i> signifies two <i>asses</i> and a +half. Though the <i>sestertius</i>, therefore, was +originally a silver coin, its value was estimated +in copper. At Rome, one who owed a +great deal of money was said to have a great +deal of other people's copper.</p> + +<p>The northern nations who established themselves +upon the ruins of the Roman empire, +seem to have had silver money from the first +beginning of their settlements, and not to +have known either gold or copper coins for +several ages thereafter. There were silver +coins in England in the time of the Saxons; +but there was little gold coined till the time +of of Edward III. nor any copper till that of +James I. of Great Britain. In England, +therefore, and for the same reason, I believe, +in all other modern nations of Europe, all +accounts are kept, and the value of all goods +and of all estates is generally computed, in +silver: and when we mean to express the +amount of a person's fortune, we seldom mention +the number of guineas, but the number +of pounds sterling which we suppose would +be given for it.</p> + +<p>Originally, in all countries, I believe, a legal +tender of payment could be made only in +the coin of that metal which was peculiarly +considered as the standard or measure of +value. In England, gold was not considered +as a legal tender for a long time after it was +coined into money. The proportion between +the values of gold and silver money was not +fixed by any public law or proclamation, but +was left to be settled by the market. If a +debtor offered payment in gold, the creditor +might either reject such payment altogether, +or accept of it at such a valuation of the gold +as he and his debtor could agree upon. +Copper is not at present a legal tender, except +in the change of the smaller silver coins. +<span class='pagenum'><a name="Page_17" id="Page_17">[Pg 17]</a></span>In this state of things, the distinction between +the metal which was the standard, and that +which was not the standard, was something +more than a nominal distinction.</p> + +<p>In process of time, and as people became +gradually more familiar with the use of the +different metals in coin, and consequently better +acquainted with the proportion between +their respective values, it has, in most countries, +I believe, been found convenient to ascertain +this proportion, and to declare by a +public law, that a guinea, for example, of such +a weight and fineness, should exchange for +one-and-twenty shillings, or be a legal tender +for a debt of that amount. In this state of +things, and during the continuance of any one +regulated proportion of this kind, the distinction +between the metal, which is the standard, +and that which is not the standard, becomes +little more than a nominal distinction.</p> + +<p>In consequence of any change, however, in +this regulated proportion, this distinction becomes, +or at least seems to become, something +more than nominal again. If the regulated +value of a guinea, for example, was either reduced +to twenty, or raised to two-and-twenty +shillings, all accounts being kept, and almost +all obligations for debt being expressed, in +silver money, the greater part of payments +could in either case be made with the same +quantity of silver money as before; but would +require very different quantities of gold money; +a greater in the one case, and a smaller +in the other. Silver would appear to be more +invariable in its value than gold. Silver would +appear to measure the value of gold, and gold +would not appear to measure the value of silver. +The value of gold would seem to depend +upon the quantity of silver which it +would exchange for, and the value of silver +would not seem to depend upon the quantity +of gold which it would exchange for. This +difference, however, would be altogether owing +to the custom of keeping accounts, and of +expressing the amount of all great and small +sums rather in silver than in gold money. +One of Mr Drummond's notes for five-and-twenty +or fifty guineas would, after an alteration +of this kind, be still payable with five-and-twenty +or fifty guineas, in the same manner +as before. It would, after such an alteration, +be payable with the same quantity of gold +as before, but with very different quantities of +silver. In the payment of such a note, gold +would appear to be more invariable in its value +than silver. Gold would appear to measure +the value of silver, and silver would not +appear to measure the value of gold. If the +custom of keeping accounts, and of expressing +promissory-notes and other obligations for money, +in this manner should ever become general, +gold, and not silver, would be considered +as the metal which was peculiarly the standard +or measure of value.</p> + +<p>In reality, during the continuance of any +one regulated proportion between the respective +values of the different metals in coin, the +value of the most precious metal regulates the +value of the whole coin. Twelve copper pence +contain half a pound avoirdupois of copper, +of not the best quality, which, before it is +coined, is seldom worth sevenpence in silver. +But as, by the regulation, twelve such pence +are ordered to exchange for a shilling, they +are in the market considered as worth a shilling, +and a shilling can at any time be had for +them. Even before the late reformation of +the gold coin of Great Britain, the gold, that +part of it at least which circulated in London +and its neighbourhood, was in general less degraded +below its standard weight than the +greater part of the silver. One-and-twenty +worn and defaced shillings, however, were +considered as equivalent to a guinea, which, +perhaps, indeed, was worn and defaced too, +but seldom so much so. The late regulations +have brought the gold coin as near, perhaps, +to its standard weight as it is possible to bring +the current coin of any nation; and the order +to receive no gold at the public offices but by +weight, is likely to preserve it so, as long as +that order is enforced. The silver coin still +continues in the same worn and degraded state +as before the reformation of the gold coin. In +the market, however, one-and-twenty shillings +of this degraded silver coin are still considered +as worth a guinea of this excellent gold +coin.</p> + +<p>The reformation of the gold coin has evidently +raised the value of the silver coin which +can be exchanged for it.</p> + +<p>In the English mint, a pound weight of +gold is coined into forty-four guineas and a +half, which at one-and-twenty shillings the +guinea, is equal to forty-six pounds fourteen +shillings and sixpence. An ounce of such +gold coin, therefore, is worth L.3 : 17 : 10½ +in silver. In England, no duty or seignorage +is paid upon the coinage, and he who carries +a pound weight or an ounce weight of standard +gold bullion to the mint, gets back a +pound weight or an ounce weight of gold in +coin, without any deduction. Three pounds +seventeen shillings and tenpence halfpenny an +ounce, therefore, is said to be the mint price +of gold in England, or the quantity of gold +coin which the mint gives in return for standard +gold bullion.</p> + +<p>Before the reformation of the gold coin, +the price of standard gold bullion in the market +had, for many years, been upwards of +L.3 : 18s. sometimes L.3 : 19s. and very frequently +L.4 an ounce; that sum, it is probable, +in the worn and degraded gold coin, seldom +containing more than an ounce of standard +gold. Since the reformation of the gold +coin, the market price of standard gold bullion +seldom exceeds L.3 : 17 : 7 an ounce. Before +the reformation of the gold coin, the market +price was always more or less above the<span class='pagenum'><a name="Page_18" id="Page_18">[Pg 18]</a></span> +mint price. Since that reformation, the market +price has been constantly below the mint +price. But that market price is the same +whether it is paid in gold or in silver coin. +The late reformation of the gold coin, therefore, +has raised not only the value of the gold +coin, but likewise that of the silver coin in +proportion to gold bullion, and probably, too, +in proportion to all other commodities; though +the price of the greater part of other commodities +being influenced by so many other +causes, the rise in the value of either gold or +silver coin in proportion to them may not be +so distinct and sensible.</p> + +<p>In the English mint, a pound weight of +standard silver bullion is coined into sixty-two +shillings, containing, in the same manner, a +pound weight of standard silver. Five shillings +and twopence an ounce, therefore, is said +to be the mint price of silver in England, or +the quantity of silver coin which the mint +gives in return for standard silver bullion. +Before the reformation of the gold coin, the +market price of standard silver bullion was, +upon different occasions, five shillings and +fourpence, five shillings and fivepence, five +shillings and sixpence, five shillings and sevenpence, +and very often five shillings and eightpence +an ounce. Five shillings and sevenpence, +however, seems to have been the most +common price. Since the reformation of the +gold coin, the market price of standard silver +bullion has fallen occasionally to five shillings +and threepence, five shillings and fourpence, +and five shillings and fivepence an ounce, +which last price it has scarce ever exceeded. +Though the market price of silver bullion has +fallen considerably since the reformation of +the gold coin, it has not fallen so low as the +mint price.</p> + +<p>In the proportion between the different metals +in the English coin, as copper is rated very +much above its real value, so silver is rated +somewhat below it. In the market of Europe, +in the French coin and in the Dutch coin, an +ounce of fine gold exchanges for about fourteen +ounces of fine silver. In the English +coin, it exchanges for about fifteen ounces, +that is, for more silver than it is worth, according +to the common estimation of Europe. +But as the price of copper in bars is not, even +in England, raised by the high price of copper +in English coin, so the price of silver in +bullion is not sunk by the low rate of silver +in English coin. Silver in bullion still preserves +its proper proportion to gold, for the +same reason that copper in bars preserves its +proper proportion to silver.</p> + +<p>Upon the reformation of the silver coin, in +the reign of William III., the price of silver +bullion still continued to be somewhat above +the mint price. Mr Locke imputed this high +price to the permission of exporting silver bullion, +and to the prohibition of exporting silver +coin. This permission of exporting, he said, +rendered the demand for silver bullion greater +than the demand for silver coin. But the +number of people who want silver coin for the +common uses of buying and selling at home, +is surely much greater than that of those who +want silver bullion either for the use of exportation +or for any other use. There subsists at +present a like permission of exporting gold bullion, +and a like prohibition of exporting gold +coin; and yet the price of gold bullion has +fallen below the mint price. But in the English +coin, silver was then, in the same manner +as now, under-rated in proportion to gold; +and the gold coin (which at that time, too, +was not supposed to require any reformation) +regulated then, as well as now, the real value +of the whole coin. As the reformation of the +silver coin did not then reduce the price of +silver bullion to the mint price, it is not very +probable that a like reformation will do so +now.</p> + +<p>Were the silver coin brought back as near +to its standard weight as the gold, a guinea, +it is probable, would, according to the present +proportion, exchange for more silver in coin +than it would purchase in bullion. The silver +coin containing its full standard weight, there +would in this case, be a profit in melting it +down, in order, first to sell the bullion for +gold coin, and afterwards to exchange this +gold coin for silver coin, to be melted down +in the same manner. Some alteration in the +present proportion seems to be the only method +of preventing this inconveniency.</p> + +<p>The inconveniency, perhaps, would be less, +if silver was rated in the coin as much above +its proper proportion to gold as it is at present +rated below it, provided it was at the same time +enacted, that silver should not be a legal tender +for more than the change of a guinea, in +the same manner as copper is not a legal tender +for more than the change of a shilling. +No creditor could, in this case, be cheated in +consequence of the high valuation of silver in +coin; as no creditor can at present be cheated +in consequence of the high valuation of copper. +The bankers only would suffer by this +regulation. When a run comes upon them, +they sometimes endeavour to gain time, by +paying in sixpences, and they would be precluded +by this regulation from this discreditable +method of evading immediate payment. +They would be obliged, in consequence, to +keep at all times in their coffers a greater +quantity of cash than at present; and though +this might, no doubt, be a considerable inconveniency +to them, it would, at the same time, +be a considerable security to their creditors.</p> + +<p>Three pounds seventeen shillings and tenpence +halfpenny (the mint price of gold) certainly +does not contain, even in our present +excellent gold coin, more than an ounce of +standard gold, and it may be thought, therefore, +should not purchase more standard bullion. +But gold in coin is more convenient +<span class='pagenum'><a name="Page_19" id="Page_19">[Pg 19]</a></span>than gold in bullion; and though, in England, +the coinage is free, yet the gold which is carried +in bullion to the mint, can seldom be returned +in coin to the owner till after a delay +of several weeks. In the present hurry of the +mint, it could not be returned till after a delay +of several months. This delay is equivalent +to a small duty, and renders gold in coin +somewhat more valuable than an equal quantity +of gold in bullion. If, in the English +coin, silver was rated according to its proper +proportion to gold, the price of silver bullion +would probably fall below the mint price, +even without any reformation of the silver +coin; the value even of the present worn and +defaced silver coin being regulated by the value +of the excellent gold coin for which it can +be changed.</p> + +<p>A small seignorage or duty upon the coinage +of both gold and silver, would probably +increase still more the superiority of those +metals in coin above an equal quantity of +either of them in bullion. The coinage +would, in this case, increase the value of the +metal coined in proportion to the extent of +this small duty, for the same reason that the +fashion increases the value of plate in proportion +to the price of that fashion. The superiority +of coin above bullion would prevent +the melting down of the coin, and would +discourage its exportation. If, upon any +public exigency, it should become necessary +to export the coin, the greater part of it would +soon return again, of its own accord. Abroad, +it would sell only for its weight in bullion. +At home, it would buy more than that weight. +There would be a profit, therefore, in bringing +it home again. In France, a seignorage +of about eight per cent. is imposed upon the +coinage, and the French coin, when exported, +is said to return home again, of its own accord.</p> + +<p>The occasional fluctuations in the market +price of gold and silver bullion arise from the +same causes as the like fluctuations in that +of all other commodities. The frequent loss +of those metals from various accidents by sea +and land, the continual waste of them in +gilding and plating, in lace and embroidery, +in the wear and tear of coin, and in that of +plate, require, in all countries which possess +no mines of their own, a continual importation, +in order to repair this lose and this +waste. The merchant importers, like all +other merchants, we may believe, endeavour, +as well as they can, to suit their occasional +importations to what they judge is likely to +be the immediate demand. With all their +attention, however, they sometimes overdo +the business, and sometimes underdo it. +When they import more bullion than is wanted, +rather than incur the risk and trouble of +exporting it again, they are sometimes willing +to sell a part of it for something less than +the ordinary or average price. When, on the +other hand, they import less than is wanted, +they get something more than this price. +But when, under all those occasional fluctuations, +the market price either of gold or silver +bullion continues for several years together +steadily and constantly, either more or +less above, or more or less below the mint +price, we may be assured that this steady and +constant, either superiority or inferiority of +price, is the effect of something in the state of +the coin, which, at that time, renders a certain +quantity of coin either of more value or +of less value than precise quantity of bullion +which it ought to contain. The constancy +and steadiness of the effect supposes a +proportionable constancy and steadiness in +the cause.</p> + +<p>The money of any particular country is, at +any particular time and place, more or less an +accurate measure or value, according as the +current coin is more or less exactly agreeable +to its standard, or contains more or less exactly +the precise quantity of pure gold or +silver which it ought to contain. If in +England, for example, forty-four guineas and +a half contained exactly a pound weight of +standard gold, or eleven ounces of fine gold, +and one ounce of alloy, the gold coin of England +would be as accurate a measure of the +actual goods at any particular time +and place as the nature of the thing would +admit. But if, by rubbing and wearing, +forty-four guineas and a half generally contain +less than a pound weight of standard +gold, the diminution, however, being greater +in some pieces than in others, the measure of +value comes to be liable to the same sort of +uncertainty to which all other weights and +measures are commonly exposed. As it rarely +happens that these are exactly agreeable to +their standard, the merchant adjusts the price +of his goods as well as he can, not to what +those weights and measures ought to be, but +to what, upon an average, he finds, by experience, +they actually are. In consequence of +a like disorder in the coin, the price of goods +comes, in the same manner, to be adjusted, +not to the quantity of pure gold or silver +which the coin ought to contain, but to that +which, upon an average, it is found, by experience, +it actually does contain.</p> + +<p>By the money price of goods, it is to be +observed, I understand always the quantity of +pure gold or silver for which they are sold, +without any regard to the denomination of +the coin. Six shillings and eight pence, for +example, in the time of Edward I., I consider +as the same money price with a pound +sterling in the present times, because it contained, +as nearly as we can judge, the same +quantity of pure silver.<span class='pagenum'><a name="Page_20" id="Page_20">[Pg 20]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VI.</h3> + +<h4>OF THE COMPONENT PART OF THE PRICE OF +COMMODITIES.</h4> + + +<p>In that early and rude state of society which +precedes both the accumulation of stock and +the appropriation of land, the proportion between +the quantities of labour necessary for +acquiring different objects, seems to be the +only circumstance which can afford any rule +for exchanging them for one another. If +among a nation of hunters, for example, it +usually costs twice the labour to kill a beaver +which it does to kill a deer, one beaver should +naturally exchange for or be worth two deer. +It is natural that what is usually the produce +of two days or two hours labour, should be +worth double of what is usually the produce +of one day's or one hour's labour.</p> + +<p>If the one species of labour should be more +severe than the other, some allowance will naturally +be made for this superior hardship; +and the produce of one hour's labour in the +one way may frequently exchange for that of +two hour's labour in the other.</p> + +<p>Or if the one species of labour requires an +uncommon degree of dexterity and ingenuity, +the esteem which men have for such talents, +will naturally give a value to their produce, +superior to what would be due to the time +employed about it. Such talents can seldom +be acquired but in consequence of long application, +and the superior value of their produce +may frequently be no more than a reasonable +compensation for the time and labour +which must be spent in acquiring them. In +the advanced state of society, allowances of +this kind, for superior hardship and superior +skill, are commonly made in the wages of labour; +and something of the same kind must +probably have taken place in its earliest and +rudest period.</p> + +<p>In this state of things, the whole produce +of labour belongs to the labourer; and the +quantity of labour commonly employed in acquiring +or producing any commodity, is the +only circumstance which can regulate the +quantity of labour which it ought commonly +to purchase, command, or exchange for.</p> + +<p>As soon as stock has accumulated in the +hands of particular persons, some of them will +naturally employ it in setting to work industrious +people, whom they will supply with materials +and subsistence, in order to make a +profit by the sale of their work, or by what +their labour adds to the value of the materials. +In exchanging the complete manufacture +either for money, for labour, or for other +goods, over and above what may be sufficient +to pay the price of the materials, and the +wages of the workmen, something must be +given for the profits of the undertaker of the +work, who hazards his stock in this adventure. +The value which the workmen add to the materials, +therefore, resolves itself in this case +into two parts of which the one pays their +wages, the other the profits of their employer +upon the whole stock of materials and wages +which he advanced. He could have no interest +to employ them, unless he expected from +the sale of their work something more than +what was sufficient to replace his stock to +him; and he could have no interest to employ +a great stock rather than a small one, unless +his profits were to bear some proportion to +the extent of his stock.</p> + +<p>The profits of stock, it may perhaps be +thought, are only a different name for the +wages of a particular sort of labour, the labour +of inspection and direction. They are, +however, altogether different, are regulated +by quite different principles, and bear no proportion +to the quantity, the hardship, or the +ingenuity of this supposed labour of inspection +and direction. They are regulated altogether +by the value of the stock employed, +and are greater or smaller in proportion to the +extent of this stock. Let us suppose, for example, +that in some particular place, where +the common annual profits of manufacturing +stock are ten per cent. there are two different +manufactures, in each of which twenty workmen +are employed, at the rate of fifteen +pounds a year each, or at the expense of three +hundred a-year in each manufactory. Let +us suppose, too, that the coarse materials +annually wrought up in the one cost only +seven hundred pounds, while the finer materials +in the other cost seven thousand. The +capital annually employed in the one will, in +this case, amount only to one thousand +pounds; whereas that employed in the other +will amount to seven thousand three hundred +pounds. At the rate of ten per cent. therefore, +the undertaker of the one will expect a +yearly profit of about one hundred pounds +only; while that of the other will expect +about seven hundred and thirty pounds. But +though their profits are so very different, their +labour of inspection and direction may be +either altogether or very nearly the same. In +many great works, almost the whole labour +of this kind is committed to some principal +clerk. His wages properly express the value +of this labour of inspection and direction. +Though in settling them some regard is had +commonly, not only to his labour and skill, +but to the trust which is reposed in him, yet +they never bear any regular proportion to the +capital of which he oversees the management; +and the owner of this capital, though he is +thus discharged of almost all labour, still expects +that his profit should bear a regular proportion +to his capital. In the price of commodities, +therefore, the profits of stock con<span class='pagenum'><a name="Page_21" id="Page_21">[Pg 21]</a></span>stitute +a component part altogether different +from the wages of labour, and regulated by +quite different principles.</p> + +<p>In this state of things, the whole produce +of labour does not always belong to the labourer. +He must in most cases share it with +the owner of the stock which employs him. +Neither is the quantity of labour commonly +employed in acquiring or producing any +commodity, the only circumstance which can +regulate the quantity which it ought commonly +to purchase, command or exchange for. +An additional quantity, it is evident, must be +due for the profits of the stock which advanced +the wages and furnished the materials of +that labour.</p> + +<p>As soon as the land of any country has all +become private property, the landlords, like +all other men, love to reap where they never +sowed, and demand a rent even for its natural +produce. The wood of the forest, the +grass of the field, and all the natural fruits of +the earth, which, when land was in common, +cost the labourer only the trouble of gathering +them, come, even to him, to have an additional +price fixed upon them. He must +then pay for the licence to gather them, and +must give up to the landlord a portion of +what his labour either collects or produces. +This portion, or, what comes to the same +thing, the price of this portion, constitutes the +rent of land, and in the price of the greater +part of commodities, makes a third component +part.</p> + +<p>The real value of all the different component +parts of price, it must be observed, is measured +by the quantity of labour which they +can, each of them, purchase or command. +Labour measures the value, not only of that +part of price which resolves itself into labour, +but of that which resolves itself into rent, and +of that which resolves itself into profit.</p> + +<p>In every society, the price of every commodity +finally resolves itself into some one or +other, or all of those three parts; and in every +improved society, all the three enter, more or +less, as component parts, into the price of the +far greater part of commodities.</p> + +<p>In the price of corn, for example, one part +pays the rent of the landlord, another pays the +wages or maintenance of the labourers and labouring +cattle employed in producing it, and +the third pays the profit of the farmer. These +three parts seem either immediately or ultimately +to make up the whole price of corn. +A fourth part, it may perhaps be thought is +necessary for replacing the stock of the farmer, +or for compensating the wear and tear of +his labouring cattle, and other instruments of +husbandry. But it must be considered, that +the price of any instrument of husbandry, such +as a labouring horse, is itself made up of the +same three parts; the rent of the land upon +which he is reared, the labour of tending and +rearing him, and the profits of the farmer, who +advances both the rent of this land, and the +wages of this labour. Though the price of the +corn, therefore, may pay the price as well as +the maintenance of the horse, the whole price +still resolves itself, either immediately or ultimately, +into the same three parts of rent, labour, +and profit.</p> + +<p>In the price of flour or meal, we must add +to the price of the corn, the profits of the miller, +and the wages of his servants; in the price +of bread, the profits of the baker, and the +wages of his servants; and in the price of +both, the labour of transporting the corn from +the house of the farmer to that of the miller, +and from that of the miller to that of the baker, +together with the profits of those who advance +the wages of that labour.</p> + +<p>The price of flax resolves itself into the +same three parts as that of corn. In the price +of linen we must add to this price the wages +of the flax-dresser, of the spinner, of the weaver, +of the bleacher, &c. together with the +profits of their respective employers.</p> + +<p>As any particular commodity comes to be +more manufactured, that part of the price +which resolves itself into wages and profit, +comes to be greater in proportion to that which +resolves itself into rent. In the progress of +the manufacture, not only the number of profits +increase, but every subsequent profit is +greater than the foregoing; because the capital +from which it is derived must always be +greater. The capital which employs the weavers, +for example, must be greater than that +which employs the spinners; because it not +only replaces that capital with its profits, but +pays, besides, the wages of the weavers: and +the profits must always bear some proportion +to the capital.</p> + +<p>In the most improved societies, however, +there are always a few commodities of which +the price resolves itself into two parts only, +the wages of labour, and the profits of stock; +and a still smaller number, in which it consists +altogether in the wages of labour. In +the price of sea-fish, for example, one part +pays the labour of the fisherman, and the other +the profits of the capital employed in the fishery. +Rent very seldom makes any part of it, +though it does sometimes, as I shall shew +hereafter. It is otherwise, at least through +the greater part of Europe, in river fisheries. +A salmon fishery pays a rent; and rent, though +it cannot well be called the rent of land, makes +a part of the price of a salmon, as well as +wages and profit. In some parts of Scotland, +a few poor people make a trade of gathering, +along the sea-shore, those little variegated +stones commonly known by the name of Scotch +pebbles. The price which is paid to them by +the stone-cutter, is altogether the wages of +their labour; neither rent nor profit makes any +part of it.</p> + +<p>But the whole price of any commodity must +still finally resolve itself into some one or other<span class='pagenum'><a name="Page_22" id="Page_22">[Pg 22]</a></span> +or all of those three parts; as whatever part +of it remains after paying the rent of the land, +and the price of the whole labour employed in +raising, manufacturing, and bringing it to +market, must necessarily be profit to somebody.</p> + +<p>As the price or exchangeable value of every +particular commodity, taken separately, resolves +itself into some one or other, or all of +those three parts; so that of all the commodities +which compose the whole annual produce +of the labour of every country, taken complexly, +must resolve itself into the same three +parts, and be parcelled out among different inhabitants +of the country, either as the wages +of their labour, the profits of their stock, or +the rent of their land. The whole of what is +annually either collected or produced by the +labour of every society, or, what comes to the +same thing, the whole price of it, is in this +manner originally distributed among some of +its different members. Wages, profit, and +rent, are the three original sources of all revenue, +as well as of all exchangeable value. All +other revenue is ultimately derived from some +one or other of these.</p> + +<p>Whoever derives his revenue from a fund +which is his own, must draw it either from +his labour, from his stock, or from his land. +The revenue derived from labour is called +wages; that derived from stock, by the person +who manages or employs it, is called profit; +that derived from it by the person who +does not employ it himself, but lends it to another, +is called the interest or the use of money. +It is the compensation which the borrower +pays to the lender, for the profit which +he has an opportunity of making by the use +of the money. Part of that profit naturally +belongs to the borrower, who runs the risk +and takes the trouble of employing it, and part +to the lender, who affords him the opportunity +of making this profit. The interest of money +is always a derivative revenue, which, if +it is not paid from the profit which is made by +the use of the money, must be paid from some +other source of revenue, unless perhaps the +borrower is a spendthrift, who contracts a second +debt in order to pay the interest of the +first. The revenue which proceeds altogether +from land, is called rent, and belongs to the +landlord. The revenue of the farmer is derived +partly from his labour, and partly from +his stock. To him, land is only the instrument +which enables him to earn the wages of +this labour, and to make the profits of this +stock. All taxes, and all the revenue which +is founded upon them, all salaries, pensions, +and annuities of every kind, are ultimately derived +from some one or other of those three +original sources of revenue, and are paid either +immediately or mediately from the wages +of labour, the profits of stock, or the rent of +land.</p> + +<p>When those three different sorts of revenue +belong to different persons, they are readily +distinguished; but when they belong to the +same, they are sometimes confounded with +one another, at least in common language.</p> + +<p>A gentleman who farms a part of his own +estate, after paying the expense of cultivation, +should gain both the rent of the landlord and +the profit of the farmer. He is apt to denominate, +however, his whole gain, profit, and +thus confounds rent with profit, at least in +common language. The greater part of our +North American and West Indian planters +are in this situation. They farm, the greater +part of them, their own estates; and accordingly +we seldom hear of the rent of a plantation, +but frequently of its profit.</p> + +<p>Common farmers seldom employ any overseer +to direct the general operations of the +farm. They generally, too, work a good deal +with their own hands, as ploughmen, harrowers, +&c. What remains of the crop, after paying +the rent, therefore, should not only replace +to them their stock employed in cultivation, +together with its ordinary profits, but +pay them the wages which are due to them, +both as labourers and overseers. Whatever +remains, however, after paying the rent and +keeping up the stock, is called profit. But +wages evidently make a part of it. The farmer, +by saving these wages, must necessarily +gain them. Wages, therefore, are in this case +confounded with profit.</p> + +<p>An independent manufacturer, who has +stock enough both to purchase materials, and to +maintain himself till he can carry his work to +market, should gain both the wages of a journeyman +who works under a master, and the +profit which that master makes by the sale of +that journeyman's work. His whole gains, +however, are commonly called profit, and +wages are, in this case, too, confounded with +profit.</p> + +<p>A gardener who cultivates his own garden +with his own hands, unites in his own person +the three different characters, of landlord, +farmer, and labourer. His produce, therefore, +should pay him the rent of the first, the +profit of the second, and the wages of the +third. The whole, however, is commonly considered +as the earnings of his labour. Both +rent and profit are, in this case, confounded +with wages.</p> + +<p>As in a civilized country there are but few +commodities of which the exchangeable value +arises from labour only, rent and profit contributing +largely to that of the far greater +part of them, so the annual produce of its labour +will always be sufficient to purchase or +command a much greater quantity of labour +than what was employed in raising, preparing, +and bringing that produce to market. If the +society were annually to employ all the labour +which it can annually purchase, as the quantity +of labour would increase greatly every +year, so the produce of every succeeding year<span class='pagenum'><a name="Page_23" id="Page_23">[Pg 23]</a></span> +would be of vastly greater value than that of +the foregoing. But there is no country in +which the whole annual produce is employed in +maintaining the industrious. The idle everywhere +consume a great part of it; and, according +to the different proportions in which +it is annually divided between these two different +orders of people, its ordinary or average +value must either annually increase or diminish, +or continue the same from one year +to another.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VII.</h3> + +<h4>OF THE NATURAL AND MARKET PRICE OF COMMODITIES.</h4> + + +<p>There is in every society or neighbourhood +an ordinary or average rate, both of wages +and profit, in every different employment of +labour and stock. This rate is naturally regulated, +as I shall show hereafter, partly by +the general circumstances of the society, their +riches or poverty, their advancing, stationary, +or declining condition, and partly by the particular +nature of each employment.</p> + +<p>There is likewise in every society or neighbourhood +an ordinary or average rate of rent, +which is regulated, too, as I shall shew hereafter, +partly by the general circumstances of +the society or neighbourhood in which the +land is situated, and partly by the natural +improved fertility of the land.</p> + +<p>These ordinary or average rates may be +called the natural rates of wages, profit and +rent, at the time and place in which they +commonly prevail.</p> + +<p>When the price of any commodity is neither +more nor less than what is sufficient to pay +the rent of the land, the wages of the labour, +and the profits of the stock employed in raising, +preparing, and bringing it to market, according +to their natural rates, the commodity +is then sold for what may be called its natural +price.</p> + +<p>The commodity is then sold precisely for +what it is worth, or for what it really costs +the person who brings it to market; for +though, in common language, what is called +the prime cost of any commodity does not +comprehend the profit of the person who is +sell it again, yet, if he sells it at a price which +does not allow him the ordinary rate of profit +in his neighbourhood, he is evidently a loser +by the trade; since, by employing his stock +in some other way, he might have made that +profit. His profit, besides, is his revenue, +the proper fund of his subsistence. As, +while he is preparing and bringing the goods +to market, he advances to his workmen their +wages, or their subsistence, so he advances to +himself, in the same manner, his own subsistence, +which is generally suitable to the profit +which he may reasonably expect from the sale +of his goods. Unless they yield him this +profit, therefore, they do not repay him what +they may very properly be said to have really +cost him.</p> + +<p>Though the price, therefore, which leaves +him this profit, is not always the lowest at +which a dealer may sometimes sell his goods, +it is the lowest at which he is likely to sell +them for any considerable time; at least +where there is perfect liberty, or where he +may change his trade as often as he pleases.</p> + +<p>The actual price at which any commodity is +commonly sold, is called its market price. It +may either be above, or below, or exactly the +same with its natural price.</p> + +<p>The market price of every particular commodity +is regulated by the proportion between +the quantity which is actually brought to +market, and the demand of those who are +willing to pay the natural price of the commodity, +or the whole value of the rent, labour, +and profit, which must be paid in order to +bring it thither, Such people may be called +the effectual demanders, and their demand the +effectual demand; since it may be sufficient +to effectuate the bringing of the commodity +to market. It is different from the absolute +demand. A very poor man may be said, in +some sense, to have a demand for a coach and +six; he might like to have it; but his demand +is not an effectual demand, as the commodity +can never he brought to market in +order to satisfy it.</p> + +<p>When the quantity of any commodity which +is brought to market falls short of the effectual +demand, all those who are willing to pay +the whole value of the rent, wages, and profit, +which must he paid in order to bring it thither, +cannot be supplied with the quantity which +they want. Rather than want it altogether, +some of them will be willing to give more. A +competition will immediately begin among +them, and the market price will rise more or +less above the natural price, according as +either the greatness of the deficiency, or the +wealth and wanton luxury of the competitors, +happen to animate more or less the eagerness +of the competition. Among competitors of +equal wealth and luxury, the same deficiency +will generally occasion a more or less eager +competition, according as the acquisition of +the commodity happens to be of more or less +importance to them. Hence the exorbitant +price of the necessaries of life during the +blockade of a town, or in a famine.</p> + +<p>When the quantity brought to market exceeds +the effectual demand, it cannot be all +sold to those who are willing to pay the whole +value of the rent, wages, and profit, which +must be paid in order to bring it thither. +Some part must be sold to those who are +willing to pay less, and the low price which<span class='pagenum'><a name="Page_24" id="Page_24">[Pg 24]</a></span> +they give for it must reduce the price of the +whole. The market price will sink more or +less below the natural price, according as the +greatness of the excess increases more or less +the competition of the sellers, or according as +it happens to be more or less important to +them to get immediately rid of the commodity. +The same excess in the importation of +perishable, will occasion a much greater competition +than in that of durable commodities; +in the importation of oranges, for example, +than in that of old iron.</p> + +<p>When the quantity brought to market is +just sufficient to supply the effectual demand, +and no more, the market price naturally +comes to be either exactly, or as nearly as +can be judged of, the same with the natural +price. The whole quantity upon hand can +be disposed of for this price, and cannot be +disposed of for more. The competition of +the different dealers obliges them all to accept +of this price, but does not oblige them +to accept of less.</p> + +<p>The quantity of every commodity brought +to market naturally suits itself to the effectual +demand. It is the interest of all those who +employ their land, labour, or stock, in bringing +any commodity to market, that the quantity +never should exceed the effectual demand; +and it is the interest of all other people that +it never should fall short of that demand.</p> + +<p>If at any time it exceeds the effectual demand, +some of the component parts of its +price must be paid below their natural rate. +If it is rent, the interest of the landlords will +immediately prompt them to withdraw a part +of their land; and if it is wages or profit, +the interest of the labourers in the one case, +and of their employers in the other, will +prompt them to withdraw a part of their labour +or stock, from this employment. The +quantity brought to market will soon be no +more than sufficient to supply the effectual +demand. All the different parts of its price +will rise to their natural rate, and the whole +price to its natural price.</p> + +<p>If, on the contrary, the quantity brought to +market should at any time fall short of the effectual +demand, some of the component parts +of its price must rise above their natural rate. +If it is rent, the interest of all other landlords +will naturally prompt them to prepare more +land for the raising of this commodity; if it +is wages or profit, the interest of all other labourers +and dealers will soon prompt them to +employ more labour and stock in preparing +and bringing it to market. The quantity +brought thither will soon be sufficient to supply +the effectual demand. All the different +parts of its price will soon sink to their natural +rate, and the whole price to its natural +price.</p> + +<p>The natural price, therefore, is, as it were, +the central price, to which the prices of all +commodities are continually gravitating. Different +accidents may sometimes keep them +suspended a good deal above it, and sometimes +force them down even somewhat below +it. But whatever may be the obstacles which +hinder them from settling in this centre of repose +and continuance, they are constantly +tending towards it.</p> + +<p>The whole quantity of industry annually +employed in order to bring any commodity to +market, naturally suits itself in this manner to +the effectual demand. It naturally aims at +bringing always that precise quantity thither +which may be sufficient to supply, and no +more than supply, that demand.</p> + +<p>But, in some employments, the same quantity +of industry will, in different years, produce +very different quantities of commodities; +while, in others, it will produce always the +same, or very nearly the same. The same +number of labourers in husbandry will, in +different years, produce very different quantities +of corn, wine, oil, hops, &c. But the +same number of spinners or weavers will every +year produce the same, or very nearly the +same, quantity of linen and woollen cloth. It +is only the average produce of the one species +of industry which can be suited, in any respect, +to the effectual demand; and as its actual +produce is frequently much greater, and +frequently much less, than its average produce, +the quantity of the commodities brought +to market will sometimes exceed a good deal, +and sometimes fall short a good deal, of the +effectual demand. Even though that demand, +therefore, should continue always the same, +their market price will be liable to great fluctuations, +will sometimes fall a good deal below, +and sometimes rise a good deal above, +their natural price. In the other species of +industry, the produce of equal quantities of +labour being always the same, or very nearly +the same, it can be more exactly suited to the +effectual demand. While that demand continues +the same, therefore, the market price of +the commodities is likely to do so too, and to +be either altogether, or as nearly as can be +judged of, the same with the natural price. +That the price of linen and woollen cloth is +liable neither to such frequent, nor to such +great variations, as the price of corn, every +man's experience will inform him. The price +of the one species of commodities varies only +with the variations in the demand; that of +the other varies not only with the variations +in the demand, but with the much greater, +and more frequent, variations in the quantity +of what is brought to market, in order to supply +that demand.</p> + +<p>The occasional and temporary fluctuations +in the market price of any commodity fall +chiefly upon those parts of its price which resolve +themselves into wages and profit. That +part which resolves itself into rent is less affected +by them. A rent certain in money is +not in the least affected by them, either in its<span class='pagenum'><a name="Page_25" id="Page_25">[Pg 25]</a></span> +rate or in its value. A rent which consists +either in a certain proportion, or in a certain +quantity, of the rude produce, is no doubt affected +in its yearly value by all the occasional +and temporary fluctuations in the market +price of that rude produce; but it is seldom +affected by them in its yearly rate. In settling +the terms of the lease, the landlord and +farmer endeavour, according to their best +judgment, to adjust that rate, not to the temporary +and occasional, but to the average and +ordinary price of the produce.</p> + +<p>Such fluctuations affect both the value and +the rate, either of wages or of profit, according +as the market happens to be either overstocked +or understocked with commodities or +with labour, with work done, or with work to +be done. A public mourning raises the price +of black cloth (with which the market is almost +always understocked upon such occasions), +and augments the profits of the merchants +who possess any considerable quantity of +it. It has no effect upon the wages of the +weavers. The market is understocked with +commodities, not with labour, with work done, +not with work to be done. It raises the +wages of journeymen tailors. The market is +here understocked with labour. There is an +effectual demand for more labour, for more +work to be done, than can be had. It sinks +the price of coloured silks and cloths, and +thereby reduces the profits of the merchants +who have any considerable quantity of them +upon hand. It sinks, too, the wages of the +workmen employed in preparing such commodities, +for which all demand is stopped for +six months, perhaps for a twelvemonth. The +market is here overstocked both with commodities +and with labour.</p> + +<p>But though the market price of every particular +commodity is in this manner continually +gravitating, if one may say so, towards +the natural price; yet sometimes particular +accidents, sometimes natural causes, and sometimes +particular regulations of police, may, in +many commodities, keep up the market price, +for a long time together, a good deal above +the natural price.</p> + +<p>When, by an increase in the effectual demand, +the market price of some particular +commodity happens to rise a good deal above +the natural price, those who employ their +stocks in supplying that market, are generally +careful to conceal this change. If it was +commonly known, their great profit would +tempt so many new rivals to employ their +stocks in the same way, that, the effectual demand +being fully supplied, the market price +would soon be reduced to the natural price, +and, perhaps, for some time even below +it. If the market is at a great distance +from the residence of those who supply it, +they may sometimes be able to keep the secret +for several years together, and may so +long enjoy their extraordinary profits without +any new rivals. Secrets of this kind, however, +it must be acknowledged, can seldom +be long kept; and the extraordinary profit +can last very little longer than they are kept.</p> + +<p>Secrets in manufactures are capable of being +longer kept than secrets in trade. A dyer +who has found the means of producing a particular +colour with materials which cost only +half the price of those commonly made use of, +may, with good management, enjoy the advantage +of his discovery as long as he lives, +and even leave it as a legacy to his posterity. +His extraordinary gains arise from the high +price which is paid for his private labour. +They properly consist in the high wages of +that labour. But as they are repeated upon +every part of his stock, and as their whole +amount bears, upon that account, a regular +proportion to it, they are commonly considered +as extraordinary profits of stock.</p> + +<p>Such enhancements of the market price are +evidently the effects of particular accidents, of +which, however, the operation may sometimes +last for many years together.</p> + +<p>Some natural productions require such a +singularity of soil and situation, that all the +land in a great country, which is fit for producing +them, may not be sufficient to supply +the effectual demand. The whole quantity +brought to market, therefore, may be disposed +of to those who are willing to give more than +what is sufficient to pay the rent of the land +which produced them, together with the wages +of the labour and the profits of the stock which +were employed in preparing and bringing them +to market, according to their natural rates. +Such commodities may continue for whole +centuries together to be sold at this high price; +and that part of it which resolves itself into +the rent of land, is in this case the part which +is generally paid above its natural rate. The +rent of the land which affords such singular +and esteemed productions, like the rent of +some vineyards in France of a peculiarly happy +soil and situation, bears no regular proportion +to the rent of other equally fertile and +equally well cultivated land in its neighbourhood. +The wages of the labour, and the profits +of the stock employed in bringing such +commodities to market, on the contrary, are +seldom out of their natural proportion to those +of the other employments of labour and stock +in their neighbourhood.</p> + +<p>Such enhancements of the market price are +evidently the effect of natural causes, which +may hinder the effectual demand from ever +being fully supplied, and which may continue, +therefore, to operate for ever.</p> + +<p>A monopoly granted either to an individual +or to a trading company, has the same effect +as a secret in trade or manufactures. The +monopolists, by keeping the market constantly +understocked by never fully supplying the effectual +demand, sell their commodities much +above the natural price, and raise their emo<span class='pagenum'><a name="Page_26" id="Page_26">[Pg 26]</a></span>luments, +whether they consist in wages or profit, +greatly above their natural rate.</p> + +<p>The price of monopoly is upon every occasion +the highest which can be got. The natural +price, or the price of free competition, on +the contrary, is the lowest which can be taken, +not upon every occasion indeed, but for any +considerable time together. The one is upon +every occasion the highest which can be +squeezed out of the buyers, or which it is supposed +they will consent to give; the other is +the lowest which the sellers can commonly +afford to take, and at the same time continue +their business.</p> + +<p>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, +though in a less degree. They are a +sort of enlarged monopolies, and may frequently, +for ages together, and in whole classes +of employments, keep up the market price of +particular commodities above the natural price, +and maintain both wages of the labour and +the profits of the stock employed about them +somewhat above their natural rate.</p> + +<p>Such enhancements of the market price may +last as long as the regulations of police which +give occasion to them.</p> + +<p>The market price of any particular commodity, +though it may continue long above, can +seldom continue long below, its natural price. +Whatever part of it was paid below the natural +rate, the persons whose interest is affected +would immediately feel the loss, and would +immediately withdraw either so much land or +so much labour, or so much stock, from being +employed about it, that the quantity brought +to market would soon be no more than sufficient +to supply the effectual demand. Its market +price, therefore, would soon rise to the +natural price; this at least would be the case +where there was perfect liberty.</p> + +<p>The same statutes of apprenticeship and +other corporation laws, indeed, which, when a +manufacture is in prosperity, enable the workman +to raise his wages a good deal above their +natural rate, sometimes oblige him, when it +decays, to let them down a good deal below +it. As in the one case they exclude many +people from his employment, so in the other +they exclude him from many employments. +The effect of such regulations, however, is not +near so durable in sinking the workman's +wages below, as in raising them above their +natural rate. Their operation in the one way +may endure for many centuries, but in the +other it can last no longer than the lives of +some of the workmen who were bred to the +business in the time of prosperity. When +they are gone, the number of those who are +afterwards educated to the trade will naturally +suit itself to the effectual demand. The police +must be as violent as that of Indostan or +ancient Egypt (where every man was bound +by a principle of religion to follow the occupation +of his father, and was supposed to commit +the most horrid sacrilege if he changed it +for another), which can in any particular employment, +and for several generations together, +sink either the wages of labour or the profits +of stock below their natural rate.</p> + +<p>This is all that I think necessary to be observed +at present concerning the deviations, +whether occasional or permanent, of the market +price of commodities from the natural +price.</p> + +<p>The natural price itself varies with the natural +rate of each of its component parts, or +wages, profit, and rent; and in every society +this rate varies according to their circumstances, +according to their riches and poverty, their +advancing, stationary, or declining condition. +I shall, in the four following chapters, endeavour +to explain, as fully and distinctly as I can, +the causes of those different variations.</p> + +<p>First, I shall endeavour to explain what are +the circumstances which naturally determine +the rate of wages, and in what manner those +circumstances are affected by the riches or poverty, +by the advancing, stationary, or declining +state of the society.</p> + +<p>Secondly, I shall endeavour to shew what +are the circumstances which naturally determine +the rate of profit; and in what manner, +too, those circumstances are affected by the +like variations in the state of the society.</p> + +<p>Though pecuniary wages and profit are very +different in the different employments of labour +and stock; yet a certain proportion seems +commonly to take place between both the pecuniary +wages in all the different employments +of labour, and the pecuniary profits in all the +different employments of stock. This proportion, +it will appear hereafter, depends partly +upon the nature of the different employments, +and partly upon the different laws and +policy of the society in which they are carried +on. But though in many respects dependent +upon the laws and policy, this proportion +seems to be little affected by the riches or poverty +of that society, by its advancing, stationary, +or declining condition, but to remain +the same, or very nearly the same, in all those +different states. I shall, in the third place, +endeavour to explain all the different circumstances +which regulate this proportion.</p> + +<p>In the fourth and last place, I shall endeavour +to shew what are the circumstances which +regulate the rent of land, and which either +raise or lower the price of all the different +substances which it produces.<span class='pagenum'><a name="Page_27" id="Page_27">[Pg 27]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VIII.</h3> + +<h4>OF THE WAGES OF LABOUR.</h4> + + +<p>The produce of labour constitutes the natural +recompence or wages of labour.</p> + +<p>In that original state of things which precedes +both the appropriation of land and the +accumulation of stock, the whole produce of +labour belongs to the labourer. He has neither +landlord nor master to share with him.</p> + +<p>Had this state continued, the wages of labour +would have augmented with all those +improvements in its productive powers, to +which the division of labour gives occasion. +All things would gradually have become +cheaper. They would have been produced by +a smaller quantity of labour; and as the commodities +produced by equal quantities of labour +would naturally in this state of things be +exchanged for one another, they would have +been purchased likewise with the produce of +a smaller quantity.</p> + +<p>But though all things would have become +cheaper in reality, in appearance many things +might have become dearer, than before, or +have been exchanged for a greater quantity of +other goods. Let us suppose, for example, +that in the greater part of employments the +productive powers of labour had been improved +to tenfold, or that a day's labour could +produce ten times the quantity of work which +it had done originally; but that in a particular +employment they had been improved only +to double, or that a day's labour could produce +only twice the quantity of work which +it had done before. In exchanging the produce +of a day's labour in the greater part of +employments for that of a day's labour in this +particular one, ten times the original quantity +of work in them would purchase only twice +the original quantity of it. Any particular +quantity in it, therefore, a pound weight, for +example, would appear to be five times dearer +than before. In reality, however, it would be +twice as cheap. Though it required five times +the quantity of other goods to purchase it, it +would require only half the quantity of labour +either to purchase or to produce it. The +acquisition, therefore, would be twice as easy +as before.</p> + +<p>But this original state of things, in which +the labourer enjoyed the whole produce of his +own labour, could not last beyond the first introduction +of the appropriation of land and +the accumulation of stock. It was at an end, +therefore, long before the most considerable +improvements were made in the productive +powers of labour; and it would be to no purpose +to trace further what might have been +its effects upon the recompence or wages of +labour.</p> + +<p>As soon as land becomes private property, +the landlord demands a share of almost all the +produce which the labourer can either raise or +collect from it. His rent makes the first deduction +from the produce of the labour which +is employed upon land.</p> + +<p>It seldom happens that the person who tills +the ground has wherewithal to maintain himself +till he reaps the harvest. His maintenance +is generally advanced to him from the +stock of a master, the farmer who employs +him, and who would have no interest to employ +him, unless he was to share in the produce +of his labour, or unless his stock was to +be replaced to him with a profit. This profit +makes a second deduction from the produce +of the labour which is employed upon land.</p> + +<p>The produce of almost all other labour is +liable to the like deduction of profit. In all +arts and manufactures, the greater part of the +workmen stand in need of a master, to advance +them the materials of their work, and +their wages and maintenance, till it be completed. +He shares in the produce of their labour, +or in the value which it adds to the materials +upon which it is bestowed; and in this +share consists his profit.</p> + +<p>It sometimes happens, indeed, that a single +independent workman has stock sufficient both +to purchase the materials of his work, and to +maintain himself till it be completed. He is +both master and workman, and enjoys the +whole produce of his own labour, or the whole +value which it adds to the materials upon which +it is bestowed. It includes what are usually +two distinct revenues, belonging to two distinct +persons, the profits of stock, and the +wages of labour.</p> + +<p>Such cases, however, are not very frequent; +and in every part of Europe twenty workmen +serve under a master for one that is independent, +and the wages of labour are everywhere +understood to be, what they usually are, when +the labourer is one person, and the owner of +the stock which employs him another.</p> + +<p>What are the common wages of labour, depends +everywhere upon the contract usually +made between those two parties, whose interests +are by no means the same. The workmen +desire to get as much, 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> + +<p>It is not, however, difficult to foresee which +of the two parties must, upon all ordinary occasions, +have the advantage in the dispute, +and force the other into a compliance with +their terms. The masters, being fewer in number, +can combine much more easily: and the +law, besides, authorises, or at least does not +prohibit, their combinations, while it prohibits +those of the workmen. We have no acts of +parliament against combining to lower the +price of work, but many against combining +to raise it. In all such disputes, the masters +can hold out much longer. A landlord, a<span class='pagenum'><a name="Page_28" id="Page_28">[Pg 28]</a></span> +farmer, a master manufacturer, or merchant, +though they did not employ a single workman, +could generally live a year or two upon the +stocks, which they have already acquired. +Many workmen could not subsist a week, few +could subsist a month, and scarce any a year, +without employment. In the long run, the +workman may be as necessary to his master as +his master is to him; but the necessity is not +so immediate.</p> + +<p>We rarely hear, it has been said, of the +combinations of masters, though frequently of +those of workmen. But whoever imagines, +upon this account, that masters rarely combine, +is as ignorant of the world as of the subject. +Masters are always and everywhere in +a sort of tacit, but constant and uniform, combination, +not to raise the wages of labour above +their actual rate. To violate this combination +is everywhere a most unpopular action, +and a sort of reproach to a master among +his neighbors and equals. We seldom, indeed, +hear of this combination, because it is +the usual, and, one may say, the natural state +of things, which nobody ever hears of. Masters, +too, sometimes enter into particular combinations +to sink the wages of labour even below +this rate. These are always conducted +with the utmost silence and secrecy till the +moment of execution; and when the workmen +yield, as they sometimes do without resistance, +though severely felt by them, they +are never heard of by other people. Such +combinations, however, are frequently resisted +by a contrary defensive combination of the +workmen, who sometimes, too, without any +provocation of this kind, combine, of their +own accord, to raise the price of their labour. +Their usual pretences are, sometimes the high +price of provisions, sometimes the great profit +which their masters make by their work. But +whether their combinations be offensive or defensive, +they are always abundantly heard of. +In order to bring the point to a speedy decision, +they have always recourse to the loudest +clamour, and sometimes to the most shocking +violence and outrage. They are desperate, +and act with the folly and extravagance of +desperate men, who must either starve, or +frighten their masters into an immediate compliance +with their demands. The masters, +upon these occasions, are just as clamorous +upon the other side, and never cease to call +aloud for the assistance of the civil magistrate, +and the rigorous execution of those laws which +have been enacted with so much severity against +the combination of servants, labourers, +and journeymen. The workmen, accordingly, +very seldom derive any advantage from the +violence of those tumultuous combinations, +which, partly from the interposition of the +civil magistrate, partly from the superior steadiness +of the masters, partly from the necessity +which the greater part of the workmen are +under of submitting for the sake of present +subsistence, generally end in nothing but the +punishment or ruin of the ringleaders.</p> + +<p>But though, in disputes with their workmen, +masters must generally have the advantage, +there is, however, a certain rate, below +which it seems impossible to reduce, for any +considerable time, the ordinary wages even of +the lowest species of labour.</p> + +<p>A man must always live by his work, and +his wages must at least be sufficient to maintain +him. They must even upon most occasions +be somewhat more, otherwise it would +be impossible for him to bring up a family, +and the race of such workmen could not last +beyond the first generation. Mr. Cantillon +seems, upon this account, to suppose that the +lowest species of common labourers must +everywhere earn at least double their own +maintenance, in order that, one with another, +they may be enabled to bring up two children; +the labour of the wife, on account of +her necessary attendance on the children, being +supposed no more than sufficient to provide +for herself. But one half the children +born, it is computed, die before the age of +manhood. The poorest labourers, therefore, +according to this account, must, one with +another, attempt to rear at least four children, +in order that two may have an equal chance +of living to that age. But the necessary +maintenance of four children, it is supposed, +may be nearly equal to that of one man. The +labour of an able-bodied slave, the same +author adds, is computed to be worth double +his maintenance; and that of the meanest labourer, +he thinks, cannot be worth less than +that of an able-bodied slave. Thus far at +least seems certain, that, in order to bring up +a family, the labour of the husband and wife +together must, even in the lowest species of +common labour, be able to earn something +more than what in precisely necessary for their +own maintenance; but in what proportion, +whether in that above-mentioned, or in any +other, I shall not take upon me to determine.</p> + +<p>There are certain circumstances, however, +which sometimes give the labourers an advantage, +and enable them to raise their wages +considerably above this rate, evidently the +lowest which is consistent with common humanity.</p> + +<p>When in any country the demand for those +who live by wages, labourers, journeymen, +servants of every kind, is continually increasing; +when every year furnishes employment +for a greater number than had been employed +the year before, the workmen have no occasion +to combine in order to raise their wages. +The scarcity of hands occasions a competition +among masters, who bid against one another +in order to get workmen, and thus voluntarily +break through the natural combination of master +not to raise wages.</p> + +<p>The demand for those who live by wages, +it is evident, cannot increase but in propor<span class='pagenum'><a name="Page_29" id="Page_29">[Pg 29]</a></span>tion +to the increase of the funds which are +destined to the payment of wages. These +funds are of two kinds; first, the revenue +which is over and above what is necessary for +the maintenance; and, secondly, the stock +which is over and above what is necessary for +the employment of their masters.</p> + +<p>When the landlord, annuitant, or monied +man, has a greater revenue than what he +judges sufficient to maintain his own family, +he employs either the whole or a part of the +surplus in maintaining one or more menial +servants. Increase this surplus, and he will +naturally increase the number of those servants.</p> + +<p>When an independent workman, such as a +weaver or shoemaker, has got more stock +than what is sufficient to purchase the materials +of his own work, and to maintain himself +till he can dispose of it, he naturally employs +one or more journeymen with the surplus, +in order to make a profit by their work. +Increase this surplus, and he will naturally +increase the number of his journeymen.</p> + +<p>The demand for those who live by wages, +therefore, necessarily increases with the increase +of the revenue and stock of every +country, and cannot possibly increase without +it. The increase of revenue and stock is the +increase of national wealth. The demand for +those who live by wages, therefore, naturally +increases with the increase of national wealth, +and cannot possibly increase without it.</p> + +<p>It is not the actual greatness of national +wealth, but its continual increase, which occasions +a rise in the wages of labour. It is +not, accordingly, in the richest countries, +in the most thriving, or in those which are +growing rich the fastest, that the wages of labour +are highest. England is certainly, in +the present times, a much richer country than +any part of North America. The wages of +labour, however, are much higher in North +America than in any part of England. In +the province of New York, common labourers +earn<a name="FNanchor_8_8" id="FNanchor_8_8"></a><a href="#Footnote_8_8" class="fnanchor">[8]</a> three shillings and sixpence currency, +equal to two shillings sterling, a-day; ship-carpenters, +ten shillings and sixpence currency, +with a pint of rum, worth sixpence sterling, +equal in all to six shillings and sixpence +sterling; house-carpenters and bricklayers, +eight shillings currency, equal to four shillings +and sixpence sterling; journeymen tailors, +five shillings currency, equal to about +two shillings and tenpence sterling. These +prices are all above the London price; and +wages are said to be as high in the other colonies +as in New York. The price of provisions +is everywhere in North America much +lower than in England. A dearth has never +been known there. In the worst seasons +they have always had a sufficiency for themselves, +though less for exportation. If the +money price of labour, therefore, be higher +than it is anywhere in the mother-country, +its real price, the real command of the necessaries +and conveniencies of life which it conveys +to the labourer, must be higher in a still +greater proportion.</p> + +<p>But though North America is not yet so +rich as England, it is much more thriving, +and advancing with much greater rapidity +to the further acquisition of riches. The +most decisive mark of the prosperity of any +country is the increase of the number of its +inhabitants. In Great Britain, and most +other European countries, they are not supposed +to double in less than five hundred +years. In the British colonies in North +America, it has been found that they double +in twenty or five-and-twenty years. Nor in +the present times is this increase principally +owing to the continual importation of new +inhabitants, but to the great multiplication of +the species. Those who live to old age, it is +said, frequently see there from fifty to a hundred, +and sometimes many more, descendants +from their own body. Labour is there so +well rewarded, that a numerous family of +children, instead of being a burden, is a source +of opulence and prosperity to the parents. +The labour of each child, before it can leave +their house, is computed to be worth a hundred +pounds clear gain to them. A young +widow with four or five young children, who, +among the middling or inferior ranks of people +in Europe, would have so little chance for +a second husband, is there frequently courted +as a sort of fortune. The value of children is +the greatest of all encouragements to marriage. +We cannot, therefore, wonder that the people +in North America should generally marry +very young. Notwithstanding the great increase +occasioned by such early marriages, +there is a continual complaint of the scarcity +of hands in North America. The demand +for labourers, the funds destined for maintaining +them increase, it seems, still faster +than they can find labourers to employ.</p> + +<p>Though the wealth of a country should be +very great, yet if it has been long stationary, +we must not expect to find the wages of labour +very high in it. The funds destined for +the payment of wages, the revenue and stock +of its inhabitants, may be of the greatest extent; +but if they have continued for several +centuries of the same, or very nearly of the +same extent, the number of labourers employed +every year could easily supply, and even +more than supply, the number wanted the +following year. There could seldom be any +scarcity of hands, nor could the masters be +obliged to bid against one another in order to +get them. The hands, on the contrary, would, +in this case, naturally multiply beyond their +employment. There would be a constant +scarcity of employment, and the labourers<span class='pagenum'><a name="Page_30" id="Page_30">[Pg 30]</a></span> +would be obliged to bid against one another +in order to get it. If in such a country the +wages of labour had ever been more than sufficient +to maintain the labourer, and to enable +him to bring up a family, the competition of +the labourers and the interest of the masters +would soon reduce them to the lowest rate +which is consistent with common humanity. +China has been long one of the richest, that +is, one of the most fertile, best cultivated, +most industrious, and most populous, countries +in the world. It seems, however, to have +been long stationary. Marco Polo, who visited +it more than five hundred years ago, describes +its cultivation, industry, and populousness, +almost in the same terms in which they +are described by travellers in the present +times. It had, perhaps, even long before his +time, acquired that full complement of riches +which the nature of its laws and institutions +permits it to acquire. The accounts of all +travellers, inconsistent in many other respects, +agree in the low wages of labour, and in the +difficulty which a labourer finds in bringing +up a family in China. If by digging the +ground a whole day he can get what will purchase +a small quantity of rice in the evening, +he is contented. The condition of artificers +is, if possible, still worse. Instead of waiting +indolently in their work-houses for the calls +of their customers, as in Europe, they are +continually running about the streets with the +tools of their respective trades, offering their +services, and, as it were, begging employment. +The poverty of the lower ranks of people in +China far surpasses that of the most beggarly +nations in Europe. In the neighborhood of +Canton, many hundred, it is commonly +said, many thousand families have no habitation +on the land, but live constantly in little +fishing-boats upon the rivers and canals. +The subsistence which they find there is so +scanty, that they are eager to fish up the nastiest +garbage thrown overboard from any European +ship. Any carrion, the carcase of a +dead dog or cat, for example, though half putrid +and stinking, is as welcome to them as +the most wholesome food to the people of +other countries. Marriage is encouraged in +China, not by the profitableness of children, +but by the liberty of destroying them. In +all great towns, several are every night exposed +in the street, or drowned like puppies in +the water. The performance of this horrid +office is even said to be the avowed business +by which some people earn their subsistence.</p> + +<p>China, however, though it may, perhaps, +stand still, does not seem to go backwards. +Its towns are nowhere deserted by their inhabitants. +The lands which had once been cultivated, +are nowhere neglected. The same, +or very nearly the same, annual labour, must, +therefore, continue to be performed, and the +funds destined for maintaining it must not, +consequently, be sensibly diminished. The +lowest class of labourers, therefore, notwithstanding +their scanty subsistence, must some +way or other make shift to continue their +race so far as to keep up their usual numbers.</p> + +<p>But it would be otherwise in a country +where the funds destined for the maintenance +of labour were sensibly decaying. Every year +the demand for servants and labourers would, +in all the different classes of employments, be +less than it had been the year before. Many +who had been bred in the superior classes, not +being able to find employment in their own +business, would be glad to seek it in the lowest. +The lowest class being not only overstocked +with its own workmen, but with the +overflowings of all the other classes, the competition +for employment would be so great in +it, as to reduce the wages of labour to the +most miserable and scanty subsistence of the +labourer. Many would not be able to find +employment even upon these hard terms, but +would either starve, or be driven to seek a subsistence, +either by begging, or by the perpetration, +perhaps, of the greatest enormities. Want, +famine, and mortality, would immediately prevail +in that class, and from thence extend themselves +to all the superior classes, till the number +of inhabitants in the country was reduced to +what could easily be maintained by the revenue +and stock which remained in it, and which +had escaped either the tyranny or calamity +which had destroyed the rest. This, perhaps, +is nearly the present state of Bengal, and of +some other of the English settlements in the +East Indies. In a fertile country, which had +before been much depopulated, where subsistence, +consequently, should not be very difficult, +and where, notwithstanding, three or +four hundred thousand people die of hunger +in one year, we may be assured that the funds +destined for the maintenance of the labouring +poor are fast decaying. The difference between +the genius of the British constitution, +which protects and governs North America, +and that of the mercantile company which oppresses +and domineers in the East Indies, +cannot, perhaps, be better illustrated than by +the different state of those countries.</p> + +<p>The liberal reward of labour, therefore, as +it is the necessary effect, so it is the natural +symptom of increasing national wealth. The +scanty maintenance of the labouring poor, on +the other hand, is the natural symptom that +things are at a stand, and their starving condition, +that they are going fast backwards.</p> + +<p>In Great Britain, the wages of labour seem, +in the present times, to be evidently more +than what is precisely necessary to enable the +labourer to bring up a family. In order to +satisfy ourselves upon this point, it will not +be necessary to enter into any tedious or +doubtful calculation of what may be the lowest +sum upon which it is possible to do this. +There are many plain symptoms, that the +wages of labour are nowhere in this country<span class='pagenum'><a name="Page_31" id="Page_31">[Pg 31]</a></span> +regulated by this lowest rate, which is consistent +with common humanity.</p> + +<p>First, in almost every part of Great Britain +there is a distinction, even in the lowest species +of labour, between summer and winter +wages. Summer wages are always highest. +But, on account of the extraordinary expense +of fuel, the maintenance of a family is most +expensive in winter. Wages, therefore, being +highest when this expense is lowest, it seems +evident that they are not regulated by what +is necessary for this expense, but by the quantity +and supposed value of the work. A labourer, +it may be said, indeed, ought to save +part of his summer wages, in order to defray +his winter expense; and that, through the +whole year, they do not exceed what is necessary +to maintain his family through the whole +year. A slave, however, or one absolutely +dependent on us for immediate subsistence, +would not be treated in this manner. His +daily subsistence would be proportioned to his +daily necessities.</p> + +<p>Secondly, the wages of labour do not, in +Great Britain, fluctuate with the price of provisions. +These vary everywhere from year to +year, frequently from month to month. But +in many places, the money price of labour remains +uniformly the same, sometimes for half +a century together. If, in these places, therefore, +the labouring poor can maintain their families +in dear years, they must be at their ease +in times of moderate plenty, and in affluence +in those of extraordinary cheapness. The high +price of provisions during these ten years past, +has not, in many parts of the kingdom, been +accompanied with any sensible rise in the money +price of labour. It has, indeed, in some; +owing, probably, more to the increase of the +demand for labour, than to that of the price +of provisions.</p> + +<p>Thirdly, as the price of provisions varies +more from year to year than the wages of labour, +so, on the other hand, the wages of labour +vary more from place to place than the +price of provisions. The prices of bread and +butchers' meat are generally the same, or very +nearly the same, through the greater part of +the united kingdom. These, and most other +things which are sold by retail, the way in +which the labouring poor buy all things, are +generally fully as cheap, or cheaper, in great +towns than in the remoter parts of the country, +for reasons which I shall have occasion to +explain hereafter. But the wages of labour +in a great town and its neighbourhood, are +frequently a fourth or a fifth part, twenty or +five-and-twenty per cent. higher than at a few +miles distance. Eighteen pence a day may +be reckoned the common price of labour in +London and its neighborhood. At a few +miles distance, it falls to fourteen and fifteen +pence. Tenpence may be reckoned its price +in Edinburgh and its neighbourhood. At a +few miles distance, it falls to eightpence, the +usual price of common labour through the +greater part of the low country of Scotland, +where it varies a good deal less than in England. +Such a difference of prices, which, it +seems, is not always sufficient to transport a +man from one parish to another, would necessarily +occasion so great a transportation of the +most bulky commodities, not only from one +parish to another, but from one end of the kingdom, +almost from one end of the world to the +other, as would soon reduce them more nearly +to a level. After all that has been said of the +levity and inconstancy of human nature, it +appears evidently from experience, that man +is, of all sorts of luggage, the most difficult to +be transported. If the labouring poor, therefore, +can maintain their families in those parts +of the kingdom where the price of labour is +lowest, they must be in affluence where it is +highest.</p> + +<p>Fourthly, 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.</p> + +<p>Grain, the food of the common people, is +dearer in Scotland than in England, whence +Scotland receives almost every year very large +supplies. But English corn must be sold +dearer in Scotland, the country to which it is +brought, than in England, the country from +which it comes; and it proportion to its quality +it cannot be sold dearer in Scotland than +the Scotch corn that comes to the same market +in competition with it. The quality of +grain depends chiefly upon the quantity of +flour or meal which it yields at the mill; and, +in this respect, English grain is so much superior +to the Scotch, that though often dearer +in appearance, or in proportion to the measure +of its bulk, it is generally cheaper in reality, +or in proportion to its quality, or even to the +measure of its weight. The price of labour, +on the contrary, is dearer in England than in +Scotland. If the labouring poor, therefore, +can maintain their families in the one part of +the united kingdom, they must be in affluence +in the other. Oatmeal, indeed, supplies the +common people in Scotland with the greatest +and the best part of their food, which is, in +general, much inferior to that of their neighbours +of the same rank in England. This +difference, however, in the mode of their subsistence, +is not the cause, but the effect, of +the difference in their wages; though, by a +strange misapprehension, I have frequently +heard it represented as the cause. It is not +because one man keeps a coach, while his +neighbour walks a-foot, that one is rich, +and the other poor; but because the one is +rich, he keeps a coach, and because the other +is poor, he walks a-foot.</p> + +<p>During the course of the last century, taking +one year with another, grain was dearer +in both parts of the united kingdom than during +that of the present. This is a matter of<span class='pagenum'><a name="Page_32" id="Page_32">[Pg 32]</a></span> +fact which cannot now admit of any reasonable +doubt; and the proof of it is, if possible, +still more decisive with regard to Scotland +than with regard to England. It is in Scotland +supported by the evidence of the public +fiars, annual valuations made upon oath, according +to the actual state of the markets, of +all the different sorts of grain in every different +county of Scotland. If such direct proof +could require any collateral evidence to confirm +it, I would observe, that this has likewise +been the case in France, and probably in +most other parts of Europe. With regard to +France, there is the clearest proof. But though +it is certain, that in both parts of the united +kingdom grain was somewhat dearer in the +last century than in the present, it is equally +certain that labour was much cheaper. If the +labouring poor, therefore, could bring up their +families then, they must be much more at +their ease now. In the last century, the most +usual day-wages of common labour through +the greater part of Scotland were sixpence in +summer, and fivepence in winter. Three shillings +a-week, the same price, very nearly still +continues to be paid in some parts of the +Highlands and Western islands. Through +the greater part of the Low country, the most +usual wages of common labour are now eightpence +a-day; tenpence, sometimes a shilling, +about Edinburgh, in the counties which border +upon England, probably on account of +that neighbourhood, and in a few other places +where there has lately been a considerable rise +in the demand for labour, about Glasgow, +Carron, Ayrshire, &c. In England, the improvements +of agriculture, manufactures, and +commerce, began much earlier than in Scotland. +The demand for labour, and consequently +its price, must necessarily have increased +with those improvements. In the last +century, accordingly, as well as in the present, +the wages of labour were higher in England +than in Scotland. They have risen, too, considerably +since that time, though, on account +of the greater variety of wages paid there in +different places, it is more difficult to ascertain +how much. In 1614, the pay of a foot +soldier was the same as in the present times, +eightpence a-day. When it was first established, +it would naturally be regulated by the +usual wages of common labourers, the rank +of people from which foot soldiers are commonly +drawn. Lord-chief-justice Hales, who +wrote in the time of Charles II. computes the +necessary expense of a labourer's family, consisting +of six persons, the father and mother, +two children able to do something, and two +not able, at ten shillings a-week, or twenty-six +pounds a-year. If they cannot earn this by +their labour, they must make it up, he supposes, +either by begging or stealing. He appears +to have enquired very carefully into this +subject<a name="FNanchor_9_9" id="FNanchor_9_9"></a><a href="#Footnote_9_9" class="fnanchor">[9]</a>. In 1688, Mr Gregory King, whose +skill in political arithmetic is so much extolled +by Dr Davenant, computed the ordinary +income of labourers and out-servants to be +fifteen pounds a-year to a family, which he +supposed to consist, one with another, of three +and a half persons. His calculation, therefore, +though different in appearance, corresponds +very nearly at bottom with that of Judge +Hales. Both suppose the weekly expense of +such families to be about twenty-pence a-head. +Both the pecuniary income and expense of +such families have increased considerably since +that time through the greater part of the kingdom, +in some places more, and in some less, +though perhaps scarce anywhere so much as +some exaggerated accounts of the present wages +of labour have lately represented them to the +public. The price of labour, it must be observed, +cannot be ascertained very accurately +anywhere, different prices being often paid at +the same place and for the same sort of labour, +not only according to the different abilities +of the workman, but according to the +easiness or hardness of the masters. Where +wages are not regulated by law, all that we +can pretend to determine is, what are the +most usual; and experience seems to shew +that law can never regulate them properly, +though it has often pretended to do so.</p> + +<p>The real recompence of labour, the real +quantity of the necessaries and conveniencies +of life which it can procure to the labourer, +has, during the course of the present century, +increased perhaps in a still greater proportion +than its money price. Not only grain has become +somewhat cheaper, but many other +things, from which the industrious poor derive +an agreeable and wholesome variety of food, +have become a great deal cheaper. Potatoes, +for example, do not at present, through the +greater part of the kingdom, cost half the +price which they used to do thirty or forty +years ago. The same thing may be said of +turnips, carrots, cabbages; things which were +formerly never raised but by the spade, but +which are now commonly raised by the plough. +All sort of garden stuff, too, has become cheaper. +The greater part of the apples, and even +of the onions, consumed in Great Britain, +were, in the last century, imported from Flanders. +The great improvements in the coarser +manufactories of both linen and woollen cloth +furnish the labourers with cheaper and better +clothing; and those in the manufactories of +the coarser metals, with cheaper and better instruments +of trade, as well as with many agreeable +and convenient pieces of household +furniture. Soap, salt, candles, leather, and +fermented liquors, have, indeed, become a<span class='pagenum'><a name="Page_33" id="Page_33">[Pg 33]</a></span> +good deal dearer, chiefly from the taxes which +have been laid upon them. The quantity of +these, however, which the labouring poor are +under any necessity of consuming, is so very +small, that the increase in their price does not +compensate the diminution in that of so many +other things. The common complaint, that +luxury extends itself even to the lowest ranks +of the people, and that the labouring poor will +not now be contented with the same food, +clothing, and lodging, which satisfied them in +former times, may convince us that it is not +the money price of labour only, but its real +recompence, which has augmented.</p> + +<p>Is this improvement in the circumstances of +the lower ranks of the people to be regarded +as an advantage, or as an inconveniency, to +the society? The answer seems at first abundantly +plain. Servants, labourers, and workmen +of different kinds, make up the far greater +part of every great political society. But +what improves the circumstances of the greater +part, can never be regarded as any inconveniency +to the whole. No society can surely +be flourishing and happy, of which the far +greater part of the members are poor and miserable. +It is but equity, besides, that they +who feed, clothe, and lodge the whole body +of the people, should have such a share of the +produce of their own labour as to be themselves +tolerably well fed, clothed, and lodged.</p> + +<p>Poverty, though it no doubt discourages, +does not always prevent, marriage. It seems +even to be favourable to generation. A half-starved +Highland woman frequently bears more +than twenty children, while a pampered fine +lady is often incapable of bearing any, and is +generally exhausted by two or three. Barrenness, +so frequent among women of fashion, +is very rare among those of inferior station. +Luxury, in the fair sex, while it inflames, perhaps, +the passion for enjoyment, seems always +to weaken, and frequently to destroy altogether, +the powers of generation.</p> + +<p>But poverty, though it does not prevent the +generation, is extremely unfavourable to the +rearing of children. The tender plant is produced; +but in so cold a soil, and so severe a +climate, soon withers and dies. It is not uncommon, +I have been frequently told, in the +Highlands of Scotland, for a mother who has +born twenty children not to have two alive. +Several officers of great experience have assured +me, that, so far from recruiting their +regiment, they have never been able to supply +it with drums and fifes, from all the soldiers' +children that were born in it. A greater number +of fine children, however, is seldom seen +anywhere than about a barrack of soldiers. +Very few of them, it seems, arrive at the age +of thirteen or fourteen. In some places, one +half the children die before they are four years +of age, in many places before they are seven, +and in almost all places before they are nine +or ten. This great mortality, however will +everywhere be found chiefly among the children +of the common people, who cannot afford +to tend them with the same care as those of +better station. Though their marriages are +generally more fruitful than those of people +of fashion, a smaller proportion of their children +arrive at maturity. In foundling hospitals, +and among the children brought up by +parish charities, the mortality is still greater +than among those of the common people.</p> + +<p>Every species of animals naturally multiplies +in proportion to the means of their subsistence, +and no species can ever multiply beyond +it. But in civilized society, it is only +among the inferior ranks of people that the +scantiness of subsistence can set limits to the +further multiplication of the human species; +and it can do so in no other way than by destroying +a great part of the children which +their fruitful marriages produce.</p> + +<p>The liberal reward of labour, by enabling +them to provide better for their children, and +consequently to bring up a greater number, +naturally tends to widen and extend those limits. +It deserves to be remarked, too, that it +necessarily does this as nearly as possible in +the proportion which the demand for labour +requires. If this demand is continually increasing, +the reward of labour must necessarily +encourage in such a manner the marriage +and multiplication of labourers, as may enable +them to supply that continually increasing demand +by a continually increasing population. +If the reward should at any time be less than +what was requisite for this purpose, the deficiency +of hands would soon raise it; and if +it should at any time be more, their excessive +multiplication would soon lower it to this necessary +rate. The market would be so much +understocked with labour in the one case, and +so much overstocked in the other, as would +soon force back its price to that proper rate +which the circumstances of the society required. +It is in this manner that the demand for +men, like that for any other commodity, necessarily +regulates the production of men, +quickens it when it goes on too slowly, and +stops it when it advances too fast. It is this +demand which regulates and determines the +state of propagation in all the different countries +of the world; in North America, in Europe, +and in China; which renders it rapidly +progressive in the first, slow and gradual in +the second, and altogether stationary in the +last.</p> + +<p>The wear and tear of a slave, it has been +said, is at the expense of his master; but that +of a free servant is at his own expense. The +wear and tear of the latter, however, is, in +reality, as much at the expense of his master +as that of the former. The wages paid to +journeymen and servants of every kind must +be such as may enable them, one with another +to continue the race of journeymen and servants, +according as the increasing, diminish<span class='pagenum'><a name="Page_34" id="Page_34">[Pg 34]</a></span>ing, +or stationary demand of the society, may +happen to require. But though the wear and +tear of a free servant be equally at the expense +of his master, it generally costs him +much less than that of a slave. The fund +destined for replacing or repairing, if I may +say so, the wear and tear of the slave, is commonly +managed by a negligent master or +careless overseer. That destined for performing +the same office with regard to the freeman +is managed by the freeman himself. +The disorders which generally prevail in the +economy of the rich, naturally introduce +themselves into the management of the former; +the strict frugality and parsimonious +attention of the poor as naturally establish +themselves in that of the latter. Under such +different management, the same purpose must +require very different degrees of expense to +execute it. It appears, accordingly, from the +experience of all ages and nations, I believe, +that the work done by freemen comes cheaper +in the end than that performed by slaves. It +is found to do so even at Boston, New-York, +and Philadelphia, where the wages of common +labour are so very high.</p> + +<p>The liberal reward of labour, therefore, as +it is the effect of increasing wealth, so it is +the cause of increasing population. To complain +of it, is to lament over the necessary +cause and effect of the greatest public prosperity.</p> + +<p>It deserves to be remarked, perhaps, that it +is in the progressive state, while the society is +advancing to the further acquisition, rather +than when it has acquired its full complement +of riches, that the condition of the labouring +poor, of the great body of the people, seems +to be the happiest and the most comfortable. +It is hard in the stationary, and miserable in +the declining state. The progressive state is, +in reality, the cheerful and the hearty state to +all the different orders of the society; the +stationary is dull; the declining melancholy.</p> + +<p>The liberal reward of labour, as it encourages +the propagation, so it increases the industry +of the common people. The wages of +labour are the encouragement of industry, +which, like every other human quality, improves +in proportion to the encouragement it +receives. A plentiful subsistence increases +the bodily strength of the labourer, and the +comfortable hope of bettering his condition, +and of ending his days, perhaps, in ease and +plenty, animates him to exert that strength to +the utmost. Where wages are high, accordingly, +we shall always find the workmen more +active, diligent, and expeditious, than where +they are low; in England, for example, than +in Scotland; in the neighbourhood of great +towns, than in remote country places. Some +workmen, indeed, when they can earn in four +days what will maintain them through the +week, will be idle the other three. This, however, +is by no means the case with the greater +part. Workmen, on the contrary, when they +are liberally paid by the piece, are very apt to +overwork themselves, and to ruin their health +and constitution in a few years. A carpenter +in London, and in some other places, is not +supposed to last in his utmost vigour above +eight years. Something of the same kind +happens in many other trades, in which the +workmen are paid by the piece; as they generally +are in manufactures, and even in +country labour, wherever wages are higher +than ordinary. Almost every class of artificers +is subject to some peculiar infirmity occasioned +by excessive application to their peculiar +species of work. Ramuzzini, an eminent +Italian physician, has written a particular +book concerning such diseases. We do +not reckon our soldiers the most industrious +set of people among us; yet when soldiers +have been employed in some particular sorts +of work, and liberally paid by the piece, their +officers have frequently been obliged to stipulate +with the undertaker, that they should not +be allowed to earn above a certain sum every +day, according to the rate at which they were +paid. Till this stipulation was made, mutual +emulation, and the desire of greater gain, +frequently prompted them to overwork themselves, +and to hurt their health by excessive +labour. Excessive application, during four +days of the week, is frequently the real cause +of the idleness of the other three, so much and +so loudly complained of. Great labour, either +of mind or body, continued for several days +together is, in most men, naturally followed +by a great desire of relaxation, which, if not +restrained by force, or by some strong necessity, +is almost irresistible. It is the call of +nature, which requires to be relieved by some +indulgence, sometimes of ease only, but sometimes +too of dissipation and diversion. If it +is not complied with, the consequences are +often dangerous and sometimes fatal, and +such as almost always, sooner or later, bring +on the peculiar infirmity of the trade. If +masters would always listen to the dictates of +reason and humanity, they have frequently +occasion rather to moderate, than to animate +the application of many of their workmen. It +will be found, I believe, in every sort of trade, +that the man who works so moderately, as to +be able to work constantly, not only preserves +his health the longest, but, in the course of +the year, executes the greatest quantity of +work.</p> + +<p>In cheap years it is pretended, workmen +are generally more idle, and in dear times +more industrious than ordinary. A plentiful +subsistence, therefore, it has been concluded, +relaxes, and a scanty one quickens their industry. +That a little more plenty than ordinary +may render some workmen idle, cannot +be well doubted; but that it should have this +effect upon the greater part, or that men in +general should work better when they are ill<span class='pagenum'><a name="Page_35" id="Page_35">[Pg 35]</a></span> +fed, than when they are well fed, when they +are disheartened than when they are in good +spirits, when they are frequently sick than +when they are generally in good health, seems +not very probable. Years of dearth, it is to +be observed, are generally among the common +people years of sickness and mortality, +which cannot fail to diminish the produce of +their industry.</p> + +<p>In years of plenty, servants frequently leave +their masters, and trust their subsistence to +what they can make by their own industry. +But the same cheapness of provisions, by increasing +the fund which is destined for the +maintenance of servants, encourages masters, +farmers especially, to employ a greater number. +Farmers, upon such occasions, expect more profit +from their corn by maintaining a few more +labouring servants, than by selling it at a low +price in the market. The demand for servants +increases, while the number of those who offer +to supply that demand diminishes. The price +of labour, therefore, frequently rises in cheap +years.</p> + +<p>In years of scarcity, the difficulty and uncertainty +of subsistence make all such people +eager to return to service. But the high price +of provisions, by diminishing the funds destined +for the maintenance of servants, disposes +masters rather to diminish than to increase the +number of those they have. In dear years, +too, poor independent workmen frequently +consume the little stock with which they had +used to supply themselves with the materials +of their work, and are obliged to become journeymen +for subsistence. More people want +employment than easily get it; many are willing +to take it upon lower terms than ordinary; +and the wages of both servants and journeymen +frequently sink in dear years.</p> + +<p>Masters of all sorts, therefore, frequently +make better bargains with their servants in +dear than in cheap years, and find them more +humble and dependent in the former than in +the latter. They naturally, therefore, commend +the former as more favourable to industry. +Landlords and farmers, besides, two of +the largest classes of masters, have another +reason for being pleased with dear years. The +rents of the one, and the profits of the other, +depend very much upon the price of provisions. +Nothing can be more absurd, however, +than to imagine that men in general +should work less when they work for themselves, +than when they work for other people. +A poor independent workman will generally +be more industrious than even a journeyman +who works by the piece. The one enjoys the +whole produce of his own industry, the other +shares it with his master. The one, in his +separate independent state, is less liable to +the temptations of bad company, which, in +large manufactories, so frequently ruin the +morals of the other. The superiority of the +independent workman over those servants who +are hired by the month or by the year, and +whose wages and maintenance are the same, +whether they do much or do little, is likely to +be still greater. Cheap years tend to increase +the proportion of independent workmen to +journeymen and servants of all kinds, and +dear years to diminish it.</p> + +<p>A French author of great knowledge and +ingenuity, Mr Messance, receiver of the tallies +in the election of St Etienne, endeavours +to shew that the poor do more work in cheap +than in dear years, by comparing the quantity +and value of the goods made upon those different +occasions in three different manufactures; +one of coarse woollens, carried on at +Elbeuf; one of linen, and another of silk, +both which extend through the whole generality +of Rouen. It appears from his account, +which is copied from the registers of +the public offices, that the quantity and value +of the goods made in all those three manufactories +has generally been greater in cheap than +in dear years, and that it has always been +greatest in the cheapest, and least in the dearest +years. All the three seem to be stationary +manufactures, or which, though their produce +may vary somewhat from year to year, are, upon +the whole, neither going backwards nor +forwards.</p> + +<p>The manufacture of linen in Scotland, and +that of coarse woollens in the West Riding of +Yorkshire, are growing manufactures, of which +the produce is generally, though with some +variations, increasing both in quantity and value. +Upon examining, however, the accounts +which have been published of their annual +produce, I have not been able to observe that +its variations have had any sensible connection +with the dearness or cheapness of the seasons. +In 1740, a year of great scarcity, both manufactures, +indeed, appear to have declined very +considerably. But in 1756, another year of +great scarcity, the Scotch manufactures made +more than ordinary advances. The Yorkshire +manufacture, indeed, declined, and its produce +did not rise to what it had been in 1755, +till 1766, after the repeal of the American +stamp act. In that and the following year, +it greatly exceeded what it had ever been before, +and it has continued to advance ever +since.</p> + +<p>The produce of all great manufactures for +distant sale must necessarily depend, not so +much upon the dearness or cheapness of the +seasons in the countries where they are carried +on, as upon the circumstances which affect the +demand in the countries where they are consumed; +upon peace or war, upon the prosperity +or declension of other rival manufactures, +and upon the good or bad humour of their +principal customers. A great part of the extraordinary +work, besides, which is probably +done in cheap years, never enters the public +registers of manufactures. The men-servants, +who leave their masters, become independent<span class='pagenum'><a name="Page_36" id="Page_36">[Pg 36]</a></span> +labourers. The women return to their parents, +and commonly spin, in order to make +clothes for themselves and their families. +Even the independent workmen do not always +work for public sale, but are employed by +some of their neighbours in manufactures for +family use. The produce of their labour, +therefore, frequently makes no figure in those +public registers, of which the records are sometimes +published with so much parade, and +from which our merchants and manufacturers +would often vainly pretend to announce the +prosperity or declension of the greatest empires.</p> + +<p>Though the variations in the price of labour +not only do not always correspond with those +in the price of provisions, but are frequently +quite opposite, we must not, upon this account, +imagine that the price of provisions has +no influence upon that of labour. The money +price of labour is necessarily regulated by two +circumstances; the demand for labour, and +the price of the necessaries and conveniencies +of life. The demand for labour, according as +it happens to be increasing, stationary, or declining, +or to require an increasing, stationary, +or declining population, determines the +quantities of the necessaries and conveniencies +of life which must be given to the labourer; +and the money price of labour is determined +by what is requisite for purchasing this quantity. +Though the money price of labour, +therefore, is sometimes high where the price +of provisions is low, it would be still higher, +the demand continuing the same, if the price +of provisions was high.</p> + +<p>It is because the demand for labour increases +in years of sudden and extraordinary +plenty, and diminishes in those of sudden and +extraordinary scarcity, that the money price of +labour sometimes rises in the one, and sinks +in the other.</p> + +<p>In a year of sudden and extraordinary plenty, +there are funds in the hands of many of +the employers of industry, sufficient to maintain +and employ a greater number of industrious +people than had been employed the year +before; and this extraordinary number cannot +always be had. Those masters, therefore, who +want more workmen, bid against one another, +in order to get them, which sometimes raises +both the real and the money price of their labour.</p> + +<p>The contrary of this happens in a year of +sudden and extraordinary scarcity. The funds +destined for employing industry are less than +they had been the year before. A considerable +number of people are thrown out of employment, +who bid one against another, in order +to get it, which sometimes lowers both the +real and the money price of labour. In 1740, +a year of extraordinary scarcity, many people +were willing to work for bare subsistence. In +the succeeding years of plenty, it was more +difficult to get labourers and servants.</p> + +<p>The scarcity of a dear year, by diminishing +the demand for labour, tends to lower its +price, as the high price of provisions tends to +raise it. The plenty of a cheap year, on the +contrary, by increasing the demand, tends to +raise the price of labour, as the cheapness of +provisions tends to lower it. In the ordinary +variations of the prices of provisions, those +two opposite causes seem to counterbalance +one another, which is probably, in part, the +reason why the wages of labour are everywhere +so much more steady and permanent +than the price of provisions.</p> + +<p>The increase in the wages of labour necessarily +increases the price of many commodities, +by increasing that part of it which resolves +itself into wages, and so far tends to diminish +their consumption, both at home and abroad. +The same cause, however, which raises the +wages of labour, the increase of stock, tends +to increase its productive powers, and to make +a smaller quantity of labour produce a greater +quantity of work. The owner of the stock +which employs a great number of labourers +necessarily endeavours, for his own advantage, +to make such a proper division and distribution +of employment, that they may be enabled +to produce the greatest quantity of work possible. +For the same reason, he endeavours to +supply them with the best machinery which +either he or they can think of. What takes +place among the labourers in a particular +workhouse, takes place, for the same reason, +among those of a great society. The greater +their number, the more they naturally divide +themselves into different classes and subdivisions +of employments. More heads are occupied +in inventing the most proper machinery +for executing the work of each, and it is, +therefore, more likely to be invented. There +are many commodities, therefore, which, in +consequence of these improvements, come to +be produced by so much less labour than before, +that the increase of its price is more than +compensated by the diminution of its quantity.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IX.</h3> + +<h4>OF THE PROFITS OF STOCK.</h4> + + +<p>The rise and fall in the profits of stock depend +upon the same causes with the rise and +fall in the wages of labour, the increasing or +declining state of the wealth of the society; +but those causes affect the one and the other +very differently.</p> + +<p>The increase of stock, which raises wages, +tends to lower profit. When the stocks of +many rich merchants are turned into the same +trade, their mutual competition naturally tends +to lower its profit; and when there is a like<span class='pagenum'><a name="Page_37" id="Page_37">[Pg 37]</a></span> +increase of stock in all the different trades +carried on in the same society, the same competition +must produce the same effect in them +all.</p> + +<p>It is not easy, it has already been observed, +to ascertain what are the average wages of labour, +even in a particular place, and at a particular +time. We can, even in this case, seldom +determine more than what are the most +usual wages. But even this can seldom be +done with regard to the profits of stock. Profit +is so very fluctuating, that the person who +carries on a particular trade, cannot always +tell you himself what is the average of his annual +profit. It is affected, not only by every +variation of price in the commodities which +he deals in, but by the good or bad fortune +both of his rivals and of his customers, and by +a thousand other accidents, to which goods, +when carried either by sea or by land, or even +when stored in a warehouse, are liable. It +varies, therefore, not only from year to year, +but from day to day, and almost from hour to +hour. To ascertain what is the average profit +of all the different trades carried on in a +great kingdom, must be much more difficult; +and to judge of what it may have been formerly, +or in remote periods of time, with any +degree of precision, must be altogether impossible.</p> + +<p>But though it may be impossible to determine, +with any degree of precision, what are +or were the average profits of stock, either in +the present or in ancient times, some notion +may be formed of them from the interest of +money. It may be laid down as a maxim, +that wherever a great deal can be made by the +use of money, a great deal will commonly be +given for the use of it; and that, wherever +little can be made by it, less will commonly +be given for it. Accordingly, therefore, as +the usual market rate of interest varies in any +country, we may be assured that the ordinary +profits of stock must vary with it, must sink +as it sinks, and rise as it rises. The progress +of interest, therefore, may lead us to form +some notion of the progress of profit.</p> + +<p>By the 37th of Henry VIII. all interest +above ten per cent. was declared unlawful. +More, it seems, had sometimes been taken before +that. In the reign of Edward VI. religious +zeal prohibited all interest. This prohibition, +however, like all others of the same +kind, is said to have produced no effect, and +probably rather increased than diminished the +evil of usury. The statute of Henry VIII. +was revived by the 13th of Elizabeth, cap. 8. +and ten per cent. continued to be the legal +rate of interest till the 21st of James I. when +it was restricted to eight per cent. It was reduced +to six per cent. soon after the Restoration, +and by the 12th of Queen Anne, to five +per cent. All these different statutory regulations +seem to have been made with great +propriety. They seem to have followed, and +not to have gone before, the market rate of +interest, or the rate at which people of good +credit usually borrowed. Since the time of +Queen Anne, five per cent. seems to have been +rather above than below the market rate. Before +the late war, the government borrowed +at three per cent.; and people of good credit +in the capital, and in many other parts of the +kingdom, at three and a-half, four, and four +and a-half per cent.</p> + +<p>Since the time of Henry VIII. the wealth +and revenue of the country have been continually +advancing, and in the course of their +progress, their pace seems rather to have been +gradually accelerated than retarded. They +seem not only to have been going on, but to +have been going on faster and faster. The +wages of labour have been continually increasing +during the same period, and, in the greater +part of the different branches of trade and +manufactures, the profits of stock have been +diminishing.</p> + +<p>It generally requires a greater stock to +carry on any sort of trade in a great town +than in a country village. The great stock +employed in every branch of trade, and the +number of rich competitors, generally reduce +the rate of profit in the former below what it +is in the latter. But the wages of labour are +generally higher in a great town than in a +country village. In a thriving town, the people +who have great stocks to employ, frequently +cannot get the number of workmen they +want, and therefore bid against one another, +in order to get as many as they can, which +raises the wages of labour, and lowers the profits +of stock. In the remote parts of the +country, there is frequently not stock sufficient +to employ all the people, who therefore +bid against one another, in order to get employment, +which lowers the wages of labour, +and raises the profits of stock.</p> + +<p>In Scotland, though the legal rate of interest +is the same as in England, the market +rate is rather higher. People of the best credit +there seldom borrow under five per cent. +Even private bankers in Edinburgh give four +per cent. upon their promissory-notes, of +which payment, either in whole or in part +may be demanded at pleasure. Private bankers +in London give no interest for the money +which is deposited with them. There are few +trades which cannot be carried on with a +smaller stock in Scotland than in England. +The common rate of profit, therefore, must +be somewhat greater. The wages of labour, +it has already been observed, are lower in +Scotland than in England. The country, too, +is not only much poorer, but the steps by +which it advances to a better condition, for it +is evidently advancing, seem to be much slower +and more tardy.</p> + +<p>The legal rate of interest in France has not,<span class='pagenum'><a name="Page_38" id="Page_38">[Pg 38]</a></span> +during the course of the present century, been +always regulated by the market rate<a name="FNanchor_10_10" id="FNanchor_10_10"></a><a href="#Footnote_10_10" class="fnanchor">[10]</a>. In +1720, interest was reduced from the twentieth +to the fiftieth penny, or from five to two per +cent. In 1724, it was raised to the thirtieth +penny, or to three and a third per cent. In +1725, it was again raised to the twentieth +penny, or to five per cent. In 1766, during +the administration of Mr Laverdy, it was reduced +to the twenty-fifth penny, or to four +per cent. The Abbé Terray raised it afterwards +to the old rate of five per cent. The +supposed purpose of many of those violent reductions +of interest was to prepare the way +for reducing that of the public debts; a purpose +which has sometimes been executed. +France is, perhaps, in the present times, not +so rich a country as England; and though +the legal rate of interest has in France frequently +been lower than in England, the +market rate has generally been higher; for +there, as in other countries, they have several +very safe and easy methods of evading the law. +The profits of trade, I have been assured by +British merchants who had traded in both +countries, are higher in France than in England; +and it is no doubt upon this account, +that many British subjects chuse rather to employ +their capitals in a country where trade is +in disgrace, than in one where it is highly respected. +The wages of labour are lower in +France than in England. When you go from +Scotland to England, the difference which you +may remark between the dress and countenance +of the common people in the one country +and in the other, sufficiently indicates the +difference in their condition. The contrast +is still greater when you return from France. +France, though no doubt a richer country +than Scotland, seems not to be going forward +so fast. It is a common and even a popular +opinion in the country, that it is going backwards; +an opinion which I apprehend, is ill-founded, +even with regard to France, but +which nobody can possibly entertain with regard +to Scotland, who sees the country now, +and who saw it twenty or thirty years ago.</p> + +<p>The province of Holland, on the other +hand, in proportion to the extent of its territory +and the number of its people, is a richer +country than England. The government there +borrow at two per cent. and private people of +good credit at three. The wages of labour +are said to be higher in Holland than in England, +and the Dutch, it is well known, trade +upon lower profits than any people in Europe. +The trade of Holland, it has been pretended +by some people, is decaying, and it +may perhaps be true that some particular +branches of it are so; but these symptoms +seem to indicate sufficiently that there is no +general decay. When profit diminishes, merchants +are very apt to complain that trade decays, +though the diminution of profit is the +natural effect of its prosperity, or of a greater +stock being employed in it than before. During +the late war, the Dutch gained the whole +carrying trade of France, of which they still +retain a very large share. The great property +which they possess both in French and +English funds, about forty millions, it is said +in the latter (in which, I suspect, however, +there is a considerable exaggeration), the great +sums which they lend to private people, in +countries where the rate of interest is higher +than in their own, are circumstances which no +doubt demonstrate the redundancy of their +stock, or that it has increased beyond what +they can employ with tolerable profit in the +proper business of their own country; but +they do not demonstrate that that business has +decreased. As the capital of a private man, +though acquired by a particular trade, may +increase beyond what he can employ in it, and +yet that trade continue to increase too, so may +likewise the capital of a great nation.</p> + +<p>In our North American and West Indian +colonies, not only the wages of labour, but the +interest of money, and consequently the profits +of stock, are higher than in England. In +the different colonies, both the legal and the +market rate of interest run from six to eight +per cent. High wages of labour and high +profits of stock, however, are things, perhaps, +which scarce ever go together, except in the +peculiar circumstances of new colonies. A +new colony must always, for some time, be +more understocked in proportion to the extent +of its territory, and more underpeopled in proportion +to the extent of its stock, than the +greater part of other countries. They have more +land than they have stock to cultivate. What +they have, therefore, is applied to the cultivation +only of what is most fertile and most favourably +situated, the land near the sea-shore +and along the banks of navigable rivers. +Such land, too, is frequently purchased at a +price below the value even of its natural produce. +Stock employed in the purchase and +improvement of such lands, must yield a very +large profit, and, consequently, afford to pay +a very large interest. Its rapid accumulation +in so profitable an employment enables the +planter to increase the number of his hands +faster than he can find them in a new settlement. +Those whom he can find, therefore, +are very liberally rewarded. As the colony +increases, the profits of stock gradually diminish. +When the most fertile and best situated +lands have been all occupied, less profit +can be made by the cultivation of what is inferior +both in soil and situation, and less interest +can be afforded for the stock which is +so employed. In the greater part of our colonies, +accordingly, both the legal and the +market rate of interest have been considerably +reduced during the course of the present<span class='pagenum'><a name="Page_39" id="Page_39">[Pg 39]</a></span> +century. As riches, improvement, and population, +have increased, interest has declined. +The wages of labour do not sink with the profits +of stock. The demand for labour increases +with the increase of stock, whatever be its +profits; and after these are diminished, stock +may not only continue to increase, but to increase +much faster than before. It is with industrious +nations, who are advancing in the +acquisition of riches, as with industrious individuals. +A great stock, though with small +profits, generally increases faster than a small +stock with great profits. Money, says the proverb, +makes money. When you have got a +little, it is often easy to get more. The great +difficulty is to get that little. The connection +between the increase of stock and that of industry, +or of the demand for useful labour, +has partly been explained already, but will be +explained more fully hereafter, in treating of +the accumulation of stock.</p> + +<p>The acquisition of new territory, or of new +branches of trade, may sometimes raise the +profits of stock, and with them the interest of +money, even in a country which is fast advancing +in the acquisition of riches. The +stock of the country, not being sufficient for +the whole accession of business which such acquisitions +present to the different people among +whom it is divided, is applied to those particular +branches only which afford the greatest +profit. Part of what had before been employed +in other trades, is necessarily withdrawn +from them, and turned into some of the new +and more profitable ones. In all those old +trades, therefore, the competition comes to be +less than before. The market comes to be +less fully supplied with many different sorts +of goods. Their price necessarily rises more +or less, and yields a greater profit to those who +deal in them, who can, therefore, afford to +borrow at a higher interest. For some time +after the conclusion of the late war, not only +private people of the best credit, but some of +the greatest companies in London, commonly +borrowed at five per cent. who, before that, +had not been used to pay more than four, and +four and a half per cent. The great accession +both of territory and trade by our acquisitions +in North America and the West Indies, will +sufficiently account for this, without supposing +any diminution in the capital stock of the +society. So great an accession of new business +to be carried on by the old stock, must +necessarily have diminished the quantity employed +in a great number of particular branches, +in which the competition being less, the +profits must have been greater. I shall hereafter +have occasion to mention the reasons +which dispose me to believe that the capital +stock of Great Britain was not diminished, +even by the enormous expense of the late war.</p> + +<p>The diminution of the capital stock of the +society, or of the funds destined for the maintenance +of industry, however, as it lowers the +wages of labour, so it raises the profits of +stock, and consequently the interest of money. +By the wages of labour being lowered, the +owners of what stock remains in the society +can bring their goods at less expense to market +than before; and less stock being employed +in supplying the market than before, they +can sell them dearer. Their goods cost them +less, and they get more for them. Their profits, +therefore, being augmented at both ends, +can well afford a large interest. The great +fortunes so suddenly and so easily acquired in +Bengal and the other British settlements in +the East Indies, may satisfy us, that as the +wages of labour are very low, so the profits of +stock are very high in those ruined countries. +The interest of money is proportionably so. +In Bengal, money is frequently lent to the +farmers at forty, fifty, and sixty per cent. and +the succeeding crop is mortgaged for the payment. +As the profits which can afford such +an interest must eat up almost the whole rent +of the landlord, so such enormous usury must +in its turn eat up the greater part of those +profits. Before the fall of the Roman republic, +a usury of the same kind seems to have +been common in the provinces, under the ruinous +administration of their proconsuls. The +virtuous Brutus lent money in Cyprus at +eight-and-forty per cent. as we learn from the +letters of Cicero.</p> + +<p>In a country which had acquired that full +complement of riches which the nature of its +soil and climate, and its situation with respect +to other countries, allowed it to acquire, which +could, therefore, advance no further, and +which was not going backwards, both the +wages of labour and the profits of stock would +probably be very low. In a country fully +peopled in proportion to what either its territory +could maintain, or its stock employ, the +competition for employment would necessarily +be so great as to reduce the wages of labour +to what was barely sufficient to keep up the +number of labourers, and the country being +already fully peopled, that number could never +be augmented. In a country fully stocked +in proportion to all the business it had to +transact, as great a quantity of stock would +be employed in every particular branch as the +nature and extent of the trade would admit. +The competition, therefore, would everywhere +be as great, and, consequently, the ordinary +profit as low as possible.</p> + +<p>But, perhaps, no country has ever yet arrived +at this degree of opulence. China seems +to have been long stationary, and had, probably, +long ago acquired that full complement +of riches which is consistent with the nature +of its laws and institutions. But this complement +may be much inferior to what, with +other laws and institutions, the nature of its +soil, climate, and situation, might admit of. +A country which neglects or despises foreign +commerce, and which admits the vessels of<span class='pagenum'><a name="Page_40" id="Page_40">[Pg 40]</a></span> +foreign nations into one or two of its ports only, +cannot transact the same quantity of business +which it might do with different laws +and institutions. In a country, too, where, +though the rich, or the owners of large capitals, +enjoy a good deal of security, the poor, +or the owners of small capitals, enjoy scarce +any, but are liable, under the pretence of justice, +to be pillaged and plundered at any time +by the inferior mandarins, the quantity of +stock employed in all the different branches of +business transacted within it, can never be +equal to what the nature and extent of that +business might admit. In every different +branch, the oppression of the poor must establish +the monopoly of the rich, who, by engrossing +the whole trade to themselves, will +be able to make very large profits. Twelve +per cent. accordingly, is said to be the common +interest of money in China, and the ordinary +profits of stock must be sufficient to +afford this large interest.</p> + +<p>A defect in the law may sometimes raise +the rate of interest considerably above what +the condition of the country, as to wealth or +poverty, would require. When the law does +not enforce the performance of contracts, it +puts all borrowers nearly upon the same footing +with bankrupts, or people of doubtful +credit, in better regulated countries. The uncertainty +of recovering his money makes the +lender exact the same usurious interest which +is usually required from bankrupts. Among +the barbarous nations who overran the western +provinces of the Roman empire, the performance +of contracts was left for many ages to +the faith of the contracting parties. The +courts of justice of their kings seldom intermeddled +in it. The high rate of interest +which took place in those ancient times, may +perhaps, be partly accounted for from this +cause.</p> + +<p>When the law prohibits interest altogether, +it does not prevent it. Many people must +borrow, and nobody will lend without such a +consideration for the use of their money as is +suitable, not only to what can be made by the +use of it, but to the difficulty and danger of +evading the law. The high rate of interest +among all Mahometan nations is accounted for +by M. Montesquieu, not from their poverty, +but partly from this, and partly from the difficulty +of recovering the money.</p> + +<p>The lowest ordinary rate of profit must always +be something more than what is sufficient +to compensate the occasional losses to +which every employment of stock is exposed. +It is this surplus only which is neat or clear +profit. What is called gross profit, comprehends +frequently not only this surplus, but +what is retained for compensating such extraordinary +losses. The interest which the borrower +can afford to pay is in proportion to the +clear profit only.</p> + +<p>The lowest ordinary rate of interest must, +in the same manner, be something more than +sufficient to compensate the occasional losses +to which lending, even with tolerable prudence, +is exposed. Were it not, mere charity +or friendship could be the only motives for +lending.</p> + +<p>In a country which had acquired its full +complement of riches, where, in every particular +branch of business, there was the greatest +quantity of stock that could be employed +in it, as the ordinary rate of clear profit would +be very small, so the usual market rate of interest +which could be afforded out of it would +be so low as to render it impossible for any +but the very wealthiest people to live upon +the interest of their money. All people of +small or middling fortunes would be obliged +to superintend themselves the employment of +their own stocks. It would be necessary that +almost every man should be a man of business, +or engage in some sort of trade. The province +of Holland seems to be approaching +near to this state. It is there unfashionable +not to be a man of business. Necessity +makes it usual for almost every man to be so, +and custom everywhere regulates fashion. As +it is ridiculous not to dress, so is it, in some +measure, not to be employed like other people. +As a man of a civil profession seems awkward +in camp or a garrison, and is even in some +danger of being despised there, so does an +idle man among men of business.</p> + +<p>The highest ordinary rate of profit may be +such as, in the price of the greater part of +commodities, eats up the whole of what should +go to the rent of the land, and leaves only +what is sufficient to pay the labour of preparing +and bringing them to market, according +to the lowest rate at which labour can anywhere +be paid, the bare subsistence of the labourer. +The workman must always have +been fed in some way or other while he was +about the work, but the landlord may not always +have been paid. The profits of the +trade which the servants of the East India +Company carry on in Bengal may not, perhaps, +be very far from this rate.</p> + +<p>The proportion which the usual market +rate of interest ought to bear to the ordinary +rate of clear profit, necessarily varies as profit +rises or falls. Double interest is in Great +Britain reckoned what the merchants call a +good, moderate, reasonable profit; terms +which, I apprehend, mean no more than a +common and usual profit. In a country where +the ordinary rate of clear profit is eight or +ten per cent. it may be reasonable that one +half of it should go to interest, wherever business +is carried on with borrowed money. The +stock is at the risk of the borrower, who, as it +were, insures it to the lender; and four or five +per cent. may, in the greater part of trades, +be both a sufficient profit upon the risk of +this insurance, and a sufficient recompence for +the trouble of employing the stock. But the +<span class='pagenum'><a name="Page_41" id="Page_41">[Pg 41]</a></span>proportion between interest and clear profit +might not be the same in countries where the +ordinary rate of profit was either a good deal +lower, or a good deal higher. If it were a +good deal lower, one half of it, perhaps, could +not be afforded for interest; and more might +be afforded if it were a good deal higher.</p> + +<p>In countries which are fast advancing to +riches, the low rate of profit may, in the price +of many commodities, compensate the high +wages of labour, and enable those countries +to sell as cheap as their less thriving neighbours, +among whom the wages of labour may +be lower.</p> + +<p>In reality, high profits tend much more to +raise the price of work than high wages. If, +in the linen manufacture, for example, the +wages of the different working people, the flax-dressers, +the spinners, the weavers, &c. should +all of them be advanced twopence a-day, it +would be necessary to heighten the price of a +piece of linen only by a number of twopences +equal to the number of people that had been +employed about it, multiplied by the number +of days during which they had been so employed. +That part of the price of the commodity +which resolved itself into the wages, +would, through all the different stages of the +manufacture, rise only in arithmetical proportion +to this rise of wages. But if the profits +of all the different employers of those working +people should be raised five per cent. that +part of the price of the commodity which resolved +itself into profit would, through all the +different stages of the manufacture, rise in +geometrical proportion to this rise of profit. +The employer of the flax-dressers would, in +selling his flax, require an additional five per +cent. upon the whole value of the materials +and wages which he advanced to his workmen. +The employer of the spinners would require +an additional five per cent. both upon the advanced +price of the flax, and upon the wages +of the spinners. And the employer of the +weavers would require a like five per cent. +both upon the advanced price of the linen-yarn, +and upon the wages of the weavers. In +raising the price of commodities, the rise of +wages operates in the same manner as simple +interest does in the accumulation of debt. +The rise of profit operates like compound interest. +Our merchants and master manufacturers +complain much of the bad effects of +high wages in raising the price, and thereby +lessening the sale of their goods, both at home +and abroad. They say nothing concerning +the bad effects of high profits; they are silent +with regard to the pernicious effects of their +own gains; they complain only of those of +other people.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. X.</h3> + +<h4>OF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS +OF LABOUR AND STOCK.</h4> + + +<p>The whole of the advantages and disadvantages +of the different employments of labour +and stock, must, in the same neighbourhood, +be either perfectly equal, or continually tending +to equality. If, in the same neighbourhood, +there was any employment evidently +either more or less advantageous than the rest, +so many people would crowd into it in the one +case, and so many would desert it in the other, +that its advantages would soon return to the +level of other employments. This, at least, +would be the case in a society where things +were left to follow their natural course, where +there was perfect liberty, and where every man +was perfectly free both to choose what occupation +he thought proper, and to change it as +often as he thought proper. Every man's interest +would prompt him to seek the advantageous, +and to shun the disadvantageous employment.</p> + +<p>Pecuniary wages and profit, indeed, are +everywhere in Europe extremely different, according +to the different employments of labour +and stock. But this difference arises, partly +from certain circumstances in the employments +themselves, which, either really, or at +least in the imagination of men, make up for +a small pecuniary gain in some, and counterbalance +a great one in others, and partly from +the policy of Europe, which nowhere leaves +things at perfect liberty.</p> + +<p>The particular consideration of those circumstances, +and of that policy, will divide +this Chapter into two parts.</p> + + +<h4><span class="smcap">Part I.</span>—<i>Inequalities arising from the nature +of the employments themselves.</i></h4> + +<p>The five following are the principal circumstances +which, so far as I have been able to +observe, make up for a small pecuniary gain +in some employments, and counterbalance a +great one in others. First, the agreeableness +or disagreeableness of the employments themselves; +secondly, the easiness and cheapness, +or the difficulty and expense of learning them; +thirdly, the constancy or inconstancy of employment +in them; fourthly, the small or great +trust which must be reposed in those who exercise +them; and, fifthly, the probability or +improbability of success in them.</p> + +<p>First, the wages of labour vary with the +ease or hardship, the cleanliness or dirtiness, +the honourableness or dishonourableness, of +the employment. Thus in most places, take +the year round, a journeyman tailor earns less +than a journeyman weaver. His work is much<span class='pagenum'><a name="Page_42" id="Page_42">[Pg 42]</a></span> +easier. A journeyman weaver earns less than +a journeyman smith. His work is not always +easier, but it is much cleanlier. A journeyman +blacksmith, though an artificer, seldom +earns so much in twelve hours, as a collier, +who is only a labourer, does in eight. His +work is not quite so dirty, is less dangerous, +and is carried on in day-light, and above +ground. Honour makes a great part of the +reward of all honourable professions. In point +of pecuniary gain, all things considered, they +are generally under-recompensed, as I shall +endeavour to shew by and by. Disgrace has +the contrary effect. The trade of a butcher +is a brutal and an odious business; but it is +in most places more profitable than the greater +part of common trades. The most detestable +of all employments, that of public executioner, +is, in proportion to the quantity of +work done, better paid than any common trade +whatever.</p> + +<p>Hunting and fishing, the most important +employments of mankind in the rude state of +society, become, in its advanced state, their +most agreeable amusements, and they pursue +for pleasure what they once followed from necessity. +In the advanced state of society, +therefore, they are all very poor people who +follow as a trade, what other people pursue as +a pastime. Fishermen have been so since the +time of Theocritus<a name="FNanchor_11_11" id="FNanchor_11_11"></a><a href="#Footnote_11_11" class="fnanchor">[11]</a>. A poacher is everywhere +a very poor man in Great Britain. In +countries where the rigour of the law suffers +no poachers, the licensed hunter is not in a +much better condition. The natural taste for +those employments makes more people follow +them, than can live comfortably by them; and +the produce of their labour, in proportion to +its quantity, comes always too cheap to market, +to afford any thing but the most scanty +subsistence to the labourers.</p> + +<p>Disagreeableness and disgrace affect the +profits of stock in the same manner as the +wages of labour. The keeper of an inn or +tavern, who is never master of his own house, +and who is exposed to the brutality of every +drunkard, exercises neither a very agreeable +nor a very creditable business. But there is +scarce any common trade in which a small +stock yields so great a profit.</p> + +<p>Secondly, the wages of labour vary with the +easiness and cheapness, or the difficulty and +expense, of learning the business.</p> + +<p>When any expensive machine is erected, +the extraordinary work to be performed by it +before it is worn out, it must be expected, will +replace the capital laid out upon it, with at +least the ordinary profits. A man educated +at the expense of much labour and time to any +of those employments which require extraordinary +dexterity and skill, may be compared +to one of those expensive machines. The +work which he learns to perform, it must be +expected, over and above the usual wages of +common labour, will replace to him the whole +expense of his education, with at least the ordinary +profits of an equally valuable capital. +It must do this too in a reasonable time, regard +being had to the very uncertain duration +of human life, in the same manner as to the +more certain duration of the machine.</p> + +<p>The difference between the wages of skilled +labour and those of common labour, is founded +upon this principle.</p> + +<p>The policy of Europe considers the labour +of all mechanics, artificers, and manufacturers, +as skilled labour; and that of all country labourers +as common labour. It seems to suppose +that of the former to be of a more nice +and delicate nature than that of the latter. It +is so perhaps in some cases; but in the greater +part it is quite otherwise, as I shall endeavour +to shew by and by. The laws and customs +of Europe, therefore, in order to qualify +any person for exercising the one species of +labour, impose the necessity of an apprenticeship, +though with different degrees of rigour +in different places. They leave the other free +and open to every body. During the continuance +of the apprenticeship, the whole labour +of the apprentice belongs to the master. In +the meantime he must, in many cases, be +maintained by his parents or relations, and, in +almost all cases, must be clothed by them. +Some money, too, is commonly given to the +master for teaching him his trade. They who +cannot give money, give time, or become bound +for more than the usual number of years; a +consideration which, though it is not always +advantageous to the master, on account of the +usual idleness of apprentices, is always disadvantageous +to the apprentice. In country labour, +on the contrary, the labourer, while he +is employed about the easier, learns the more +difficult parts of his business, and his own labour +maintains him through all the different +stages of his employment. It is reasonable, +therefore, that in Europe the wages of mechanics, +artificers, and manufacturers, should +be somewhat higher than those of common labourers. +They are so accordingly, and their +superior gains make them, in most places, be +considered as a superior rank of people. This +superiority, however, is generally very small: +the daily or weekly earnings of journeymen +in the more common sorts of manufactures, +such as those of plain linen and woollen cloth, +computed at an average, are, in most places, +very little more than the day-wages of common +labourers. Their employment, indeed, +is more steady and uniform, and the superiority +of their earnings, taking the whole year +together, may be somewhat greater. It seems +evidently, however, to be no greater than what +is sufficient to compensate the superior expense +of their education.</p> + +<p>Education in the ingenious arts, and in the +liberal professions, is still more tedious and<span class='pagenum'><a name="Page_43" id="Page_43">[Pg 43]</a></span> +expensive. The pecuniary recompence, therefore, +of painters and sculptors, of lawyers and +physicians, ought to be much more liberal; +and it is so accordingly.</p> + +<p>The profits of stock seem to be very little +affected by the easiness or difficulty of learning +the trade in which it is employed. All +the different ways in which stock is commonly +employed in great towns seem, in reality, +to be almost equally easy and equally difficult +to learn. One branch, either of foreign or +domestic trade, cannot well be a much more +intricate business than another.</p> + +<p>Thirdly, the wages of labour in different +occupations vary with the constancy or inconstancy +of employment.</p> + +<p>Employment is much more constant in +some trades than in others. In the greater +part of manufactures, a journeyman may be +pretty sure of employment almost every day +in the year that he is able to work. A mason +or bricklayer, on the contrary, can work +neither in hard frost nor in foul weather, and +his employment at all other times depends upon +the occasional calls of his customers. He is +liable, in consequence, to be frequently without +any. What he earns, therefore, while he +is employed, must not only maintain him +while he is idle, but make him some compensation +for those anxious and desponding moments +which the thought of so precarious a +situation must sometimes occasion. Where +the computed earnings of the greater part of +manufacturers, accordingly, are nearly upon a +level with the day-wages of common labourers, +those of masons and bricklayers are generally +from one-half more to double those +wages. Where common labourers earn four +of five shillings a week, masons and bricklayers +frequently earn seven and eight; where +the former earn six, the latter often earn nine +and ten; and where the former earn nine and +ten, as in London, the latter commonly earn +fifteen and eighteen. No species of skilled +labour, however, seems more easy to learn +than that of masons and bricklayers. Chairmen +in London, during the summer season, +are said sometimes to be employed as bricklayers. +The high wages of those workmen, +therefore, are not so much the recompence of +their skill, as the compensation for the inconstancy +of their employment.</p> + +<p>A house-carpenter seems to exercise rather +a nicer and a more ingenious trade than a +mason. In most places, however, for it is not +universally so, his day-wages are somewhat +lower. His employment, though it depends +much, does not depend so entirely upon the +occasional calls of his customers; and it is +not liable to be interrupted by the weather.</p> + +<p>When the trades which generally afford +constant employment, happen in a particular +place not to do so, the wages of the workmen +always rise a good deal above their ordinary +proportion to those of common labour. In +London, almost all journeymen artificers are +liable to be called upon and dismissed by their +masters from day to day, and from week to +week, in the same manner as day-labourers in +other places. The lowest order of artificers, +journeymen tailors, accordingly, earn their +half-a-crown a-day, though eighteen pence +may be reckoned the wages of common labour. +In small towns and country villages, +the wages of journeymen tailors frequently +scarce equal those of common labour; but in +London they are often many weeks without +employment, particularly during the summer.</p> + +<p>When the inconstancy of employment is +combined with the hardship, disagreeableness, +and dirtiness of the work, it sometimes raises +the wages of the most common labour above +those of the most skilful artificers. A collier +working by the piece is supposed, at Newcastle, +to earn commonly about double, and, +in many parts of Scotland, about three times, +the wages of common labour. His high wages +arise altogether from the hardship, disagreeableness, +and dirtiness of his work. His employment +may, upon most occasions, be as +constant as he pleases. The coal-heavers in +London exercise a trade which, in hardship, +dirtiness, and disagreeableness, almost equals +that of colliers; and, from the unavoidable irregularity +in the arrivals of coal-ships, the +employment of the greater part of them is necessarily +very inconstant. If colliers, therefore, +commonly earn double and triple the +wages of common labour, it ought not to seem +unreasonable that coal-heavers should sometimes +earn four and five times those wages. +In the inquiry made into their condition a few +years ago, it was found that, at the rate at +which they were paid, they could earn +from six to ten shillings a-day. Six shillings +are about four times the wages of common labour +in London; and, in every particular +trade, the lowest common earnings may always +be considered as those of the far greater +number. How extravagant soever those earnings +may appear, if they were more than sufficient +to compensate all the disagreeable circumstances +of the business, there would soon +be so great a number of competitors, as, in a +a trade which has no exclusive privilege, would +quickly reduce them to a lower rate.</p> + +<p>The constancy or inconstancy of employment +cannot affect the ordinary profits of +stock in any particular trade. Whether the +stock is or is not constantly employed, depends, +not upon the trade, but the trader.</p> + +<p>Fourthly, the wages of labour vary according +to the small or great trust which must be +reposed in the workmen.</p> + +<p>The wages of goldsmiths and jewellers are +everywhere superior to those of many other +workmen, not only of equal, but of much superior +ingenuity, on account of the precious +materials with which they are entrusted.</p> + +<p>We trust our health to the physician, our<span class='pagenum'><a name="Page_44" id="Page_44">[Pg 44]</a></span> +fortune, and sometimes our life and reputation, +to the lawyer and attorney. Such confidence +could not safely be reposed in people of +a very mean or low condition. Their reward +must be such, therefore, as may give them +that rank in the society which so important a +trust requires. The long time and the great +expense which must be laid out in their education, +when combined with this circumstance, +necessarily enhance still further the price of +their labour.</p> + +<p>When a person employs only his own stock +in trade, there is no trust; and the credit +which he may get from other people, depends, +not upon the nature of the trade, but upon +their opinion of his fortune, probity and prudence. +The different rates of profit, therefore, +in the different branches of trade, cannot arise +from the different degrees of trust reposed in +the traders.</p> + +<p>Fifthly, the wages of labour in different +employments vary according to the probability +or improbability of success in them.</p> + +<p>The probability that any particular person +shall ever be qualified for the employments +to which he is educated, is very different in +different occupations. In the greatest part of +mechanic trades, success is almost certain; +but very uncertain in the liberal professions. +Put your son apprentice to a shoemaker, there +is little doubt of his learning to make a pair of +shoes; but send him to study the law, it as +at least twenty to one if he ever makes such +proficiency as will enable him to live by the +business. In a perfectly fair lottery, those +who draw the prizes ought to gain all that is +lost by those who draw the blanks. In a profession, +where twenty fail for one that succeeds, +that one ought to gain all that should +have been gained by the unsuccessful twenty. +The counsellor at law, who, perhaps, at near +forty years of age, begins to make something +by his profession, ought to receive the retribution, +not only of his own so tedious and expensive +education, but of that of more than +twenty others, who are never likely to make +any thing by it. How extravagant soever the +fees of counsellors at law may sometimes appear, +their real retribution is never equal to +this. Compute, in any particular place, what +is likely to be annually gained, and what is +likely to be annually spent, by all the different +workmen in any common trade, such as +that of shoemakers or weavers, and you will +find that the former sum will generally exceed +the latter. But make the same computation +with regard to all the counsellors and students +of law, in all the different Inns of court, +and you will find that their annual gains bear +but a very small proportion to their annual +expense, even though you rate the former as +high, and the latter as low, as can well be +done. The lottery of the law, therefore, is +very far from being a perfectly fair lottery; +and that, as well as many other liberal and +honourable professions, is, in point of pecuniary +gain, evidently under-recompensed.</p> + +<p>Those professions keep their level, however, +with other occupations; and, notwithstanding +these discouragements, all the most generous +and liberal spirits are eager to crowd into +them. Two different causes contribute to recommend +them. First, the desire of the reputation +which attends upon superior excellence +in any of them; and, secondly, the natural +confidence which every man has, more +or less, not only in his own abilities, but in +his own good fortune.</p> + +<p>To excel in any profession, in which but +few arrive at mediocrity, it is the most decisive +mark of what is called genius, or superior +talents. The public admiration which attends +upon such distinguished abilities makes +always a part of their reward; a greater of +smaller, in proportion as it is higher or lower +in degree. It makes a considerable part of +that reward in the profession of physic; a still +greater, perhaps, in that of law; in poetry +and philosophy it makes almost the whole.</p> + +<p>There are some very agreeable and beautiful +talents, of which the possession commands +a certain sort of admiration, but of which the +exercise, for the sake of gain, is considered, +whether from reason or prejudice, as a sort of +public prostitution. The pecuniary recompence, +therefore, of those who exercise them +in this manner, must be sufficient, not only to +pay for the time, labour, and expense for acquiring +the talents, but for the discredit which +attends the employment of them as the means +of subsistence. The exorbitant rewards of +players, opera-singers, opera-dancers, &c. are +founded upon those two principles; the rarity +and beauty of the talent, and the discredit of +employing them in this manner. It seems +absurd at first sight, that we should despise +their persons, and yet reward their talents with +the most profuse liberality. While we do the +one, however, we must of necessity do the +other. Should the public opinion of prejudice +ever alter with regard to such occupations, +their pecuniary recompence would +quickly diminish. More people would apply +to them, and the competition would quickly +reduce the price of their labour. Such talents, +though far from being common, are by no +means so rare as imagined. Many people +possess them in great perfection, who disdain +to make this use of them; and many more +are capable of acquiring them, if any thing +could be made honourably by them.</p> + +<p>The over-weening conceit which the great +part of men have of their own abilities, is an +ancient evil remarked by the philosophers and +moralists of all ages. Their absurd presumption +in their own good fortune has been less +taken notice of. It is, however, if possible, +still more universal. There is no man living, +who, when in tolerable health and spirits, has +not some share of it. The chance of gain is<span class='pagenum'><a name="Page_45" id="Page_45">[Pg 45]</a></span> +by every man more or less over-valued, and +the chance of loss is by most men under-valued, +and by scarce any man, who is in tolerable +health and spirits, valued more than it is +worth.</p> + +<p>That the chance of gain is naturally over-valued, +we may learn from the universal success +of lotteries. The world neither ever saw, +nor ever will see, a perfectly fair lottery, or +one in which the whole gain compensated the +whole loss; because the undertaker could +make nothing by it. In the state lotteries, the +tickets are really not worth the price which is +paid by the original subscribers, and yet commonly +sell in the market for twenty, thirty, +and sometimes forty per cent. advance. The +vain hopes of gaining some of the great prizes +is the sole cause of this demand. The soberest +people scarce look upon it as a folly to pay +a small sum for the chance of gaining ten or +twenty thousand pounds, though they know +that even that small sum is perhaps twenty or +thirty per cent. more than the chance is worth. +In a lottery in which no prize exceeded twenty +pounds, though in other respects it approached +much nearer to a perfectly fair one than +the common state lotteries, there would not +be the same demand for tickets. In order to +have a better chance for some of the great +prizes, some people purchase several tickets; +and others, small shares in a still greater number. +There is not, however, a more certain +proposition in mathematics, than that the more +tickets you adventure upon, the more likely +you are to be a loser. Adventure upon all +the tickets in the lottery, and you lose for certain; +and the greater the number of your tickets, +the nearer your approach to this certainty.</p> + +<p>That the chance of loss is frequently under-valued, +and scarce ever valued more than it is +worth, we may learn from the very moderate +profit of insurers. In order to make insurance, +either from fire or sea-risk, a trade at all, +the common premium must be sufficient to +compensate the common losses, to pay the expense +of management, and to afford such a +profit as might have been drawn from an equal +capital employed in any common trade. The +person who pays no more than this, evidently +pays no more than the real value of the risk, +or the lowest price at which he can reasonably +expect to insure it. But though many +people have made a little money by insurance, +very few have made a great fortune; and, +from this consideration alone, it seems evident +enough that the ordinary balance of profit and +loss is not more advantageous in this than in +other common trades, by which so many people +make fortunes. Moderate, however, as +the premium of insurance commonly is, many +people despise the risk too much to care to +pay it. Taking the whole kingdom at an average, +nineteen houses in twenty, or rather, +perhaps, ninety-nine in a hundred, are not +insured from fire. Sea-risk is more alarming +to the greater part of people; and the proportion +of ships insured to those not insured is +much greater. Many sail, however, at all +seasons, and even in time of war, without any +insurance. This may sometimes, perhaps, be +done without any imprudence. When a great +company, or even a great merchant, has twenty +or thirty ships at sea, they may, as it were, +insure one another. The premium saved up +on them all may more than compensate such +losses as they are likely to meet with in the +common course of chances. The neglect of +insurance upon shipping, however, in the same +manner as upon houses, is, in most cases, the +effect of no such nice calculation, but of mere +thoughtless rashness, and presumptuous contempt +of the risk.</p> + +<p>The contempt of risk, and the presumptuous +hope of success, are in no period of life +more active than at the age at which young +people choose their professions. How little +the fear of misfortune is then capable of balancing +the hope of good luck, appears still +more evidently in the readiness of the common +people to enlist as soldiers, or to go to sea, +than in the eagerness of those of better fashion +to enter into what are called the liberal professions.</p> + +<p>What a common soldier may lose is obvious +enough. Without regarding the danger, +however, young volunteers never enlist so +readily as at the beginning of a new war; and +though they have scarce any chance of preferment, +they figure to themselves, in their youthful +fancies, a thousand occasions of acquiring +honour and distinction which never occur. +These romantic hopes make the whole price +of their blood. Their pay is less than that of +common labourers, and, in actual service, their +fatigues are much greater.</p> + +<p>The lottery of the sea is not altogether so +disadvantageous as that of the army. The +son of a creditable labourer or artificer may +frequently go to sea with his father's consent; +but if he enlists as a soldier, it is always without +it. Other people see some chance of his +making something by the one trade; nobody +but himself sees any of his making any thing +by the other. The great admiral is less the +object of public admiration than the great general; +and the highest success in the sea service +promises a less brilliant fortune and reputation +than equal success in the land. The +same difference runs through all the inferior +degrees of preferment in both. By the rules +of precedency, a captain in the navy ranks +with a colonel in the army; but he does not +rank with him in the common estimation. As +the great prizes in the lottery are less, the +smaller ones must be more numerous. Common +sailors, therefore, more frequently get +some fortune and preferment than common +soldiers; and the hope of those prizes is what +principally recommends the trade. Though +their skill and dexterity are much superior to<span class='pagenum'><a name="Page_46" id="Page_46">[Pg 46]</a></span> +that of almost any artificers: and though their +whole life is one continual scene of hardship +and danger; yet for all this dexterity and skill, +for all those hardships and dangers, while they +remain in the condition of common sailors, +they receive scarce any other recompence but +the pleasure of exercising the one and of surmounting +the other. Their wages are not +greater than those of common labourers at the +port which regulates the rate of seamen's +wages. As they are continually going from +port to port, the monthly pay of those who +sail from all the different ports of Great Britain, +is more nearly upon a level than that of +any other workmen in those different places; +and the rate of the port to and from which the +greatest number sail, that is, the port of London, +regulates that of all the rest. At London, +the wages of the greater part of the different +classes of workmen are about double +those of the same classes at Edinburgh. But +the sailors who sail from the port of London, +seldom earn above three or four shillings a-month +more than those who sail from the port +of Leith, and the difference is frequently not +so great. In time of peace, and in the merchant-service, +the London price is from a +guinea to about seven-and-twenty shillings the +calendar month. A common labourer in London, +at the rate of nine or ten shillings a-week, +may earn in the calendar month from +forty to five-and-forty shillings. The sailor, +indeed, over and above his pay, is supplied +with provisions. Their value, however, may +not perhaps always exceed the difference between +his pay and that of the common labourer; +and though it sometimes should, the excess +will not be clear gain to the sailor, because +he cannot share it with his wife and family, +whom he must maintain out of his wages +at home.</p> + +<p>The dangers and hair-breadth escapes of a +life of adventures, instead of disheartening +young people, seem frequently to recommend +a trade to them. A tender mother, among the +inferior ranks of people, is often afraid to send +her son to school at a sea-port town, lest the +sight of the ships, and the conversation and +adventures of the sailors, should entice him to +go to sea. The distant prospect of hazards, +from which we can hope to extricate ourselves +by courage and address, is not disagreeable to +us, and does not raise the wages of labour in +any employment. It is otherwise with those +in which courage and address can be of no +avail. In trades which are known to be very +unwholesome, the wages of labour are always +remarkably high. Unwholesomeness is a species +of disagreeableness, and its effects upon +the wages of labour are to be ranked under +that general head.</p> + +<p>In all the different employments of stock, +the ordinary rate of profit varies more or less +with the certainty or uncertainty of the returns. +These are, in general, less uncertain +in the inland than in the foreign trade, and in +some branches of foreign trade than in others; +in the trade to North America, for example, +than in that to Jamaica. The ordinary rate +of profit always rises more or less with the +risk. It does not, however, seem to rise in +proportion to it, or so as to compensate it +completely. Bankruptcies are most frequent +in the most hazardous trades. The most hazardous +of all trades, that of a smuggler, though, +when the adventure succeeds, it is likewise the +most profitable, is the infallible road to bankruptcy. +The presumptuous hope of success +seems to act here as upon all other occasions, +and to entice so many adventurers into those +hazardous trades, that their competition reduces +the profit below what is sufficient to +compensate the risk. To compensate it completely, +the common returns ought, over and +above the ordinary profits of stock, not only +to make up for all occasional losses, but to +afford a surplus profit to the adventurers, of +the same nature with the profit of insurers. +But if the common returns were sufficient for +all this, bankruptcies would not be more frequent +in these than in other trades.</p> + +<p>Of the five circumstances, therefore, which +vary the wages of labour, two only affect the +profits of stock; the agreeableness or disagreeableness +of the business, and the risk or security +with which it is attended. In point of +agreeableness or disagreeableness, there is little +or no difference in the far greater part of the +different employments of stock, but a great +deal in those of labour; and the ordinary profit +of stock, though it rises with the risk, does +not always seem to rise in proportion to it. +It should follow from all this, that, in the +same society or neighbourhood, the average +and ordinary rates of profit in the different +employments of stock should be more nearly +upon a level than the pecuniary wages of the +different sorts of labour.</p> + +<p>They are so accordingly. The difference +between the earnings of a common labourer +and those of a well employed lawyer or physician, +is evidently much greater than that between +the ordinary profits in any two different +branches of trade. The apparent difference, +besides, in the profits of different trades, is +generally a deception arising from our not +always distinguishing what ought to be considered +as wages, from what ought to be considered +as profit.</p> + +<p>Apothecaries' profit is become a bye-word, +denoting something uncommonly extravagant. +This great apparent profit, however, is frequently +no more than the reasonable wages of +labour. The skill of an apothecary is a much +nicer and more delicate matter than that of +any artificer whatever; and the trust which is +reposed in him is of much greater importance. +He is the physician of the poor in all cases, +and of the rich when the distress or danger is +not very great. His reward, therefore, ought<span class='pagenum'><a name="Page_47" id="Page_47">[Pg 47]</a></span> +to be suitable to his skill and his trust; and it +arises generally from the price at which he +sells his drugs. But the whole drugs which +the best employed apothecary in a large market-town, +will sell in a year, may not perhaps +cost him above thirty or forty pounds. Though +he should sell them, therefore, for three or +four hundred, or at a thousand per cent, profit, +this may frequently be no more than the +reasonable wages of his labour, charged, in +the only way in which he can charge them, +upon the price of his drugs. The greater part +of the apparent profit is real wages disguised +in the garb of profit.</p> + +<p>In a small sea-port town, a little grocer will +make forty or fifty per cent. upon a stock of +a single hundred pounds, while a considerable +wholesale merchant in the same place will +scarce make eight or ten per cent. upon a +stock of ten thousand. The trade of the +grocer may be necessary for the conveniency +of the inhabitants, and the narrowness of the +market may not admit the employment of a +larger capital in the business. The man, +however, must not only live by his trade, but +live by it suitably to the qualifications which +it requires. Besides possessing a little capital, +he must be able to read, write, and account, +and must be a tolerable judge, too, of +perhaps fifty or sixty different sorts of goods, +their prices, qualities, and the markets where +they are to be had cheapest. He must +have all the knowledge, in short, that is necessary +for a great merchant, which nothing +hinders him from becoming but the want of a +sufficient capital. Thirty or forty pounds a-year +cannot be considered as too great a recompence +for the labour of a person so accomplished. +Deduct this from the seemingly +great profits of his capital, and little more will +remain, perhaps, than the ordinary profits of +stock. The greater part of the apparent profit +is, in this case too, real wages.</p> + +<p>The difference between the apparent profit +of the retail and that of the wholesale trade, +is much less in the capital than in small towns +and country villages. Where ten thousand +pounds can be employed in the grocery trade, +the wages of the grocer's labour must be a +very trifling addition to the real profits of so +great a stock. The apparent profits of the +wealthy retailer, therefore, are there more +nearly upon a level with these of the wholesale +merchant. It is upon this account that +goods sold by retail are generally +and frequently much cheaper, in the capital +than in small towns and country villages. +Grocery goods, for example, are generally +much cheaper; bread and butchers' meat frequently +as cheap. It costs no more to bring +grocery goods to the great town than to the +country village; but it costs a great deal more +to bring corn and cattle, as the greater part of +them must be brought from a much greater +distance. The prime cost of grocery goods, +therefore, being the same in both places, they +are cheapest where the least profit is charged +upon them. The prime cost of bread and +butchers' meat is greater in the great town +than in the country village; and though the +profit is less, therefore they are not always +cheaper there, but often equally cheap. In +such articles as bread and butchers' meat, the +the same cause which diminishes apparent profit, +increases prime cost. The extent of the market, +by giving employment to greater stocks, +diminishes apparent profit; but by requiring +supplies from a greater distance, it increases +prime cost. This diminution of the one and +increase of the other, seem, in most cases, +nearly to counterbalance one another, which +is probably the reason that, though the prices +of corn and cattle are commonly very different +in different parts of the kingdom, those of +bread and butchers' meat are generally very +nearly the same through the greater part of +it.</p> + +<p>Though the profits of stock, both in the +wholesale and retail trade, are generally less +in the capital than in small towns and country +villages, yet great fortunes are frequently +acquired from small beginnings in the former, +and scarce ever in the latter. In small towns +and country villages, on account of the narrowness +of the market, trade cannot always +be extended as stock extends. In such places, +therefore, though the rate of a particular person's +profits may be very high, the sum or amount +of them can never be very great, nor +consequently that of his annual accumulation. +In great towns, on the contrary, trade can be +extended as stock increases, and the credit of +a frugal and thriving man increases much +faster than his stock. His trade is extended +in proportion to the amount of both; and the +sum or amount of his profits is in proportion +to the extent of his trade, and his annual accumulation +in proportion to the amount of +his profits. It seldom happens, however, that +great fortunes are made, even in great towns, +by any one regular, established, and well-known +branch of business, but in consequence +of a long life of industry, frugality, and attention. +Sudden fortunes, indeed, are sometimes +made in such places, by what is called +the trade of speculation. The speculative +merchant exercises no one regular, established, +or well-known branch of business. He is a +corn merchant this year, and a wine merchant +the next, and a sugar, tobacco, or tea merchant +the year after. He enters into every +trade, when he foresees that it is likely to be +more than commonly profitable, and he quits +it when he foresees that its profits are likely +to return to the level of other trades. His +profits and losses, therefore, can bear no regular +proportion to those of any one established +and well-known branch of business. A bold +adventurer may sometimes acquire a considerable +fortune by two or three successful specu<span class='pagenum'><a name="Page_48" id="Page_48">[Pg 48]</a></span>lations, +but is just as likely to lose one by two +or three unsuccessful ones. This trade can +be carried on nowhere but in great towns. It +is only in places of the most extensive commerce +and correspondence that the intelligence +requisite for it can he had.</p> + +<p>The five circumstances above mentioned, +though they occasion considerable inequalities +in the wages of labour and profits of stock, +occasion none in the whole of the advantages +and disadvantages, real or imaginary, of the +different employments of either. The nature +of those circumstances is such, that they make +up for a small pecuniary gain in some, and +counterbalance a great one in others.</p> + +<p>In order, however, that this equality may +take place in the whole of their advantages or +disadvantages, three things are requisite, even +where there is the most perfect freedom. +First, the employments must be well known +and long established in the neighbourhood; +secondly, they must be in their ordinary, or +what may be called their natural state; and, +thirdly, they must be the sole or principal employments +of those who occupy them.</p> + +<p>First, This equality can lake place only in +those employments which are well known, +and have been long established in the neighbourhood.</p> + +<p>Where all other circumstances are equal, +wages are generally higher in new than in old +trades. When a projector attempts to establish +a new manufacture, he must at first entice +his workmen from other employments, by +higher wages than they can either earn in their +own trades, or than the nature of his work +would otherwise require; and a considerable +time must pass away before he can venture to +reduce them to the common level. Manufactures +for which the demand arises altogether +from fashion and fancy, are continually changing, +and seldom last long enough to be considered +as old established manufactures. Those, +on the contrary, for which the demand arises +chiefly from use or necessity, are less liable to +change, and the same form of fabric may continue +in demand for whole centuries together. +The wages of labour, therefore, are likely to +be higher in manufactures of the former, than +in those of the latter kind. Birmingham +deals chiefly in manufactures of the former +kind; Sheffield in those of the latter; and the +wages of labour in those two different places +are said to be suitable to this difference in the +nature of their manufactures.</p> + +<p>The establishment of any new manufacture, +of any new branch of commerce, or of any +new practice in agriculture, is always a speculation +from which the projector promises himself +extraordinary profits. These profits sometimes +are very great, and sometimes, more +frequently, perhaps, they are quite otherwise; +but, in general, they bear no regular proportion +to those of other old trades in the neighbourhood. +If the project succeeds, they are +commonly at first very high. When the trade +or practice becomes thoroughly established +and well known, the competition reduces +them to the level of other trades.</p> + +<p>Secondly, this equality in the whole of the +advantages and disadvantages of the different +employments of labour and stock, can take +place only in the ordinary, or what may be +called the natural state of those employments.</p> + +<p>The demand for almost every different +species of labour is sometimes greater, and +sometimes less than usual. In the one case, +the advantages of the employment rise above, +in the other they fall below the common level. +The demand for country labour is greater at +hay-time and harvest than during the greater +part of the year; and wages rise with the demand. +In time of war, when forty or fifty +thousand sailors are forced from the merchant +service into that of the king, the demand for +sailors to merchant ships necessarily rises with +their scarcity; and their wages, upon such +occasions, commonly rise from a guinea and +seven-and-twenty shillings to forty shillings +and three pounds a-month. In a decaying +manufacture, on the contrary, many workmen, +rather than quit their own trade, are +contented with smaller wages than would +be suitable to the nature of their +employment.</p> + +<p>The profits of stock vary with the price of +the commodities in which it is employed. As +the price of any commodity rises above the +ordinary or average rate, the profits of at +least some part of the stock that is employed +in bringing it to market, rise above their proper +level, and as it falls they sink below it. +All commodities are more or less liable to variations +of price, but some are much more so +than others. In all commodities which are +produced by human industry, the quantity of +industry annually employed is necessarily regulated +by the annual demand, in such a manner +that the average annual produce may, as +nearly as possible, be equal to the average annual +consumption. In some employments, it +has already been observed, the same quantity +of industry will always produce the same, or +very nearly the same quantity of commodities. +In the linen or woollen manufactures, for example, +the same number of hands will annually +work up very nearly the same quantity +of linen and woollen cloth. The variations +in the market price of such commodities, +therefore, can arise only from some accidental +variation in the demand. A public mourning +raises the price of black cloth. But as the +demand for most sorts of plain linen and +woollen cloth is pretty uniform, so is likewise +the price. But there are other employments +in which the same quantity of industry will +not always produce the same quantity of commodities. +The same quantity of industry, for +example, will, in different years, produce very +different quantities of corn, wine, hops, sugar,<span class='pagenum'><a name="Page_49" id="Page_49">[Pg 49]</a></span> +tobacco, &c. The price of such commodities, +therefore, varies not only with the variations +of demand, but with the much greater and +more frequent variations of quantity, and is +consequently extremely fluctuating; but the +profit of some of the dealers must necessarily +fluctuate with the price of the commodities. +The operations of the speculative merchant +are principally employed about such commodities. +He endeavours to buy them up when +he foresees that their price is likely to rise, +and to sell them when it is likely to fall.</p> + +<p>Thirdly, this equality in the whole of the +advantages and disadvantages of the different +employments of labour and stock, can take +place only in such as are the sole or principal +employments of those who occupy them.</p> + +<p>When a person derives his subsistence from +one employment, which does not occupy the +greater part of his time, in the intervals of his +leisure he is often willing to work at another +for less wages than would otherwise suit the +nature of the employment.</p> + +<p>There still subsists, in many parts of Scotland, +a set of people called <i>cottars</i> or <i>cottagers</i>, +though they were more frequent some years +ago than they are now. They are a sort of +out-servants of the landlords and farmers. +The usual reward which they receive from +their master is a house, a small garden for +pot-herbs, as much grass as will feed a cow, +and, perhaps, an acre or two of bad arable +land. When their master has occasion for +their labour, he gives them, besides, two pecks +of oatmeal a-week, worth about sixteen pence +sterling. During a great part of the year, he +has little or no occasion for their labour, and +the cultivation of their own little possession is +not sufficient to occupy the time which is left +at their own disposal. When such occupiers +were more numerous than they are at present, +they are said to have been willing to give +their spare time for a very small recompence +to any body, and to have wrought for less +wages than other labourers. In ancient +times, they seem to have been common all +over Europe. In countries ill cultivated, and +worse inhabited, the greater part of landlords +and farmers could not otherwise provide themselves +with the extraordinary number of hands +which country labour requires at certain seasons. +The daily or weekly recompence which +such labourers occasionally received from their +masters, was evidently not the whole price of +their labour. Their small tenement made a +considerable part of it. This daily or weekly +recompence, however, seems to have been +considered as the whole of it, by many writers +who have collected the prices of labour and +provisions in ancient times, and who have +taken pleasure in representing both as wonderfully +low.</p> + +<p>The produce of such labour comes frequently +cheaper to market than would otherwise be +suitable to its nature. Stockings, in many +parts of Scotland, are knit much cheaper than +they can anywhere be wrought upon the loom. +They are the work of servants and labourers, +who derive the principal part of their subsistence +from some other employment. More +than a thousand pair of Shetland stockings are +annually imported into Leith, of which the +price is from fivepence to sevenpence a pair. +At Lerwick, the small capital of the Shetland +islands, tenpence a-day, I have been assured, +is a common price of common labour. In the +same islands, they knit worsted stockings to +the value of a guinea a pair and upwards.</p> + +<p>The spinning of linen yarn is carried on in +Scotland nearly in the same way as the knitting +of stockings, by servants, who are chiefly +hired for other purposes. They earn but a +very scanty subsistence, who endeavour to get +their livelihood by either of those trades. In +most parts of Scotland, she is a good spinner +who can earn twentypence a-week.</p> + +<p>In opulent countries, the market is generally +so extensive, that any one trade is sufficient +to employ the whole labour and stock of +those who occupy it. Instances of people living +by one employment, and, at the same time, +deriving some little advantage from another, +occur chiefly in poor countries. The following +instance, however, of something of the +same kind, is to be found in the capital of a +very rich one. There is no city in Europe, I +believe, in which house-rent is dearer than in +London, and yet I know no capital in which +a furnished apartment can be hired so cheap. +Lodging is not only much cheaper in London +than in Paris; it is much cheaper than in +Edinburgh, of the same degree of goodness; +and, what may seem extraordinary, the dearness +of house-rent is the cause of the cheapness +of lodging. The dearness of house-rent +in London arises, not only from those causes +which render it dear in all great capitals, the +dearness of labour, the dearness of all the materials +of building, which must generally be +brought from a great distance, and, above all, +the dearness of ground-rent, every landlord +acting the part of a monopolist, and frequently +exacting a higher rent for a single acre of +bad land in a town, than can be had for a +hundred of the best in the country, but it +arises in part from the peculiar manners and +customs of the people, which oblige every +master of a family to hire a whole house from +top to bottom. A dwelling-house in England +means every thing that is contained under the +same roof. In France, Scotland, and many +other parts of Europe, it frequently means no +more than a single storey. A tradesman in +London is obliged to hire a whole house in +that part of the town where his customers +live. His shop is upon the ground floor, and +he and his family sleep in the garret; and he +endeavours to pay a part of his house-rent by +letting the two middle storeys to lodgers. He +expects to maintain his family by his trade,<span class='pagenum'><a name="Page_50" id="Page_50">[Pg 50]</a></span> +and not by his lodgers. Whereas at Paris and +Edinburgh, people who let lodgings have +commonly no other means of subsistence; and +the price of the lodging must pay, not only +the rent of the house, but the whole expense +of the family.</p> + + +<h4><span class="smcap">Part II.</span>—<i>Inequalities occasioned by the +Policy of Europe.</i></h4> + +<p>Such are the inequalities in the whole of the +advantages and disadvantages of the different +employments of labour and stock, which the +defect of any of the three requisites above +mentioned must occasion, even where there is +the most perfect liberty. But the policy of +Europe, by not leaving things at perfect liberty, +occasions other inequalities of much +greater importance.</p> + +<p>It does this chiefly in the three following +ways. First, by restraining the competition +in some employments to a smaller number +than would otherwise be disposed to enter +into them; secondly, by increasing it in others +beyond what it naturally would be; and, +thirdly, by obstructing the free circulation of +labour and stock, both from employment to +employment, and from place to place.</p> + +<p>First, The policy of Europe occasions a very +important inequality in the whole of the advantages +and disadvantages of the different +employments of labour and stock, by restraining +the competition in some employments to +a smaller number than might otherwise be disposed +to enter into them.</p> + +<p>The exclusive privileges of corporations are +the principal means it makes use of for this +purpose.</p> + +<p>The exclusive privilege of an incorporated +trade necessarily restrains the competition, in +the town where it is established, to those who +are free of the trade. To have served an apprenticeship +in the town, under a master properly +qualified, is commonly the necessary requisite +for obtaining this freedom. The bye-laws +of the corporation regulate sometimes +the number of apprentices which any master +is allowed to have, and almost always the +number of years which each apprentice is obliged +to serve. The intention of both regulations +is to restrain the competition to a much +smaller number than might otherwise be disposed +to enter into the trade. The limitation +of the number of apprentices restrains it directly. +A long term of apprenticeship restrains +it more indirectly, but as effectually, by increasing +the expense of education.</p> + +<p>In Sheffield, no master cutler can have more +than one apprentice at a time, by a bye-law of +the corporation. In Norfolk and Norwich, +no master weaver can have more than two apprentices, +under pain of forfeiting five pounds +a-month to the king. No master hatter can +have more than two apprentices anywhere in +England, or in the English plantations, under +pain of forfeiting five pounds a-month, +half to the king, and half to him who shall +sue in any court of record. Both these regulations, +though they have been confirmed by +a public law of the kingdom, are evidently +dictated by the same corporation-spirit which +enacted the bye-law of Sheffield. The silk-weavers +in London had scarce been incorporated +a year, when they enacted a bye-law, +restraining any master from having more than +two apprentices at a time. It required a particular +act of parliament to rescind this bye-law.</p> + +<p>Seven years seem anciently to have been, +all over Europe, the usual term established +for the duration of apprenticeships in the +greater part of incorporated trades. All such +incorporations were anciently called universities, +which, indeed, is the proper Latin name +for any incorporation whatever. The university +of smiths, the university of tailors, &c. +are expressions which we commonly meet with +in the old charters of ancient towns. When +those particular incorporations, which are now +peculiarly called universities, were first established, +the term of years which it was necessary +to study, in order to obtain the degree of +master of arts, appears evidently to have been +copied from the term of apprenticeship in +common trades, of which the incorporations +were much more ancient. As to have wrought +seven years under a master properly qualified, +was necessary, in order to entitle any person to +become a master, and to have himself apprentices +in a common trade; so to have studied +seven years under a master properly qualified, +was necessary to entitle him to become a master, +teacher, or doctor (words anciently synonymous), +in the liberal arts, and to have scholars +or apprentices (words likewise originally +synonymous) to study under him.</p> + +<p>By the 5th of Elizabeth, commonly called +the Statute of Apprenticeship, it was enacted, +that no person should, for the future, exercise +any trade, craft, or mystery, at that time exercised +in England, unless he had previously +served to it an apprenticeship of seven years +at least; and what before had been the bye-law +of many particular corporations, became +in England the general and public law of all +trades carried on in market towns. For though +the words of the statute are very general, and +seem plainly to include the whole kingdom, +by interpretation its operation has been limited +to market towns; it having been held that, +in country villages, a person may exercise several +different trades, though he has not served +a seven years apprenticeship to each, they being +necessary for the conveniency of the inhabitants, +and the number of people frequently +not being sufficient to supply each with a +particular set of hands.</p> + +<p>By a strict interpretation of the words, too, +the operation of this statute has been limited<span class='pagenum'><a name="Page_51" id="Page_51">[Pg 51]</a></span> +to those trades which were established in England +before the 5th of Elizabeth, and has never +been extended to such as have been introduced +since that time. This limitation has +given occasion to several distinctions, which, +considered as rules of police, appear as foolish +as can well be imagined. It has been adjudged, +for example, that a coachmaker can +neither himself make nor employ journeymen +to make his coach-wheels, but must buy them +of a master wheel-wright; this latter trade +having been exercised in England before the +5th of Elizabeth. But a wheel-wright, though +he has never served an apprenticeship to a +coachmaker, may either himself make or employ +journeymen to make coaches; the trade +of a coachmaker not being within the statute, +because not exercised in England at the time +when it was made. The manufactures of +Manchester, Birmingham, and Wolverhampton, +are many of them, upon this account, not +within the statute, not having been exercised +in England before the 5th of Elizabeth.</p> + +<p>In France, the duration of apprenticeships +is different in different towns and in different +trades. In Paris, five years is the term required +in a great number; but, before any +person can be qualified to exercise the trade +as a master, he must, in many of them, serve +five years more as a journeyman. During +this latter term, he is called the companion of +his master, and the term itself is called his +companionship.</p> + +<p>In Scotland, there is no general law which +regulates universally the duration of apprenticeships. +The term is different in different +corporations. Where it is long, a part of it +may generally be redeemed by paying a small +fine. In most towns, too, a very small fine is +sufficient to purchase the freedom of any corporation. +The weavers of linen and hempen +cloth, the principal manufactures of the country, +as well as all other artificers subservient +to them, wheel-makers, reel-makers, &c. may +exercise their trades in any town-corporate, +without paying any fine. In all towns-corporate, +all persons are free to sell butchers' +meat upon any lawful day of the week. Three +years is, in Scotland, a common term of apprenticeship, +even in some very nice trades; +and, in general, I know of no country in Europe, +in which corporation laws are so little +oppressive.</p> + +<p>The property which every man has in his +own labour, as it is the original foundation of +all other property, so it is the most sacred and +inviolable. The patrimony of a poor man +lies in the strength and dexterity of his hands; +and to hinder him from employing this +strength and dexterity in what manner he +thinks proper, without injury to his neighbour, +is a plain violation of this most sacred +property. It is a manifest encroachment +upon the just liberty, both of the workman, +and of those who might be disposed to employ +him. As it hinders the one from working +at what he thinks proper, so it hinders the +others from employing whom they think proper. +To judge whether he is fit to be employed, +may surely be trusted to the discretion +of the employers, whose interest it so +much concerns. The affected anxiety of the +lawgiver, lest they should employ an improper +person, is evidently as impertinent as it is +oppressive.</p> + +<p>The institution of long apprenticeships can +give no security that insufficient workmanship +shall not frequently be exposed to public +sale. When this is done, it is generally the +effect of fraud, and not of inability; and the +longest apprenticeship can give no security +against fraud. Quite different regulations +are necessary to prevent this abuse. The +sterling mark upon plate, and the stamps upon +linen and woollen cloth, give the purchaser +much greater security than any statute of apprenticeship. +He generally looks at these, +but never thinks it worth while to enquire +whether the workman had served a seven +years apprenticeship.</p> + +<p>The institution of long apprenticeships has +no tendency to form young people to industry. +A journeyman who works by the piece +is likely to be industrious, because he derives +a benefit from every exertion of his industry. +An apprentice is likely to be idle, and almost +always is so, because he has no immediate interest +to be otherwise. In the inferior employments, +the sweets of labour consist altogether +in the recompence of labour. They +who are soonest in a condition to enjoy the +sweets of it, are likely soonest to conceive a +relish for it, and to acquire the early habit of +industry. A young man naturally conceives +an aversion to labour, when for a long time +he receives no benefit from it. The boys who +are put out apprentices from public charities +are generally bound for more than the usual +number of years, and they generally turn out +very idle and worthless.</p> + +<p>Apprenticeships were altogether unknown +to the ancients. The reciprocal duties of master +and apprentice make a considerable article +in every modern code. The Roman law is +perfectly silent with regard to them. I know +no Greek or Latin word (I might venture, I +believe, to assert that there is none) which expresses +the idea we now annex to the word +apprentice, a servant bound to work at a particular +trade for the benefit of a master, during +a term of years, upon condition that the +master shall teach him that trade.</p> + +<p>Long apprenticeships are altogether unnecessary. +The arts, which are much superior +to common trades, such as those of making +clocks and watches, contain no such mystery +as to require a long course of instruction. +The first invention of such beautiful machines, +indeed, and even that of some of the instruments +employed in making them, must no<span class='pagenum'><a name="Page_52" id="Page_52">[Pg 52]</a></span> +no doubt have been the work of deep thought +and long time, and may justly be considered +as among the happiest efforts of human ingenuity. +But when both have been fairly invented, +and are well understood, to explain +to any young man, in the completest manner, +how to apply the instruments, and how to +construct the machines, cannot well require +more than the lessons of a few weeks; perhaps +those of a few days might be sufficient. +In the common mechanic trades, those of a +few days might certainly be sufficient. The +dexterity of hand, indeed, even in common +trades, cannot be acquired without much practice +and experience. But a young man would +practice with much more diligence and attention, +if from the beginning he wrought as a +journeyman, being paid in proportion to the +little work which he could execute, and paying +in his turn for the materials which he +might sometimes spoil through awkwardness +and inexperience. His education would generally +in this way be more effectual, and always +less tedious and expensive. The master, +indeed, would be a loser. He would lose +all the wages of the apprentice, which he now +saves, for seven years together. In the end, +perhaps, the apprentice himself would be a +loser. In a trade so easily learnt he would +have more competitors, and his wages, when +he came to be a complete workman, would be +much less than at present. The same increase +of competition would reduce the profits of the +masters, as well as the wages of workmen. +The trades, the crafts, the mysteries, would +all be losers. But the public would be a +gainer, the work of all artificers coming in +this way much cheaper to market.</p> + +<p>It is to prevent this reduction of price, and +consequently of wages and profit, by restraining +that free competition which would most +certainly occasion it, that all corporations, +and the greater part of corporation laws, have +been established. In order to erect a corporation, +no other authority in ancient times was +requisite, in many parts of Europe, but that +of the town-corporate in which it was established. +In England, indeed, a charter from +the king was likewise necessary. But this +prerogative of the crown seems to have been +reserved rather for extorting money from the +subject, than for the defence of the common +liberty against such oppressive monopolies. +Upon paying a fine to the king, the charter +seems generally to have been readily granted; +and when any particular class of artificers or +traders thought proper to act as a corporation, +without a charter, such adulterine guilds, as +they were called, were not always disfranchised +upon that account, but obliged to fine annually +to the king, for permission to exercise +their usurped privileges<a name="FNanchor_12_12" id="FNanchor_12_12"></a><a href="#Footnote_12_12" class="fnanchor">[12]</a>. The immediate +inspection of all corporations, and of the bye-laws +which they might think proper to enact +for their own government, belonged to the +town-corporate in which they were established; +and whatever discipline was exercised +over them, proceeded commonly, not from the +king, but from that greater incorporation of +which those subordinate ones were only parts +or members.</p> + +<p>The government of towns-corporate was altogether +in the hands of traders and artificers, +and it was the manifest interest of every particular +class of them, to prevent the market +from being overstocked, as they commonly express +it, with their own particular species of +industry; which is in reality to keep it always +understocked. Each class was eager +to establish regulations proper for this purpose, +and, provided it was allowed to do so, +was willing to consent that every other class +should do the same. In consequence of such +regulations, indeed, each class was obliged to +buy the goods they had occasion for from +every other within the town, somewhat dearer +than they otherwise might have done. But, +in recompence, they were enabled to sell their +own just as much dearer; so that, so far it +was as broad as long, as they say; and in the +dealings of the different classes within the +town with one another, none of them were +losers by these regulations. But in their +dealings with the country they were all great +gainers; and in these latter dealings consist +the whole trade which supports and enriches +every town.</p> + +<p>Every town draws its whole subsistence, +and all the materials of its industry, from the +country. It pays for these chiefly in two +ways. First, by sending back to the country +a part of those materials wrought up and manufactured; +in which case, their price is augmented +by the wages of the workmen, and the +profits of their masters or immediate employers; +secondly, by sending to it a part both of the +rude and manufactured produce, either of +other countries, or of distant parts +of the same country, imported into the town; in +which case, too, the original price of those +goods is augmented by the wages of the carriers +or sailors, and by the profits of the +merchants who employ them. In what is +gained upon the first of those branches of +commerce, consists the advantage which the +town makes by its manufactures; in what is +gained upon the second, the advantage of its +inland and foreign trade. The wages of the +workmen, and the profits of their different +employers, make up the whole of what is +gained upon both. Whatever regulations, +therefore, tend to increase those wages and +profits beyond what they otherwise would be, +tend to enable the town to purchase, with a +smaller quantity of its labour, the produce of +a greater quantity of the labour of the country. +They give the traders and artificers in the +town an advantage over the landlords, +<span class='pagenum'><a name="Page_53" id="Page_53">[Pg 53]</a></span>farmers, and labourers, in the country, and +break down that natural equality which would +otherwise take place in the commerce which is +carried on between them. The whole annual +produce of the labour of the society is annually +divided between these two different sets of +people. By means of those regulations, a +greater share of it is given to the inhabitants +of the town than would otherwise fall to them, +and a less to those of the country.</p> + +<p>The price which the town really pays for +the provisions and materials annually imported +into it, is the quantity of manufactures and +other goods annually exported from it. The +dearer the latter are sold, the cheaper the +former are bought. The industry of the +town becomes more, and that of the country +less advantageous.</p> + +<p>That the industry which is carried on in +towns is, everywhere in Europe, more advantageous +than that which is carried on in the +country, without entering into any very nice +computations, we may satisfy ourselves by one +very simple and obvious observation. In +every country of Europe, we find at least a +hundred people who have acquired great fortunes, +from small beginnings, by trade and +manufactures, the industry which properly +belongs to towns, for one who has done so by +that which properly belongs to the country, +the raising of rude produce by the improvement +and cultivation of land. Industry, +therefore, must be better rewarded, the wages +of labour and the profits of stock must evidently +be greater, in the one situation than in +the other. But stock and labour naturally +seek the most advantageous employment. +They naturally, therefore, resort as much as +they can to the town, and desert the country.</p> + +<p>The inhabitants of a town being collected +into one place, can easily combine together. +The most insignificant trades carried on in +towns have, accordingly, in some place or +other, been incorporated; and even where they +have never been incorporated, yet the corporation-spirit, +the jealousy of strangers, the aversion +to take apprentices, or to communicate +the secret of their trade, generally prevail in +them, and often teach them, by voluntary associations +and agreements, to prevent that free +competition which they cannot prohibit by +bye-laws. The trades which employ but a +small number of hands, run most easily into +such combinations. Half-a-dozen wool-combers, +perhaps, are necessary to keep a thousand +spinners and weavers at work. By combining +not to take apprentices, they can not only engross +the employment, but reduce the whole +manufacture into a sort of slavery to themselves, +and raise the price of their labour much +above what is due to the nature of their work.</p> + +<p>The inhabitants of the country, dispersed +in distant places, cannot easily combine together. +They have not only never been incorporated, +but the incorporation spirit never +has prevailed among them. No apprenticeship +has ever been thought necessary to qualify +for husbandry, the great trade of the country. +After what are called the fine arts, and +the liberal professions, however, there is perhaps +no trade which requires so great a variety +of knowledge and experience. The innumerable +volumes which have been written upon +it in all languages, may satisfy us, that among +the wisest and most learned nations, it +has never been regarded as a matter very easily +understood. And from all those volumes +we shall in vain attempt to collect that knowledge +of its various and complicated operations +which is commonly possessed even by the common +farmer; how contemptuously soever the +very contemptible authors of some of them +may sometimes affect to speak of him. There +is scarce any common mechanic trade, on the +contrary, of which all the operations may not +be as completely and distinctly explained in +a pamphlet of a very few pages, as it is possible +for words illustrated by figures to explain +them. In the history of the arts, now publishing +by the French Academy of Sciences, several +of them are actually explained in this +manner. The direction of operations, besides, +which must be varied with every change of +the weather, as well as with many other accidents, +requires much more judgment and +discretion, than that of those which are always +the same, or very nearly the same.</p> + +<p>Not only the art of the farmer, the general +direction of the operations of husbandry, but +many inferior branches of country labour require +much more skill and experience than +the greater part of mechanic trades. The +man who works upon brass and iron, works +with instruments, and upon materials of which +the temper is always the same, or very nearly +the same. But the man who ploughs the +ground with a team of horses or oxen, works +with instruments of which the health, strength, +and temper, are very different upon different +occasions. The condition of the materials +which he works upon, too, is as variable as +that of the instruments which he works with, +and both require to be managed with much +judgment and discretion. The common ploughman, +though generally regarded as the pattern +of stupidity and ignorance, is seldom defective +in this judgment and discretion. He is less +accustomed, indeed, to social intercourse, than +the mechanic who lives in a town. His voice +and language are more uncouth, and more +difficult to be understood by those who are +not used to them. His understanding, however, +being accustomed to consider a greater +variety of objects, is generally much superior +to that of the other, whose whole attention, +from morning till night is commonly occupied +in performing one or two very simple operations. +How much the lower ranks of people +in the country are really superior to those of +the town, is well known to every man whom +<span class='pagenum'><a name="Page_54" id="Page_54">[Pg 54]</a></span>either business or curiosity has led to converse +much with both. In China and Indostan, accordingly, +both the rank and the wages of +country labourers are said to be superior to +those of the greater part of artificers and manufacturers. +They would probably be so +everywhere, if corporation laws and the corporation +spirit did not prevent it.</p> + +<p>The superiority which the industry of the +towns has everywhere in Europe over that of +the country, is not altogether owing to corporations +and corporation laws. It is supported +by many other regulations. The high duties +upon foreign manufactures, and upon all +goods imported by alien merchants, all tend +to the same purpose. Corporation laws enable +the inhabitants of towns to raise their +prices, without fearing to be undersold by the +free competition of their own countrymen. +Those other regulations secure them equally +against that of foreigners. The enhancement +of price occasioned by both is everywhere finally +paid by the landlords, farmers, and labourers, +of the country, who have seldom opposed +the establishment of such monopolies. +They have commonly neither inclination nor +fitness to enter into combinations; and the +clamour and sophistry of merchants and manufacturers +easily persuade them, that the private +interest of a part, and of a subordinate +part, of the society, is the general interest of +the whole.</p> + +<p>In Great Britain, the superiority of the industry +of the towns over that of the country +seems to have been greater formerly than in +the present times. The wages of country labour +approach nearer to those of manufacturing +labour, and the profits of stock employed +in agriculture to those of trading and manufacturing +stock, than they are said to have +done in the last century, or in the beginning +of the present. This change may be regarded +as the necessary, though very late consequence +of the extraordinary encouragement +given to the industry of the towns. The +stocks accumulated in them come in time to +be so great, that it can no longer be employed +with the ancient profit in that species of industry +which in peculiar to them. That industry +has its limits like every other; and the +increase of stock, by increasing the competition, +necessarily reduces the profit. The lowering +of profit in the town forces out stock to +the country, where, by creating a new demand +for country labour, it necessarily raises its +wages. It then spreads itself, if I may say +so, over the face of the land, and, by being +employed in agriculture, is in part restored to +the country, at the expense of which, in a +great measure, it had originally been accumulated +in the town. That everywhere in Europe +the greatest improvements of the country +have been owing to such overflowings of the +stock originally accumulated in the towns, I +shall endeavour to shew hereafter, and at the +same time to demonstrate, that though some +countries have, by this course, attained to a +considerable degree of opulence, it is in itself +necessarily slow, uncertain, liable to be disturbed +and interrupted by innumerable accidents, +and, in every respect, contrary to the +order of nature and reason. The interests, +prejudices, laws, and customs, which have +given occasion to it, I shall endeavour to explain +as fully and distinctly as I can in the +third and fourth books of this Inquiry.</p> + +<p>People of the same trade seldom meet together, +even for merriment and diversion, but +the conversation ends in a conspiracy against +the public, or in some contrivance to raise +prices. It is impossible, indeed, to prevent +such meetings, by any law which either could +be executed, or would be consistent with liberty +and justice. But though the law cannot +hinder people of the same trade from +sometimes assembling together, it ought to do +nothing to facilitate such assemblies, much +less to render them necessary.</p> + +<p>A regulation which obliges all those of the +same trade in a particular town to enter their +names and places of abode in a public register, +facilitates such assemblies. It connects +individuals who might never otherwise be +known to one another, and gives every man +of the trade a direction where to find every +other man of it.</p> + +<p>A regulation which enables those of the +same trade to tax themselves, in order to provide +for their poor, their sick, their widows +and orphans, by giving them a common interest +to manage, renders such assemblies necessary.</p> + +<p>An incorporation not only renders them necessary, +but make the act of the majority +binding upon the whole. In a free trade, an +effectual combination cannot be established +but by the unanimous consent of every single +trader, and it cannot last longer than every +single trader continues of the same mind. +The majority of a corporation can enact a bye-law, +with proper penalties, which will limit +the competition more effectually and more +durably than any voluntary combination whatever.</p> + +<p>The pretence that corporations are necessary +for the better government of the trade, is +without any foundation. The real and effectual +discipline which is exercised over a workman, +is not that of his corporation, but that +of his customers. It is the fear of losing their +employment which restrains his frauds and +corrects his negligence. An exclusive corporation +necessarily weakens the force of this +discipline. A particular set of workmen must +then be employed, let them behave well or ill. +It is upon this account that, in many large +incorporated towns, no tolerable workmen are +to be found, even in some of the most necessary +trades. If you would have your work +tolerably executed, it must be done in the<span class='pagenum'><a name="Page_55" id="Page_55">[Pg 55]</a></span> +suburbs, where the workmen, having no exclusive +privilege, have nothing but their character +to depend upon, and you must then +smuggle it into the town as well as you can.</p> + +<p>It is in this manner that the policy of Europe, +by restraining the competition in some +employments to a smaller number than would +otherwise be disposed to enter into them, occasions +a very important inequality in the +whole of the advantages and disadvantages of +the different employments of labour and stock.</p> + +<p>Secondly, The policy of Europe, by increasing +the competition in some employments beyond +what it naturally would be, occasions +another inequality, of an opposite kind, in the +whole of the advantages and disadvantages of +the different employments of labour and stock.</p> + +<p>It has been considered as of so much importance +that a proper number of young people +should be educated for certain professions, +that sometimes the public, and sometimes the +piety of private founders, have established +many pensions, scholarships, exhibitions, bursaries, +&c. for this purpose, which draw many +more people into those trades than could +otherwise pretend to follow them. In all +Christian countries, I believe, the education +of the greater part of churchmen is paid for +in this manner. Very few of them are educated +altogether at their own expense. The +long, tedious, and expensive education, therefore, +of those who are, will not always procure +them a suitable reward, the church being +crowded with people, who, in order to get +employment, are willing to accept of a much +smaller recompence than what such an education +would otherwise have entitled them to; +and in this manner the competition of the +poor takes away the reward of the rich. It +would be indecent, no doubt, to compare +either a curate or a chaplain with a journeyman +in any common trade. The pay of a +curate or chaplain, however, may very properly +be considered as of the same nature with +the wages of a journeyman. They are all +three paid for their work according to the +contract which they may happen to make +with their respective superiors. Till after the +middle of the fourteenth century, five merks, +containing about as much silver as ten pounds +of our present money, was in England the +usual pay of a curate or a stipendiary parish +priest, as we find it regulated by the decrees of +several different national councils. At the same +period, fourpence a-day, containing the same +quantity of silver as a shilling of our present +money, was declared to be the pay of a master +mason; and threepence a-day, equal to +ninepence of our present money, that of a +journeyman mason<a name="FNanchor_13_13" id="FNanchor_13_13"></a><a href="#Footnote_13_13" class="fnanchor">[13]</a>. The wages of both +these labourers, therefore, supposing them to +have been constantly employed, were much +superior to those of the curate. The wages +of the master mason, supposing him to have +been without employment one-third of the +year, would have fully equalled them. By +the 12th of Queen Anne, c. 12. it is declared, +'That whereas, for want of sufficient maintenance +and encouragement to curates, the +cures have, in several places, been meanly +supplied, the bishop is, therefore, empowered +to appoint, by writing under his hand +and seal, a sufficient certain stipend or allowance, +not exceeding fifty, and not less +than twenty pounds a-year.' Forty pounds +a-year is reckoned at present very good pay for +a curate; and, notwithstanding this act of +parliament, there are many curacies under +twenty pounds a-year. There are journeymen +shoemakers in London who earn forty +pounds a-year, and there is scarce an industrious +workman of any kind in that metropolis +who does not earn more than twenty. +This last sum, indeed, does not exceed what +is frequently earned by common labourers in +many country parishes. Whenever the law +has attempted to regulate the wages of workmen, +it has always been rather to lower them +than to raise them. But the law has, upon +many occasions, attempted to raise the wages of +curates, and, for the dignity of the church, to +oblige the rectors of parishes to give them +more than the wretched maintenance which +they themselves might be willing to accept of. +And, in both cases, the law seems to have +been equally ineffectual, and has never either +been able to raise the wages of curates, or to +sink those of labourers to the degree that was +intended; because it has never been able to +hinder either the one from being willing to +accept of less than the legal allowance, on account +of the indigence of their situation and +the multitude of their competitors, or the +other from receiving more, on account of the +contrary competition of those who expected +to derive either profit or pleasure from employing +them.</p> + +<p>The great benefices and other ecclesiastical +dignities support the honour of the church, +notwithstanding the mean circumstances of +some of its inferior members. The respect +paid to the profession, too, makes some compensation +even to them for the meanness of +their pecuniary recompence. In England, +and in all Roman catholic countries, the lottery +of the church is in reality much more advantageous +than is necessary. The example +of the churches of Scotland, of Geneva, and +of several other protestant churches, may satisfy +us, that in so creditable a profession, in +which education is so easily procured, the +hopes of much more moderate benefices will +draw a sufficient number of learned, decent, +and respectable men into holy orders.</p> + +<p>In professions in which there are no benefices, +such as law and physic, if an equal proportion +of people were educated at the public +expense, the competition would soon be so<span class='pagenum'><a name="Page_56" id="Page_56">[Pg 56]</a></span> +great as to sink very much their pecuniary reward. +It might then not be worth any man's +while to educate his son to either of those +professions at his own expense. They would +be entirely abandoned to such as had been +educated by those public charities, whose numbers +and necessities would oblige them in general +to content themselves with a very miserable +recompence, to the entire degradation of +the now respectable professions of law and +physic.</p> + +<p>That unprosperous race of men, commonly +called men of letters, are pretty much in the +situation which lawyers and physicians probably +would be in, upon the foregoing supposition. +In every part of Europe, the greater +part of them have been educated for the +church, but have been hindered by different +reasons from entering into holy orders. They +have generally, therefore, been educated at the +public expense; and their numbers are everywhere +so great, as commonly to reduce the +price of their labour to a very paltry recompence.</p> + +<p>Before the invention of the art of printing, +the only employment by which a man of letters +could make any thing by his talents, was +that of a public or private teacher, or by communicating +to other people the curious and +useful knowledge which he had acquired +himself; and this is still surely a more honourable, +a more useful, and, in general, even +a more profitable employment than that other +of writing for a bookseller, to which the art +of printing has given occasion. The time +and study, the genius, knowledge, and application +requisite to qualify an eminent teacher +of the sciences, are at least equal to what is +necessary for the greatest practitioners in law +and physic. But the usual reward of the +eminent teacher bears no proportion to that of +the lawyer or physician, because the trade of +the one is crowded with indigent people, who +have been brought up to it at the public expense; +whereas those of the other two are encumbered +with very few who have not been +educated at their own. The usual recompence, +however, of public and private teachers, +small as it may appear, would undoubtedly +be less than it is, if the competition of +those yet more indigent men of letters, who +write for bread, was not taken out of the +market. Before the invention of the art of +printing, a scholar and a beggar seem to have +been terms very nearly synonymous. The +different governors of the universities, before +that time, appear to have often granted licences +to their scholars to beg.</p> + +<p>In ancient times, before any charities of this +kind had been established for the education of +indigent people to the learned professions, the +rewards of eminent teachers appear to have +been much more considerable. Isocrates, in +what is called his discourse against the sophists, +reproaches the teachers of his own times +with inconsistency. "They make the most +magnificent promises to their scholars," says +he, "and undertake to teach them to be wise, +to be happy, and to be just; and, in return +for so important a service, they stipulate the +paltry reward of four or five minæ." "They +who teach wisdom," continues he, "ought +certainly to be wise themselves; but if any man +were to sell such a bargain for such a price, +he would be convicted of the most evident +folly." He certainly does not mean here to +exaggerate the reward, and we may be assured +that it was not less than he represents it. +Four minæ were equal to thirteen pounds six +shillings and eightpence; five minæ to sixteen +pounds thirteen shillings and fourpence.—Something +not less than the largest of those +two sums, therefore, must at that time have +been usually paid to the most eminent teachers +at Athens. Isocrates himself demanded +ten minæ, or L.33 : 6 : 8 from each scholar. +When he taught at Athens, he is said to have +had a hundred scholars. I understand this +to be the number whom he taught at one +time, or who attended what we would call one +course of lectures; a number which will not +appear extraordinary from so great a city to so +famous a teacher, who taught, too, what was +at that time the most fashionable of all sciences, +rhetoric. He must have made, therefore, +by each course of lectures, a thousand +minæ, or L.3333 : 6 : 8. A thousand minæ, +accordingly, is said by Plutarch, in another +place, to have been his didactron, or usual +price of teaching. Many other eminent teachers +in those times appear to have acquired +great fortunes. Georgias made a present to +the temple of Delphi of his own statue in solid +gold. We must not, I presume, suppose that +it was as large as the life. His way of living, +as well as that of Hippias and Protagoras, two +other eminent teachers of those times, is represented +by Plato as splendid, even to ostentation. +Plato himself is said to have lived +with a good deal of magnificence. Aristotle, +after having been tutor to Alexander, and +most munificently rewarded, as it is universally +agreed, both by him and his father, +Philip, thought it worth while, notwithstanding, +to return to Athens, in order to resume +the teaching of his school. Teachers of the +sciences were probably in those times less +common than they came to be in an age or +two afterwards, when the competition had +probably somewhat reduced both the price of +their labour and the admiration for their persons. +The most eminent of them, however, +appear always to have enjoyed a degree of +consideration much superior to any of the like +profession in the present times. The Athenians +sent Carneades the academic, and Diogenes +the stoic, upon a solemn embassy to +Rome; and though their city had then declined +from its former grandeur, it was still +an independent and considerable republic.<span class='pagenum'><a name="Page_57" id="Page_57">[Pg 57]</a></span> +Carneades, too, was a Babylonian by birth; +and as there never was a people more jealous +of admitting foreigners to public offices than +the Athenians, their consideration for him +must have been very great.</p> + +<p>This inequality is, upon the whole, perhaps +rather advantageous than hurtful to the public. +It may somewhat degrade the profession +of a public teacher; but the cheapness of literary +education is surely an advantage which +greatly overbalances this trifling inconveniency. +The public, too, might derive still +greater benefit from it, if the constitution of +those schools and colleges, in which education +is carried on, was more reasonable than it is +at present through the greater part of Europe.</p> + +<p>Thirdly, the policy of Europe, by obstructing +the free circulation of labour and stock, +both from employment to employment, and +from place to place, occasions, in some cases, +a very inconvenient inequality in the whole of +the advantages and disadvantages of their different +employments.</p> + +<p>The statute of apprenticeship obstructs the +free circulation of labour from one employment +to another, even in the same place. +The exclusive privileges of corporations obstruct +it from one place to another, even in +the same employment.</p> + +<p>It frequently happens, that while high +wages are given to the workmen in one manufacture, +those in another are obliged to content +themselves with bare subsistence. The +one is in an advancing state, and has therefore +a continual demand for new hands; the +other is in a declining state, and the superabundance +of hands is continually increasing. +Those two manufactures may sometimes be +in the same town, and sometimes in the same +neighbourhood, without being able to lend +the least assistance to one another. The statute +of apprenticeship may oppose it in the +one case, and both that and an exclusive corporation +in the other. In many different manufactures, +however, the operations are so +much alike, that the workmen could easily +change trades with one another, if those absurd +laws did not hinder them. The arts of +weaving plain linen and plain silk, for example, +are almost entirely the same. That of +weaving plain woollen is somewhat different; +but the difference is so insignificant, that +either a linen or a silk weaver might become +a tolerable workman in a very few days. If +any of those three capital manufactures, therefore, +were decaying, the workmen might find +a resource in one of the other two which was +in a more prosperous condition; and their +wages would neither rise too high in the +thriving, nor sink too low in the decaying manufacture. +The linen manufacture, indeed, +is in England, by a particular statute, open +to every body; but as it is not much cultivated +through the greater part of the country, it +can afford no general resource to the workmen +of other decaying manufactures, who, +wherever the statute of apprenticeship takes +place, have no other choice, but either to come +upon the parish, or to work as common labourers; +for which, by their habits, they are +much worse qualified than for any sort of manufacture +that bears any resemblance to their +own. They generally, therefore, chuse to +come upon the parish.</p> + +<p>Whatever obstructs the free circulation of +labour from one employment to another, obstructs +that of stock likewise; the quantity of +stock which can be employed in any branch +of business depending very much upon that +of the labour which can be employed in it. +Corporation laws, however, give less obstruction +to the free circulation of stock from one +place to another, than to that of labour. It +is everywhere much easier for a wealthy +merchant to obtain the privilege of trading in +a town-corporate, than for a poor artificer to +obtain that of working in it.</p> + +<p>The obstruction which corporation laws +give to the free circulation of labour is common, +I believe, to every part of Europe. +That which is given to it by the poor laws is, +so far as I know, peculiar to England. It +consists in the difficulty which a poor man +finds in obtaining a settlement, or even in being +allowed to exercise his industry in any +parish but that to which he belongs. It is +the labour of artificers and manufacturers +only of which the free circulation is obstructed +by corporation laws. The difficulty of obtaining +settlements obstructs even that of common +labour. It may be worth while to give +some account of the rise, progress, and present +state of this disorder, the greatest, perhaps, +of any in the police of England.</p> + +<p>When, by the destruction of monasteries, the +poor had been deprived of the charity of those +religious houses, after some other ineffectual +attempts for their relief, it was enacted, by the +43d of Elizabeth, c. 2. that every parish +should be bound to provide for its own poor, +and that overseers of the poor should be annually +appointed, who, with the church-wardens, +should raise, by a parish rate, competent sums +for this purpose.</p> + +<p>By this statute, the necessity of providing +for their own poor was indispensably imposed +upon every parish. Who were to be considered +as the poor of each parish became, +therefore, a question of some importance. +This question, after some variation, was at +last determined by the 13th and 14th of +Charles II. when it was enacted, that forty +days undisturbed residence should gain any +person a settlement in any parish; but that +within that time it should be lawful for two +justices of the peace, upon complaint made +by the church-wardens or overseers of the +poor, to remove any new inhabitant to the +parish where he was last legally settled; unless +he either rented a tenement of ten pounds<span class='pagenum'><a name="Page_58" id="Page_58">[Pg 58]</a></span> +a-year, or could give such security for the discharge +of the parish where he was then living, +as those justices should judge sufficient.</p> + +<p>Some frauds, it is said, were committed in +consequence of this statute; parish officers +sometimes bribing their own poor to go clandestinely +to another parish, and, by keeping +themselves concealed for forty days, to gain a +settlement there, to the discharge of that to +which they properly belonged. It was enacted, +therefore, by the 1st of James II. that the +forty days undisturbed residence of any person +necessary to gain a settlement, should be +accounted only from the time of his delivering +notice, in writing, of the place of his abode +and the number of his family, to one of +the church-wardens or overseers of the parish +where he came to dwell.</p> + +<p>But parish officers, it seems, were not always +more honest with regard to their own +than they had been with regard to other parishes, +and sometimes connived at such intrusions, +receiving the notice, and taking no proper +steps in consequence of it. As every person +in a parish, therefore, was supposed to have +an interest to prevent as much as possible their +being burdened by such intruders, it was further +enacted by the 3d of William III. that +the forty days residence should be accounted +only from the publication of such notice in +writing on Sunday in the church, immediately +after divine service.</p> + +<p>"After all," says Doctor Burn, "this kind +of settlement, by continuing forty days after +publication of notice in writing, is very seldom +obtained; and the design of the acts is not so +much for gaining of settlements, as for the +avoiding of them by persons coming into a +parish clandestinely, for the giving of notice +is only putting a force upon the parish to remove. +But if a person's situation is such, +that it is doubtful whether he is actually removable +or not, he shall, by giving of notice, +compel the parish either to allow him a settlement +uncontested, by suffering him to continue +forty days, or by removing him to try the +right."</p> + +<p>This statute, therefore, rendered it almost +impracticable for a poor man to gain a new +settlement in the old way, by forty days inhabitancy. +But that it might not appear to preclude +altogether the common people of one +parish from ever establishing themselves with +security in another, it appointed four other +ways by which a settlement might be gained +without any notice delivered or published. +The first was, by being taxed to parish rates +and paying them; the second, by being elected +into an annual parish office, and serving in +it a year; the third, by serving an apprenticeship +in the parish; the fourth, by being hired +into service there for a year, and continuing +in the same service during the whole of it.</p> + +<p>Nobody can gain a settlement by either of +the first two ways, but by the public deed of +the whole parish, who are too well aware of +the consequences to adopt any new-comer, +who has nothing but his labour to support +him, either by taxing him to parish rates, or +by electing him into a parish office.</p> + +<p>No married man can well gain any settlement +in either of the two last ways. An apprentice +is scarce ever married; and it is expressly +enacted, that no married servant shall +gain any settlement by being hired for a year. +The principal effect of introducing settlement +by service, has been to put out in a great measure +the old fashion of hiring for a year; +which before had been so customary in England, +that even at this day, if no particular +term is agreed upon, the law intends that +every servant is hired for a year. But masters +are not always willing to give their servants +a settlement by hiring them in this manner; +and servants are not always willing to be +so hired, because, as every last settlement discharges +all the foregoing, they might thereby +lose their original settlement in the places of +their nativity, the habitation of their parents +and relations.</p> + +<p>No independent workman, it is evident, +whether labourer or artificer, is likely to gain +any new settlement, either by apprenticeship +or by service. When such a person, therefore, +carried his industry to a new parish, he +was liable to be removed, how healthy and industrious +soever, at the caprice of any church-warden +or overseer, unless he either rented a +tenement of ten pounds a-year, a thing impossible +for one who has nothing but his labour +to live by, or could give such security +for the discharge of the parish as two justices +of the peace should judge sufficient.</p> + +<p>What security they shall require, indeed, is +left altogether to their discretion; but they +cannot well require less than thirty pounds, +it having been enacted, that the purchase even +of a freehold estate of less than thirty pounds +value, shall not gain any person a settlement, +as not being sufficient for the discharge of the +parish. But this is a security which scarce +any man who lives by labour can give; and +much greater security is frequently demanded.</p> + +<p>In order to restore, in some measure, that +free circulation of labour which those different +statutes had almost entirely taken away, +the invention of certificates was fallen upon. +By the 8th and 9th of William III. it was enacted +that if any person should bring a certificate +from the parish where he was last legally +settled, subscribed by the church-wardens +and overseers of the poor, and allowed by two +justices of the peace, that every other parish +should be obliged to receive him; that he +should not be removable merely upon account +of his being likely to become chargeable, but +only upon his becoming actually chargeable; +and that then the parish which granted the +certificate should be obliged to pay the expense +both of his maintenance, and of his re<span class='pagenum'><a name="Page_59" id="Page_59">[Pg 59]</a></span>moval. +And in order to give the most perfect +security to the parish where such certificated +man should come to reside, it was further +enacted by the same statute, that he should +gain no settlement there by any means whatever, +except either by renting a tenement of +ten pounds a-year, or by serving upon his +account in an annual parish office for one +whole year; and consequently neither by notice +nor by service, nor by apprenticeship, nor +by paying parish rates. By the 12th of Queen +Anne, too, stat. 1, c. 18, it was further enacted, +that neither the servants nor apprentices +of such certificated man should gain any settlement +in the parish where he resided under +such certificate.</p> + +<p>How far this invention has restored that free +circulation of labour, which the preceding statutes +had almost entirely taken away, we may +learn from the following very judicious observation +of Doctor Burn. "It is obvious," +says he, "that there are divers good reasons +for requiring certificates with persons coming +to settle in any place; namely, that persons +residing under them can gain no settlement, +neither by apprenticeship, nor by service, nor +by giving notice, nor by paying parish rates; +that they can settle neither apprentices nor +servants; that if they become chargeable, it is +certainly known whither to remove them, and +the parish shall be paid for the removal, and +for their maintenance in the mean time; and +that, if they fall sick, and cannot be removed, +the parish which gave the certificate must +maintain them, none of all which can be without +a certificate. Which reasons will hold +proportionably for parishes not granting certificates +in ordinary cases; for it is far more +than an equal chance, but that they will have +the certificated persons again, and in a worse +condition." The moral of this observation +seems to be, that certificates ought always to +be required by the parish where any poor man +comes to reside, and that they ought very seldom +to be granted by that which he purposes +to leave. "There is somewhat of hardship +in this matter of certificates," says the same +very intelligent author, in his History of the +Poor Laws, "by putting it in the power of a +parish officer to imprison a man as it were for +life, however inconvenient it may be for him +to continue at that place where he has had the +misfortune to acquire what is called a settlement, +or whatever advantage he may propose +to himself by living elsewhere."</p> + +<p>Though a certificate carries along with it no +testimonial of good behaviour, and certifies +nothing but that the person belongs to the parish +to which he really does belong, it is altogether +discretionary in the parish officers either +to grant or to refuse it. A mandamus was +once moved for, says Doctor Burn, to compel +the church-wardens and overseers to sign a +certificate; but the Court of King's Bench +rejected the motion as a very strange attempt.</p> + +<p>The very unequal price of labour which we +frequently find in England, in places at no +great distance from one another, is probably +owing to the obstruction which the law of +settlements gives to a poor man who would +carry his industry from one parish to another +without a certificate. A single man, indeed, +who is healthy and industrious, may sometimes +reside by sufferance without one, but a +man with a wife and family who should attempt +to do so, would, in most parishes, be +sure of being removed; and, if the single man +should afterwards marry, he would generally +be removed likewise. The scarcity of hands +in one parish, therefore, cannot always be relieved +by their superabundance in another, as +it is constantly in Scotland, and, I believe, in +all other countries where there is no difficulty +of settlement. In such countries, though +wages may sometimes rise a little in the neighbourhood +of a great town, or wherever else +there is an extraordinary demand for labour, and +sink gradually as the distance from such places +increases, till they fall back to the common +rate of the country; yet we never meet with +those sudden and unaccountable differences in +the wages of neighbouring places which we +sometimes find in England, where it is often +more difficult for a poor man to pass the artificial +boundary of a parish, than an arm of the +sea, or a ridge of high mountains, natural +boundaries which sometimes separate very distinctly +different rates of wages in other countries.</p> + +<p>To remove a man who has committed no misdemeanour, +from the parish where he chooses +to reside, is an evident violation of natural +liberty and justice. The common people of +England, however, so jealous of their liberty, +but like the common people of most other +countries, never rightly understanding wherein +it consists, have now, for more than a century +together, suffered themselves to be exposed +to this oppression without a remedy. +Though men of reflection, too, have sometimes +complained of the law of settlements as +a public grievance; yet it has never been the +object of any general popular clamour, such +as that against general warrants, an abusive +practice undoubtedly, but such a one as was +not likely to occasion any general oppression. +There is scarce a poor man in England, of +forty years of age, I will venture to say, who +has not, in some part of his life, felt himself +most cruelly oppressed by this ill-contrived +law of settlements.</p> + +<p>I shall conclude this long chapter with observing, +that though anciently it was usual to +rate wages, first by general laws extending +over the whole kingdom, and afterwards by +particular orders of the justices of peace in +every particular county, both these practices +have now gone entirely into disuse "By the +experience of above four hundred years," says +Doctor Burn, "it seems time to lay aside all<span class='pagenum'><a name="Page_60" id="Page_60">[Pg 60]</a></span> +endeavours to bring under strict regulations, +what in its own nature seems incapable of minute +limitation; for if all persons in the same +kind of work were to receive equal wages, +there would be no emulation, and no room +left for industry or ingenuity."</p> + +<p>Particular acts of parliament, however, still +attempt sometimes to regulate wages in particular +trades, and in particular places. Thus +the 8th of George III. prohibits, under heavy +penalties, all master tailors in London, and +five miles round it, from giving, and their +workmen from accepting, more than two shillings +and sevenpence halfpenny a-day, except +in the case of a general mourning. Whenever +the legislature attempts to regulate the +differences between masters and their workmen, +its counsellors are always the masters. +When the regulation, therefore, is in favour +of the workmen, it is always just and equitable; +but it is sometimes otherwise when in +favour of the masters. Thus the law which +obliges the masters in several different trades +to pay their workmen in money, and not in +goods, is quite just and equitable. It imposes +no real hardship upon the masters. It only +obliges them to pay that value in money, which +they pretended to pay, but did not always +really pay, in goods. This law is in favour of +the workmen; but the 8th of George III. is +in favour of the masters. When masters combine +together, in order to reduce the wages of +their workmen, they commonly enter into a +private bond or agreement, not to give more +than a certain wage, under a certain penalty. +Were the workmen to enter into a contrary +combination of the same kind, not to accept +of a certain wage, under a certain penalty, the +law would punish them very severely, and, +if it dealt impartially, it would treat the masters +in the same manner. But the 8th of +George III. enforces by law that very regulation +which masters sometimes attempt to establish +by such combinations. The complaint +of the workmen, that it puts the ablest and +most industrious upon the same footing with +an ordinary workman, seems perfectly well +founded.</p> + +<p>In ancient times, too, it was usual to attempt +to regulate the profits of merchants and +other dealers, by regulating the price of +provisions and other goods. The assize of bread +is, so far as I know, the only remnant of this +ancient usage. Where there is an exclusive +corporation, it may, perhaps, he proper to +regulate the price of the first necessary of life; +but, where there is none, the competition will +regulate it much better than any assize. The +method of fixing the assize of bread, established +by the 81st of George II. could not be put +in practice in Scotland, on account of a defect +in the law, its execution depending upon the +office of clerk of the market, which does not +exist there. This defect was not remedied till +the third of George III. The want of an assize +occasioned no sensible inconveniency; +and the establishment of one in the few places +where it has yet taken place has produced no +sensible advantage. In the greater part of the +towns in Scotland, however, there is an +incorporation of bakers, who claim exclusive +privileges, though they are not very strictly +guarded.</p> + +<p>The proportion between the different rates, +both of wages and profit, in the different employments +of labour and stock, seems not to +be much affected, as has already been +observed, by the riches or poverty, the advancing, +stationary, or declining state of the society. +Such revolutions in the public welfare, though +they affect the general rates both of wages and +profit, must, in the end, affect them equally in +all different employments. The proportion +between them, therefore, must remain the +same, and cannot well be altered, as least for +any considerable time, by any such revolutions.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. XI.</h3> + +<h4>OF THE RENT OF LAND.</h4> + + +<p>Rent, considered as the price paid for the use +of land, is naturally the highest which the +tenant can afford to pay in the actual circumstances +of the land. In adjusting the terms +of the lease, the landlord endeavours to leave +him no greater share of the produce than what +is sufficient to keep up the stock from which +he furnishes the seed, pays the labour, and +purchases and maintains the cattle and other +instruments of husbandry, together with the +ordinary profits of farming stock in the neighbourhood. +This is evidently the smallest share +with which the tenant can content himself, +without being a loser, and the landlord seldom +means to leave him any more. Whatever +part of the produce, or, what is the same +thing, whatever part of its price, is over and +above this share, he naturally endeavours to +reserve to himself as the rent of his land, +which is evidently the highest the tenant can +afford to pay in the actual circumstances of +the land. Sometimes, indeed, the liberality, +more frequently the ignorance, of the landlord, +makes him accept of somewhat less than +this portion; and sometimes, too, though more +rarely, the ignorance of the tenant makes him +undertake to pay somewhat more, or to content +himself with somewhat less, than the ordinary +profits of farming stock in the neighbourhood. +This portion, however, may still +be considered as the natural rent of land, or +the rent at which it is naturally meant that +land should, for the most part, be let.</p> + +<p>The rent of land, it may be thought, is +frequently no more than a reasonable profit or<span class='pagenum'><a name="Page_61" id="Page_61">[Pg 61]</a></span> +interest for the stock laid out by the landlord +upon its improvement. This, no doubt, may +be partly the case upon some occasions; for it +can scarce ever be more than partly the case. +The landlord demands a rent even for unimproved +land, and the supposed interest or profit +upon the expense of improvement is generally +an addition to this original rent. Those +improvements, besides, are not always made +by the stock of the landlord, but sometimes +by that of the tenant. When the lease comes +to be renewed, however, the landlord commonly +demands the same augmentation of rent +as if they had been all made by his own.</p> + +<p>He sometimes demands rent for what is +altogether incapable of human improvements. +Kelp is a species of sea-weed, which, when +burnt, yields an alkaline salt, useful for making +glass, soup, and for several other purposes. +It grows in several parts of Great Britain, +particularly in Scotland, upon such rocks only +as lie within the high-water mark, which are +twice every day covered with the sea, and of +which the produce, therefore, was never +augmented by human industry. The landlord, +however, whose estate is bounded by a kelp +shore of this kind, demands a rent for it as +much as for his corn-fields.</p> + +<p>The sea in the neighbourhood of the islands +of Shetland is more than commonly abundant +in fish, which makes a great part of the +subsistence of their inhabitants. But, in order +to profit by the produce of the water, they +must have a habitation upon the neighbouring +land. The rent of the landlord is in proportion, +not to what the farmer can make by the +land, but to what he can make both by the +land and the water. It is partly paid in sea-fish; +and one of the very few instances in +which rent makes a part of the price of that +commodity, is to be found in that country.</p> + +<p>The rent of land, therefore, considered as +the price paid for the use of the land, is naturally +a monopoly price. It is not at all proportioned +to what the landlord may have laid +out upon the improvement of the land, or to +what he can afford to take, but to what the +farmer can afford to give.</p> + +<p>Such parts only of the produce of land can +commonly be brought to market, of which the +ordinary price is sufficient to replace the stock +which must be employed in bringing them +thither, together with its ordinary profits. If +the ordinary price is more than this, the surplus +part of it will naturally go to the rent of +the land. If it is not more, though the commodity +may be brought to market, it can afford +no rent to the landlord. Whether the +price is, or is not more, depends upon the demand.</p> + +<p>There are some parts of the produce of land, +for which the demand must always be such as +to afford a greater price than what is sufficient +to bring them to market, and there are +others for which it either may or may not be +such as to afford this greater price. The +former must always afford a rent to the landlord. +The latter sometimes may and sometimes may +not, according to different circumstances.</p> + +<p>Rent, it is to be observed, therefore, enters +into the composition of the price of commodities +in a different way from wages and profit. +High or low wages and profit are the +causes of high or low price; high or low rent +is the effect of it. It is because high or low +wages and profit must be paid, in order to +bring a particular commodity to market, that +its price is high or low. But it is because its +price is high or low, a great deal more, or +very little more, or no more, than what is sufficient +to pay those wages and profit, that it +affords a high rent, or a low rent, or no rent +at all.</p> + +<p>The particular consideration, first, of those +parts of the produce of land which always afford +some rent; secondly, of those which sometimes +may and sometimes may not afford rent; +and, thirdly, of the variations which, in the +different periods of improvement, naturally +take place in the relative value of those two +different sorts of rude produce, when compared +both with one another and with manufactured +commodities, will divide this chapter +into three parts.</p> + + +<h4><span class="smcap">Part I.</span>—<i>Of the Produce of Land which +always affords Rent.</i></h4> + +<p>As men, like all other animals, naturally multiply +in proportion to the means of their subsistence, +food is always more or less in demand. +It can always purchase or command +a greater or smaller quantity of labour, and +somebody can always be found who is willing to +do something in order to obtain it. The +quantity of labour, indeed, which it can purchase, +is not always equal to what it could +maintain, if managed in the most economical +manner, on account of the high wages which +are sometimes given to labour; but it can always +purchase such a quantity of labour as it +can maintain, according to the rate at which +that sort of labour is commonly maintained in +the neighbourhood.</p> + +<p>But land, in almost any situation, produces +a greater quantity of food than what is sufficient +to maintain all the labour necessary for +bringing it to market, in the most liberal way +in which that labour is ever maintained. The +surplus, too, is always more than sufficient to +replace the stock which employed that labour, +together with its profit. Something, therefore, +always remains for a rent to the landlord.</p> + +<p>The most desert moors in Norway and Scotland +produce some sort of pasture for cattle, +of which the milk and the increase are always +more than sufficient, not only to maintain all +the labour necessary for tending them, and to<span class='pagenum'><a name="Page_62" id="Page_62">[Pg 62]</a></span> +pay the ordinary profit to the farmer or the +owner of the herd or flock, but to afford some +small rent to the landlord. The rent increases +in proportion to the goodness of the pasture. +The same extent of ground not only maintains +a greater number of cattle, but as they +are brought within a smaller compass, less labour +becomes requisite to tend them, and to +collect their produce. The landlord gains +both ways; by the increase of the produce, +and by the diminution of the labour which +must be maintained out of it.</p> + +<p>The rent of land not only varies with its +fertility, whatever be its produce, but with its +situation, whatever be its fertility. Land in +the neighbourhood of a town gives a greater +rent than land equally fertile in a distant part +of the country. Though it may cost no more +labour to cultivate the one than the other, it +must always cost more to bring the produce +of the distant land to market. A greater +quantity of labour, therefore, must be maintained +out of it; and the surplus, from which +are drawn both the profit of the farmer and +the rent of the landlord, must be diminished. +But in remote parts of the country, the rate +of profit, as has already been shewn, is generally +higher than in the neighbourhood of a +large town. A smaller proportion of this diminished +surplus, therefore, must belong to +the landlord.</p> + +<p>Good roads, canals, and navigable rivers, +by diminishing the expense of carriage, put +the remote parts of the country more nearly +upon a level with those in the neighbourhood +of the town. They are upon that account the +greatest of all improvements. They encourage +the cultivation of the remote, which must +always be the most extensive circle of the +country. They are advantageous to the town +by breaking down the monopoly of the country +in its neighbourhood. They are advantageous +even to that part of the country. +Though they introduce some rival commodities +into the old market, they open many new +markets to its produce. Monopoly, besides, +is a great enemy to good management, which +can never be universally established, but in +consequence of that free and universal competition +which forces every body to have recourse +to it for the sake of self-defence. It +is not more than fifty years ago, that some of +the counties in the neighbourhood of London +petitioned the parliament against the extension +of the turnpike roads into the remoter +counties. Those remoter counties, they pretended, +from the cheapness of labour, would +be able to sell their grass and corn cheaper in +the London market than themselves, and would +thereby reduce their rents, and ruin their cultivation. +Their rents, however, have risen, +and their cultivation has been improved since +that time.</p> + +<p>A corn field of moderate fertility produces +a much greater quantity of food for man, than +the best pasture of equal extent. Though its +cultivation requires much more labour, yet the +surplus which remains after replacing the seed +and maintaining all that labour, is likewise +much greater. If a pound of butcher's meat, +therefore, was never supposed to be worth more +than a pound of bread, this greater surplus +would everywhere be of greater value and +constitute a greater fund, both for the profit +of the farmer and the rent of the landlord. It +seems to have done so universally in the rude +beginnings of agriculture.</p> + +<p>But the relative values of those two different +species of food, bread and butcher's meat, +are very different in the different periods of +agriculture. In its rude beginnings, the unimproved +wilds, which then occupy the far +greater part of the country, are all abandoned +to cattle. There is more butcher's meat than +bread; and bread, therefore, is the food for +which there is the greatest competition, and +and which consequently brings the greatest price. +At Buenos Ayres, we are told by Ulloa, four +reals, one-and-twenty pence halfpenny sterling, +was, forty or fifty years ago, the ordinary price +of an ox, chosen from a herd of two or three +hundred. He says nothing of the price of +bread, probably because he found nothing remarkable +about it. An ox there, he says, +costs little more than the labour of catching +him. But corn can nowhere be raised without +a great deal of labour; and in a country +which lies upon the river Plate, at that time +the direct road from Europe to the silver +mines of Potosi, the money-price of labour +could be very cheap. It is otherwise when +cultivation is extended over the greater part +of the country. There is then more bread than +butcher's meat. The competition changes its +direction, and the price of butcher's meat becomes +greater than the price of bread.</p> + +<p>By the extension, besides, of cultivation, +the unimproved wilds become insufficient to +supply the demand for butcher's meat. A +great part of the cultivated lands must be employed +in rearing and fattening cattle; of which +the price, therefore, must be sufficient to pay, +not only the labour necessary for tending them, +but the rent, which the landlord, and the profit +which the farmer, could have drawn from +such land employed in tillage. The cattle +bred upon the most uncultivated moors, when +brought to the same market, are, in proportion +to their weight or goodness, sold at the +same price as these which are reared upon the +most improved land. The proprietors of those +moors profit by it, and raise the rent of their +land in proportion to the price of their cattle. +It is not more than a century ago, that in +many parts of the Highlands of Scotland, +butcher's meat was as cheap or cheaper than +even bread made of oatmeal. The Union +opened the market of England to the Highland +cattle. Their ordinary price, at present, +is about three times greater than at the begin<span class='pagenum'><a name="Page_63" id="Page_63">[Pg 63]</a></span>ning +of the century, and the rents of many +Highland estates have been tripled and quadrupled +in the same time. In almost every +part of Great Britain, a pound of the best +butcher's meat is, in the present times +generally worth more than two pounds of the best +white bread; and in plentiful years it is sometimes +worth three or four pounds.</p> + +<p>It is thus that, in the progress of improvement, +the rent and profit of unimproved pasture +come to be regulated in some measure by +the rent and profit of what is improved, and +these again by the rent and profit of corn. +Corn is an annual crop; butcher's meat, a crop +which requires four or five years to grow. As +an acre of land, therefore, will produce a much +smaller quantity of the one species of food +than of the other, the inferiority of the +quantity must be compensated by the superiority +of the price. If it was more than compensated, +more corn-land would be turned into +pasture; and if it was not compensated, part +of what was in pasture would be brought back +into corn.</p> + +<p>This equality, however, between the rent +and profit of grass and those of corn; of the +land of which the immediate produce is food +for cattle, and of that of which the immediate +produce is food for men, must be understood +to take place only through the greater part of +the improved lands of a great country. In +some particular local situations it is quite +otherwise, and the rent and profit of grass are +much superior to what can be made by corn.</p> + +<p>Thus, in the neighbourhood of a great town, +the demand for milk, and for forage to horses, +frequently contribute, together with the high +price of butcher's meat, to raise the value of +grass above what may be called its natural +proportion to that of corn. This local advantage, +it is evident, cannot be communicated to +the lands at a distance.</p> + +<p>Particular circumstances have sometimes +rendered some countries so populous, that the +whole territory, like the lands in the neighbourhood +of a great town, has not been sufficient +to produce both the grass and the corn +necessary for the subsistence of their inhabitants. +Their lands, therefore, have been principally +employed in the production of grass, +the more bulky commodity, and which cannot +be so easily brought from a great distance; +and corn, the food of the great body of the +people, has been chiefly imported from foreign +countries. Holland is at present in this +situation; and a considerable part of ancient +Italy seems to have been so during the prosperity +of the Romans. To feed well, old Cato +said, as we are told by Cicero, was the first +and most profitable thing in the management +of a private estate; to feed tolerably well, the +second; and to feed ill, the third. To plough, +he ranked only in the fourth place of profit +and advantage. Tillage, indeed, in that part +of ancient Italy which lay in the neighbourhood +of Rome, must have been very much +discouraged by the distributions of corn which +were frequently made to the people, either +gratuitously, or at a very low price. This +corn was brought from the conquered provinces, +of which several, instead of taxes, were +obliged to furnish a tenth part of their produce +at a stated price, about sixpence a-peck, +to the republic. The low price at which this +corn was distributed to the people, must +necessarily have sunk the price of what could be +brought to the Roman market from Latium, +or the ancient territory of Rome, and must +have discouraged its cultivation in that country.</p> + +<p>In an open country, too, of which the principal +produce is corn, a well-inclosed piece of +grass will frequently rent higher than any +corn field in its neighbourhood. It is convenient +for the maintenance of the cattle employed +in the cultivation of the corn; and its +high rent is, in this case, not so properly paid +from the value of its own produce, as from +that of the corn lands which are cultivated by +means of it. It is likely to fall, if ever the +neighbouring lands are completely inclosed. +The present high rent of inclosed land in +Scotland seems owing to the scarcity of +inclosure, and will probably last no longer than +that scarcity. The advantage of inclosure is +greater for pasture than for corn. It saves +the labour of guarding the cattle, which feed +better, too, when they are not liable to be +disturbed by their keeper or his dog.</p> + +<p>But where these is no local advantage of +this kind, the rent and profit of corn, or +whatever else is the common vegetable food of the +people, must naturally regulate upon the land +which is fit for producing it, the rent and +profit of pasture.</p> + +<p>The use of the artificial grasses, of turnips, +carrots, cabbages, and the other expedients +which have been fallen upon to make an equal +quantity of land feed a greater number of +cattle than when in natural grass, should +somewhat reduce, it might be expected, the +superiority which, in an improved country, +the price of butcher's meat naturally has over +that of bread. It seems accordingly to have +done so, and there is some reason for believing +that, at least in the London market, the +price of butcher's meat, in proportion to the +price of bread, is a good deal lower in the +present times than it was in the beginning +of the last century.</p> + +<p>In the Appendix to the life of Prince Henry, +Doctor Birch has given us an account of +the prices of butcher's meat as commonly paid +by that prince. It is there said, that the four +quarters of an ox, weighing six hundred +pounds, usually cost him nine pounds ten +shillings, or thereabouts; that is thirty-one +shillings and eight-pence per hundred pounds +weight. Prince Henry died on the 6th of +November 1612, in the nineteenth year of his age.<span class='pagenum'><a name="Page_64" id="Page_64">[Pg 64]</a></span></p> + +<p>In March 1764, there was a parliamentary +inquiry into the causes of the high price of +provisions at that time. It was then, among +other proof to the same purpose, given in evidence +by a Virginia merchant, that in March +1763, he had victualled his ships for twenty-four +or twenty-five shillings the hundred +weight of beef, which he considered as the ordinary +price; whereas, in that dear year, he +had paid twenty-seven shillings for the same +weight and sort. This high price in 1764 is, +however, four shillings and eight-pence cheaper +than the ordinary price paid by Prince +Henry; and it is the best beef only, it must +be observed, which is fit to be salted for those +distant voyages.</p> + +<p>The price paid by Prince Henry amounts +to 3d. 4-5ths per pound weight of the whole +carcase, coarse and choice pieces taken together; +and at that rate the choice pieces could +not have been sold by retail for less than 4½d. +or 5d. the pound.</p> + +<p>In the parliamentary inquiry in 1764, the +witnesses stated the price of the choice pieces +of the best beef to be to the consumer 4d. and +4½d. the pound; and the coarse pieces in general +to be from seven farthings to 2½d. and +2¾d.; and this, they said, was in general one +halfpenny dearer than the same sort of pieces +had usually been sold in the month of March. +But even this high price is still a good deal +cheaper than what we can well suppose the +ordinary retail price to have been in the time +of Prince Henry.</p> + +<p>During the first twelve years of the last century, +the average price of the best wheat at +the Windsor market was L.1 : 18 : 3½d. the +quarter of nine Winchester bushels.</p> + +<p>But in the twelve years preceding 1764, +including that year, the average price of the +same measure of the best wheat at the same +market was L.2 : 1 : 9½d.</p> + +<p>In the first twelve years of the last century, +therefore, wheat appears to have been a good +deal cheaper, and butcher's meat a good deal +dearer, than in the twelve years preceding +1764, including that year.</p> + +<p>In all great countries, the greater part of +the cultivated lands are employed in producing +either food for men or food for cattle. +The rent and profit of these regulate the rent +and profit of all other cultivated land. If any +particular produce afforded less, the land would +soon be turned into corn or pasture; and if +any afforded more, some part of the lands in +corn or pasture would soon be turned to that +produce.</p> + +<p>Those productions, indeed, which require +either a greater original expense of improvement, +or a greater annual expense of cultivation +in order to fit the land for them, appear +commonly to afford, the one a greater rent, +the other a greater profit, than corn pasture. +This superiority, however, will seldom +be found to amount to more than a reasonable +interest or compensation for this superior +expense.</p> + +<p>In a hop garden, a fruit garden, a kitchen +garden, both the rent of the landlord, and the +profit of the farmer, are generally greater than +in a corn or grass field. But to bring the +ground into this condition requires more expense. +Hence a greater rent becomes due to +the landlord. It requires, too, a more attentive +and skilful management. Hence a greater +profit becomes due to the farmer. The +crop, too, at least in the hop and fruit garden, +is more precarious. Its price, therefore, besides +compensating all occasional losses, must +afford something like the profit of insurance. +The circumstances of gardeners, generally +mean, and always moderate, may satisfy us +that their great ingenuity is not commonly +over-recompensed. Their delightful art is +practised by so many rich people for amusement, +that little advantage is to be made by +these who practise it for profit; because the +persons who should naturally be their best +customers, supply themselves with all their +most precious productions.</p> + +<p>The advantage which the landlord derives +from such improvements, seems at no time to +have been greater than what was sufficient to +compensate the original expense of making +them. In the ancient husbandry, after the +vineyard, a well-watered kitchen garden seems +to have been the part of the farm which was +supposed to yield the most valuable produce. +But Democritus, who wrote upon husbandry +about two thousand years ago, and who was +regarded by the ancients as one of the fathers +the of the art, thought they did not act wisely +who inclosed a kitchen garden. The profit, +he said, would not compensate the expense of +a stone-wall: and bricks (he meant, I suppose, +bricks baked in the sun) mouldered with +the rain and the winter-storm, and required +continual repairs. Columella, who reports +this judgment of Democritus, does not controvert +it, but proposes a very frugal method +of inclosing with a hedge of brambles and +briars, which he says he had found by experience +to be both a lasting and an impenetrable +fence; but which, it seems, was not commonly +known in the time of Democritus. Palladius +adopts the opinion of Columella, which +had before been recommended by Varro. In +the judgment of these ancient improvers, the +produce of a kitchen garden had, it seems, +been little more than sufficient to pay the extraordinary +culture and the expense of watering; +for in countries so near the sun, it was +thought proper, in those times as in the present, +to have the command of a stream of water, +which could be conducted to every bed in +the garden. Through the greater part of Europe, +a kitchen garden is not at present supposed +to deserve a better inclosure than that +recommended by Columella. In Great Britain, +and some other northern countries, the<span class='pagenum'><a name="Page_65" id="Page_65">[Pg 65]</a></span> +finer fruits cannot be brought to perfection +but by the assistance of a wall. Their price, +therefore, in such countries, must be sufficient +to pay the expense of building and maintaining +what they cannot be had without. The +fruit-wall frequently surrounds the kitchen +garden, which thus enjoys the benefit of an inclosure +which its own produce could seldom +pay for.</p> + +<p>That the vineyard, when properly planted +and brought to perfection, was the most valuable +part of the farm, seems to have been an +undoubted maxim in the ancient agriculture, +as it is in the modern, through all the wine +countries. But whether it was advantageous +to plant a new vineyard, was a matter of dispute +among the ancient Italian husbandmen, +as we learn from Columella. He decides, +like a true lover of all curious cultivation, in +favour of the vineyard; and endeavours to +shew, by a comparison of the profit and expense, +that it was a most advantageous improvement. +Such comparisons, however, between +the profit and expense of new projects +are commonly very fallacious; and in nothing +more so than in agriculture. Had the gain +actually made by such plantations been commonly +as great as he imagined it might have +been, there could have been no dispute about +it. The same point is frequently at this day +a matter of controversy in the wine countries. +Their writers on agriculture, indeed, the lovers +and promoters of high cultivation, seem +generally disposed to decide with Columella +in favour of the vineyard. In France, the +anxiety of the proprietors of the old vineyards +to prevent the planting of any new ones, seems +to favour their opinion, and to indicate a consciousness +in those who must have the experience, +that this species of cultivation is at present +in that country more profitable than any +other. It seems, at the same time, however, +to indicate another opinion, that this superior +profit can last no longer than the laws which +at present restrain the free cultivation of the +vine. In 1731, they obtained an order of +council, prohibiting both the planting of new +vineyards, and the renewal of these old ones, +of which the cultivation had been interrupted +for two years, without a particular permission +from the king, to be granted only in consequence +of an information from the intendant +of the province, certifying that he had examined +the land, and that it was incapable of +any other culture. The pretence of this order +was the scarcity of corn and pasture, and +the superabundance of wine. But had this +superabundance been real, it would, without +any order of council, have effectually prevented +the plantation of new vineyards, by reducing +the profits of this species of cultivation +below their natural proportion to those of corn +and pasture. With regard to the supposed +scarcity of corn occasioned by the multiplication +of vineyards, corn is nowhere in France +more carefully cultivated than in the wine +provinces, where the land is fit for producing +it: as in Burgundy, Guienne, and the Upper +Languedoc. The numerous hands employed +in the one species of cultivation necessarily +encourage the other, by affording a ready market +for its produce. To diminish the number +of those who are capable of paying it, is surely +a most unpromising expedient for encouraging +the cultivation of corn. It is like the +policy which would promote agriculture, by +discouraging manufactures.</p> + +<p>The rent and profit of those productions, +therefore, which require either a greater original +expense of improvement in order to fit the +land for them, or a greater annual expense of +cultivation, though often much superior to +those of corn and pasture, yet when they do +no more than compensate such extraordinary +expense, are in reality regulated by the rent +and profit of those common crops.</p> + +<p>It sometimes happens, indeed, that the quantity +of land which can be fitted for some particular +produce, is too small to supply the effectual +demand. The whole produce can be +disposed of to those who are willing to give +somewhat more than what is sufficient to pay +the whole rent, wages, and profit, necessary +for raising and bringing it to market, according +to their natural rates, or according to the +rates at which they are paid in the greater +part of other cultivated land. The surplus +part of the price which remains after defraying +the whole expense of improvement and +cultivation, may commonly, in this case, and +in this case only, bear no regular proportion +to the like surplus in corn or pasture, but may +exceed it in almost any degree; and the greater +part of this excess naturally goes to the +rent of the landlord.</p> + +<p>The usual and natural proportion, for example, +between the rent and profit of wine, and +those of corn and pasture, must be understood +to take place only with regard to those vineyards +which produce nothing but good common +wine, such as can be raised almost anywhere, +upon any light, gravelly, or sandy soil, and +which has nothing to recommend it but its +strength and wholesomeness. It is with such +vineyards only, that the common land of the +country can be brought into competition; for +with those of a peculiar quality it is evident +that it cannot.</p> + +<p>The vine is more affected by the difference +of soils than any other fruit-tree. From some +it derives a flavour which no culture or management +can equal, it is supposed, upon any +other. This flavour, real or imaginary, is +sometimes peculiar to the produce of a few +vineyards; sometimes it extends through +the greater part of a small district, and sometimes +through a considerable part of a large province. +The whole quantity of such wines +that is brought to market falls short of the effectual +demand, or the demand of those who<span class='pagenum'><a name="Page_66" id="Page_66">[Pg 66]</a></span> +would be willing to pay the whole rent, profit, +and wages, necessary for preparing and +bringing them thither, according to the ordinary +rate, or according to the rate at which they +are paid in common vineyards. The whole +quantity, therefore, can be disposed of to those +who are willing to pay more, which necessarily +raises their price above that of common +wine. The difference is greater or less, according +as the fashionableness and scarcity of +the wine render the competition of the buyers +more or less eager. Whatever it be, the greater +part of it goes to the rent of the landlord. +For though such vineyards are in general +more carefully cultivated than most others, +the high price of the wine seems to be, not so +much the effect, as the cause of this careful +cultivation. In so valuable a produce, the +loss occasioned by negligence is so great, as +to force even the most careless to attention. +A small part of this high price, therefore, is +sufficient to pay the wages of the extraordinary +labour bestowed upon their cultivation, +and the profits of the extraordinary stock +which puts that labour into motion.</p> + +<p>The sugar colonies possessed by the European +nations in the West Indies may be compared +to those precious vineyards. Their whole +produce falls short of the effectual demand of +Europe, and can be disposed of to those who +are willing to give more than what is sufficient +to pay the whole rent, profit, and wages, +necessary for preparing and bringing it to +market, according to the rate at which they +are commonly paid by any other produce. In +Cochin China, the finest white sugar generally +sells for three piastres the quintal, about +thirteen shillings and sixpence of our money, +as we are told by Mr Poivre<a name="FNanchor_14_14" id="FNanchor_14_14"></a><a href="#Footnote_14_14" class="fnanchor">[14]</a>, a very careful +observer of the agriculture of that country. +What is there called the quintal, weighs from +a hundred and fifty to two hundred Paris +pounds, or a hundred and seventy-five Paris +pounds at a medium, which reduces the price +of the hundred weight English to about eight +shillings sterling; not a fourth part of what +is commonly paid for the brown or muscovada +sugars imported from our colonies, and +not a sixth part of what is paid for the finest +white sugar. The greater part of the cultivated +lands in Cochin China are employed in +producing corn and rice, the food of the great +body of the people. The respective prices of +corn, rice, and sugar, are there probably in +the natural proportion, or in that which naturally +takes place in the different crops of the +greater part of cultivated land, and which recompenses +the landlord and farmer, as nearly +as can be computed, according to what is +usually the original expense of improvement, +and the annual expense of cultivation. But +in our sugar colonies, the price of sugar bears +no such proportion to that of the produce of +a rice or corn field either in Europe or America. +It is commonly said that a sugar planter +expects that the rum and the molasses should +defray the whole expense of his cultivation, +and that his sugar should be all clear profit. +If this be true, for I pretend not to affirm it, +it is as if a corn farmer expected to defray +the expense of his cultivation with the chaff +and the straw, and that the grain should be +all clear profit. We see frequently societies +of merchants in London, and other trading +towns, purchase waste lands in our sugar colonies, +which they expect to improve and cultivate +with profit, by means of factors and agents, +notwithstanding the great distance and +the uncertain returns, from the defective administration +of justice in those countries. Nobody +will attempt to improve and cultivate in +the same manner the most fertile lands of +Scotland, Ireland, or the corn provinces of +North America, though, from the more exact +administration of justice in these countries, +more regular returns might be expected.</p> + +<p>In Virginia and Maryland, the cultivation +of tobacco is preferred, as most profitable, to +that of corn. Tobacco might be cultivated +with advantage through the greater part of +Europe; but, in almost every part of Europe, +it has become a principal subject of taxation; +and to collect a tax from every different farm +in the country where this plant might happen +to be cultivated, would be more difficult, it +has been supposed, than to levy one upon its +importation at the custom-house. The cultivation +of tobacco has, upon this account, been +most absurdly prohibited through the greater +part of Europe, which necessarily gives a sort +of monopoly to the countries where it is allowed; +and as Virginia and Maryland produce the +greatest quantity of it, they share largely, +though with some competitors, in the advantage +of this monopoly. The cultivation of tobacco, +however, seems not to be so advantageous +as that of sugar. I have never even +heard of any tobacco plantation that was improved +and cultivated by the capital of merchants +who resided in Great Britain; and our +tobacco colonies send us home no such wealthy +planters as we see frequently arrive from +our sugar islands. Though, from the preference +given in those colonies to the cultivation +of tobacco above that of corn, it would appear +that the effectual demand of Europe for tobacco +is not completely supplied, it probably +is more nearly so than that for sugar; and +though the present price of tobacco is probably +more than sufficient to pay the whole rent, +wages, and profit, necessary for preparing and +bringing it to market, according to the rate at +which they are commonly paid in corn land, +it must not be so much more as the present +price of sugar. Our tobacco planters, accordingly, +have shewn the same fear of the +superabundance of tobacco, which the proprietors +of the old vineyards in France have of<span class='pagenum'><a name="Page_67" id="Page_67">[Pg 67]</a></span> +the superabundance of wine. By act of assembly, +they have restrained its cultivation to +six thousand plants, supposed to yield a thousand +weight of tobacco, for every negro between +sixteen and sixty years of age. Such +a negro, over and above this quantity of tobacco, +can manage, they reckon, four acres of +Indian corn. To prevent the market from +being overstocked, too, they have sometimes, +in plentiful years, we are told by Dr Douglas<a name="FNanchor_15_15" id="FNanchor_15_15"></a><a href="#Footnote_15_15" class="fnanchor">[15]</a> +(I suspect he has been ill informed), +burnt a certain quantity of tobacco for every +negro, in the same manner as the Dutch are +said to do of spices. If such violent methods +are necessary to keep up the present price of +tobacco, the superior advantage of its culture +over that of corn, if it still has any, will not +probably be of long continuance.</p> + +<p>It is in this manner that the rent of the cultivated +land, of which the produce is human +food, regulates the rent of the greater part of +other cultivated land. No particular produce +can long afford less, because the land would +immediately be turned to another use; and if +any particular produce commonly affords more, +it is because the quantity of land which can +be fitted for it is too small to supply the effectual +demand.</p> + +<p>In Europe, corn is the principal produce of +land, which serves immediately for human +food. Except in particular situations, therefore, +the rent of corn land regulates in Europe +that of all other cultivated land. Britain need +envy neither the vineyards of France, nor the +olive plantations of Italy. Except in particular +situations, the value of these is regulated +by that of corn, in which the fertility of Britain +is not much inferior to that of either of +those two countries.</p> + +<p>If, in any country, the common and favourite +vegetable food of the people should be +drawn from a plant, of which the most common +land, with the same, or nearly the same +culture, produced a much greater quantity +than the most fertile does of corn; the rent of +the landlord, or the surplus quantity of food +which would remain to him, after paying the +labour, and replacing the stock of the farmer, +together with its ordinary profits, would necessarily +be much greater. Whatever was the +rate at which labour was commonly maintained +in that country, this greater surplus could +always maintain a greater quantity of it, and, +consequently, enable the landlord to purchase +or command a greater quantity of it. The +real value of his rent, his real power and authority, +his command of the necessaries and +conveniencies of life with which the labour of +other people could supply him, would necessarily +be much greater.</p> + +<p>A rice field produces a much greater quantity +of food than the most fertile corn field. +Two crops in the year, from thirty to sixty +bushels each, are said to be the ordinary produce +of an acre. Though its cultivation, +therefore, requires more labour, a much greater +surplus remains after maintaining all that +labour. In those rice countries, therefore, +where rice is the common and favourite vegetable +food of the people, and where the cultivators +are chiefly maintained with it, a greater +share of this greater surplus should belong to +the landlord than in corn countries. In Carolina, +where the planters, as in other British +colonies, are generally both farmers and landlords, +and where rent, consequently, is confounded +with profit, the cultivation of rice is +found to be more profitable than that of corn, +though their fields produce only one crop in +the year, and though, from the prevalence of +the customs of Europe, rice is not there the +common and favourite vegetable food of the +people.</p> + +<p>A good rice field is a bog at all seasons, +and at one season a bog covered with water. +It is unfit either for corn, or pasture, or vineyard, +or, indeed, for any other vegetable produce +that is very useful to men; and the lands +which are fit for those purposes are not fit for +rice. Even in the rice countries, therefore, +the rent of rice lands cannot regulate the rent +of the other cultivated land which can never +be turned to that produce.</p> + +<p>The food produced by a field of potatoes is +not inferior in quantity to that produced by a +field of rice, and much superior to what is +produced by a field of wheat. Twelve thousand +weight of potatoes from an acre of land +is not a greater produce than two thousand +weight of wheat. The food or solid nourishment, +indeed, which can be drawn from each +of those two plants, is not altogether in proportion +to their weight, on account of the watery +nature of potatoes. Allowing, however, +half the weight of this root to go to water, a +very large allowance, such an acre of potatoes +will still produce six thousand weight of solid +nourishment, three times the quantity produced +by the acre of wheat. An acre of potatoes +is cultivated with less expense than an +acre of wheat; the fallow, which generally +precedes the sowing of wheat, more than compensating +the hoeing and other extraordinary +culture which is always given to potatoes. +Should this root ever become in any part of +Europe, like rice in some rice countries, the +common and favourite vegetable food of the +people, so as to occupy the same proportion +of the lands in tillage, which wheat and other +sorts of grain for human food do at present, +the same quantity of cultivated land would +maintain a much greater number of people; +and the labourers being generally fed with potatoes, +a greater surplus would remain after +replacing all the stock, and maintaining all +the labour employed in cultivation. A greater +share of this surplus, too, would belong to the +landlord. Population would increase, and<span class='pagenum'><a name="Page_68" id="Page_68">[Pg 68]</a></span> +rents would rise much beyond what they are +at present.</p> + +<p>The land which is fit for potatoes, is fit for +almost every other useful vegetable. If they +occupied the same proportion of cultivated +land which corn does at present, they would +regulate, in the same manner, the rent of the +greater part of other cultivated land.</p> + +<p>In some parts of Lancashire, it is pretended, +I have been told, that bread of oatmeal is +a heartier food for labouring people than +wheaten bread, and I have frequently heard +the same doctrine held in Scotland. I am, +however, somewhat doubtful of the truth of +it. The common people in Scotland, who are +fed with oatmeal, are in general neither so +strong nor so handsome as the same rank of +people in England, who are fed with wheaten +bread. They neither work so well, nor look +so well; and as there is not the same difference +between the people of fashion in the two +countries, experience would seem to shew, +that the food of the common people in Scotland +is not so suitable to the human constitution +as that of their neighbours of the same +rank in England. But it seems to be otherwise +with potatoes. The chairmen, porters, +and coal-heavers in London, and those unfortunate +women who live by prostitution, the +strongest men and the most beautiful women +perhaps in the British dominions, are said to +be, the greater part of them, from the lowest +rank of people in Ireland, who are generally +fed with this root. No food can afford a more +decisive proof of its nourishing quality, or of +its being peculiarly suitable to the health of +the human constitution.</p> + +<p>It is difficult to preserve potatoes through +the year, and impossible to store them like +corn, for two or three years together. The +fear of not being able to sell them before they +rot, discourages their cultivation, and is, perhaps, +the chief obstacle to their ever becoming +in any great country, like bread, the principal +vegetable food of all the different ranks of the +people.</p> + + +<h4><span class="smcap">Part II.</span>—<i>Of the Produce of Land, which +sometimes does, and sometimes does not, afford +Rent.</i></h4> + +<p>Human food seems to be the only produce of +land, which always and necessarily affords +some rent to the landlord. Other sorts of +produce sometimes may, and sometimes may +not, according to different circumstances.</p> + +<p>After food, clothing and lodging are the +two great wants of mankind.</p> + +<p>Land, in its original rude state, can afford +the materials of clothing and lodging to a +much greater number of people than it can +feed. In its improved state, it can sometimes +feed a greater number of people than it can +supply with those materials; at least in the +way in which they require them, and are willing +to pay for them. In the one state, therefore, +there is always a superabundance of those +materials, which are frequently, upon that account, +of little or no value. In the other, +there is often a scarcity, which necessarily +augments their value. In the one state, a +great part of them is thrown away as useless; +and the price of what is used is considered as +equal only to the labour and expense of fitting +it for use, and can, therefore, afford no +rent to the landlord. In the other, they are +all made use of, and there is frequently a demand +for more than can be had. Somebody +is always willing to give more for every part +of them, than what is sufficient to pay the expense +of bringing them to market. Their +price, therefore, can always afford some rent +to the landlord.</p> + +<p>The skins of the larger animals were the +original materials of clothing. Among nations +of hunters and shepherds, therefore, +whose food consists chiefly in the flesh of those +animals, every man, by providing himself with +food, provides himself with the materials of +more clothing than he can wear. If there +was no foreign commerce, the greater part of +them would be thrown away as things of no +value. This was probably the case among +the hunting nations of North America, before +their country was discovered by the Europeans, +with whom they now exchange their surplus +peltry, for blankets, fire-arms, and brandy, +which gives it some value. In the present +commercial state of the known world, the +most barbarous nations, I believe, among +whom land property is established, have some +foreign commerce of this kind, and find among +their wealthier neighbours such a demand for +all the materials of clothing, which their land +produces, and which can neither be wrought +up nor consumed at home, as raises their price +above what it costs to send them to those +wealthier neighbors. It affords, therefore, +some rent to the landlord. When the greater +part of the Highland cattle were consumed +on their own hills, the exportation of their +hides made the most considerable article of +the commerce of that country, and what they +were exchanged for afforded some addition to +the rent of the Highland estates. The wool +of England, which in old times, could neither +be consumed nor wrought up at home, found +a market in the then wealthier and more industrious +country of Flanders, and its price +afforded something to the rent of the land +which produced it. In countries not better +cultivated than England was then, or than the +Highlands of Scotland are now, and which +had no foreign commerce, the materials of +clothing would evidently be so superabundant, +that a great part of them would be thrown +away as useless, and no part could afford any +rent to the landlord.</p> + +<p>The materials of lodging cannot always be<span class='pagenum'><a name="Page_69" id="Page_69">[Pg 69]</a></span> +transported to so great a distance as those of +clothing, and do not so readily become an object +of foreign commerce. When they are +superabundant in the country which produces +them, it frequently happens, even in the present +commercial state of the world, that they +are of no value to the landlord. A good stone +quarry in the neighbourhood of London would +afford a considerable rent. In many parts of +Scotland and Wales it affords none. Barren +timber for building is of great value in a populous +and well-cultivated country, and the +land which produces it affords a considerable +rent. But in many parts of North America, +the landlord would be much obliged to any +body who would carry away the greater part +of his large trees. In some parts of the Highlands +of Scotland, the bark is the only part of +the wood which, for want of roads and water-carriage, +can be sent to market; the timber is +left to rot upon the ground. When the materials +of lodging are so superabundant, the +part made use of is worth only the labour and +expense of fitting it for that use. It affords +no rent to the landlord, who generally grants +the use of it to whoever takes the trouble of +asking it. The demand of wealthier nations, +however, sometimes enables him to get a rent +for it. The paving of the streets of London +has enabled the owners of some barren rocks +on the coast of Scotland to draw a rent from +what never afforded any before. The woods +of Norway, and of the coasts of the Baltic, +find a market in many parts of Great Britain, +which they could not find at home, and thereby +afford some rent to their proprietors.</p> + +<p>Countries are populous, not in proportion +to the number of people whom their produce +can clothe and lodge, but in proportion to that +of those whom it can feed. When food is +provided, it is easy to find the necessary clothing +and lodging. But though these are at +hand, it may often be difficult to find food. +In some parts of the British dominions, what +is called a house may be built by one day's +labour of one man. The simplest species of +clothing, the skins of animals, require somewhat +more labour to dress and prepare them +for use. They do not, however, require a +great deal. Among savage or barbarous nations, +a hundredth, or little more than a hundredth +part of the labour of the whole year, +will be sufficient to provide them with such +clothing and lodging as satisfy the greater +part of the people. All the other ninety-nine +parts are frequently no more than enough to +provide them with food.</p> + +<p>But when, by the improvement and cultivation +of land, the labour of one family can +provide food for two, the labour of half the +society becomes sufficient to provide food for +the whole. The other half, therefore, or at +least the greater part of them, can be employed +in providing other things, or in satisfying +the other wants and fancies of mankind. +Clothing and lodging, household furniture, +and what is called equipage, are the principal +objects of the greater part of those wants and +fancies. The rich man consumes no more +food than his poor neighbour. In quality it +may be very different, and to select and prepare +it may require more labour and art; +but in quantity it is very nearly the same. +But compare the spacious palace and great +wardrobe of the one, with the hovel and the +few rags of the other, and you will be sensible +that the difference between their clothing, +lodging, and household furniture, is almost as +great in quantity as it is in quality. The desire +of food is limited in every man by the +narrow capacity of the human stomach; but +the desire of the conveniencies and ornaments +of building, dress, equipage, and household +furniture, seems to have no limit or certain +boundary. Those, therefore, who have the +command of more food than they themselves +can consume, are always willing to exchange +the surplus, or, what is the same thing, the +price of it, for gratifications of this other kind. +What is over and above satisfying the limited +desire, is given for the amusement of those +desires which cannot be satisfied, but seem to +be altogether endless. The poor, in order to +obtain food, exert themselves to gratify those +fancies of the rich; and to obtain it more certainly, +they vie with one another in the cheapness +and perfection of their work. The number +of workmen increases with the increasing +quantity of food, or with the growing improvement +and cultivation of the lands; and as the +nature of their business admits of the utmost +subdivisions of labour, the quantity of materials +which they can work up, increases in a +much greater proportion than their numbers. +Hence arises a demand for every sort of material +which human invention can employ, +either usefully or ornamentally, in building, +dress, equipage, or household furniture; for +the fossils and minerals contained in the bowels +of the earth, the precious metals, and the +precious stones.</p> + +<p>Food is, in this manner, not only the original +source of rent, but every other part of the +produce of land which afterwards affords rent, +derives that part of its value from the improvement +of the powers of labour in producing +food, by means of the improvement +and cultivation of land.</p> + +<p>Those other parts of the produce of land, +however, which afterwards afford rent, do not +afford it always. Even in improved and cultivated +countries, the demand for them is not +always such as to afford a greater price than +what is sufficient to pay the labour, and replace, +together with its ordinary profits, the +stock which must be employed in bringing +them to market. Whether it is or is not such, +depends upon different circumstances.<span class='pagenum'><a name="Page_70" id="Page_70">[Pg 70]</a></span></p> + +<p>Whether a coal mine, for example, can afford +any rent, depends partly upon its fertility, +and partly upon its situation.</p> + +<p>A mine of any kind may be said to be either +fertile or barren, according as the quantity of +mineral which can be brought from it by a +certain quantity of labour, as greater or less +than what can be brought by an equal quantity +from the greater part of other mines of +the same kind.</p> + +<p>Some coal mines, advantageously situated, +cannot be wrought on account of their barrenness. +The produce does not pay the expense. +They can afford neither profit nor rent.</p> + +<p>There are some, of which the produce is +barely sufficient to pay the labour, and +replace, together with its ordinary profits, the +stock employed in working them. They afford +some profit to the undertaker of the work, +but no rent to the landlord. They can be +wrought advantageously by nobody but the +landlord, who, being himself the undertaker +of the work, gets the ordinary profit of the +capital which he employs in it. Many coal +mines in Scotland are wrought in this manner, +and can be wrought in no other. The landlord +will allow nobody else to work them without +paying some rent, and nobody can afford +to pay any.</p> + +<p>Other coal mines in the same country, sufficiently +fertile, cannot be wrought on account +of their situation. A quantity of mineral, +sufficient to defray the expense of working, +could be brought from the mine by the ordinary, +or even less than the ordinary quantity +of labour: but in an inland country, thinly +inhabited, and without either good roads or +water-carriage, this quantity could not be sold.</p> + +<p>Coals are a less agreeable fuel than wood: +they are said too to be less wholesome. The +expense of coals, therefore, at the place where +they are consumed, must generally be somewhat +less than that of wood.</p> + +<p>The price of wood, again, varies with the +state of agriculture, nearly in the same manner, +and exactly for the same reason, as the +price of cattle. In its rude beginnings, the +greater part of every country is covered with +wood, which is then a mere incumbrance, of +no value to the landlord, who would gladly +give it to any body for the cutting. As agriculture +advances, the woods are partly cleared +by the progress of tillage, and partly go to decay +in consequence of the increased number +of cattle. These, though they do not increase +in the same proportion as corn, which is altogether +the acquisition of human industry, yet +multiply under the care and protection of men, +who store up in the season of plenty what +may maintain them in that of scarcity; who, +through the whole year, furnish them with a +greater quantity of food than uncultivated nature +provides for them; and who, by destroying +and extirpating their enemies, secure them +in the free enjoyment of all that she provides. +Numerous herds of cattle, when allowed to +wander through the woods, though they do +not destroy the old trees, hinder any young +ones from coming up; so that, in the course +of a century or two, the whole forest goes to +ruin. The scarcity of wood then raises its +price. It affords a good rent; and the landlord +sometimes finds that he can scarce employ +his best lands more advantageously than +in growing barren timber, of which the greatness +of the profit often compensates the lateness +of the returns. This seems, in the present +times, to be nearly the state of things in +several parts of Great Britain, where the profit +of planting is found to be equal to that of +either corn or pasture. The advantage which +the landlord derives from planting can nowhere +exceed, at least for any considerable +time, the rent which these could afford him; +and in an inland country, which is highly cultivated, +it will frequently not fall much short +of this rent. Upon the sea-coast of a well-improved +country, indeed, if coals can conveniently +be had for fuel, it may sometimes be +cheaper to bring barren timber for building +from less cultivated foreign countries than to +raise it at home. In the new town of Edinburgh, +built within these few years, there is +not, perhaps, a single stick of Scotch timber.</p> + +<p>Whatever may be the price of wood, if that +of coals is such that the expense of a coal fire +is nearly equal to that of a wood one, we may +be assured, that at that place, and in these +circumstances, the price of coals is as high as +it can be. It seems to be so in some of the +inland parts of England, particularly in Oxfordshire, +where it is usual, even in the fires +of the common people, to mix coals and wood +together, and where the difference in the +expense of those two sorts of fuel cannot, therefore, +be very great. Coals, in the coal countries, +are everywhere much below this highest +price. If they were not, they could not bear +the expense of a distant carriage, either by +land or by water. A small quantity only could +be sold; and the coal masters and the coal +proprietors find it more for their interest to +sell a great quantity at a price somewhat above +the lowest, than a small quantity at the highest. +The most fertile coal mine, too, regulates +the price of coals at all the other mines +in its neighbourhood. Both the proprietor +and the undertaker of the work find, the one +that he can get a greater rent, the other that +he can get a greater profit, by somewhat underselling +all their neighbours. Their neighbours +are soon obliged to sell at the same +price, though they cannot so well afford it, +and though it always diminishes, and sometimes +takes away altogether, both their rent +and their profit. Some works are abandoned +altogether; others can afford no rent, and can +be wrought only by the proprietor.</p> + +<p>The lowest price at which coals can be sold +for any considerable time, is, like that of all<span class='pagenum'><a name="Page_71" id="Page_71">[Pg 71]</a></span> +other commodities, the price which is barely +sufficient to replace, together with its ordinary +profits, the stock which must be employed in +bringing them to market. At a coal mine for +which the landlord can get no rent, but which +he must either work himself or let it alone altogether, +the price of coals must generally be +nearly about this price.</p> + +<p>Rent, even where coals afford one, has generally +a smaller share in their price than in +that of most other parts of the rude produce +of land. The rent of an estate above ground, +commonly amounts to what is supposed to be +a third of the gross produce; and it is generally +a rent certain and independent of the occasional +variations in the crop. In coal mines, +a fifth of the gross produce is a very great +rent, a tenth the common rent; and it is seldom +a rent certain, but depends upon the occasional +variations in the produce. These are +so great, that in a country where thirty years +purchase is considered as a moderate price for +the property of a landed estate, ten years purchase +is regarded as a good price for that of +a coal mine.</p> + +<p>The value of a coal mine to the proprietor, +frequently depends as much upon its situation +as upon its fertility. That of a metallic mine +depends more upon its fertility, and less upon +its situation. The coarse, and still more the +precious metals, when separated from the ore, +are so valuable, that they can generally bear +the expense of a very long land, and of the +most distant sea carriage. Their market is +not confined to the countries in the neighbourhood +of the mine, but extends to the +whole world. The copper of Japan makes +an article of commerce in Europe; the iron +of Spain in that of Chili and Peru. The silver +of Peru finds its way, not only to Europe, +but from Europe to China.</p> + +<p>The price of coals in Westmoreland or +Shropshire can have little effect on their price +at Newcastle; and their price in the Lionnois +can have none at all. The productions of +such distant coal mines can never be brought +into competition with one another. But the +productions of the most distant metallic mines +frequently may, and in fact commonly are.</p> + +<p>The price, therefore, of the coarse, and still +more that of the precious metals, at the most +fertile mines in the world, must necessarily +more or less affect their price at every other +in it. The price of copper in Japan must +have some influence upon its price at the copper +mines in Europe. The price of silver in +Peru, or the quantity either of labour or of +other goods which it will purchase there, must +have some influence on its price, not only at +the silver mines of Europe, but at those of +China. After the discovery of the mines of +Peru, the silver mines of Europe were, the +greater part of them, abandoned. The value +of silver was so much reduced, that their produce +could no longer pay the expense of +working them, or replace, with a profit, the +food, clothes, lodging, and other necessaries +which were consumed in that operation. This +was the case, too, with the mines of Cuba and +St. Domingo, and even with the ancient mines +of Peru, after the discovery of those of Potosi.</p> + +<p>The price of every metal, at every mine, +therefore, being regulated in some measure +by its price at the most fertile mine in the +world that is actually wrought, it can, at the +greater part of mines, do very little more than +pay the expense of working, and can seldom +afford a very high rent to the landlord. Rent +accordingly, seems at the greater part of +mines to have but a small share in the price +of the coarse, and a still smaller in that of the +precious metals. Labour and profit make up +the greater part of both.</p> + +<p>A sixth part of the gross produce may be +reckoned the average rent of the tin mines of +Cornwall, the most fertile that are known in +the world, as we are told by the Rev. Mr. +Borlace, vice-warden of the stannaries. Some, +he says, afford more, and some do not afford +so much. A sixth part of the gross produce +is the rent, too, of several very fertile lead +mines in Scotland.</p> + +<p>In the silver mines of Peru, we are told by +Frezier and Ulloa, the proprietor frequently +exacts no other acknowledgment from the undertaker +of the mine, but that he will grind +the ore at his mill, paying him the ordinary +multure or price of grinding. Till 1736, indeed, +the tax of the king of Spain amounted +to one fifth of the standard silver, which till +then might be considered as the real rent of +the greater part of the silver mines of Peru, +the richest which have been known in the +world. If there had been no tax, this fifth +would naturally have belonged to the landlord, +and many mines might have been +wrought which could not then be wrought, +because they could not afford this tax. The +tax of the duke of Cornwall upon tin is supposed +to amount to more than five per cent. +or one twentieth part of the value; and whatever +may be his proportion, it would naturally, +too, belong to the proprietor of the mine, +if tin was duty free. But if you add one +twentieth to one sixth, you will find that the +whole average rent of the tin mines of Cornwall, +was to the whole average rent of the silver +mines of Peru, as thirteen to twelve. But +the silver mines of Peru are not now able to +pay even this low rent; and the tax upon silver +was, in 1736, reduced from one fifth to +one tenth. Even this tax upon silver, too, +gives more temptation to smuggling than the +tax of one twentieth upon tin; and smuggling +must be much easier in the precious +than in the bulky commodity. The tax of +the king of Spain, accordingly, is said to be +very ill paid, and that of the duke of Cornwall +very well. Rent, therefore, it is probable,<span class='pagenum'><a name="Page_72" id="Page_72">[Pg 72]</a></span> +makes a greater part of the price of tin at the +must fertile tin mines than it does of silver at +the most fertile silver mines in the world. +After replacing the stock employed in working +those different mines, together with its ordinary +profits, the residue which remains to +the proprietor is greater, it seems, in the +coarse, than in the precious metal.</p> + +<p>Neither are the profits of the undertakers +of silver mines commonly very great in Peru. +The same most respectable and well-informed +authors acquaint us, that when any person undertakes +to work a new mine in Peru, he is +universally looked upon as a man destined to +bankruptcy and ruin, and is upon that account +shunned and avoided by every body.—Mining, +it seems, is considered there in the +same light as here, as a lottery, in which the +prizes do not compensate the blanks, though +the greatness of some tempts many adventurers +to throw away their fortunes in such unprosperous +projects.</p> + +<p>As the sovereign, however, derives a considerable +part of his revenue from the produce +of silver mines, the law in Peru gives every +possible encouragement to the discovery and +working of new ones. Whoever discovers a +new mine, is entitled to measure off two +hundred and forty-six feet in length, according +to what he supposes to be the direction of +the vein, and half as much in breadth. He +becomes proprietor of this portion of the mine, +and can work it without paying any acknowledgment +to the landlord. The interest of +the duke of Cornwall has given occasion to a +regulation nearly of the same kind in that ancient +dutchy. In waste and uninclosed lands, +any person who discovers a tin mine may +mark out its limits to a certain extent, which +is called bounding a mine. The bounder becomes +the real proprietor of the mine, and +may either work it himself, or give it in lease +to another, without the consent of the owner +of the land, to whom, however, a very small +acknowledgment must be paid upon working +it. In both regulations, the sacred rights of +private property are sacrificed to the supposed +interests of public revenue.</p> + +<p>The same encouragement is given in Peru +to the discovery and working of new gold +mines; and in gold the king's tax amounts +only to a twentieth part of the standard rental. +It was once a fifth, and afterwards a tenth, as +in silver; but it was found that the work +could not bear even the lowest of these two +taxes. If it is rare, however, say the same +authors, Frezier and Ulloa, to find a person +who has made his fortune by a silver, it is +still much rarer to find one who has done so +by a gold mine. This twentieth part seems +to be the whole rent which is paid by the +greater part of the gold mines of Chili and +Peru. Gold, too, is much more liable to be +smuggled than even silver; not only on account +of the superior value of the metal in +proportion to its bulk, but on account of the +peculiar way in which nature produces it. +Silver is very seldom found virgin, but, like +most other metals, is generally mineralized +with some other body, from which it is impossible +to separate it in such quantities as +will pay for the expense, but by a very laborious +and tedious operation, which cannot well +be carried on but in work-houses erected for +the purpose, and, therefore, exposed to the inspection +of the king's officers. Gold, on the +contrary, is almost always found virgin. It +is sometimes found in pieces of some bulk; +and, even when mixed, in small and almost +insensible particles, with sand, earth, and +other extraneous bodies, it can be separated +from them by a very short and simple operation, +which can be carried on in any private +house by any body who is possessed of a small +quantity of mercury. If the king's tax, therefore, +is but ill paid upon silver, it is likely to +be much worse paid upon gold; and rent +must make a much smaller part of the price +of gold than that of silver.</p> + +<p>The lowest price at which the precious +metals can be sold, or the smallest quantity of +other goods for which they can be exchanged, +during any considerable time, is regulated by +the same principles which fix the lowest +ordinary price of all other goods. The stock +which must commonly be employed, the food, +clothes, and lodging, which must commonly +be consumed in bringing them from the mine +to the market, determine it. It must at least +be sufficient to replace that stock, with the +ordinary profits.</p> + +<p>Their highest price, however, seems not to +be necessarily determined by any thing but +the actual scarcity or plenty of these metals +themselves. It is not determined by that of +any other commodity, in the same manner as +the price of coals is by that of wood, beyond +which no scarcity can ever raise it. Increase +the scarcity of gold to a certain degree, and +the smallest bit of it may become more precious +than a diamond, and exchange for a +greater quantity of other goods.</p> + +<p>The demand for those metals arises partly +from their utility, and partly from their beauty. +If you except iron, they are more useful +than, perhaps, any other metal. As they are +less liable to rust and impurity, they can +more easily be kept clean; and the utensils, +either of the table or the kitchen, are often, +upon that account, more agreeable when made +of them. A silver boiler is more cleanly than +a lead, copper, or tin one; and the same quality +would render a gold boiler still better than +a silver one. Their principal merit, however, +arises from their beauty, which renders them +peculiarly fit for the ornaments of dress and +furniture. No paint or dye can give so splendid +a colour as gilding. The merit of their +beauty is greatly enhanced by their scarcity. +With the greater part of rich people, the<span class='pagenum'><a name="Page_73" id="Page_73">[Pg 73]</a></span> +chief enjoyment of riches consists in the parade +of riches; which, in their eye, is never so +complete as when they appear to possess those +decisive marks of opulence which nobody can +possess but themselves. In their eyes, the +merit of an object, which is in any degree +either useful or beautiful, is greatly enhanced +by its scarcity, or by the great labour which +it requires to collect any considerable quantity +of it; a labour which nobody can afford to +pay but themselves. Such objects they are +willing to purchase at a higher price than +things much more beautiful and useful, but +more common. These qualities of utility, +beauty, and scarcity, are the original foundation +of the high price of those metals, or of +the great quantity of other goods for which +they can everywhere be exchanged. This +value was antecedent to, and independent of +their being employed as coin, and was the +quality which fitted them for that employment. +That employment, however, by occasioning +a new demand, and by diminishing +the quantity which could be employed in any +other way, may have afterwards contributed +to keep up or increase their value.</p> + +<p>The demand for the precious stones arises +altogether from their beauty. They are of no +use but as ornaments; and the merit of their +beauty is greatly enhanced by their scarcity, +or by the difficulty and expense of getting +them from the mine. Wages and profit accordingly +make up, upon most occasions, almost +the whole of the high price. Rent comes +in but for a very small share, frequently for no +share; and the most fertile mines only afford +any considerable rent. When Tavernier, a +jeweller, visited the diamond mines of Golconda +and Visiapour, he was informed that +the sovereign of the country, for whose benefit +they were wrought, had ordered all of +them to be shut up except those which yielded +the largest and finest stones. The other, +it seems, were to the proprietor not worth the +working.</p> + +<p>As the prices, both of the precious metals +and of the precious stones, is regulated all +over the world by their price at the most fertile +mine in it, the rent which a mine of either +can afford to its proprietor is in proportion, +not to its absolute, but to what may be called +its relative fertility, or to its superiority over +other mines of the same kind. If new mines +were discovered, as much superior to those of +Potosi, as they were superior to those of Europe, +the value of silver might be so much degraded +as to render even the mines of Potosi +not worth the working. Before the discovery +of the Spanish West Indies, the most fertile +mines in Europe may have afforded as great +a rent to their proprietors as the richest mines +in Peru do at present. Though the quantity +of silver was much less, it might have exchanged +for an equal quantity of other goods, and +the proprietor's share might have enabled him +to purchase or command an equal quantity +either of labour or of commodities.</p> + +<p>The value, both of the product and of the +rent, the real revenue which they afforded, +both to the public and to the proprietor, might +have been the same.</p> + +<p>The most abundant mines, either of the +precious metals, or of the precious stones, +could add little to the wealth of the world. +A produce, of which the value is principally +derived from its scarcity, is necessarily degraded +by its abundance. A service of plate, and +the other frivolous ornaments of dress and +furniture, could be purchased for a smaller +quantity of labour, or for a smaller quantity +of commodities; and in this would consist the +sole advantage which the world could derive +from that abundance.</p> + +<p>It is otherwise in estates above ground. +The value, both of their produce and of their +rent, is in proportion to their absolute, and +not to their relative fertility. The land which +produces certain quantity of food, clothes, +and lodging, can always feed, clothe, and +lodge, a certain number of people; and whatever +may be the proportion of the landlord, it +will always give him a proportionable command +of the labour of those people, and of the +commodities with which that labour can supply +him. The value of the most barren land +is not diminished by the neighbourhood of the +most fertile. On the contrary, it is generally +increased by it. The great number of people +maintained by the fertile lands afford a market +to many parts of the produce of the barren, +which they could never have found among +those whom their own produce could maintain.</p> + +<p>Whatever increases the fertility of land in +producing food, increases not only the value +of the lands upon which the improvement is +bestowed, but contributes likewise to increase +that or many other lands, by creating a new +demand for their produce. That abundance +of food, of which, in consequence of the improvement +of land, many people have the disposal +beyond what they themselves can consume, +is the great cause of the demand, both +for the precious metals and the precious stones, +as well as for every other conveniency and ornament +of dress, lodging, household furniture, +and equipage. Food not only constitutes the +principal part of the riches of the world, but +it is the abundance of food which gives the +principal part of their value to many other +sorts of riches. The poor inhabitants of Cuba +and St. Domingo, when they were first discovered +by the Spaniards, used to wear little +bits of gold as ornaments in their hair and +other parts of their dress. They seemed to +value them as we would do any little pebbles +of somewhat more than ordinary beauty, and +to consider them as just worth the picking up, +but not worth the refusing to any body who +asked them. They gave them to their new<span class='pagenum'><a name="Page_74" id="Page_74">[Pg 74]</a></span> +guests at the first request, without seeming to +think that they had made them any very valuable +present. They were astonished to observe +the rage of the Spaniards to obtain +them; and had no notion that there could +anywhere be a country in which many people +had the disposal of so great a superfluity of +food; so scanty always among themselves, +that, for a very small quantity of those glittering +baubles, they would willingly give as +much as might maintain a whole family for +many years. Could they have been made to +understand this, the passion of the Spaniards +would not have surprised them.</p> + + +<h4><span class="smcap">Part III.</span>—<i>Of the variations in the Proportion +between the respective Values of that +sort of Produce which always affords Rent, +and of that which sometimes does, and sometimes +does not, afford Rent.</i></h4> + +<p>The increasing abundance of food, in consequence +of the increasing improvement and +cultivation, must necessarily increase the demand +for every part of the produce of land +which is not food, and which can be applied +either to use or to ornament. In the whole +progress of improvement, it might, therefore, +be expected there should be only one variation +in the comparative values of those two different +sorts of produce. The value of that sort +which sometimes does, and sometimes does +not afford rent, should constantly rise in proportion +to that which always affords some +rent. As art and industry advance, the materials +of clothing and lodging, the useful fossils +and materials of the earth, the precious +metals and the precious stones, should gradually +come to be more and more in demand, +should gradually exchange for a greater and +a greater quantity of food; or, in other words, +should gradually become dearer and dearer. +This, accordingly, has been the case with most +of these things upon most occasions, and +would have been the case with all of them +upon all occasions, if particular accidents had +not, upon some occasions, increased the supply +of some of them in a still greater proportion +than the demand.</p> + +<p>The value of a free-stone quarry, for example, +will necessarily increase with the increasing +improvement and population of the +country round about it, especially if it should +be the only one in the neighbourhood. But +the value of a silver mine, even though there +should not be another within a thousand miles +of it, will not necessarily increase with the +improvement of the country in which it is situated. +The market for the produce of a +free-stone quarry can seldom extend more +than a few miles round about it, and the demand +must generally be in proportion to the +improvement and population of that small district; +but the market for the produce of a silver +mine may extend over the whole known +world. Unless the world in general, therefore, +be advancing in improvement and population, +the demand for silver might not be at +all increased by the improvement even of a +large country in the neighbourhood of the +mine. Even though the world in general +were improving, yet if, in the course of its +improvements, new mines should be discovered, +much more fertile than any which had +been known before, though the demand for +silver would necessarily increase, yet the supply +might increase in so much a greater proportion, +that the real price of that metal might +gradually fall; that is, any given quantity, a +pound weight of it, for example, might gradually +purchase or command a smaller and a +smaller quantity of labour, or exchange for a +smaller and a smaller quantity of corn, the +principal part of the subsistence of the labourer.</p> + +<p>The great market for silver is the commercial +and civilized part of the world.</p> + +<p>If, by the general progress of improvement, +the demand of this market should increase, +while, at the same time, the supply did not +increase in the same proportion, the value of +silver would gradually rise in proportion to +that of corn. Any given quantity of silver +would exchange for a greater and a greater +quantity of corn; or, in other words, the average +money price of corn would gradually become +cheaper and cheaper.</p> + +<p>If, on the contrary, the supply, by some accident, +should increase, for many years together, +in a greater proportion than the demand, +that metal would gradually become +cheaper and cheaper; or, in other words, the +average money price of corn would, in spite +of all improvements, gradually become dearer +and dearer.</p> + +<p>But if, on the other hand, the supply of +that metal should increase nearly in the same +proportion as the demand, it would continue +to purchase or exchange for nearly the same +quantity of corn; and the average money price +of corn would, in spite of all improvements, +continue very nearly the same.</p> + +<p>These three seem to exhaust all the possible +combinations of events which can happen in +the progress of improvement; and during the +course of the four centuries preceding the +present, if we may judge by what has happened +both in France and Great Britain, each of +those three different combinations seems to +have taken place in the European market, and +nearly in the same order, too, in which I have +here set them down.</p> + + +<h4><i>Digression concerning the Variations in the value +of Silver during the Course of the Four +last Centuries.</i></h4> + +<p><i>First Period.</i>—In 1350, and for some time +before, the average price of the quarter of<span class='pagenum'><a name="Page_75" id="Page_75">[Pg 75]</a></span> +wheat in England seems not to have been estimated +lower than four ounces of silver, +Tower weight, equal to about twenty shillings +of our present money. From this price it +seems to have fallen gradually to two ounces +of silver, equal to about ten shillings of our +present money, the price at which we find it +estimated in the beginning of the sixteenth +century, and at which it seems to have continued +to be estimated till about 1570.</p> + +<p>In 1350, being the 25th of Edward III. +was enacted what is called the Statute of Labourers. +In the preamble, it complains much +of the insolence of servants, who endeavoured +to raise their wages upon their masters. It +therefore ordains, that all servants and labourers +should, for the future, be contented with +the same wages and liveries (liveries in those +times signified not only clothes, but provisions) +which they had been accustomed to receive in +the 20th year of the king, and the four preceding +years; that, upon this account, their +livery-wheat should nowhere be estimated +higher than tenpence a-bushel, and that it +should always be in the option of the master +to deliver them either the wheat or the money. +Tenpence a-bushel, therefore, had, in the 25th +of Edward III. been reckoned a very moderate +price of wheat, since it required a particular +statute to oblige servants to accept of it +in exchange for their usual livery of provisions; +and it had been reckoned a reasonable price +ten years before that, or in the 16th year of +the king, the term to which the statute refers. +But in the 16th year of Edward III. tenpence +contained about half an ounce of silver, Tower +weight, and was nearly equal to half-a-crown +of our present money. Four ounces of silver, +Tower weight, therefore, equal to six shillings +and eightpence of the money of those times, +and to near twenty shillings of that of the +present, must have been reckoned a moderate +price for the quarter of eight bushels.</p> + +<p>This statute is surely a better evidence of +what was reckoned, in those times, a moderate +price of grain, than the prices of some particular +years, which have generally been recorded +by historians and other writers, on account +of their extraordinary dearness or cheapness, +and from which, therefore, it is difficult +to form any judgment concerning what may +have been the ordinary price. There are, besides, +other reasons for believing that, in the +beginning of the fourteenth century, and for +some time before, the common price of wheat +was not less than four ounces of silver the +quarter, and that of other grain in proportion.</p> + +<p>In 1309, Ralph de Born, prior of St. Augustine's, +Canterbury, gave a feast upon his +installation-day, of which William Thorn has +preserved, not only the bill of fare, but the +prices of many particulars. In that feast were +consumed, 1st, fifty-three quarters of wheat, +which cost nineteen pounds, or seven shillings +and twopence a-quarter, equal to about one-and-twenty +shillings and sixpence of our present +money; 2dly, fifty-eight quarters of malt, +which cost seventeen pounds ten shillings, or +six shillings a-quarter, equal to about eighteen +shillings of our present money; 3dly, +twenty quarters of oats, which cost four pounds, +or four shillings a-quarter, equal to about +twelve shillings of our present money. The +prices of malt and oats seem here to be higher +than their ordinary proportion to the price of +wheat.</p> + +<p>These prices are not recorded, on account +of their extraordinary dearness or cheapness, +but are mentioned accidentally, as the prices +actually paid for large quantities of grain consumed +at a feast, which was famous for its +magnificence.</p> + +<p>In 1262, being the 51st of Henry III. was +revived an ancient statute, called <i>the assize of +bread and ale</i>, which, the king says in the +preamble, had been made in the times of his +progenitors, some time kings of England. It +is probably, therefore, as old at least as the +time of his grandfather, Henry II. and may +have been as old as the Conquest. It regulates +the price of bread according as the prices +of wheat may happen to be, from one shilling +to twenty shillings the quarter of the money +of those times. But statutes of this kind are +generally presumed to provide with equal care +for all deviations from the middle price, for +those below it, as well as for those above it. +Ten shillings, therefore, containing six ounces +of silver, Tower weight, and equal to about +thirty shillings of our present money, must, +upon this supposition, have been reckoned the +middle price of the quarter of wheat when +this statute was first enacted, and must have +continued to be so in the 51st of Henry III. +We cannot, therefore, be very wrong in supposing +that the middle price was not less than +one-third of the highest price at which this +statute regulates the price of bread, or than +six shillings and eightpence of the money of +those times, containing four ounces of silver, +Tower weight.</p> + +<p>From these different facts, therefore, we +seem to have some reason to conclude that, +about the middle of the fourteenth century, +and for a considerable time before, the average +or ordinary price of the quarter of wheat +was not supposed to be less than four ounces +of silver, Tower weight.</p> + +<p>From about the middle of the fourteenth +to the beginning of the sixteenth century, +what was reckoned the reasonable and moderate, +that is, the ordinary or average price of +wheat, seems to have sunk gradually to about +one half of this price; so as at last to have +fallen to about two ounces of silver, Tower +weight, equal to about ten shillings of our +present money. It continued to be estimated +at this price till about 1570.</p> + +<p>In the household book of Henry, the fifth<span class='pagenum'><a name="Page_76" id="Page_76">[Pg 76]</a></span> +earl of Northumberland, drawn up in 1512, +there are two different estimations of wheat. +In one of them it is computed at six shillings +and eightpence the quarter, in the other at five +shillings and eightpence only. In 1512, six +shillings and eightpence contained only two +ounces of silver, Tower weight, and were +equal to about ten shillings of our present +money.</p> + +<p>From the 25th of Edward III. to the beginning +of the reign of Elizabeth, during the +space of more than two hundred years, six +shillings and eightpence, it appears from several +different statutes, had continued to be +considered as what is called the moderate and +reasonable, that is, the ordinary or average +price of wheat. The quantity of silver, however, +contained in that nominal sum was, during +the course of this period, continually diminishing, +in consequence of some alterations +which were made in the coin. But the increase +of the value of silver had, it seems, so +far compensated the diminution of the quantity +of it contained in the same nominal sum, +that the legislature did not think it worth while +to attend to this circumstance.</p> + +<p>Thus, in 1436, it was enacted, that wheat +might be exported without a licence when the +price was so low as six shillings and eightpence: +and in 1463, it was enacted, that no +wheat should be imported if the price was not +above six shillings and eightpence the quarter. +The legislature had imagined, that when +the price was so low, there could be no inconveniency +in exportation, but that when it rose +higher, it became prudent to allow of importation. +Six shillings and eightpence, therefore, +containing about the same quantity of +silver as thirteen shillings and fourpence of +our present money (one-third part less than +the same nominal sum contained in the time +of Edward III.), had, in those times, been +considered as what is called the moderate and +reasonable price of wheat.</p> + +<p>In 1554, by the 1st and 2d of Philip and +Mary, and in 1558, by the 1st of Elizabeth, +the exportation of wheat was in the same manner +prohibited, whenever the price of the quarter +should exceed six shillings and eightpence, +which did not then contain two penny worth +more silver than the same nominal sum does +at present. But it had soon been found, that +to restrain the exportation of wheat till the +price was so very low, was, in reality, to prohibit +it altogether. In 1562, therefore, by +the 5th of Elizabeth, the exportation of wheat +was allowed from certain ports, whenever the +price of the quarter should not exceed ten +shillings, containing nearly the same quantity +of silver as the like nominal sum does at present. +This price had at this time, therefore, +been considered as what is called the moderate +and reasonable price of wheat. It agrees nearly +with the estimation of the Northumberland +book in 1512.</p> + +<p>That in France the average price of grain +was, in the same manner, much lower in the +end of the fifteenth and beginning of the sixteenth +century, than in the two centuries preceding, +has been observed both by Mr Dupré +de St Maur, and by the elegant author of the +Essay on the Policy of Grain. Its price, during +the same period, had probably sunk in +the same manner through the greater part of +Europe.</p> + +<p>This rise in the value of silver, in proportion +to that of corn, may either have been owing +altogether to the increase of the demand +for that metal, in consequence of increasing +improvement and cultivation, the supply, in +the mean time, continuing the same as before; +or, the demand continuing the same as +before, it may have been owing altogether to +the gradual diminution of the supply: the +greater part of the mines which were then +known in the world being much exhausted, +and, consequently, the expense of working +them much increased; or it may have been +owing partly to the one, and partly to the other +of those two circumstances. In the end of +the fifteenth and beginning of the sixteenth +centuries, the greater part of Europe was approaching +towards a more settled form of government +than it had enjoyed for several ages +before. The increase of security would naturally +increase industry and improvement; +and the demand for the precious metals, as +well as for every other luxury and ornament, +would naturally increase with the increase of +riches. A greater annual produce would require +a greater quantity of coin to circulate +it; and a greater number of rich people would +require a greater quantity of plate and other +ornaments of silver. It is natural to suppose, +too, that the greater part of the mines which +then supplied the European market with silver +might be a good deal exhausted, and have become +more expensive in the working. They +had been wrought, many of them, from the +time of the Romans.</p> + +<p>It has been the opinion, however, of the +greater part of those who have written upon +the prices of commodities in ancient times, +that, from the Conquest, perhaps from the invasion +of Julius Cæsar, till the discovery of +the mines of America, the value of silver was +continually diminishing. This opinion they +seem to have been led into, partly by the observations +which they had occasion to make +upon the prices both of corn and of some other +parts of the rude produce of land, and partly +by the popular notion, that as the quantity of +silver naturally increases in every country with +the increase of wealth, so its value diminishes +as its quantity increases.</p> + +<p>In their observations upon the prices of corn, +three different circumstances seem frequently +to have misled them.</p> + +<p>First, in ancient times, almost all rents +were paid in kind; in a certain quantity of<span class='pagenum'><a name="Page_77" id="Page_77">[Pg 77]</a></span> +corn, cattle, poultry, &c. It sometimes happened, +however, that the landlord would stipulate, +that he should be at liberty to demand +of the tenant, either the annual payment in +kind or a certain sum of money instead of it. +The price at which the payment in kind was +in this manner exchanged for a certain sum of +money, is in Scotland called the conversion +price. As the option is always in the landlord +to take either the substance or the price, +it is necessary, for the safety of the tenant, +that the conversion price should rather be below +than above the average market price. In +many places, accordingly, it is not much above +one half of this price. Through the greater +part of Scotland this custom still continues +with regard to poultry, and in some places +with regard to cattle. It might probably have +continued to take place, too, with regard to +corn, had not the institution of the public fiars +put an end to it. These are annual valuations, +according to the judgment of an assize, +of the average price of all the different sorts +of grain, and of all the different qualities of +each, according to the actual market price in +every different county. This institution rendered +it sufficiently safe for the tenant, and +much more convenient for the landlord, to +convert, as they call it, the corn rent, rather +at what should happen to be the price of the +fiars of each year, than at any certain fixed +price. But the writers who have collected +the prices of corn in ancient times seem frequently +to have mistaken what is called in +Scotland the conversion price for the actual +market price. Fleetwood acknowledges, upon +one occasion, that he had made this mistake. +As he wrote his book, however, for a +particular purpose, he does not think proper +to make this acknowledgment till after transcribing +this conversion price fifteen times. +The price is eight shillings the quarter of +wheat. This sum in 1423, the year at which +he begins with it, contained the same quantity +of silver as sixteen shillings of our present +money. But in 1562, the year at which he +ends with it, it contained no more than the +same nominal sum does at present.</p> + +<p>Secondly, they have been misled by the slovenly +manner in which some ancient statutes +of assize had been sometimes transcribed by +lazy copiers, and sometimes, perhaps, actually +composed by the legislature.</p> + +<p>The ancient statutes of assize seem to have +begun always with determining what ought to +be the price of bread and ale when the price +of wheat and barley were at the lowest; and +to have proceeded gradually to determine what +it ought to be, according as the prices of those +two sorts of grain should gradually rise above +this lowest price. But the transcribers of +those statutes seem frequently to have thought +it sufficient to copy the regulation as far as +the three or four first and lowest prices; saving +in this manner their own labour, and judging, +I suppose, that this was enough to show +what proportion ought to be observed in all +higher prices.</p> + +<p>Thus, in the assize of bread and ale, of the +51st of Henry III. the price of bread was regulated +according to the different prices of +wheat, from one shilling to twenty shillings +the quarter of the money of those times. But +in the manuscripts from which all the different +editions of the statutes, preceding that of +Mr Ruffhead, were printed, the copiers had +never transcribed this regulation beyond the +price of twelve shillings. Several writers, +therefore, being misled by this faulty transcription, +very naturally conclude that the +middle price, or six shillings the quarter, equal +to about eighteen shillings of our present +money, was the ordinary or average price of +wheat at that time.</p> + +<p>In the statute of Tumbrel and Pillory, enacted +nearly about the same time, the price of +ale is regulated according to every sixpence +rise in the price of barley, from two shillings, +to four shillings the quarter. That four shillings, +however, was not considered as the +highest price to which barley might frequently +rise in those times and that these prices +were only given as an example of the proportion +which ought to be observed in all other +prices, whether higher or lower, we may infer +from the last words of the statute: "<i>Et +sic deinceps crescetur vel diminuetur per sex +denarios.</i>" The expression is very slovenly, +but the meaning is plain enough, "that the +price of ale is in this manner to be increased +or diminished according to every sixpence rise +or fall in the price of barley." In the composition +of this statute, the legislature itself +seems to have been as negligent as the copiers +were in the transcription of the other.</p> + +<p>In an ancient manuscript of the Regiam +Majestatem, an old Scotch law book, there is +a statute of assize, in which the price of bread +is regulated according to all the different +prices of wheat, from tenpence to three shillings +the Scotch boll, equal to about half an +English quarter. Three shillings Scotch, at +the time when this assize is supposed to have +been enacted, were equal to about nine shillings +sterling of our present money. Mr Ruddiman +seems<a name="FNanchor_16_16" id="FNanchor_16_16"></a><a href="#Footnote_16_16" class="fnanchor">[16]</a> to conclude from this, that three shillings +was the highest price to which wheat +ever rose in those times, and that tenpence, a +shilling, or at most two shillings, were the +ordinary prices. Upon consulting the manuscript, +however, it appears evidently, that all +these prices are only set down as examples of +the proportion which ought to be observed +between the respective prices of wheat and +bread. The last words of the statute are +"<i>reliqua judicabis secundum præscripta, habendo +respectum ad pretium bladi</i>."—"You +shall judge of the remaining cases, according<span class='pagenum'><a name="Page_78" id="Page_78">[Pg 78]</a></span> +to what is above written, having respect to the +price of corn."</p> + +<p>Thirdly, they seem to have been misled too, +by the very low price at which wheat was +sometimes sold in very ancient times; and to +have imagined, that as its lowest price was +then much lower than in later times its ordinary +price must likewise have been much lower. +They might have found, however, that in +those ancient times its highest price was fully +as much above, as its lowest price was below +any thing that had ever been known in later +times. Thus, in 1270, Fleetwood gives us +two prices of the quarter of wheat. The one +is four pounds sixteen shillings of the money +of those times, equal to fourteen pounds eight +shillings of that of the present; the other is +six pounds eight shillings, equal to nineteen +pounds four shillings of our present money. +No price can be found in the end of the fifteenth, +or beginning of the sixteenth century, +which approaches to the extravagance of these. +The price of corn, though at all times liable +to variation, varies most in those turbulent +and disorderly societies, in which the interruption +of all commerce and communication hinders +the plenty of one part of the country from +relieving the scarcity of another. In the disorderly +state of England under the Plantagenets, +who governed it from about the middle +of the twelfth till towards the end of the fifteenth +century, one district might be in plenty, +while another, at no great distance, by +having its crop destroyed, either by some accident +of the seasons, or by the incursion of +some neighbouring baron, might be suffering +all the horrors of a famine; and yet if the +lands of some hostile lord were interposed between +them, the one might not be able to give +the least assistance to the other. Under the +vigorous administration of the Tudors, who +governed England during the latter part of +the fifteenth, and through the whole of the +sixteenth century, no baron was powerful enough +to dare to disturb the public security.</p> + +<p>The reader will find at the end of this chapter +all the prices of wheat which have been +collected by Fleetwood, from 1202 to 1597, +both inclusive, reduced to the money of the +present times, and digested, according to the +order of time, into seven divisions of twelve +years each. At the end of each division, too, +he will find the average price of the twelve +years of which it consists. In that long period +of time, Fleetwood has been able to collect +the prices of no more than eighty years; +so that four years are wanting to make out +the last twelve years. I have added, therefore, +from the accounts of Eton college, the +prices of 1598, 1599, 1600, and 1601. It is +the only addition which I have made. The +reader will see, that from the beginning of +the thirteenth till after the middle of the sixteenth +century, the average price of each twelve +years grows gradually lower and lower; and +that towards the and of the sixteenth century +it begins to rise again. The prices, indeed, +which Fleetwood has been able to collect, +seem to have been those chiefly which were +remarkable for extraordinary dearness or cheapness; +and I do not pretend that any very certain +conclusion can be drawn from them. So +far, however, as they prove any thing at all, +they confirm the account which I have been +endeavouring to give. Fleetwood himself, +however, seems, with most other writers, to +have believed, that, during all this period, the +value of silver, in consequence of its increasing +abundance, was continually diminishing. +The prices of corn, which he himself has collected, +certainly do not agree with this opinion. +They agree perfectly with that of Mr +Dupré de St Maur, and with that which I +have been endeavouring to explain. Bishop +Fleetwood and Mr Dupré de St Maur are the +two authors who seem to have collected, with +the greatest diligence and fidelity, the prices +of things in ancient times. It is somewhat +curious that, though their opinions are so very +different, their facts, so far as they relate to +the price of corn at least, should coincide so +very exactly.</p> + +<p>It is not, however, so much from the low +price of corn, as from that of some other parts +of the rude produce of land, that the most judicious +writers have inferred the great value +of silver in those very ancient times. Corn, +it has been said, being a sort of manufacture, +was, in those rude ages, much dearer in proportion +than the greater part of other commodities; +it is meant, I suppose, than the greater +part of unmanufactured commodities, such +as cattle, poultry, game of all kinds, &c. That +in those times of poverty and barbarism these +were proportionably much cheaper than corn, +is undoubtedly true. But this cheapness was +not the effect of the high value of silver, but +of the low value of those commodities. It +was not because silver would in such time +purchase or represent a greater quantity of labour, +but because such commodities would +purchase or represent a much smaller quantity +than in times of more opulence and improvement. +Silver must certainly be cheaper in +Spanish America than in Europe; in the country +where it is produced, than in the country +to which it is brought, at the expense of a +long carriage both by land and by sea, of a +freight, and an insurance. One-and-twenty +pence halfpenny sterling, however, we are told +by Ulloa, was, not many years ago, at Buenos +Ayres, the price of an ox chosen from a herd +of three or four hundred. Sixteen shillings +sterling, we are told by Mr Byron, was the +price of a good horse in the capital of Chili. +In a country naturally fertile, but of which +the far greater part is altogether uncultivated, +cattle, poultry, game of all kinds, &c. as they +can be acquired with a very small quantity of +labour, so they will purchase or command but<span class='pagenum'><a name="Page_79" id="Page_79">[Pg 79]</a></span> +a very small quantity. The low money price +for which they may be sold, is no proof that +the real value of silver is there very high, but +that the real value of those commodities is +very low.</p> + +<p>Labour, it must always be remembered, and +not any particular commodity, or set of commodities, +is the real measure of the value both +of silver and of all other commodities.</p> + +<p>But in countries almost waste, or but thinly +inhabited, cattle, poultry, game of all kinds, +&c. as they are the spontaneous productions +of Nature, so she frequently produces them in +much greater quantities than the consumption +of the inhabitants requires. In such a state of +things, the supply commonly exceeds the demand. +In different states of society, in different +states of improvement, therefore, such +commodities will represent, or be equivalent, +to very different quantities of labour.</p> + +<p>In every state of society, in every stage of +improvement, corn is the production of human +industry. But the average produce of every +sort of industry is always suited, more or less +exactly, to the average consumption; the average +supply to the average demand. In every +different stage of improvement, besides, the +raising of equal quantities of corn in the same +soil and climate, will, at an average, require +nearly equal quantities of labour; or, what +comes to the same thing, the price of nearly +equal quantities; the continual increase of +the productive powers of labour, in an improved +state of cultivation, being more or less +counterbalanced by the continual increasing +price of cattle, the principal instruments of +agriculture. Upon all these accounts, therefore, +we may rest assured, that equal quantities +of corn will, in every state of society, in every +stage of improvement, more nearly represent, +or be equivalent to, equal quantities of labour, +than equal quantities of any other part of the +rude produce of land. Corn, accordingly, it +has already been observed, is, in all the different +stages of wealth and improvement, a more +accurate measure of value than any other commodity +or set of commodities. In all those +different stages, therefore, we can judge better +of the real value of silver, by comparing +it with corn, than by comparing it with any +other commodity or set of commodities.</p> + +<p>Corn, besides, or whatever else is the common +and favourite vegetable food of the people, +constitutes, in every civilized country, the +principal part of the subsistence of the labourer. +In consequence of the extension of agriculture, +the land of every country produces a +much greater quantity of vegetable than of +animal food, and the labourer everywhere +lives chiefly upon the wholesome food that is +cheapest and most abundant. Butcher's meat, +except in the most thriving countries, or where +labour is most highly rewarded, makes but an +insignificant part of his subsistence; poultry +makes a still smaller part of it, and game no +part of it. In France, and even in Scotland, +where labour is somewhat better rewarded +than in France, the labouring poor seldom +eat butcher's meat, except upon holidays, and +other extraordinary occasions. The money +price of labour, therefore, depends much more +upon the average money price of corn, the +subsistence of the labourer, than upon that of +butcher's meat, or of any other part of the +rude produce of land. The real value of gold +and silver, therefore, the real quantity of labour +which they can purchase or command, +depends much more upon the quantity of corn +which they can purchase or command, than +upon that of butcher's meat, or any other part +of the rude produce of land.</p> + +<p>Such slight observations, however, upon the +prices either of corn or of other commodities, +would not probably have misled so many intelligent +authors, had they not been influenced +at the same time by the popular notion, that +as the quantity of silver naturally increases +in every country with the increase of wealth, +so its value diminishes as its quantity increases. +This notion, however, seems to be altogether +groundless.</p> + +<p>The quantity of the precious metals may +increase in any country from two different +causes; either, first, from the increased abundance +of the mines which supply it; or, secondly, +from the increased wealth of the people, +from the increased produce of their annual +labour. The first of these causes is no +doubt necessarily connected with the diminution +of the value of the precious metals; but +the second is not.</p> + +<p>When more abundant mines are discovered, +a greater quantity of the precious metals is +brought to market; and the quantity of the +necessaries and conveniencies of life for which +they must be exchanged being the same as before, +equal quantities of the metals must be +exchanged for smaller quantities of commodities. +So far, therefore, as the increase of +the quantity of the precious metals in any +country arises from the increased abundance +of the mines, it is necessarily connected with +some diminution of their value.</p> + +<p>When, on the contrary, the wealth of any +country increases, when the annual produce +of its labour becomes gradually greater and +greater, a greater quantity of coin becomes +necessary in order to circulate a greater quantity +of commodities: and the people, as they +can afford it, as they have more commodities +to give for it, will naturally purchase a greater +and a greater quantity of plate. The quantity +of their coin will increase from necessity; +the quantity of their plate from vanity and +ostentation, or from the same reason that the +quantity of fine statues, pictures, and of every +other luxury and curiosity, is likely to increase +among them. But as statuaries and +painters are not likely to be worse rewarded +in times of wealth and prosperity, than in<span class='pagenum'><a name="Page_80" id="Page_80">[Pg 80]</a></span> +times of poverty and depression, so gold and +silver are not likely to be worse paid for.</p> + +<p>The price of gold and silver, when the accidental +discovery of more abundant mines +does not keep it down, as it naturally rises +with the wealth of every country; so, whatever +be the state of the mines, it is at all times +naturally higher in a rich than in a poor country. +Gold and silver, like all other commodities, +naturally seek the market where the +best price is given for them, and the best price +is commonly given for every thing in the +country which can best afford it. Labour, it +must be remembered, is the ultimate price +which is paid for every thing; and in countries +where labour is equally well rewarded, +the money price of labour will be in proportion +to that of the subsistence of the labourer. +But gold and silver will naturally exchange +for a greater quantity of subsistence in a rich +than in a poor country; in a country which +abounds with subsistence, than in one which +is but indifferently supplied with it. If the +two countries are at a great distance, the difference +may be very great; because, though +the metals naturally fly from the worse to the +better market, yet it may be difficult to transport +them in such quantities as to bring their +price nearly to a level in both. If the countries +are near, the difference will be smaller, +and may sometimes be scarce perceptible; because +in this case the transportation will be +easy. China is a much richer country than +any part of Europe, and the difference between +the price of subsistence in China and in +Europe is very great. Rice in China is much +cheaper than wheat is anywhere in Europe. +England is a much richer country than Scotland, +but the difference between the money +price of corn in those two countries is much +smaller, and is but just perceptible. In proportion +to the quantity or measure, Scotch +corn generally appears to be a good deal cheaper +than English; but, in proportion to its quality, +it is certainly somewhat dearer. Scotland +receives almost every year very large supplies +from England, and every commodity +must commonly be somewhat dearer in the +country to which it is brought than in that +from which it comes. English corn, therefore, +must be dearer in Scotland than in England; +and yet in proportion to its quality, or +to the quantity and goodness of the flour or +meal which can be made from it, it cannot +commonly be sold higher there than the Scotch +corn which comes to market in competition +with it.</p> + +<p>The difference between the money price of +labour in China and in Europe, is still greater +than that between the money price of subsistence; +because the real recompence of labour +is higher in Europe than in China, the +greater part of Europe being in an improving +state, while China seems to be standing still. +The money price of labour is lower in Scotland +than in England, because the real recompence +of labour is much lower: Scotland, +though advancing to greater wealth, advances +much more slowly than England. The +frequency of emigration from Scotland, and +the rarity of it from England, sufficiently +prove that the demand for labour is very different +in the two countries. The proportion +between the real recompence of labour in different +countries, it must be remembered, is +naturally regulated, not by their actual wealth +or poverty, but by their advancing, stationary, +or declining condition.</p> + +<p>Gold and silver, as they are naturally of the +greatest value among the richest, so they are +naturally of the least value among the poorest +nations. Among savages, the poorest of all +nations, they are scarce of any value.</p> + +<p>In great towns, corn is always dearer than +in remote parts of the country. This, however, +is the effect, not of the real cheapness of +silver, but of the real dearness of corn. It +does not cost less labour to bring silver to the +great town than to the remote parts of the +country; but it costs a great deal more to +bring corn.</p> + +<p>In some very rich and commercial countries, +such as Holland and the territory of +Genoa, corn is dear for the same reason that +it is dear in great towns. They do not produce +enough to maintain their inhabitants. +They are rich in the industry and skill of their +artificers and manufacturers, in every sort of +machinery which can facilitate and abridge +labour; in shipping, and in all the other instruments +and means of carriage and commerce: +but they are poor in corn, which, as +it must be brought to them from distant countries, +must, by an addition to its price, pay +for the carriage from these countries. It does +not cost less labour to bring silver to Amsterdam +than to Dantzic; but it costs a great deal +more to bring corn. The real cast of silver +must be nearly the same in both places; but +that of corn must be very different. Diminish +the real opulence either of Holland or of the +territory of Genoa, while the number of their +inhabitants remains the same; diminish their +power of supplying themselves from distant +countries; and the price of corn, instead of +sinking with that diminution in the quantity +of their silver, which must necessarily accompany +this declension, either as its cause or as +its effect, will rise to the price of a famine. +When we are in want of necessaries, we must +part with all superfluities, of which the value, +as it rises in times of opulence and prosperity, +so it sinks in times of poverty and distress. +It is otherwise with necessaries. Their real +price, the quantity of labour which they can +purchase or command, rises in times of poverty +and distress, and sinks in times of opulence +and prosperity, which are always times +of great abundance; for they could not otherwise +be times of opulence and prosperity<span class='pagenum'><a name="Page_81" id="Page_81">[Pg 81]</a></span> +Corn is a necessary, silver is only a superfluity.</p> + +<p>Whatever, therefore, may have been the increase +in the quantity of the precious metals, +which, during the period between the middle +of the fourteenth and that of the sixteenth +century, arose from the increase of wealth +and improvement, it could have no tendency +to diminish their value, either in Great Britain, +or in any other part of Europe. If those +who have collected the prices of things in ancient +times, therefore, had, during this period, +no reason to infer the diminution of the value +of silver from any observations which they +had made upon the prices either of corn, or of +other commodities, they had still less reason +to infer it from any supposed increase of +wealth and improvement.</p> + +<p> </p> +<p><i>Second Period.</i>—But how various soever +may have been the opinions of the learned concerning +the progress of the value of silver +during the first period, they are unanimous +concerning it during the second.</p> + +<p>From about 1570 to about 1640, during a +period of about seventy years, the variation in +the proportion between the value of silver and +that of corn held a quite opposite course. Silver +sunk in its real value, or would exchange +for a smaller quantity of labour than before; +and corn rose in its nominal price, and, instead +of being commonly sold for about two +ounces of silver the quarter, or about ten shillings +of our present money, came to be sold +for six and eight ounces of silver the quarter, +or about thirty and forty shillings of our present +money.</p> + +<p>The discovery of the abundant mines of +America seems to have been the sole cause of +this diminution in the value of silver, in proportion +to that of corn. It is accounted for, +accordingly, in the same manner by every body; +and there never has been any dispute, +either about the fact, or about the cause of it. +The greater part of Europe was, during this +period, advancing in industry and improvement, +and the demand for silver must consequently +have been increasing; but the increase +of the supply had, it seems, so far exceeded +that of the demand, that the value of +that metal sunk considerably. The discovery +of the mines of America, it is to be observed, +does not seem to have had any very sensible +effect upon the prices of things in England, +till after 1570; even though the mines of Potosi +had been discovered more than twenty +years before.</p> + +<p>From 1595 to 1620, both inclusive, the +average price of the quarter of nine bushels of +the best wheat, at Windsor market, appears, +from the accounts of Eton college, to have +been L.2 : 1 : 6<sup>9</sup>⁄<sub>13</sub>. From which sum, neglecting +the fraction, and deducting a ninth, or +4s. 7<sup>1</sup>⁄<sub>3</sub>d., the price of the quarter of eight +bushels comes out to have been L.1 : 16 : 10<sup>2</sup>⁄<sub>3</sub>. +And from this sum, neglecting likewise the +fraction, and deducting a ninth, or 4s. 1<sup>1</sup>⁄<sub>9</sub>d., +for the difference between the price of the best +wheat and that of the middle wheat, the price +of the middle wheat comes out to have been +about L.1 : 12 : 8<sup>8</sup>⁄<sub>9</sub>, or about six ounces and +one-third of an ounce of silver.</p> + +<p>From 1621 to 1636, both inclusive, the +average price of the same measure of the best +wheat, at the same market, appears, from the +same accounts, to have been L.2 : 10s.; from +which, making the like deductions as in the +foregoing case, the average price of the +quarter of eight bushels of middle wheat +comes out to have been L.1 : 19 : 6, or about +seven ounces and two-thirds of an ounce of +silver.</p> + +<p> </p> +<p><i>Third Period.</i>—Between 1630 and 1640, +or about 1636, the effect of the discovery of +the mines of America, is reducing the value +of silver, appears to have been completed, and +the value of that metal seems never to have +sunk lower in proportion to that of corn than +it was about that time. It seems to have risen +somewhat in the course of the present century, +and it had probably begun to do so, even +some time before the end of the last.</p> + +<p>From 1637 to 1700, both inclusive, being +the sixty-four last years of the last century, +the average price of the quarter of nine bushels +of the best wheat, at Windsor market, appears, +from the same accounts, to have been +L.2 : 11 : 0<sup>1</sup>⁄<sub>3</sub>, which is only 1s. 0<sup>1</sup>⁄<sub>3</sub>d. dearer +than it had been during the sixteen years before. +But, in the course of these sixty-four +years, there happened two events, which must +have produced a much greater scarcity of corn +than what the course of the seasons would +otherwise have occasioned, and which, therefore, +without supposing any further reduction +in the value of silver, will much more than +account for this very small enhancement of +price.</p> + +<p>The first of these events was the civil war, +which, by discouraging tillage and interrupting +commerce, must have raised the price of +corn much above what the course of the seasons +would otherwise have occasioned. It +must have had this effect, more or less, at all +the different markets in the kingdom, but particularly +at those in the neighborhood of +London, which require to be supplied from +the greatest distance. In 1648, accordingly, +the price of the best wheat, at Windsor market, +appears, from the same accounts, to have +been L.4 : 5s., and, in 1649, to have been +L.4, the quarter of nine bushels. The excess +of those two years above L.2 10s. (the average +price of the sixteen years preceding 1637) +is L.3 5s., which, divided among the sixty-four +last years of the last century, will alone +very nearly account for that small enhancement +of price which seems to have taken place +in them. These, however, though the highest,<span class='pagenum'><a name="Page_82" id="Page_82">[Pg 82]</a></span> +are by no means the only high prices which +seem to have been occasioned by the civil +wars.</p> + +<p>The second event was the bounty upon the +exportation of corn, granted in 1688. The +bounty, it has been thought by many people, +by encouraging tillage, may, in a long course +of years, have occasioned a greater abundance, +and, consequently, a greater cheapness of corn +in the home market, than what would otherwise +have taken place there. How far the +bounty could produce this effect at any time +I shall examine hereafter: I shall only observe +at present, that between 1688 and 1700, +it had not time to produce any such effect. +During this short period, its only effect must +have been, by encouraging the exportation of +the surplus produce of every year, and thereby +hindering the abundance of one year from +compensating the scarcity of another, to raise +the price in the home market. The scarcity +which prevailed in England, from 1693 to +1699, both inclusive, though no doubt principally +owing to the badness of the seasons, and, +therefore, extending through a considerable +part of Europe, must have been somewhat enhanced +by the bounty. In 1699, accordingly, +the further exportation of corn was prohibited +for nine months.</p> + +<p>There was a third event which occurred +in the course of the same period, and which, +though it could not occasion any scarcity of +corn, nor, perhaps, any augmentation in the +real quantity of silver which was usually paid +for it, must necessarily have occasioned some +augmentation in the nominal sum. This event +was the great debasement of the silver coin, +by clipping and wearing. This evil had begun +in the reign of Charles II. and had gone on +continually increasing till 1695; at which +time, as we may learn from Mr Lowndes, the +current silver coin was, at an average, near +five-and-twenty per cent. below its standard +value. But the nominal sum which constitutes +the market price of every commodity is +necessarily regulated, not so much by the +quantity of silver, which, according to the +standard, ought to be contained in it, as by +that which, it is found by experience, actually +is contained in it. This nominal sum, therefore, +is necessarily higher when the coin is +much debased by clipping and wearing, than +when near to its standard value.</p> + +<p>In the course of the present century, the +silver coin has not at any time been more below +its standard weight than it is at present. +But though very much defaced, its value has +been kept up by that of the gold coin, for +which it is exchanged. For though, before +the late recoinage, the gold coin was a good +deal defaced too, it was less so than the silver. +In 1695, on the contrary, the value of the silver +coin was not kept up by the gold coin; a +guinea then commonly exchanging for thirty +shillings of the worn and clipt silver. Before +the late recoinage of the gold, the price of silver +bullion was seldom higher than five shillings +and sevenpence an ounce, which is but +fivepence above the mint price. But in 1695, +the common price of silver bullion was six shillings +and fivepence an ounce,<a name="FNanchor_17_17" id="FNanchor_17_17"></a><a href="#Footnote_17_17" class="fnanchor">[17]</a> which is fifteen +pence above the mint price. Even before the +late recoinage of the gold, therefore, the coin, +gold and silver together, when compared with +silver bullion, was not supposed to be more +than eight per cent below its standard value. +In 1695, on the contrary, it had been supposed +to be near five-and-twenty per cent. below that +value. But in the beginning of the present +century, that is, immediately after the great +recoinage in King William's time, the greater +part of the current silver coin must have been +still nearer to its standard weight than it is at +present. In the course of the present century, +too, there has been no great public calamity, +such as a civil war, which could rather discourage, +or interrupt the interior commerce +of the country. And though the bounty which +has taken place through the greater part of +this century, must always raise the price of +corn somewhat higher than it otherwise would +be in the actual state of tillage; yet, as in the +course of this century, the bounty has had full +time to produce all the good effects commonly +imputed to it to encourage tillage, and thereby +to increase the quantity of corn in the home +market, it may, open the principles of a system +which I shall explain and examine hereafter, +be supposed to have done something to +lower the price of that commodity the one +way, as well as to raise it the other. It is by +many people supposed to have done more. In +the sixty-four years of the present century, +accordingly, the average price of the quarter +of nine bushels of the best wheat, at Windsor +market, appears, by the accounts of Eton college, +to have been L.2 : 0 : 6<sup>10</sup>⁄<sub>32</sub>, which is +about ten shillings and sixpence, or more than +five-and-twenty per cent. cheaper than it had +been during the sixty-four last years of the +last century; and about nine shillings and +sixpence cheaper than is had been during the +sixteen years preceding 1636, when the discovery +of the abundant mines of America may +be supposed to have produced its full effect; +and about one shilling cheaper than it had +been in the twenty-six years preceding 1620, +before that discovery can well be supposed to +have produced its full effect. According to +this account, the average price of middle wheat, +during these sixty-four first years of the present +century, comes out to have been about +thirty-two shillings the quarter of eight bushels.</p> + +<p>The value of silver, therefore, seems to have +risen somewhat in proportion to that of corn +during the course of the present century, and +it had probably begun to do so even some +time before the end of the last.<span class='pagenum'><a name="Page_83" id="Page_83">[Pg 83]</a></span></p> + +<p>In 1687, the price of the quarter of nine +bushels of the best wheat, at Windsor market, +was L.1 : 5 : 2, the lowest price at which it +had ever been from 1595.</p> + +<p>In 1688, Mr Gregory King, a man famous +for his knowledge in matters of this kind, +estimated the average price of wheat, in years +of moderate plenty, to be to the grower 3s. +6d. the bushel, or eight-and-twenty shillings +the quarter. The grower's price I understand +to be the same with what is sometimes +called the contract price, or the price at which +a farmer contracts for a certain number of +years to deliver a certain quantity of corn to a +dealer. As a contract of this kind saves the farmer +the expense and trouble of marketing, the +contract price is generally lower than what is +supposed to be the average market price. Mr +King had judged eight-and-twenty shillings +the quarter to be at that time the ordinary +contract price in years of moderate plenty. +Before the scarcity occasioned by the late +extraordinary course of bad seasons, it was, I +have been assured, the ordinary contract price +in all common years.</p> + +<p>In 1688 was granted the parliamentary +bounty upon the exportation of corn. The +country gentlemen, who then composed a still +greater proportion of the legislature than they +do at present, had felt that the money price +of corn was falling. The bounty was an expedient +to raise it artificially to the high price +at which it had frequently been sold in +times of Charles I. and II. It was to take +place, therefore, till wheat was so high as forty-eight +shillings the quarter; that is, twenty +shillings, or 5-7ths dearer than Mr King had, +in that very year, estimated the grower's price +to be in times of moderate plenty. If his calculations +deserve any part of the reputation +which they have obtained very universally, +eight-and-forty shillings the quarter was a +price which, without some such expedient as +the bounty, could not at that time be expected, +except in years of extraordinary scarcity. +But the government of King William was not +then fully settled. It was in no condition to +refuse any thing to the country gentlemen, +from whom it was, at that very time, soliciting +the first establishment of the annual land-tax.</p> + +<p>The value of silver, therefore, in proportion +to that of corn, had probably risen somewhat +before the end of the last century, and it +seems to have continued to do so during the +course of the greater part of the present, +though the necessary operation of the bounty +must have hindered that time from being so +sensible as it otherwise would have been in +the actual state of tillage.</p> + +<p>In plentiful years, the bounty, by occasioning +an extraordinary exportation, necessarily +raises the price of corn above what it otherwise +would be in those years. To encourage +tillage, by keeping up the price of corn, even +in the most plentiful years, was the avowed +end of the institution.</p> + +<p>In years of great scarcity, indeed, the bounty +has generally been suspended. It must, +however, have had some effect upon the prices +of many of these years. By the extraordinary +exportation which it occasions in years of +plenty, it must frequently hinder the plenty +of one year from compensating the scarcity +of another.</p> + +<p>Both in years of plenty and in years of +scarcity, therefore, the bounty raises the price +of corn above what it naturally would be in +the actual state of tillage. If during the +sixty-four first years of the present century, +therefore, the average price has been lower +than during the sixty-four last years of the +last century, it must, in the same state of tillage, +have been much more so, had it not been +for this operation of the bounty.</p> + +<p>But, without the bounty, it maybe said the +state of tillage would not have been the same. +What may have been the effects of this institution +upon the agriculture of the country, I +shall endeavour to explain hereafter, when I +come to treat particularly of bounties. I shall +only observe at present, that this rise in the +value of silver, in proportion to that of corn, +has not been peculiar to England. It has been +observed to have taken place in France during +the same period, and nearly in the same proportion, +too, by three very faithful, diligent, +and laborious collectors of the prices of corn, +Mr Dupré de St Maur, Mr Messance, and the +author of the Essay on the Police of Grain. +But in France, till 1764, the exportation of +grain was by law prohibited; and it is somewhat +difficult to suppose, that nearly the same +diminution of price which took place in one +country, notwithstanding this prohibition, +should, in another, be owing to the extraordinary +encouragement given to exportation.</p> + +<p>It would be more proper, perhaps, to consider +this variation in the average money price +of corn as the effect rather of some gradual +rise in the real value of silver in the European +market, than of any fall in the real average +value of corn. Corn, it has already been observed, +is, at distant periods of time, a more +accurate measure of value than either silver +or, perhaps, any other commodity. When, +after the discovery of the abundant mines of +America, corn rose to three and four times +its former money price, this change was universally +ascribed, not to any rise in the real +value of corn, but to a fall in the real value +of silver. If, during the sixty-four first years +of the present century, therefore, the average +money price of corn has fallen somewhat below +what it had been during the greater part +of the last century, we should, in the same +manner, impute this change, not to any fall +in the real value of corn, but to some rise in +the real value of silver in the European market.<span class='pagenum'><a name="Page_84" id="Page_84">[Pg 84]</a></span></p> + +<p>The high price of corn during these ten or +twelve years past, indeed, has occasioned a +suspicion that the real value of silver still continues +to fall in the European market. This +high price of corn, however, seems evidently +to have been the effect of the extraordinary +unfavourableness of the seasons, and ought, +therefore, to be regarded, not as a permanent, +but as a transitory and occasional event. The +seasons, for these ten or twelve years past, +have been unfavourable through the greater +part of Europe; and the disorders of Poland +have very much increased the scarcity in all +those countries, which, in dear years, used to +be supplied from that market. So long a +course of bad seasons, though not a very common +event, is by no means a singular one; +and whoever has inquired much into the history +of the prices of corn in former times, +will be at no loss to recollect several other +examples of the same kind. Ten years of extraordinary +scarcity, besides, are not more +wonderful than ten years of extraordinary +plenty. The low price of corn, from 1741 to +1750, both inclusive, may very well be set in +opposition to its high price during these last +eight or ten years. From 1741 to 1750, the +average price of the quarter of nine bushels of +the best wheat, at Windsor market, it appears +from the accounts of Eton College, was only +L.1 : 13 : 9<sup>4</sup>⁄<sub>5</sub>, which is nearly 6s. 3d. below +the average price of the sixty-four first years +of the present century. The average price of +the quarter of eight bushels of middle wheat +comes out, according to this account, to have +been, during these ten years, only L.1 : 6 : 8.</p> + +<p>Between 1741 and 1750, however, the +bounty must have hindered the price of corn +from falling so low in the home market as it +naturally would have done. During these +ten years, the quantity of all sorts of grain +exported, it appears from the custom-house +books, amounted to no less than 8,029,156 +quarters, one bushel. The bounty paid for this +amounted to L.1,514,962 : 17 : 4½. In 1749, +accordingly, Mr Pelham, at that time prime +minister, observed to the house of commons, +that, for the three years preceding, a very extraordinary +sum had been paid as bounty for +the exportation of corn. He had good reason +to make this observation, and in the following +year he might have had still better. +In that single year, the bounty paid amounted +to no less than L.324,176 : 10 : 6.<a name="FNanchor_18_18" id="FNanchor_18_18"></a><a href="#Footnote_18_18" class="fnanchor">[18]</a> It is unnecessary +to observe how much this forced exportation +must have raised the price of corn +above what it otherwise would have been in +the home market.</p> + +<p>At the end of the accounts annexed to this +chapter the reader will find the particular account +of those ten years separated from the +rest. He will find there, too, the particular +account of the preceding ten years, of which +the average is likewise below, though not so +much below, the general average of the sixty-four +first years of the century. The year +1740, however, was a year of extraordinary +scarcity. These twenty years preceding 1750 +may very well be set in opposition to the +twenty preceding 1770. As the former were +a good deal below the general average of the +century, notwithstanding the intervention of +one or two dear years; so the latter have been +a good deal above it, notwithstanding the intervention +of one or two cheap ones, of 1759, for +example. If the former have not been as much +below the general average as the latter have +been above it, we ought probably to impute it +to the bounty. The change has evidently been +too sudden to be ascribed to any change in +the value of silver, which is always slow and +gradual. The suddenness of the effect can be +accounted for only by a cause which can operate +suddenly, the accidental variations of the +seasons.</p> + +<p>The money price of labour in Great Britain +has, indeed, risen during the course of the +present century. This, however, seems to be +the effect, not so much of any diminution in +the value of silver in the European market, as +of an increase in the demand for labour in +Great Britain, arising from the great, and almost +universal prosperity of the country. In +France, a country not altogether so prosperous, +the money price of labour has, since the +middle of the last century, been observed to +sink gradually with the average money price +of corn. Both in the last century and in the +present, the day wages of common labour are +there said to have been pretty uniformly about +the twentieth part of the average price of the +septier of wheat; a measure which contains a +little more than four Winchester bushels. In +Great Britain, the real recompence of labour, +it has already been shewn, the real quantities +of the necessaries and conveniencies of life +which are given to the labourer, has increased +considerably during the course of the present +century. The rise in its money price seems +to have been the effect, not of any diminution +of the value of silver in the general market of +Europe, but of a rise in the real price of labour, +in the particular market of Great Britain, +owing to the peculiarly happy circumstances +of the country.</p> + +<p>For some time after the first discovery of +America, silver would continue to sell at its +former, or not much below its former price. +The profits of mining would for some time be +very great, and much above their natural rate. +Those who imported that metal into Europe, +however, would soon find that the whole annual +importation could not be disposed of at +this high price. Silver would gradually exchange +for a smaller and a smaller quantity +of goods. Its price would sink gradually lower +and lower, till it fell to its natural price; +or to what was just sufficient to pay, accord<span class='pagenum'><a name="Page_85" id="Page_85">[Pg 85]</a></span>ing +to their natural rates, the wages of the labour, +the profits of the stock, and the rent of +the land, which must be paid in order to bring +it from the mine to the market. In the greater +part of the silver mines of Peru, the tax of +the king of Spain, amounting to a tenth of the +gross produce, eats up, it has already been observed, +the whole rent of the land. This tax +was originally a half; it soon afterwards fell +to a third, then to a fifth, and at last to a +tenth, at which rate it still continues. In the +greater part of the silver mines of Peru, this, +it seems, is all that remains, after replacing +the stock of the undertaker of the work, together +with its ordinary profits; and it seems +to be universally acknowledged that these profits, +which were once very high, are now as +low as they can well be, consistently with carrying +on the works.</p> + +<p>The tax of the king of Spain was reduced +to a fifth of the registered silver in 1504<a name="FNanchor_19_19" id="FNanchor_19_19"></a><a href="#Footnote_19_19" class="fnanchor">[19]</a>, +one-and-forty years before 1545, the date of the +the discovery of the mines of Potosi. In the +course of ninety years, or before 1636, these +mines, the most fertile in all America, had +time sufficient to produce their full effect, or +to reduce the value of silver in the European +market as low as it could well fall, while it +continued to pay this tax to the king of Spain. +Ninety years is time sufficient to reduce any +commodity, of which there is no monopoly, +to its natural price, or to the lowest price at +which, while it pays a particular tax, it can +continue to be sold for any considerable time +together.</p> + +<p>The price of silver in the European market +might, perhaps, have fallen still lower, and it +might have become necessary either to reduce +the tax upon it, not only to one-tenth, as in +1736, but to one twentieth, in the same manner +as that upon gold, or to give up working +the greater part of the American mines which +are now wrought. The gradual increase of +the demand for silver, or the gradual enlargement +of the market for the produce of the +silver mines of America, is probably the cause +which has prevented this from happening, and +which has not only kept up the value of silver +in the European market, but has perhaps even +raised it somewhat higher than it was about +the middle of the last century.</p> + +<p>Since the first discovery of America, the +market for the produce of its silver mines has +been growing gradually more and more extensive.</p> + +<p>First, the market of Europe has become +gradually more and more extensive. Since +the discovery of America, the greater part of +Europe has been much improved. England, +Holland, France, and Germany; even Sweden, +Denmark, and Russia, have all advanced +considerably, both in agriculture and in manufactures. +Italy seems not to have gone +backwards. The fall of Italy preceded the +conquest of Peru. Since that time it seems +rather to have recovered a little. Spain and +Portugal, indeed, are supposed to have gone +backwards. Portugal, however, is but a very +small part of Europe, and the declension of +Spain is not, perhaps, so great as is commonly +imagined. In the beginning of the sixteenth +century, Spain was a very poor country, even +in comparison with France, which has been +so much improved since that time. It was +the well known remark of the emperor Charles +V. who had travelled so frequently through +both countries, that every thing abounded in +France, but that every thing was wanting in +Spain. The increasing produce of the agriculture +and manufactures of Europe must +necessarily have required a gradual increase +in the quantity of silver coin to circulate it; +and the increasing number of wealthy individuals +must have required the like increase in +the quantity of their plate and other ornaments +of silver.</p> + +<p>Secondly, America is itself a new market, +for the produce of its own silver mines; +and as its advances in agriculture, industry, +and population, are much more rapid than +those of the most thriving countries in Europe, +its demand must increase much more +rapidly. The English colonies are altogether +a new market, which, partly for coin, and +partly for plate, requires a continual augmenting +supply of silver through a great continent +where there never was any demand before. +The greater part, too, of the Spanish +and Portuguese colonies, are altogether new +markets. New Granada, the Yucatan, Paraguay, +and the Brazils, were, before discovered +by the Europeans, inhabited by savage nations, +who had neither arts nor agriculture. +A considerable degree of both has now been +introduced into all of them. Even Mexico +and Peru, though they cannot be considered +as altogether new markets, are certainly much +more extensive ones than they ever were before. +After all the wonderful tales which +have been published concerning the splendid +state of those countries in ancient times, whoever +reads, with any degree of sober judgment, +the history of their first discovery and +conquest, will evidently discern that, in arts, +agriculture, and commerce, their inhabitants +were much more ignorant than the Tartars of +the Ukraine are at present. Even the Peruvians, +the more civilized nation of the two, +though they made use of gold and silver as +ornaments, had no coined money of any kind. +Their whole commerce was carried on by barter, +and there was accordingly scarce any division +of labour among them. Those who +cultivated the ground, were obliged to build +their own houses, to make their own household +furniture, their own clothes, shoes, and +instruments of agriculture. The few artificers +among them are said to have been all main<span class='pagenum'><a name="Page_86" id="Page_86">[Pg 86]</a></span>tained +by the sovereign, the nobles, and the +priests, and were probably their servants or +slaves. All the ancient arts of Mexico and +Peru have never furnished one single manufacture +to Europe. The Spanish armies, +though they scarce ever exceeded five hundred +men, and frequently did not amount to half +that number, found almost everywhere great +difficulty in procuring subsistence. The famines +which they are said to have occasioned +almost wherever they went, in countries, too, +which at the same time are represented as +very populous and well cultivated, sufficiently +demonstrate that the story of this populousness +and high cultivation is in a great measure +fabulous. The Spanish colonies are under +a government in many respects less favourable +to agriculture, improvement, and population, +than that of the English colonies. +They seem, however, to be advancing in all +those much more rapidly than any country in +Europe. In a fertile soil and happy climate, +the great abundance and cheapness of land, a +circumstance common to all new colonies, is, +it seems, so great an advantage, as to compensate +many defects in civil government. Frezier, +who visited Peru in 1713, represents +Lima as containing between twenty-five and +twenty-eight thousand inhabitants. Ulloa, +who resided in the same country between +1740 and 1746, represents it as containing +more than fifty thousand. The difference in +their accounts of the populousness of several +other principal towns of Chili and Peru is +nearly the same; and as there seems to be no +reason to doubt of the good information of +either, it marks an increase which is scarce inferior +to that of the English colonies. America, +therefore, is a new market for the produce +of its own silver mines, of which the demand +must increase much more rapidly than +that of the most thriving country in Europe.</p> + +<p>Thirdly, the East Indies is another market +for the produce of the silver mines of America, +and a market which, from the time of +the first discovery of those mines, has been +continually taking off a greater and a greater +quantity of silver. Since that time, the direct +trade between America and the East Indies, +which is carried on by means of the Acapulco +ships, has been continually augmenting, +and the indirect intercourse by the way of Europe +has been augmenting in a still greater +proportion. During the sixteenth century, +the Portuguese were the only European nation +who carried on any regular trade to the +East Indies. In the last years of that century, +the Dutch began to encroach upon this +monopoly, and in a few years expelled them +from their principal settlements in India. +During the greater part of the last century, +those two nations divided the most considerable +part of the East India trade between +them; the trade of the Dutch continually +augmenting in a still greater proportion than +that of the Portuguese declined. 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. +The East India trade of the Swedes +and Danes began in the course of the present +century. Even the Muscovites now trade regularly +with China, by a sort of caravans +which go over land through Siberia and Tartary +to Pekin. The East India trade of all +these nations, if we except that of the French, +which the last war had well nigh annihilated, +has been almost continually augmenting. The +increasing consumptions of East India goods +in Europe is, it seems, so great, as to afford a +gradual increase of employment to them all. +Tea, for example, was a drug very little used +in Europe, before the middle of the last century. +At present, the value of the tea annually +imported by the English East India company, +for the use of their own countrymen, +amounts to more than a million and a half +a year; and even this is not enough; a great +deal more being constantly smuggled into the +country from the ports of Holland, from Gottenburgh +in Sweden, and from the coast of +France, too, as long as the French East India +company was in prosperity. The consumption +of the porcelain of China, of the +spiceries of the Moluccas, of the piece goods +of Bengal, and of innumerable other articles, +has increased very nearly in a like proportion. +The tonnage, accordingly, of all the +European shipping employed in the East India +trade, at any one time during the last century, +was not, perhaps, much greater than +that of the English East India company before +the late reduction of their shipping.</p> + +<p>But in the East Indies, particularly in +China and Indostan, the value of the precious +metals, when the Europeans first began to +trade to those countries, was much higher than +in Europe; and it still continues to be so. +In rice countries, which generally yield two, +sometimes three crops in the year, each of +them more plentiful than any common crop +of corn, the abundance of food must be much +greater than in any corn country of equal extent. +Such countries are accordingly much +more populous. In them, too, the rich, having +a greater superabundance of food to dispose +of beyond what they themselves can consume, +have the means of purchasing a much +greater quantity of the labour of other people. +The retinue of a grandee in China or Indostan +accordingly is, by all accounts, much more +numerous and splendid than that of the richest +subjects in Europe. The same superabundance +of food, of which they have the disposal, +enables them to give a greater quantity +of it for all those singular and rare productions +which nature furnishes but in very small +quantities; such as the precious metals and +the precious stones, the great objects of the +competition of the rich. Though the mines,<span class='pagenum'><a name="Page_87" id="Page_87">[Pg 87]</a></span> +therefore, which supplied the Indian market, +had been as abundant as those which supplied +the European, such commodities would naturally +exchange for a greater quantity of food +in India than in Europe. But the mines +which supplied the Indian market with the +precious metals seem to have been a good deal +less abundant, and those which supplied it +with the precious stones a good deal more so, +than the mines which supplied the European. +The precious metals, therefore, would naturally +exchange in India for a somewhat greater +quantity of the precious stones, and for a +much greater quantity of food than in Europe. +The money price of diamonds, the greatest of +all superfluities, would be somewhat lower, +and that of food, the first of all necessaries, a +great deal lower in the one country than in the +other. But the real price of labour, the real +quantity of the necessaries of life which is +given to the labourer, it has already been observed, +is lower both in China and Indostan, +the two great markets of India, than it is +through the greater part of Europe. The +wages of the labourer will there purchase a +smaller quantity of food: and as the money +price of food is much lower in India than in +Europe, the money price of labour is there +lower upon a double account; upon account +both of the small quantity of food which it +will purchase, and of the low price of that +food. But in countries of equal art and industry, +the money price of the greater part of +manufactures will be in proportion to the money +price of labour; and in manufacturing +art and industry, China and Indostan, though +inferior, seem not to be much inferior to any +part of Europe. The money price of the the +greater part of manufactures, therefore, will +naturally be much lower in those great empires +than it is anywhere in Europe. Through +the greater part of Europe, too, the expense of +land-carriage increases very much both the and +real and nominal price of most manufactures. +It costs more labour, and therefore more money, +to bring first the materials, and afterwards +the complete manufacture to market. +In China and Indostan, the extent and variety +of inland navigations save the greater part of +this labour, and consequently of this money, +and thereby reduce still lower both the real +and the nominal price of the greater part of +their manufactures. Upon all these accounts, +the precious metals are a commodity which it +always has been, and still continues to be, extremely +advantageous to carry from Europe +to India. There is scarce any commodity +which brings a better price there; or which, +in proportion to the quantity of labour and +commodities which it costs in Europe, will +purchase or command a greater quantity of +labour and commodities in India. It is more +advantageous, too, to carry silver thither than +gold; because in China, and the greater part +of the other markets of India, the proportion +between fine silver and fine gold is but as ten, +or at most as twelve to one; whereas in Europe +it is as fourteen or fifteen to one. In +China, and the greater part of the other markets +of India, ten, or at most twelve ounces +of silver, will purchase an ounce of gold; in +Europe, it requires from fourteen to fifteen +ounces. In the cargoes, therefore, of the +greater part of European ships which sail to +India, silver has generally been one of the +most valuable articles. It is the most valuable +article in the Acapulco ships which sail +to Manilla. The silver of the new continent +seems, in this manner, to be one of the principal +commodities by which the commerce between +the two extremities of the old one is +carried on; and it is by means of it, in a great +measure, that those distant parts of the world +are connected with one another.</p> + +<p>In order to supply so very widely extended +a market, the quantity of silver annually +brought from the mines must not only be sufficient +to support that continued increase, both +of coin and of plate, which is required in all +thriving countries; but to repair that continual +waste and consumption of silver which +takes place in all countries where that metal +is used.</p> + +<p>The continual consumption of the precious +metals in coin by wearing, and in plate both +by wearing and cleaning, is very sensible; and +in commodities of which the use is so very +widely extended, would alone require a very +great annual supply. The consumption of +those metals in some particular manufactures, +though it may not perhaps be greater upon +the whole than this gradual consumption, is, +however, much more sensible, as it is much +more rapid. In the manufactures of Birmingham +alone, the quantity of gold and silver +annually employed in gilding and plating, +and thereby disqualified from ever afterwards +appearing in the shape of those metals, is said +to amount to more than fifty thousand pounds +sterling. We may from thence form some +notion how great must be the annual consumption +in all the different parts of the +world, either in manufactures of the same +kind with those of Birmingham, or in laces, +embroideries, gold and silver stuffs, the gilding +of books, furniture, &c. A considerable +quantity, too, must be annually lost in transporting +those metals from one place to another +both by sea and by land. In the greater part +of the governments of Asia, besides, the almost +universal custom of concealing treasures +in the bowels of the earth, of which the knowledge +frequently dies with the person who +makes the concealment, must occasion the loss +of a still greater quantity.</p> + +<p>The quantity of gold and silver imported at +both Cadiz and Lisbon (including not only +what comes under register, but what may be<span class='pagenum'><a name="Page_88" id="Page_88">[Pg 88]</a></span> +supposed to be smuggled) amounts, according +to the best accounts, to about six millions +sterling a-year.</p> + +<p>According to Mr Meggens<a name="FNanchor_20_20" id="FNanchor_20_20"></a><a href="#Footnote_20_20" class="fnanchor">[20]</a>, the annual +importation of the precious metals into Spain, +at an average of six years, viz. from 1748 to +1753, both inclusive, and into Portugal, at an +average of seven years, viz. from 1747 to +1753, both inclusive, amounted in silver to +1,101,107 pounds weight, and in gold to +49,940 pounds weight. The silver, at sixty-two +shillings the pound troy, amounts to +L.3,413,431 : 10s. sterling. The gold, at +forty-four guineas and a half the pound troy, +amounts to L.2,333,446 : 14s. sterling. Both +together amount to L.5,746,878 : 4s. sterling. +The account of what was imported under register, +he assures us, is exact. He gives us the +detail of the particular places from which the +gold and silver were brought, and of the particular +quantity of each metal, which, according +to the register, each of them afforded. +He makes an allowance, too, for the quantity +of each metal which, he supposes, may have +been smuggled. The great experience of this +judicious merchant renders his opinion of +considerable weight.</p> + +<p>According to the eloquent, and sometimes +well-informed, author of the Philosophical +and Political History of the Establishment of +the Europeans in the two Indies, the annual +importation of registered gold and silver into +Spain, at an average of eleven years, viz. from +1754 to 1764, both inclusive, amounted to +13,984,185<sup>3</sup>⁄<sub>5</sub> piastres of ten reals. On account +of what may have been smuggled, however, +the whole annual importation, he supposes, +may have amounted to seventeen millions of +piastres, which, at 4s. 6d. the piastre, is equal +to L.3,825,000 sterling. He gives the detail, +too, of the particular places from which +the gold and silver were brought, and of the +particular quantities of each metal, which according +to the register, each of them afforded. +He informs us, too, that if we were to judge +of the quantity of gold annually imported +from the Brazils to Lisbon, by the amount of +the tax paid to the king of Portugal, which it +seems, is one-fifth of the standard metal, we +might value it at eighteen millions of cruzadoes, +or forty-five millions of French livres, +equal to about twenty millions sterling. On +account of what may have been smuggled, +however, we may safely, he says, add to this +sum an eighth more, or L.250,000 sterling, so +that the whole will amount to L.2,250,000 +sterling. According to this account, therefore, +the whole annual importation of the +precious metals into both Spain and Portugal, +amounts to about L.6,075,000 sterling.</p> + +<p>Several other very well authenticated, though +manuscript accounts, I have been assured, +agree in making this whole annual importation +amount, at an average, to about six millions +sterling; sometimes a little more, sometimes +a little less.</p> + +<p>The annual importation of the precious +metals into Cadiz and Lisbon, indeed, is not +equal to the whole annual produce of the +mines of America. Some part is sent annually +by the Acapulco ships to Manilla; some +part is employed in a contraband trade, which +the Spanish colonies carry on with those of +other European nations; and some part, no +doubt, remains in the country. The mines +of America, besides, are by no means the only +gold and silver mines in the world. They, +are, however, by far the most abundant. The +produce of all the other mines which are known +is insignificant, it is acknowledged, in comparison +with their's; and the far greater part of +their produce, it is likewise acknowledged, is +annually imported into Cadiz and Lisbon. +But the consumption of Birmingham alone, +at the rate of fifty thousand pounds a-year, is +equal to the hundred-and-twentieth part of +this annual importation, at the rate of six millions +a-year. The whole annual consumption +of gold and silver, therefore, in all the +different countries of the world where those +metals are used, may, perhaps, be nearly equal +to the whole annual produce. The remainder +may be no more than sufficient to supply +the increasing demand of all thriving countries. +It may even have fallen so far short +of this demand, as somewhat to raise the price +of those metals in the European market.</p> + +<p>The quantity of brass and iron annually +brought from the mine to the market, is out +of all proportion greater than that of gold and +silver. We do not, however, upon this account, +imagine that those coarse metals are +likely to multiply beyond the demand, or to +become gradually cheaper and cheaper. Why +should we imagine that the precious metals +are likely to do so? The course metals, indeed, +though harder, are put to much harder +uses, and, as they are of less value, less care +is employed in their preservation. The precious +metals, however, are not necessarily immortal +any more than they, but are liable, too, +to be lost, wasted, and consumed, in a great +variety of ways.</p> + +<p>The price of all metals, though liable to +slow and gradual variations, varies less from +year to year than that of almost any other +part of the rude produce of land: and the +price of the precious metals is even less liable +to sudden variations than that of the coarse +ones. The durableness of metals is the foundation +of this extraordinary steadiness of price. +The corn which was brought to market last +year will be all, or almost all, consumed, long +before the end of this year. But some part +of the iron which was brought from the mine<span class='pagenum'><a name="Page_89" id="Page_89">[Pg 89]</a></span> +two or three hundred years ago, may be still +in use, and, perhaps, some part of the gold +which was brought from it two or three thousand +years ago. The different masses of corn, +which, in different years, must supply the consumption +of the world, will always be nearly +in proportion to the respective produce of +those different years. But the proportion between +the different masses of iron which may +be in use in two different years, will be very +little affected by any accidental difference in +the produce of the iron mines of those two +years; and the proportion between the masses +of gold will be still less affected by any such +difference in the produce of the gold mines. +Though the produce of the greater part of +metallic mines, therefore, varies, perhaps, still +more from year to year than that of the greater +part of corn fields, these variations have +not the same effect upon the price of the +species of commodities as upon that of the +other.</p> + + +<h4><i>Variations in the Proportion between the respective +Values of Gold and Silver.</i></h4> + +<p>Before the discovery of the mines of America, +the value of fine gold to fine silver was +regulated in the different mines of Europe, +between the proportions of one to ten and one +to twelve; that is, an ounce of fine gold was +supposed to be worth from ten to twelve ounces +of fine silver. About the middle of the last +century, it came to be regulated, between the +proportions of one to fourteen and one to fifteen; +that is, an ounce of fine gold came to +be supposed worth between fourteen and fifteen +ounces of fine silver. Gold rose in its +nominal value, or in the quantity of silver +which was given for it. Both metals sunk in +their real value, or in the quantity of labour +which they could purchase; but silver sunk +more than gold. Though both the gold and +silver mines of America exceeded in fertility +all those which had ever been known before, +the fertility of the silver mines had, it seems, +been proportionally still greater than that of +the gold ones.</p> + +<p>The great quantities of silver carried annually +from Europe to India, have, in some of +of the English settlements, gradually reduced +the value of that metal in proportion to gold. +In the mint of Calcutta, an ounce of fine gold +is supposed to be worth fifteen ounces of fine +silver, in the same manner as in Europe. It +is in the mint, perhaps, rated too high for the +value which it bears in the market of Bengal. +In China, the proportion of gold to silver still +continues as one to ten, or one to twelve. In +Japan, it is said to be as one to eight.</p> + +<p>The proportion between the quantities of +gold and silver annually imported into Europe, +according to Mr Meggens' account, is +as one to twenty-two nearly; that is, for one +ounce of gold there are imported a little more +than twenty-two ounces of silver. The great +quantity of silver sent annually to the East +Indies reduces, he supposes, the quantities of +those metals which remain in Europe to the +proportion of one to fourteen or fifteen, the +proportion of their values. The proportion +between their values, he seems to think, must +necessarily be the same as that between their +quantities, and would therefore be as one to +twenty-two, were it not for this greater exportation +of silver.</p> + +<p>But the ordinary proportion between the +respective values of two commodities is not +necessarily the same as that between the quantities +of them which are commonly in the +market. The price of an ox, reckoned at ten +guineas, is about three score times the price of +a lamb, reckoned at 3s. 6d. It would be absurd, +however, to infer from thence, that there +are commonly in the market three score lambs +for one ox; and it would be just as absurd to +infer, because an ounce of gold will commonly +purchase from fourteen or fifteen ounces of +silver, that there are commonly in the market +only fourteen or fifteen ounces of silver for +one ounce of gold.</p> + +<p>The quantity of silver commonly in the +market, it is probable, is much greater in proportion +to that of gold, than the value of a +certain quantity of gold is to that of an equal +quantity of silver. The whole quantity of a +cheap commodity brought to market is commonly +not only greater, but of greater value, +than the whole quantity of a dear one. The +whole quantity of bread annually brought to +market, is not only greater, but of greater value, +than the whole quantity of butcher's +meat; the whole quantity of butcher's meat, +than the whole quantity of poultry; and the +whole quantity of poultry, than the whole +quantity of wild fowl. There are so many +more purchasers for the cheap than for the +dear commodity, that, not only a greater quantity +of it, but a greater value can commonly +be disposed of. The whole quantity, therefore, +of the cheap commodity, must commonly +be greater in proportion to the whole quantity +of the dear one, than the value of a certain +quantity of the dear one, is to the value +of an equal quantity of the cheap one. When +we compare the precious metals with one another, +silver is a cheap, and gold a dear commodity. +We ought naturally to expect, therefore, +that there should always be in the market, +not only a greater quantity, but a greater +value of silver than of gold. Let any man, +who has a little of both, compare his own silver +with his gold plate, and he will probably +find, that not only the quantity, but the value +of the former, greatly exceeds that of the latter. +Many people, besides, have a good deal +of silver who have no gold plate, which, even +with those who have it, is generally confined +to watch-cases, snuff-boxes, and such like +trinkets, of which the whole amount is seldom<span class='pagenum'><a name="Page_90" id="Page_90">[Pg 90]</a></span> +of great value. In the British coin, indeed, +the value of the gold preponderates greatly, +but it is not so in that of all countries. In +the coin of some countries, the value of the +two metals is nearly equal. In the Scotch +coin, before the union with England, the +gold preponderated very little, though it did +somewhat<a name="FNanchor_21_21" id="FNanchor_21_21"></a><a href="#Footnote_21_21" class="fnanchor">[21]</a>, as it appears by the accounts +of the mint. In the coin of many countries +the silver preponderates. In France, the largest +sums are commonly paid in that metal, +and it in there difficult to get more gold than +what is necessary to carry about in your pocket. +The superior value, however, of the silver +plate above that of the gold, which takes +place in all countries, will much more than +compensate the preponderancy of the gold +coin above the silver, which takes place only +in some countries.</p> + +<p>Though, in one sense of the word, silver +always has been, and probably always will be, +much cheaper than gold; yet, in another sense, +gold may perhaps, in the present state of the +Spanish market, be said to be somewhat cheaper +than silver. A commodity may be said to +be dear or cheap not only according to the +absolute greatness or smallness of its usual +price, but according as that price is more or +less above the lowest for which it is possible +to bring it to market for any considerable time +together. This lowest price is that which +barely replaces, with a moderate profit, the +stock which must be employed in bringing of +the commodity thither. It is the price which +affords nothing to the landlord, of which rent +makes not any component part, but which resolves +itself altogether into wages and profit. +But, in the present state of the Spanish market, +gold is certainly somewhat nearer to this +lowest price than silver. The tax of the king +of Spain upon gold is only one-twentieth part +of the standard metal, or five per cent.; whereas +his tax upon silver amounts to one-tenth +part of it, or to ten per cent. In these taxes, +too, it has already been observed, consists the +whole rent of the greater part of the gold and +silver mines of Spanish America; and that +upon gold is still worse paid than that upon +silver. The profits of the undertakers of gold +mines, too, as they more rarely make a fortune, +must, in general, be still more moderate +than those of the undertakers of silver +mines. The price of Spanish gold, therefore, +as it affords both less rent and less profit, +must, in the Spanish market, be somewhat +nearer to the lowest price for which it is possible +to bring it thither, than the price of +Spanish silver. When all expenses are computed, +the whole quantity of the one metal, it +would seem, cannot, in the Spanish market, +be disposed of so advantageously as the whole +quantity of the other. The tax, indeed, of +the king of Portugal upon the gold of the +Brazils, is the same with the ancient tax of +the king of Spain upon the silver of Mexico +and Peru; or one-fifth part of the standard +metal. It may therefore be uncertain, whether, +to the general market of Europe, the +whole mass of American gold comes at a price +nearer to the lowest for which it is possible to +bring it thither, than the whole mass of American +silver.</p> + +<p>The price of diamonds and other precious +stones may, perhaps, be still nearer to the lowest +price at which it is possible to bring them +to market, than even the price of gold.</p> + +<p>Though it is not very probable that any +part of a tax, which is not only imposed upon +one of the most proper subjects of taxation, a +mere luxury and superfluity, but which affords +so very important a revenue as the tax upon +silver, will ever be given up us long as it is +possible to pay it; yet the same impossibility +of paying it, which, in 1736, made it necessary +to reduce it from one-fifth to one-tenth, +may in time make it necessary to reduce it +still further; in the same manner as it made +it necessary to reduce the tax upon gold to +one-twentieth. That the silver mines of Spanish +America, like all other mines, become +gradually more expensive in the working, on +account of the greater depths at which it is +necessary to carry on the works, and of the +greater expense of drawing out the water, and +of supplying them with fresh air at those +depths, is acknowledged by every body who +has inquired into the state of those mines.</p> + +<p>These causes, which are equivalent to a +growing scarcity of silver (for a commodity +may be said to grow scarcer when it becomes +more difficult and expensive to collect a certain +quantity of it), must, in time, produce +one or other of the three following events: +The increase of the expense must either, first, +be compensated altogether by a proportionable +increase in the price of the metal; or, secondly, +it must be compensated altogether by a proportionable +diminution of the tax upon silver; +or thirdly, it must be compensated partly by +the one and partly by the other of those two +expedients. This third event is very possible. +As gold rose in its price in proportion to silver, +notwithstanding a great diminution of +the tax upon gold, so silver might rise in its +price in proportion to labour and commodities, +notwithstanding an equal diminution of +the tax upon silver.</p> + +<p>Such successive reductions of the tax, however, +though they may not prevent altogether, +must certainly retard, more or less, the rise +of the value of silver in the European market. +In consequence of such reductions, many +mines may be wrought which could not be +wrought before, because they could not afford +to pay the old tax; and the quantity of silver +annually brought to market, must always be +somewhat greater, and, therefore, the value<span class='pagenum'><a name="Page_91" id="Page_91">[Pg 91]</a></span> +of any given quantity somewhat less, than it +otherwise would have been. In consequence +of the reduction in 1736, the value of silver +in the European market, though it may not +at this day be lower than before that reduction, +is, probably, at least ten per cent. lower +than it would have been, had the court of +Spain continued to exact the old tax.</p> + +<p>That, notwithstanding this reduction, the +value of silver has, during the course of the +present century, begun to rise somewhat in the +European market, the facts and arguments +which have been alleged above, dispose me to +believe, or more properly to suspect and conjecture; +for the best opinion which I can +form upon this subject, scarce, perhaps, deserves +the name of belief. The rise, indeed, +supposing there has been any, has hitherto +been so very small, that after all that has been +said, it may, perhaps, appear to many people +uncertain, not only whether this event has actually +taken place, but whether the contrary +may not have taken place, or whether the value +of silver may not still continue to fall in +the European market.</p> + +<p>It must be observed, however, that whatever +may be the supposed annual importation +of gold and silver, there must be a certain period +at which the annual consumption of those +metals will be equal to that annual importation. +Their consumption must increase as +their mass increases, or rather in a much +greater proportion. As their mass increases, +their value diminishes. They are more used, +and less cared for, and their consumption consequently +increases in a greater proportion +than their mass. After a certain period, therefore, +the annual consumption of these metals +must, in this manner, become equal to their +annual importation, provided that importation +is not continually increasing; which, in the +present times, is not supposed to be the case.</p> + +<p>If, when the annual consumption has become +equal to the annual importation, the annual +importation should gradually diminish, +the annual consumption may, for some time, +exceed the annual importation. The mass of +those metals may gradually and insensibly diminish, +and their value gradually and insensibly +rise, till the annual importation becoming +again stationary, the annual consumption +will gradually and insensibly accommodate +itself to what that annual importation can +maintain.</p> + + +<h4><i>Grounds of the suspicion that the Value of Silver +still continues to decrease.</i></h4> + +<p>The increase of the wealth of Europe, and +the popular action, that as the quantity of the +precious metals naturally increases with the +increase of wealth, so their value diminishes +as their quantity increases, may, perhaps, dispose +many people to believe that their value +still continues to fall in the European market; +and the still gradually increasing price +of many parts of the rude produce of land +may confirm them still farther in this opinion.</p> + +<p>That that increase in the quantity of the +precious metals, which arises in any country +from the increase of wealth, has no tendency +to diminish their value, I have endeavoured +to shew already. Gold and silver naturally +resort to a rich country, for the same reason +that all sorts of luxuries and curiosities resort +to it; not because they are cheaper there than +in poorer countries, but because they are dearer, +or because a better price is given for them. +It is the superiority of price which attracts +them; and as soon as that superiority ceases, +they necessarily cease to go thither.</p> + +<p>If you except corn, and such other vegetables +as are raised altogether by human industry, +that all other sorts of rude produce, +cattle, poultry, game of all kinds, the useful +fossils and minerals of the earth, &c. naturally +grow dearer, as the society advances in +wealth and improvement, I have endeavoured +to shew already. Though such commodities, +therefore, come to exchange for a greater +quantity of silver than before, it will not from +thence follow that silver has become really +cheaper, or will purchase less labour than before; +but that such commodities have become +really dearer, or will purchase more labour +than before. It is not their nominal price +only, but their real price, which rises in the +progress of improvement. The rise of their +nominal price is the effect, not of any degradation +of the value of silver, but of the rise in +their real price.</p> + + +<h4><i>Different Effects of the Progress of Improvement +upon three different sorts of rude Produce.</i></h4> + +<p>These different sorts of rude produce may +be divided into three classes. The first comprehends +those which it is scarce in the power +of human industry to multiply at all. The +second, those which it can multiply in proportion +to the demand. The third, those in which +the efficacy of industry is either limited or uncertain. +In the progress of wealth and improvement, +the rent price of the first may rise +to any degree of extravagance, and seems not +to be limited by any certain boundary. That +of the second, though it may rise greatly, has, +however, a certain boundary, beyond which it +cannot well pass for any considerable time together. +That of the third, though its natural +tendency is to rise in the progress of improvement, +yet in the same degree of improvement +it may sometimes happen even to fall, some +times to continue the same, and sometimes to +rise more or less, according as different accidents +render the efforts of human industry, in +multiplying this sort of rude produce, more +or less successful.</p> + +<p> </p> +<p><span class='pagenum'><a name="Page_92" id="Page_92">[Pg 92]</a></span></p> + +<p><i>First Sort.</i>—The first sort of rude produce, +of which the price rises in the progress of improvement, +is that which it is scarce in the power +of human industry to multiply at all. It consists +in those things which nature produces +only in certain quantities, and which being of +a very perishable nature, it is impossible to +accumulate together the produce of many different +seasons. Such are the greater part of +rare and singular birds and fishes, many different +sorts of game, almost all wild-fowl, all +birds of passage in particular, as well as many +other things. When wealth, and the luxury +which accompanies it, increase, the demand +for these is likely to increase with them, and +no effort of human industry may be able to +increase the supply much beyond what it was +before this increase of the demand. The quantity +of such commodities, therefore, remaining +the same, or nearly the same, while the competition +to purchase them is continually increasing, +their price may rise to any degree of +extravagance, and seems not to be limited by +any certain boundary. If woodcocks should +become so fashionable as to sell for twenty +guineas a-piece, no effort of human industry +could increase the number of those brought to +market, much beyond what it is at present. +The high price paid by the Romans, in the +time of their greatest grandeur, for rare birds +and fishes, may in this manner easily be accounted +for. These prices were not the effects +of the low value of silver in those times, +but of the high value of such rarities and curiosities +as human industry could not multiply +at pleasure. The real value of silver was +higher at Rome, for some time before, and +after the fall of the republic, than it is through +the greater part of Europe at present. Three +sestertii equal to about sixpence sterling, was +the price which the republic paid for the modius +or peck of the tithe wheat of Sicily. +This price, however, was probably below the +average market price, the obligation to deliver +their wheat at this rate being considered as a +tax upon the Sicilian farmers. When the +Romans, therefore, had occasion to order +more corn than the tithe of wheat amounted +to, they were bound by capitulation to pay for +the surplus at the rate of four sestertii, or +eightpence sterling the peck; and this had +probably been reckoned the moderate and reasonable, +that is, the ordinary or average contract +price of those times; it is equal to about +one-and-twenty shillings the quarter. Eight-and-twenty +shillings the quarter was, before +the late years of scarcity, the ordinary contract +price of English wheat, which in quality is inferior +to the Sicilian, and generally sells for a +lower price in the European market. The +value of silver, therefore, in those ancient +times, must have been to its value in the present, +as three to four inversely; that is, three +ounces of silver would then have purchased +the same quantity of labour and commodities +which four ounces will do at present. When +we read in Pliny, therefore, that Seius<a name="FNanchor_22_22" id="FNanchor_22_22"></a><a href="#Footnote_22_22" class="fnanchor">[22]</a> bought +a white nightingale, as a present for the empress +Agrippina, at the price of six thousand +sestertii, equal to about fifty pounds of our +present money; and that Asinius Celer<a name="FNanchor_23_23" id="FNanchor_23_23"></a><a href="#Footnote_23_23" class="fnanchor">[23]</a> purchased +a surmullet at the price of eight thousand +sestertii, equal to about sixty-six pounds +thirteen shillings and fourpence of our present +money; the extravagance of those prices, +how much soever it may surprise us, is apt, +notwithstanding, to appear to us about one +third less than it really was. Their real price, +the quantity of labour and subsistence which +was given away for them, was about one-third +more than their nominal price is apt to express +to us in the present times. Seius gave for the +nightingale the command of a quantity or labour +and subsistence, equal to what L.66 : 13 : 4d. +would purchase in the present times; and +Asinius Celer gave for a surmullet the command +of a quantity equal to what L.88 : 17 : 9d. +would purchase. What occasioned the +extravagance of those high prices was, not so +much the abundance of silver, as the abundance +of labour and subsistence, of which +those Romans had the disposal, beyond what +was necessary for their own use. The quantity +of silver, of which they had the disposal, +was a good deal less than what the command +of the same quantity of labour and subsistence +would have procured to them in the present +times.</p> + +<p> </p> +<p><i>Second sort.</i>—The second sort of rude produce, +of which the price rises in the progress +of improvement, is that which human industry +can multiply in proportion to the demand. +It consists in those useful plants and animals, +which, in uncultivated countries, nature produces +with such profuse abundance, that they +are of little or no value, and which, as cultivation +advances, are therefore forced to give +place to some more profitable produce. During +a long period in the progress of improvement, +the quantity of these is continually diminishing, +while, at the same time, the demand +for them is continually increasing. Their +real value, therefore, the real quantity of labour +which they will purchase or command, +gradually rises, till at last it gets so high as +to render them as profitable a produce as any +thing else which human industry can raise +upon the most fertile and best cultivated land. +When it has got so high, it cannot well go +higher. If it did, more land and more industry +would soon be employed to increase +their quantity.</p> + +<p>When the price of cattle, for example, rises +so high, that it is as profitable to cultivate land +in order to raise food for them as in order to +raise food for man, it cannot well go higher. +If it did, more corn land would soon be turn<span class='pagenum'><a name="Page_93" id="Page_93">[Pg 93]</a></span>ed +into pasture. The extension of tillage, by +diminishing the quantity of wild pasture, diminishes +the quantity of butcher's meat, which +the country naturally produces without labour +or cultivation; and, by increasing the +number of those who have either corn, or, +what comes to the same thing, the price of +corn, to give in exchange for it, increases the +demand. The price of butcher's meat, therefore, +and, consequently, of cattle, must gradually +rise, till it gets so high, that it becomes +as profitable to employ the most fertile +and best cultivated lands in raising food for +them as in raising corn. But it must always +be late in the progress of improvement before +tillage can be so far extended as to raise the +price of cattle to this height; and, till it has +got to this height, if the country is advancing +at all, their price must be continually rising. +There are, perhaps, some parts of Europe in +which the price of cattle has not yet got to +this height. It had not got to this height in +any part of Scotland before the Union. Had +the Scotch cattle been always confined to the +market of Scotland, in a country in which +the quantity of land, which can be applied to +no other purpose but the feeding of cattle, is +so great in proportion to what can be applied +to other purposes, it is scarce possible, perhaps, +that their price could ever have risen so +high as to render it profitable to cultivate +land for the sake of feeding them. In England, +the price of cattle, it has already been +observed, seems, in the neighbourhood of +London, to have got to this height about the +beginning of the last century; but it was +much later, probably, before it got through +the greater part of the remoter counties, in +some of which, perhaps, it may scarce yet +have got to it. Of all the different substances, +however, which compose this second sort of +rude produce, cattle is, perhaps, that of which +the price, in the progress of improvement, +rises first to this height.</p> + +<p>Till the price of cattle, indeed, has got to +this height, it seems scarce possible that the +greater part, even of those lands which are +capable of the highest cultivation, can be completely +cultivated. In all farms too distant +from any town to carry manure from it, that +is, in the far greater part of those of every extensive +country, the quantity of well cultivated +land must be in proportion to the quantity +of manure which the farm itself produces; +and this, again, must be in proportion to the +stock of cattle which are maintained upon it. +The land is manured, either by pasturing the +cattle upon it, or by feeding them in the stable, +and from thence carrying out their dung to +it. But unless the price of the cattle be sufficient +to pay both the rent and profit of cultivated +land, the farmer cannot afford to pasture +them upon it; and he can still less afford +to feed them in the stable. It is with the produce +of improved and cultivated land only +that cattle can be fed in the stable; because, +to collect the scanty and scattered produce of +waste and unimproved lands, would require +too much labour, and be too expensive. If +the price of the cattle, therefore, is not sufficient +to pay for the produce of improved and +cultivated land, when they are allowed to pasture +it, that price will be still less sufficient to +pay for that produce, when it must be collected +with a good deal of additional labour, +and brought into the stable to them. In these +circumstances, therefore, no more cattle can +with profit be fed in the stable than what are +necessary for tillage. But these can never afford +manure enough for keeping constantly in +good condition all the lands which they are +capable of cultivating. What they afford, being +insufficient for the whole farm, will naturally +be reserved for the lands to which it can +be most advantageously or conveniently applied; +the most fertile, or those, perhaps, in +the neighbourhood of the farm-yard. These, +therefore, will be kept constantly in good condition, +and fit for tillage. The rest will, the +greater part of them, be allowed to lie waste, +producing scarce any thing but some miserable +pasture, just sufficient to keep alive a +few straggling, half-starved cattle; the farm, +though much overstocked in proportion to +what would be necessary for its complete cultivation, +being very frequently overstocked in +proportion to its actual produce. A portion +of this waste land, however, after having been +pastured in this wretched manner for six or +seven years together, may be ploughed up, +when it will yield, perhaps, a poor crop or +two of bad oats, or of some other coarse grain; +and then, being entirely exhausted, it must be +rested and pastured again as before, and another +portion ploughed up, to be in the same +manner exhausted and rested again in its turn. +Such, accordingly, was the general system of +management all over the low country of Scotland +before the Union. The lands which were +kept constantly well manured and in good condition +seldom exceeded a third or fourth part +of the whole farm, and sometimes did not +amount to a fifth or a sixth part of it. The rest +were never manured, but a certain portion of +them was in its turn, notwithstanding, regularly +cultivated and exhausted. Under this +system of management, it is evident, even that +part of the lands of Scotland which is capable +of good cultivation, could produce but little +in comparison of what it may be capable of +producing. But how disadvantageous soever +this system may appear, yet, before the Union, +the low price of cattle seems to have rendered +it almost unavoidable. If, notwithstanding a +great rise in the price, it still continues to prevail +through a considerable part of the country, +it is owing in many places, no doubt, to +ignorance and attachment to old customs, but, +in most places, to the unavoidable obstructions +which the natural course of things op<span class='pagenum'><a name="Page_94" id="Page_94">[Pg 94]</a></span>poses +to the immediate or speedy establishment +of a better system: first, to the poverty of the +tenants, to their not having yet had time to +acquire a stock of cattle sufficient to cultivate +their lands more completely, the same rise of +price, which would render it advantageous for +them to maintain a greater stock, rendering it +more difficult for them to acquire it; and, +secondly, to their not having yet had time to +put their lands in condition to maintain this +greater stock properly, supposing they were +capable of acquiring it. The increase of stock +and the improvement of land are two events +which must go hand in hand, and of which +the one can nowhere much outrun the other. +Without some increase of stock, there can be +scarce any improvement of land, but there +can be no considerable increase of stock, but +in consequence of a considerable improvement +of land; because otherwise the land could not +maintain it. These natural obstructions to +the establishment of a better system, cannot +be removed but by a long course of frugality +and industry; and half a century or a century +more, perhaps, must pass away before the old +system, which is wearing out gradually, can +be completely abolished through all the different +parts of the country. Of all the commercial +advantages, however, which Scotland +has derived from the Union with England, this +rise in the price of cattle is, perhaps, the +greatest. It has not only raised the value of +all highland estates, but it has, perhaps, been +the principal cause of the improvement of the +low country.</p> + +<p>In all new colonies, the great quantity of +waste land, which can for many years be applied +to no other purpose but the feeding of +cattle, soon renders them extremely abundant; +and in every thing great cheapness is the +necessary consequence of great abundance. +Though all the cattle of the European colonies +in America were originally carried from +Europe, they soon multiplied so much there, +and became of so little value, that even horses +were allowed to run wild in the woods, without +any owner thinking it worth while to +claim them. It must be a long time after the +first establishment of such colonies, before it +can become profitable to feed cattle upon the +produce of cultivated land. The same causes, +therefore, the want of manure, and the disproportion +between the stock employed in cultivation +and the land which it is destined to +cultivate, are likely to introduce there a system +of husbandry, not unlike that which still +continues to take place in so many parts of +Scotland. Mr Kalm, the Swedish traveller, +when he gives an account of the husbandry of +some of the English colonies in North America, +as he found it in 1749, observes, accordingly, +that he can with difficulty discover there +the character of the English nation, so well +skilled in all the different branches of agriculture. +They make scarce any manure for +their corn fields, he says; but when one piece +of ground has been exhausted by continual +cropping, they clear and cultivate another +piece of fresh land; and when that is exhausted, +proceed to a third. Their cattle are +allowed to wander through the woods and +other uncultivated grounds, where they are +half-starved; having long ago extirpated almost +all the annual grasses, by cropping them +too early in the spring, before they had time +to form their flowers, or to shed their seeds.<a name="FNanchor_24_24" id="FNanchor_24_24"></a><a href="#Footnote_24_24" class="fnanchor">[24]</a> +The annual grasses were, it seems, the best +natural grasses in that part of North America; +and when the Europeans first settled +there, they used to grow very thick, and to +rise three or four feet high. A piece of ground +which, when he wrote, could not maintain one +cow, would in former times, he was assured, +have maintained four, each of which would +have given four times the quantity of milk +which that one was capable of giving. The +poorness of the pasture had, in his opinion, +occasioned the degradation of their cattle, +which degenerated sensibly from one generation +to another. They were probably not unlike +that stunted breed which was common all +over Scotland thirty or forty years ago, and +which is now so much mended through the +greater part of the low country, not so much +by a change of the breed, though that expedient +has been employed in some places, as +by a more plentiful method of feeding them.</p> + +<p>Though it is late, therefore, in the progress +of improvement, before cattle can bring such +a price as to render it profitable to cultivate +land for the sake of feeding them; yet of all +the different parts which compose this second +sort of rude produce, they are perhaps the first +which bring this price; because, till they bring +it, it seems impossible that improvement can +be brought near even to that degree of perfection +to which it has arrived in many parts of +Europe.</p> + +<p>As cattle are among the first, so perhaps venison +is among the last parts of this sort of +rude produce which bring this price. The +price of venison in Great Britain, how extravagant +soever it may appear, is not near sufficient +to compensate the expense of a deer +park, as is well known to all those who have +had any experience in the feeding of deer. If +it was otherwise, the feeding of deer would +soon become an article of common farming, in +the same manner as the feeding of those small +birds, called turdi, was among the ancient +Romans. Varro and Columella assure us, +that it was a most profitable article. The fattening +of ortolans, birds of passage which arrive +lean in the country, is said to be so in +some parts of France. If venison continues +in fashion, and the wealth and luxury of<span class='pagenum'><a name="Page_95" id="Page_95">[Pg 95]</a></span> +Great Britain increase as they have done for +some time past, its price may very probably +rise still higher than it is at present.</p> + +<p>Between that period in the progress of improvement, +which brings to its height the price +of so necessary an article as cattle, and that +which brings to it the price of such a superfluity +as venison, there is a very long interval, +in the course of which many other sorts of +rude produce gradually arrive at their highest +price, some sooner and some later, according +to different circumstances.</p> + +<p>Thus, in every farm, the offals of the barn +and stable will maintain a certain number of +poultry. These, as they are fed with what +would otherwise be lost, are a mere save-all; +and as they cost the farmer scarce any thing, +so he can afford to sell them for very little. +Almost all that he gets is pure gain, and their +price can scarce be so low as to discourage +him from feeding this number. But in countries +ill cultivated, and therefore but thinly +inhabited, the poultry, which are thus raised +without expense, are often fully sufficient to +supply the whole demand. In this state of +things, therefore, they are often as cheap as +butcher's meat, or any other sort of animal +food. But the whole quantity of poultry +which the farm in this manner produces without +expense, must always be much smaller +than the whole quantity of butcher's meat +which is reared upon it; and in times of +wealth and luxury, what is rare, with only +nearly equal merit, is always preferred to +what is common. As wealth and luxury increase, +therefore, in consequence of improvement +and cultivation, the price of poultry gradually +rises above that of butcher's meat, till +at last it gets so high, that it becomes profitable +to cultivate land for the sake of feeding +them. When it has got to this height, it cannot +well go higher. If it did, more land +would soon be turned to this purpose. In +several provinces of France, the feeding of +poultry is considered as a very important article +in rural economy, and sufficiently profitable +to encourage the farmer to raise a considerable +quantity of Indian corn and buckwheat +for this purpose. A middling farmer +will there sometimes have four hundred fowls +in his yard. The feeding of poultry seems +scarce yet to be generally considered as a matter +of so much importance in England. They +are certainly, however, dearer in England than +in France, as England receives considerable +supplies from France. In the progress of improvements, +the period at which every particular +sort of animal food in dearest, must naturally +be that which immediately precedes +the general practice of cultivating land for the +sake of raising it. For some time before this +practice becomes general, the scarcity must +necessarily raise the price. After it has become +general, new methods of feeding are +commonly fallen upon, which enable the farmer +to raise upon the same quantity of ground +a much greater quantity of that particular sort +of animal food. The plenty not only obliges +him to sell cheaper, but, in consequence of +these improvements, he can afford to sell +cheaper; for if he could not afford it, the +plenty would not be of long continuance. It +has been probably in this manner that the introduction +of clover, turnips, carrots, cabbages, +&c. has contributed to sink the common +price of butcher's meat in the London market, +somewhat below what it was about the beginning +of the last century.</p> + +<p>The hog, that finds his food among ordure, +and greedily devours many things rejected by +every other useful animal, is, like poultry, +originally kept as a save-all. As long as the +number of such animals, which can thus be +reared at little or no expense, is fully sufficient +to supply the demand, this sort of butcher's +meat comes to market at a much lower +price than any other. But when the demand +rises beyond what this quantity can supply, +when it becomes necessary to raise food on +purpose for feeding and fattening hogs, in the +same manner as for feeding and fattening +other cattle, the price necessarily rises, and +becomes proportionably either higher or lower +than that of other butcher's meat, according +as the nature of the country, and the state of +its agriculture, happen to render the feeding +of hogs more or less expensive than that of +other cattle. In France, according to Mr +Buffon, the price of pork is nearly equal to +that of beef. In most parts of Great Britain +it is at present somewhat higher.</p> + +<p>The great rise in the price both of hogs and +poultry, has, in Great Britain, been frequently +imputed to the diminution of the number +of cottagers and other small occupiers of land; +an event which has in every part of Europe +been the immediate forerunner of improvement +and better cultivation, but which at the +same time may have contributed to raise the +price of those articles, both somewhat sooner +and somewhat faster than it would otherwise +have risen. As the poorest family can often +maintain a cat or a dog without any expense, +so the poorest occupiers of land can commonly +maintain a few poultry, or a sow and a few +pigs, at very little. The little offals of their +own table, their whey, skimmed milk, and +butter milk, supply those animals with a part +of their food, and they find the rest in the +neighbouring fields, without doing any sensible +damage to any body. By diminishing +the number of those small occupiers, therefore, +the quantity of this sort of provisions, +which is thus produced at little or no expense, +must certainly have been a good deal diminished, +and their price must consequently +have been raised both sooner and faster than +it would otherwise have risen. Sooner or +later, however, in the progress of improvement, +it must at any rate have risen to the<span class='pagenum'><a name="Page_96" id="Page_96">[Pg 96]</a></span> +utmost height to which it is capable of rising; +or to the price which pays the labour and expense +of cultivating the land which furnishes +them with food, as well as these are paid upon +the greater part of other cultivated land.</p> + +<p>The business of the dairy, like the feeding +of hogs and poultry, is originally carried on +as a save-all. The cattle necessarily kept upon +the farm produce more milk than either +the rearing of their own young, or the consumption +of the farmer's family requires; and +they produce most at one particular season. +But of all the productions of land, milk is +perhaps the most perishable. In the warm +season, when it is most abundant, it will scarce +keep four-and-twenty hours. The farmer, by +making it into fresh butter, stores a small part +of it for a week; by making it into salt butter, +for a year; and by making it into cheese, +he stores a much greater part of it for several +years. Part of all these is reserved for +the use of his own family, the rest goes to +market, in order to find the best price which +is to be had, and which can scarce be so low +as to discourage him from sending thither +whatever is over and above the use of his own +family. If it is very low indeed, he will be +likely to manage his dairy in a very slovenly +and dirty manner, and will scarce, perhaps, +think it worth while to have a particular +room or building on purpose for it, but will +suffer the business to be carried on amidst +the smoke, filth, and nastiness of his own +kitchen, as was the case of almost all the farmers' +dairies in Scotland thirty or forty years +ago, and as is the case of many of them still. +The same causes which gradually raise the +price of butcher's meat, the increase of the +demand, and, in consequence of the improvement +of the country, the diminution of the +quantity which can be fed at little or no expense, +raise, in the same manner, that of the +produce of the dairy, of which the price naturally +connects with that of butcher's meat, or +with the expense of feeding cattle. The increase +of price pays for more labour, care, +and cleanliness. The dairy becomes more +worthy of the farmer's attention, and the quality +of its produce gradually improves. The +price at last gets so high, that it become worth +while to employ some of the most fertile and +best cultivated lands in feeding cattle merely +for the purpose of the dairy; and when it has +got to this height, it cannot well go higher. +If it did, more land would soon be turned to +this purpose. It seems to have got to this +height through the greater part of England, +where much good land is commonly employed +in this manner. If you except the neighbourhood +of a few considerable towns, it seems +not yet to have got to this height anywhere in +Scotland, where common farmers seldom employ +much good land in raising food for cattle, +merely for the purpose of the dairy. The +price of the produce, though it has risen very +considerably within these few years, is probably +still too low to admit of it. The inferiority +of the quality, indeed, compared with that +of the produce of English dairies, is fully +equal to that of the price. But this inferiority +of quality is, perhaps, rather the effect of +this lowness of price, than the cause of it. +Though the quality was much better, the +greater part of what is brought to market +could not, I apprehend, in the present circumstances +of the country, be disposed of at a +much better price; and the present price, it +is probable, would not pay the expense of the +land and labour necessary for producing a +much better quality. Through the greater +part of England, notwithstanding the superiority +of price, the dairy is not reckoned a more +profitable employment of land than the raising +of corn, or the fattening of cattle, the two great +objects of agriculture. Through the greater +part of Scotland, therefore, it cannot yet be +even so profitable.</p> + +<p>The lands of no country, it is evident, can +ever be completely cultivated and improved, +till once the price of every produce, which +human industry in obliged to raise upon them, +has got so high as to pay for the expense of +complete improvement and cultivation. In +order to do this, the price of each particular +produce must be sufficient, first, to pay the +rent of good corn land, as it is that which regulates +the rent of the greater part of other +cultivated land; and, secondly, to pay the labour +and expense of the farmer, as well as +they are commonly paid upon good corn land; +or, in other words, to replace with the ordinary +profits the stock which he employs about +it. This rise in the price of each particular +produce, must evidently be previous to the +improvement and cultivation of the land which +is destined for raising it. Gain is the end of +all improvement; and nothing could deserve +that name, of which loss was to be the necessary +consequence. But loss must be the necessary +consequence of improving land for the +sake of a produce of which the price could +never bring back the expense. If the complete +improvement and cultivation of the country +be, as it most certainly is, the greatest of +all public advantages, this rise in the price of +all those different sorts of rude produce, instead +of being considered as a public calamity, +ought to be regarded as the necessary forerunner +and attendant of the greatest of all +public advantages.</p> + +<p>This rise, too, in the nominal or money +price of all these different sorts of rude produce, +has been the effect, not of any degradation +in the value of silver, but of a rise in +their real price. They have become worth, +not only a greater quantity of silver, but a +greater quantity of labour and subsistence +than before. As it costs a greater quantity +of labour and subsistence to bring them to +market, so, when they are brought thither +<span class='pagenum'><a name="Page_97" id="Page_97">[Pg 97]</a></span>they represent, or are equivalent to a greater +quantity.</p> + +<p> </p> +<p><i>Third Sort.</i>—The third and last sort of rude +produce, of which the price naturally rises in +the progress of improvement, is that in which +the efficacy of human industry, in augmenting +the quantity, is either limited or uncertain. +Though the real price of this sort of +rude produce, therefore, naturally tends to +rise in the progress of improvement, yet, according +as different accidents happen to render +the efforts of human industry more or less +successful in augmenting the quantity, it may +happen sometimes even to fall, sometimes to +continue the same, in very different periods of +improvement, and sometimes to rise more or +less in the same period.</p> + +<p>There are some sorts of rude produce which +nature has rendered a kind of appendages to +other sorts; so that the quantity of the one +which any country can afford, is necessarily +limited by that of the other. The quantity +of wool or of raw hides, for example, which +any country can afford, is necessarily limited +by the number of great and small cattle that +are kept in it. The state of its improvement, +and the nature of its agriculture, again necessarily +determine this number.</p> + +<p>The same causes which, in the progress of +improvement, gradually raise the price of +butcher's meat, should have the same effect, +it may be thought, upon the prices of wool +and raw hides, and raise them, too, nearly in +the same proportion. It probably would be +so, if, in the rude beginnings of improvement, +the market for the latter commodities was +confined within as narrow bounds as that for +the former. But the extent of their respective +markets is commonly extremely different.</p> + +<p>The market for butcher's meat is almost +everywhere confined to the country which +produces it. Ireland, and some part of British +America, indeed, carry on a considerable +trade in salt provisions; but they are, I believe, +the only countries in the commercial +world which do so, or which export to other +countries any considerable part of their butcher's +meat.</p> + +<p>The market for wool and raw hides, on the +contrary, is, in the rude beginnings of improvement, +very seldom confined to the country +which produces them. They can easily +be transported to distant countries; wool without +any preparation, and raw hides with very +little; and as they are the materials of many +manufactures, the industry of other countries +may occasion a demand for them, though that +of the country which produces them might +not occasion any.</p> + +<p>In countries ill cultivated, and therefore +but thinly inhabited, the price of the wool and +the hide bears always a much greater proportion +to that of the whole beast, than in countries +where, improvement and population being +further advanced, there is more demand +for butcher's meat. Mr Hume observes, that +in the Saxon times, the fleece was estimated +at two-fifths of the value of the whole sheep, +and that this was much above the proportion +of its present estimation. In some provinces +of Spain, I have been assured, the sheep is +frequently killed merely for the sake of the +fleece and the tallow. The carcase is often +left to rot upon the ground, or to be devoured +by beasts and birds of prey. If this sometimes +happens even in Spain, it happens almost +constantly in Chili, at Buenos Ayres, +and in many other parts of Spanish America, +where the horned cattle are almost constantly +killed merely for the sake of the hide and the +tallow. This, too, used to happen almost constantly +in Hispaniola, while it was infested by +the buccaneers, and before the settlement, improvement, +and populousness of the French +plantations (which now extend round the coast +of almost the whole western half of the island) +had given some value to the cattle of the Spaniards, +who still continue to possess, not only +the eastern part of the coast, but the whole +inland mountainous part of the country.</p> + +<p>Though, in the progress of improvement +and population, the price of the whole beast +necessarily rises, yet the price of the carcase +is likely to be much more affected by this rise +than that of the wool and the hide. The market +for the carcase being in the rude state of +society confined always to the country which +produces it, must necessarily be extended in +proportion to the improvement and population +of that country. But the market for the +wool and the hides, even of a barbarous country, +often extending to the whole commercial +world, it can very seldom be enlarged in the +same proportion. The state of the whole commercial +world can seldom be much affected +by the improvement of any particular country; +and the market for such commodities +may remain the same, or very nearly the same, +after such improvements, as before. It should, +however, in the natural course of things, rather, +upon the whole, be somewhat extended +in consequence of them. If the manufactures, +especially, of which those commodities +are the materials, should ever come to flourish +in the country, the market, though it might +not be much enlarged, would at least be +brought much nearer to the place of growth +than before; and the price of those materials +might at least be increased by what had usually +been the expense of transporting them to +distant countries. Though it might not rise, +therefore, in the same proportion as that of +butcher's meat, it ought naturally to rise somewhat, +and it ought certainly not to fall.</p> + +<p>In England, however, notwithstanding the +flourishing state of its woollen manufacture, +the price of English wool has fallen very considerably +since the time of Edward III. There +are many authentic records which demonstrate<span class='pagenum'><a name="Page_98" id="Page_98">[Pg 98]</a></span> +that, during the reign of that prince (towards +the middle of the fourteenth century, or about +1339), what was reckoned the moderate and +reasonable price of the tod, or twenty-eight +pounds of English wool, was not less than ten +shillings of the money of those times<a name="FNanchor_25_25" id="FNanchor_25_25"></a><a href="#Footnote_25_25" class="fnanchor">[25]</a>, containing, +at the rate of twenty-pence the ounce, +six ounces of silver, Tower weight, equal to +about thirty shillings of our present money. +In the present times, one-and-twenty shillings +the tod may be reckoned a good price for very +good English wool. The money price of wool, +therefore, in the time of Edward III. was to +its money price in the present times as ten to +seven. The superiority of its real price was +still greater. At the rate of six shillings and +eightpence the quarter, ten shillings was in +those ancient times the price of twelve bushels +of wheat. At the rate of twenty-eight shillings +the quarter, one-and-twenty shillings is +in the present times the price of six bushels +only. The proportion between the real price +of ancient and modern times, therefore, is as +twelve to six, or as two to one. In those ancient +times, a tod of wool would have purchased +twice the quantity of subsistence which +it will purchase at present, and consequently +twice the quantity of labour, if the real recompence +of labour had been the same in both +periods.</p> + +<p>This degradation, both in the real and nominal +value of wool, could never have happened +in consequence of the natural course of +things. It has accordingly been the effect of +violence and artifice. First, of the absolute +prohibition of exporting wool from England: +secondly, of the permission of importing it +from Spain, duty free: thirdly, of the prohibition +of exporting it from Ireland to any +other country but England. In consequence +of these regulations, the market for English +wool, instead of being somewhat extended, in +consequence of the improvement of England, +has been confined to the home market, where +the wool of several other countries is allowed +to come into competition with it, and where +that of Ireland is forced into competition with +it. As the woollen manufactures, too, of +Ireland, are fully as much discouraged as is +consistent with justice and fair dealing, the +Irish can work up but a smaller part of their +own wool at home, and are therefore obliged +to send a greater proportion of it to Great +Britain, the only market they are allowed.</p> + +<p>I have not been able to find any such authentic +records concerning the price of raw +hides in ancient times. Wool was commonly +paid as a subsidy to the king, and its valuation +in that subsidy ascertains, at least in some +degree, what was its ordinary price. But this +seems not to have been the case with raw hides. +Fleetwood, however, from an account in 1425, +between the prior of Burcester Oxford and +one of his canons, gives us their price, at least +as it was stated upon that particular ocassion, +viz. five ox hides at twelve shillings; five cow +hides at seven shillings and threepence; thirty-six +sheep skins of two years old at nine shillings; +sixteen calf skins at two shillings. In +1425, twelve shillings contained about the +same quantity of silver as four-and-twenty +shillings of our present money. An ox hide, +therefore, was in this account valued at the +same quantity of silver as 4s. <sup>4</sup>⁄<sub>5</sub>ths of our present +money. Its nominal price was a good +deal lower than at present. But at the rate +of six shillings and eightpence the quarter, +twelve shillings would in those times have +purchased fourteen bushels and four-fifths of +a bushel of wheat, which, at three and sixpence +the bushel, would in the present times +cost 51s. 4d. An ox hide, therefore, would +in those times have purchased as much corn +as ten shillings and threepence would purchase +at present. Its real value was equal to +ten shillings and threepence of our present +money. In those ancient times, when the +cattle were half starved during the greater +part of the winter, we cannot suppose that +they were of a very large size. An ox hide +which weighs four stone of sixteen pounds of +avoirdupois, is not in the present times reckoned +a bad one; and in those ancient times +would probably have been reckoned a very +good one. But at half-a-crown the stone, +which at this moment (February 1773) I understand +to be the common price, such a hide +would at present cost only ten shillings.—Though +its nominal price, therefore, is higher +in the present than it was in those ancient +times, its real price, the real quantity of subsistence +which it will purchase or command, is +rather somewhat lower. The price of cow +hides, as stated in the above account, is nearly +in the common proportion to that of ox hides. +That of sheep skins is a good deal above it. +They had probably been sold with the wool. +That of calves skins, on the contrary, is greatly +below it. In countries where the price of +cattle is very low, the calves, which are not +intended to be reared in order to keep up the +stock, are generally killed very young, as was +the case in Scotland twenty or thirty years +ago. It saves the milk, which their price +would not pay for. Their skins, therefore, +are commonly good for little.</p> + +<p>The price of raw hides is a good deal lower +at present than it was a few years ago; +owing probably to the taking off the duty upon +seal skins, and to the allowing, for a limited +time, the importation of raw hides from +Ireland, and from the plantations, duty free, +which was done in 1769. Take the whole of +the present century at an average, their real +price has probably been somewhat higher than +it was in those ancient times. The nature of +the commodity renders it not quite so proper<span class='pagenum'><a name="Page_99" id="Page_99">[Pg 99]</a></span> +for being transported to distant markets as +wool. It suffers more by keeping. A salted +hide is reckoned inferior to a fresh one, and +sells for a lower price. This circumstance +must necessarily have some tendency to sink +the price of raw hides produced in a country +which does not manufacture them, but is obliged +to export them, and comparatively to +raise that of those produced in a country which +does manufacture them. It must have some +tendency to sink their price in a barbarous, +and to raise it in an improved and manufacturing +country. It must have had some tendency, +therefore, to sink it in ancient, and to +raise it in modern times. Our tanners, besides, +have not been quite so successful as our clothiers, +in convincing the wisdom of the nation, +that the safety of the commonwealth depends +upon the prosperity of their particular manufacture. +They have accordingly been much +less favoured. The exportation of raw hides +has, indeed, been prohibited, and declared a +nuisance; but their importation from foreign +countries has been subjected to a duty; and +though this duty has been taken off from those +of Ireland and the plantations (for the limited +time of five years only), yet Ireland has +not been confined to the market of Great Britain +for the sale of its surplus hides, or of +these which are not manufactured at home. +The hides of common cattle have, but within +these few years, been put among the enumerated +commodities which the plantations can +send nowhere but to the mother country; neither +has the commerce of Ireland been in this +case oppressed hitherto, in order to support +the manufactures of Great Britain.</p> + +<p>Whatever regulations tend to sink the price, +either of wool or of raw hides, below what it +naturally would be, must, in an improved and +cultivated country, have some tendency to raise +the price of butcher's meat. The price both +of the great and small cattle, which are fed +on improved and cultivated land, must be sufficient +to pay the rent which the landlord, and +the profit which the farmer, has reason to expect +from improved and cultivated land. If +it is not, they will soon cease to feed them. +Whatever part of this price, therefore, is not +paid by the wool and the hide, must be paid +by the carcase. The less there is paid for +the one, the more must be paid for the other. +In what manner this price is to be divided +upon the different parts of the beast, is indifferent +to the landlords and farmers, provided +it is all paid to them. In an improved and more +cultivated country, therefore, their interest as +landlords and farmers cannot be much affected +by such regulations, though their interest +as consumers may, by the rise in the price of +provisions. It would be quite otherwise, however, +in an unimproved and uncultivated +country, where the greater part of the lands +could be applied to no other purpose but the +feeding of cattle, and where the wool and the +hide made the principal part of the value of +those cattle. Their interest as landlords and +farmers would in this case be very deeply affected +by such regulations, and their interest +as consumers very little. The fall in the price +of the wool and the hide would not in this +case raise the price of the carcase; because +the greater part of the lands of the country +being applicable to no other purpose but the +feeding of cattle, the same number would still +continue to be fed. The same quantity of +butcher's meat would still come to market. +The demand for it would be no greater than +before. Its price, therefore, would be the same +as before. The whole price of cattle would +fall, and along with it both the rent and the +profit of all those lands of which cattle was +the principal produce, that is, of the greater +part of the lands of the country. The perpetual +prohibition of the exportation of wool, +which is commonly, but very falsely, ascribed +to Edward III., would, in the then circumstances +of the country, have been the most +destructive regulation which could well have +been thought of. It would not only have reduced +the actual value of the greater part of +the lands in the kingdom, but by reducing +the price of the most important species of +small cattle, it would have retarded very much +its subsequent improvement.</p> + +<p>The wool of Scotland fell very considerably +in its price in consequence of the union +with England, by which it was excluded from +the great market of Europe, and confined to +the narrow one of Great Britain. The value +of the greater part of the lands in the southern +counties of Scotland, which are chiefly a sheep +country, would have been very deeply affected +by this event, had not the rise in the price +of butcher's meat fully compensated the fall +in the price of wool.</p> + +<p>As the efficacy of human industry, in increasing +the quantity either of wool or of raw +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. It so far +depends not so much upon the quantity which +they produce, as upon that which they do not +manufacture; and upon the restraints which +they may or may not think proper to impose +upon the exportation of this sort of rude produce. +These circumstances, as they are altogether +independent of domestic industry, so +they necessarily render the efficiency of its efforts +more or less uncertain. In multiplying this +sort of rude produce, therefore, the efficacy +of human industry is not only limited, but +uncertain.</p> + +<p>In multiplying another very important sort +of rude produce, the quantity of fish that is +brought to market, it is likewise both limited +and uncertain. It is limited by the local situation +of the country, by the proximity or +distance of its different provinces from the<span class='pagenum'><a name="Page_100" id="Page_100">[Pg 100]</a></span> +sea, by the number of its lakes and rivers, and +by what may be called the fertility or barrenness +of those seas, lakes, and rivers, as to this +sort of rude produce. As population increases, +as the annual produce of the land and +labour of the country grows greater and greater, +there come to be more buyers of fish; and +those buyers, too, have a greater quantity and +variety of other goods, or, what is the same +thing, the price of a greater quantity and variety +of other goods, to buy with. But it will +generally be impossible to supply the great +and extended market, without employing a +quantity of labour greater than in proportion +to what had been requisite for supplying the +narrow and confined one. A market which, +from requiring only one thousand, comes to +require annually ten thousand ton of fish, can +seldom be supplied, without employing more +than ten times the quantity of labour which +had before been sufficient to supply it. The +fish must generally be sought for at a greater +distance, larger vessels must be employed, and +more expensive machinery of every kind made +use of. The real price of this commodity, +therefore, naturally rises in the progress of +improvement. It has accordingly done so, I +believe, more or less in every country.</p> + +<p>Though the success of a particular day's +fishing may be a very uncertain matter, yet +the local situation of the country being supposed, +the general efficacy of industry in bringing +a certain quantity of fish to market, taking +the course of a year, or of several years +together, it may, perhaps, be thought is certain +enough; and it, no doubt, is so. As it +depends more, however, upon the local situation +of the country, than upon the state of its +wealth and industry; as upon this account it +may in different countries be the same in very +different periods of improvement, and very +different in the same period; its connection +with the state of improvement is uncertain; +and it is of this sort of uncertainty that I am +here speaking.</p> + +<p>In increasing the quantity of the different +minerals and metals which are drawn from the +bowels of the earth, that of the more precious +ones particularly, the efficacy of human industry +seems not to be limited, but to be altogether +uncertain.</p> + +<p>The quantity of the precious metals which +is to be found in any country, is not limited +by any thing in its local situation, such as the +fertility or barrenness of its own mines. Those +metals frequently abound in countries which +possess no mines. Their quantity, in every +particular country, seems to depend upon two +different circumstances; first, upon its power +of purchasing, upon the state of its industry, +upon the annual produce of its land and labour, +in consequence of which it can afford +to employ a greater or a smaller quantity of +labour and subsistence, in bringing or purchasing +such superfluities as gold and silver, +either from its own mines, or from those of +other countries; and, secondly, upon the fertility +or barrenness of the mines which may +happen at any particular time to supply the +commercial world with those metals. The +quantity of those metals in the countries most +remote from the mines, must be more or less +affected by this fertility or barrenness, on account +of the easy and cheap transportation of +those metals, of their small bulk and great +value. Their quantity in China and Indostan +must have been more or less affected by the +abundance of the mines of America.</p> + +<p>So far as their quantity in any particular +country depends upon the former of those two +circumstances (the power of purchasing), their +real price, like that of all other luxuries and +superfluities, is likely to rise with the wealth +and improvement of the country, and to fall +with its poverty and depression. Countries +which have a great quantity of labour and +subsistence to spare, can afford to purchase +any particular quantity of those metals at the +expense of a greater quantity of labour and +subsistence, than countries which have less to +spare.</p> + +<p>So far as their quantity in any particular +country depends upon the latter of those two +circumstances (the fertility or barrenness of +the mines which happen to supply the commercial +world), their real price, the real quantity +of labour and subsistence which they will +purchase or exchange for, will, no doubt, +sink more or less in proportion to the fertility, +and rise in proportion to the barrenness of +those mines.</p> + +<p>The fertility or barrenness of the mines, +however, which may happen at any particular +time to supply the commercial world, is a +circumstance which, it is evident, may have +no sort of connection with the state of industry +in a particular country. It seems even to +have no very necessary connection with that +of the world in general. As arts and commerce, +indeed, gradually spread themselves +over a greater and a greater part of the earth, +the search for new mines, being extended over +a wider surface, may have somewhat a better +chance for being successful than when confined +within narrower bounds. The discovery +of new mines, however, as the old ones come +to be gradually exhausted, is a matter of the +greatest uncertainty, and such as no human +skill or industry can insure. All indications, +it is acknowledged, are doubtful; and the actual +discovery and successful working of a +new mine can alone ascertain the reality of its +value, or even of its existence. In this search +there seem to be no certain limits, either to +the possible success, or to the possible disappointment +of human industry. In the course +of a century or two, it is possible that new +mines may be discovered, more fertile than +any that have ever yet been known, and it is +just equally possible, that the most fertile mine<span class='pagenum'><a name="Page_101" id="Page_101">[Pg 101]</a></span> +then known may be more barren than any that +was wrought before the discovery of the mines +of America. Whether the one or the other of +those two events may happen to take place, is +of very little importance to the real wealth +and prosperity of the world, to the real value +of the annual produce of the land and labour +of mankind. Its nominal value, the quantity +of gold and silver by which this annual produce +could be expressed or represented, would, +no doubt, be very different; but its real value, +the real quantity of labour which it could +purchase or command, would be precisely the +same. A shilling might, in the one case, represent +no more labour than a penny does at +present; and a penny, in the other, might represent +as much as a shilling does now. But +in the one case, he who had a shilling in his +pocket would be no richer than he who has a +penny at present; and in the other, he who +had a penny would be just as rich as he who +has a shilling now. The cheapness and abundance +of gold and silver plate would be the +sole advantage which the world could derive +from the one event; and the dearness and +scarcity of those trifling superfluities, the only +inconveniency it could suffer from the other.</p> + + +<h4><i>Conclusion of the Digression concerning the Variations +in the Value of Silver.</i></h4> + +<p>The greater part of the writers who have +collected the money price of things in ancient +times, seem to have considered the low money +price of corn, and of goods in general, or, in +other words, the high value of gold and silver, +as a proof, not only of the scarcity of +those metals, but of the poverty and barbarism +of the country at the time when it took +place. This notion is connected with the system +of political economy, which represents +national wealth as consisting in the abundance +and national poverty in the scarcity, of gold +and silver; a system which I shall endeavour +to explain and examine at great length in the +fourth book of this Inquiry. I shall only observe +at present, that the high value of the +precious metals can be no proof of the poverty +or barbarism of any particular country at the +time when it took place. It is a proof only +of the barrenness of the mines which happened +at that time to supply the commercial world. +A poor country, as it cannot afford to buy +more, so it can as little afford to pay dearer +for gold and silver than a rich one; and the +value of those metals, therefore, is not likely +to be higher in the former than in the latter. +In China, a country much richer than any +part of Europe, the value of the precious metals +is much higher than in any part of Europe. +As the wealth of Europe, indeed, has +increased greatly since the discovery of the +mines of America, so the value of gold and +silver has gradually diminished. This diminution +of their value, however, has not been +owing to the increase of the real wealth of +Europe, of the annual produce of its land +and labour, but to the accidental discovery of +more abundant mines than any that were +known before. The increase of the quantity +of gold and silver in Europe, and the increase +of its manufactures and agriculture, are two +events which, though they have happened +nearly about the same time, yet have arisen +from very different causes, and have scarce +any natural connection with one another. The +one has arisen from a mere accident, in which +neither prudence nor policy either had or could +have any share; the other, from the fall of +the feudal system, and from the establishment +of a government which afforded to industry +the only encouragement which it requires, +some tolerable security that it shall enjoy the +fruits of its own labour. Poland, where the +feudal system still continues to take place, is +at this day as beggarly a country as it was before +the discovery of America. The money +price of corn, however, has risen; the real value +of the precious metals has fallen in Poland, +in the same manner as in other parts of +Europe. Their quantity, therefore, must have +increased there as in other places, and nearly +in the same proportion to the annual produce +of its land and labour. This increase of the +quantity of those metals, however, has not, it +seems, increased that annual produce, has neither +improved the manufactures and agriculture +of the country, nor mended the circumstances +of its inhabitants. Spain and Portugal, +the countries which possess the mines, +are, after Poland, perhaps the two most beggarly +countries in Europe. The value of the +precious metals, however, must be lower in +Spain and Portugal than in any other part of +Europe, as they come from those countries to +all other parts of Europe, loaded, not only +with a freight and an insurance, but with the +expense of smuggling, their exportation being +either prohibited or subjected to a duty. +In proportion to the annual produce of the +land and labour, therefore, their quantity must +be greater in those countries than in any other +part of Europe; those countries, however, +are poorer than the greater part of Europe. +Though the feudal system has been abolished +in Spain and Portugal, it has not been succeeded +by a much better.</p> + +<p>As the low value of gold and silver, therefore, +is no proof of the wealth and flourishing +state of the country where it takes place; so +neither is their high value, or the low money +price either of goods in general, or of corn in +particular, any proof of its poverty and barbarism.</p> + +<p>But though the low money price, either of +goods in general, or of corn in particular, be +no proof of the poverty or barbarism of the +times, the low money price, of some particular +sorts of goods, such as cattle, poultry<span class='pagenum'><a name="Page_102" id="Page_102">[Pg 102]</a></span> +game of all kinds, &c. in proportion to that +of corn, is a most decisive one. It clearly demonstrates, +first, their great abundance in proportion +to that of corn, and, consequently, the +great extent of the land which they occupied +in proportion to what was occupied by corn; +and, secondly, the low value of this land in +proportion to that of corn land, and, consequently, +the uncultivated and unimproved state +of the far greater part of the lands of the +country. It clearly demonstrates, that the stock +and population of the country did not bear +the same proportion to the extent of its territory, +which they commonly do in civilized +countries; and that society was at that time, +and in that country, but in its infancy. From +the high or low money price, either of goods +in general, or of corn in particular, we can +infer only, that the mines, which at that time +happened to supply the commercial world with +gold and silver, were fertile or barren, not +that the country was rich or poor. But from +the high or low money price of some sorts of +goods in proportion to that of others, we +infer, with a degree of probability that approaches +almost to certainty, that it was rich +or poor, that the greater part of its lands were +improved or unimproved, and that it was either +in a more or less barbarous state, or in a more +or less civilised one.</p> + +<p>Any rise in the money price of goods which +proceeded altogether from the degradation of +the value of silver, would affect all sorts of +goods equally, and raise their price universally, +a third, or a fourth, or a fifth part higher, according +as silver happened to lose a third, or +a fourth, or a fifth part of its former value. +But the rise in the price of provisions, which +has been the subject of so much reasoning +and conversation, does not affect all sorts of +provisions equally. Taking the course of the +present century at an average, the price of +corn, it is acknowledged, even by those who +account for this rise by the degradation of the +value of silver, has risen much less than that +of some other sorts of provisions. The rise +in the price of those other sorts of provisions, +therefore, cannot be owing altogether to the +degradation of the value of silver. Some +other causes must be taken into the account; +and those which have been above assigned, +will, perhaps, without having recourse to the +supposed degradation of the value of silver, +sufficiently explain this rise in those particular +sorts of provisions, of which the price has actually +risen in proportion to that of corn.</p> + +<p>As to the price of corn itself, it has, during +the sixty-four first years of the present century, +and before the late extraordinary course +of bad seasons, been somewhat lower than +was during the sixty-four last years of the preceding +century. This fact is attested, not only +by the accounts of Windsor market, but by +the public fiars of all the different counties of +Scotland, and by the accounts of several different +markets in France, which have been +collected with great diligence and fidelity by +Mr Messance, and by Mr Dupré de St Maur. +The evidence is more complete than could +well have been expected in a matter which is +naturally so very difficult to be ascertained.</p> + +<p>As to the high price of corn during these +last ten or twelve years, it can be sufficiently +accounted for from the badness of the seasons, +without supposing any degradation in the +value of silver.</p> + +<p>The opinion, therefore, that silver is continually +sinking in its value, seems not to be +founded upon any good observations, either +upon the prices of corn, or upon those of +other provisions.</p> + +<p>The same quantity of silver, it may perhaps +be said, will, in the present times, even according +to the account which has been here given, +purchase a much smaller quantity of several +sorts of provisions than it would have done +during some part of the last century; and to +ascertain whether this change be owing to a +rise in the value of those goods, or to a fall in +the value of silver, is only to establish a vain +and useless distinction, which can be of no +sort of service to the man who has only a certain +quantity of silver to go to market with, +or a certain fixed revenue in money. I certainly +do not pretend that the knowledge of +this distinction will enable him to buy cheaper. +It may not, however, upon that account be altogether +useless.</p> + +<p>It may be of some use to the public, by affording +an easy proof of the prosperous condition +of the country. If the rise in the price +of some sorts of provisions be owing altogether +to a fall in the value of silver, it is owing +to a circumstance, from which nothing can be +inferred but the fertility of the American +mines. The real wealth of the country, the +annual produce of its land and labour, may, +notwithstanding this circumstance, be either +gradually declining, as in Portugal and Poland; +or gradually advancing, as in most other +parts of Europe. But if this rise in the price +of some sorts of provisions be owing to a rise +in the real value of the land which produces +them, to its increased fertility, or, in consequence +of more extended improvement and +good cultivation, to its having been rendered +fit for producing corn; it is owing to a circumstance +which indicates, in the clearest +manner, the prosperous and advancing state +of the country. The land constitutes by far +the greatest, the most important, and the most +durable part of the wealth of every extensive +country. It may surely be of some use, or, +at least, it may give some satisfaction to the +public, to have so decisive a proof of the increasing +value of by far the greatest, the most +important, and the most durable part of its +wealth.</p> + +<p>It may, too, be of some use to the public, +in regulating the pecuniary reward of some of<span class='pagenum'><a name="Page_103" id="Page_103">[Pg 103]</a></span> +its inferior servants. If this rise in the price +of some sorts of provisions be owing to a fall +in the value of silver, their pecuniary reward, +provided it was not too large before, ought +certainly to be augmented in proportion to +the extent of this fall. If it is not augmented, +their real recompence will evidently be so +much diminished. But if this rise of price is +owing in the increased value, in consequence +of the improved fertility of the land which +produces such provisions, it becomes a much +nicer matter to judge, either in what proportion +any pecuniary reward ought to be augmented, +or whether it ought to be augmented +at all. The extension of improvement and +cultivation, as it necessarily raises more or less, +in proportion to the price of corn, that of +every sort of animal food, so it as necessarily +lowers that of, I believe, every sort of vegetable +food. It raises the price of animal +food; because a great part of the land which +produces it, being rendered fit for producing +corn, must afford to the landlord and farmer +the rent and profit of corn land. It lowers +the price of vegetable food; because, by increasing +the fertility of the land, it increases +its abundance. The improvements of agriculture, +too, introduce many sorts of vegetable +food, which requiring less land, and not more +labour than corn, come much cheaper to market. +Such are potatoes and maize, or what is +called Indian corn, the two most important +improvements which the agriculture of Europe, +perhaps, which Europe itself, has received +from the great extension of its commerce +and navigation. Many sorts of vegetable food, +besides, which in the rude state of agriculture +are confined to the kitchen-garden, and raised +only by the spade, come, in its improved state, +to be introduced into common fields, and to +be raised by the plough; such as turnips, carrots, +cabbages, &c. If, in the progress of improvement, +therefore, the real price of one +species of food necessarily rises, that of another +as necessarily falls; and it becomes a matter +of more nicety to judge how far the rise +in the one may be compensated by the fall in +the other. When the real price of butcher's +meat has once got to its height (which, with +regard to every sort, except perhaps that of +hogs flesh, it seems to have done through a +great part of England more than a century +ago), any rise which can afterwards happen in +that of any other sort of animal food, cannot +much affect the circumstances of the inferior +ranks of people. The circumstances of the +poor, through a great part of England, cannot +surely be so much distressed by any rise in +the price of poultry, fish, wild-fowl, or venison, +as they must he relieved by the fall in +that of potatoes.</p> + +<p>In the present season of scarcity, the high +price of corn no doubt distresses the poor. +But in times of moderate plenty, when corn +is at its ordinary or average price, the natural +rise in the price of any other sort of rude produce +cannot much affect them. They suffer +more, perhaps, by the artificial rise which has +been occasioned by taxes in the price of some +manufactured commodities, as of salt, soap, +leather, candles, malt, beer, ale, &c.</p> + + +<h4><i>Effects of the Progress of Improvement upon +the real Price of Manufactures.</i></h4> + +<p>It is the natural effect of improvement, +however, to diminish gradually the real price +of almost all manufactures. That of the manufacturing +workmanship diminishes, perhaps, +in all of them without exception. In consequence +of better machinery, of greater dexterity, +and of a more proper division and distribution +of work, all of which are the natural +effects of improvement, a much smaller quantity +of labour becomes requisite for executing +any particular piece of work; and though, in +consequence of the flourishing circumstances +of the society, the real price of labour should +rise very considerably, yet the great diminution +of the quantity will generally much more +than compensate the greatest rise which can +happen in the price.</p> + +<p>There are, indeed, a few manufactures, in +which the necessary rise in the real price of +the rude materials will more than compensate +all the advantages which improvement can introduce +into the execution of the work. In +carpenters' and joiners' work, and in the +coarser sort of cabinet work, the necessary +rise in the real price of barren timber, in consequence +of the improvement of land, will +more than compensate all the advantages +which can be derived from the best machinery, +the greatest dexterity, and the most proper +division and distribution of work.</p> + +<p>But in all cases in which the real price of +the rude material either does not rise at all, +or does not rise very much, that of the manufactured +commodity sinks very considerably.</p> + +<p>This diminution of price has, in the course +of the present and preceding century, been +most remarkable in these manufactures of +which the materials are the coarser metals. A +better movement of a watch, than about the +middle of the last century could have been +bought for twenty pounds, may now perhaps +be had for twenty shillings. In the work of +cutlers and locksmiths, in all the toys which +are made of the coarser metals, and in all +those goods which are commonly known by +the name of Birmingham and Sheffield ware, +there has been, during the same period, a +very great reduction of price, though not altogether +so great as in watch-work. It has, +however, been sufficient to astonish the workmen +of every other part of Europe, who in +many cases acknowledge that they can produce +no work of equal goodness for double<span class='pagenum'><a name="Page_104" id="Page_104">[Pg 104]</a></span> +or even for triple the price. There are perhaps +no manufactures, in which the division +of labour can be carried further, or in which +the machinery employed admits of a greater +variety of improvements, than those of which +the materials are the coarser metals.</p> + +<p>In the clothing manufacture there has, during +the same period, been no such sensible reduction +of price. The price of superfine +cloth, I have been assured, on the contrary, +has, within these five-and-twenty or thirty +years, risen somewhat in proportion to its +quality, owing, it was said, to a considerable +rise in the price of the material, which consists +altogether of Spanish wool. That of the +Yorkshire cloth, which is made altogether of +English wool, is said, indeed, during the +course of the present century, to have fallen a +good deal in proportion to its quality. Quality, +however, is so very disputable a matter, +that I look upon all information of this kind +as somewhat uncertain. In the clothing manufacture, +the division of labour is nearly the +same now as it was a century ago, and the +machinery employed is not very different. +There may, however, have been some small +improvements in both, which may have occasioned +some reduction of price.</p> + +<p>But the reduction will appear much more +sensible and undeniable, if we compare the +price of this manufacture in the present times +with what it was in a much remoter period, +towards the end of the fifteenth century, when +the labour was probably much less subdivided, +and the machinery employed much more +imperfect, than it is at present.</p> + +<p>In 1487, being the 4th of Henry VII., it +was enacted, that "whosoever shall sell by retail +a broad yard of the finest scarlet grained, +or of other grained cloth of the finest making, +above sixteen shillings, shall forfeit forty shillings +for every yard so sold." Sixteen shillings, +therefore, containing about the same +quantity of silver as four-and-twenty shillings +of our present money, was, at that time, reckoned +not an unreasonable price for a yard of +the finest cloth; and as this is a sumptuary +law, such cloth, it is probable, had usually +been sold somewhat dearer. A guinea may +be reckoned the highest price in the present +times. Even though the quality of the cloths, +therefore, should be supposed equal, and that +of the present times is most probably much +superior, yet, even upon this supposition, the +money price of the finest cloth appears to have +been considerably reduced since the end of the +fifteenth century. But its real price has been +much more reduced. Six shillings and eightpence +was then, and long afterwards, reckoned +the average price of a quarter of wheat. +Sixteen shillings, therefore, was the price of +two quarters and more than three bushels of +wheat. Valuing a quarter of wheat in the +present times at eight-and-twenty shillings, +the real price of a yard of fine cloth must, in +those times, have been equal to at least three +pounds six shillings and sixpence of our present +money. The man who bought it must +have parted with the command of a quantity +of labour and subsistence equal to what that +sum would purchase in the present times.</p> + +<p>The reduction in the real price of the coarse +manufacture, though considerable, has not +been so great as in that of the fine.</p> + +<p>In 1463, being the 3d of Edward IV. it +was enacted, that "no servant in husbandry +nor common labourer, nor servant to any artificer +inhabiting out of a city or burgh, shall +use or wear in their clothing any cloth above +two shillings the broad yard." In the 3d of +Edward IV., two shillings contained very +nearly the same quantity of silver as four of +our present money. But the Yorkshire cloth +which is now sold at four shillings the yard, +is probably much superior to any that was +then made for the wearing of the very poorest +order of common servants. Even the money +price of their clothing, therefore, may, in proportion +to the quality, be somewhat cheaper +in the present than it was in those ancient +times. The real price is certainly a good deal +cheaper. Tenpence was then reckoned what +is called the moderate and reasonable price of +a bushel of wheat. Two shillings, therefore, +was the price of two bushels and near two +pecks of wheat, which in the present times, at +three shillings and sixpence the bushel, would +be worth eight shillings and ninepence. For +a yard of this cloth the poor servant must have +parted with the power of purchasing a quantity +of subsistence equal to what eight shillings +and ninepence would purchase in the present +times. This is a sumptuary law, too, restraining +the luxury and extravagance of the poor. +Their clothing, therefore, had commonly been +much more expensive.</p> + +<p>The same order of people are, by the same +law, prohibited from wearing hose, of which +the price should exceed fourteen-pence the +pair, equal to about eight-and-twenty pence of +our present money. But fourteen-pence was +in those times the price of a bushel and near +two pecks of wheat; which in the present +times, at three and sixpence the bushel, would +cost five shillings and threepence. We should +in the present times consider this a very +high price for a pair of stockings to a servant +of the poorest and lowest order. He must, +however, in these times, have paid what was +really equivalent to this price for them.</p> + +<p>In the time of Edward IV. the art of knitting +stockings was probably not known in any +part of Europe. Their hose were made of +common cloth, which may have been one of +the causes of their dearness. The first person +that wore stockings in England is said to +have been Queen Elizabeth. She received +them as a present from the Spanish ambassador.</p> + +<p>Both in the coarse and in the fine woollen<span class='pagenum'><a name="Page_105" id="Page_105">[Pg 105]</a></span> +manufacture, the machinery employed was +much more imperfect in those ancient, than +it is in the present times. It has since received +three very capital improvements, besides, +probably, many smaller ones, of which +it may be difficult to ascertain either the number +or the importance. The three capital improvements +are, first, the exchange of the rock +and spindle for the spinning-wheel, which, +with the same quantity of labour, will perform +more than double the quantity of work. Secondly, +the use of several very ingenious machines, +which facilitate and abridge, in a still +greater proportion, the winding of the worsted +and woollen yarn, or the proper arrangement +of the warp and woof before they are put into +the loom, an operation which, previous to +the invention of those machines, must have +been extremely tedious and troublesome.—Thirdly, +the employment of the fulling-mill +for thickening the cloth, instead of treading +it in water. Neither wind nor water mills of +any kind were known in England so early as +the beginning of the sixteenth century, nor, +so far as I know, in any other part of Europe +north of the Alps. They had been introduced +into Italy some time before.</p> + +<p>The consideration of these circumstances +may, perhaps, in some measure, explain to us +why the real price both of the course and of +the fine manufacture was so much higher in +those ancient than it is in the present times. +It cost a greater quantity of labour to bring +the goods to market. When they were brought +thither, therefore, they must have purchased, +or exchanged for the price of, a greater quantity.</p> + +<p>The coarse manufacture probably was, in +these ancient times, carried on in England in +the same manner as it always has been in countries +where arts and manufactures are in their +infancy. It was probably a household manufacture, +in which every different part of the +work was occasionally performed by all the +different members of almost every private family, +but so as to be their work only when +they had nothing else to do, and not to be the +principal business from which any of them derived +the greater part of their subsistence. The +work which is performed in this manner, it +has already been observed, comes always much +cheaper to market than that which is the principal +or sole fund of the workman's subsistence. +The fine manufacture, on the other +hand, was not, in those times, carried on in +England, but in the rich and commercial +country of Flanders; and it was probably +conducted then, in the same manner as now, +by people who derived the whole, or the principal +part of their subsistence from it. It was, +besides, a foreign manufacture, and must have +paid some duty, the ancient custom of tonnage +and poundage at least, to the king. This +duty, indeed, would not probably be very +great. It was not then the policy of Europe +to restrain, by high duties, the importation of +foreign manufactures, but rather to encourage +it, in order that merchants might be enabled +to supply, at as easy a rate as possible, +the great men with the conveniencies and luxuries +which they wanted, and which the industry +of their own country could not afford +them.</p> + +<p>The consideration of these circumstances +may, perhaps, in some measure explain to us +why, in those ancient times, the real price of +the coarse manufacture was, in proportion to +that of the fine, so much lower than in the +present times.</p> + + +<h4><i>Conclusion of the Chapter.</i></h4> + +<p>I shall conclude this very long chapter with +observing, that every improvement in the circumstances +of the society tends, either directly +or indirectly, to raise the real rent of land, +to increase the real wealth of the landlord, his +power of purchasing the labour, or the produce +of the labour of other people.</p> + +<p>The extension of improvement and cultivations +tends to raise it directly. The landlord's +share of the produce necessarily increases with +the increase of the produce.</p> + +<p>That rise in the real price of these parts of +the rude produce of land, which is first the +effect of the extended improvement and cultivation, +and afterwards the cause of their being +still further extended, the rise in the price +of cattle, for example, tends, too, to raise the +rent of land directly, and in a still greater +proportion. The real value of the landlord's +share, his real command of the labour of other +people, not only rises with the real value of +the produce, but the proportion of his share to +the whole produce rises with it.</p> + +<p>That produce, after the rise in its real price, +requires no more labour to collect it than before. +A smaller proportion of it will, therefore, +be sufficient to replace, with the ordinary +profit, the stock which employs that labour. +A greater proportion of it must consequently +belong to the landlord.</p> + +<p>All those improvements in the productive +powers of labour, which tend directly to reduce +the rent price of manufactures, tend indirectly +to raise the real rent of land. The +landlord exchanges that part of his rude produce, +which is over and above his own consumption, +or, what comes to the same thing, +the price of that part of it, for manufactured +produce. Whatever reduces the real price of +the latter, raises that of the former. An equal +quantity of the former becomes thereby equivalent +to a greater quantity of the latter; and +the landlord is enabled to purchase a greater +quantity of the conveniencies, ornaments, or +luxuries which he has occasion for.</p> + +<p>Every increase in the real wealth of the society, +every increase in the quantity of useful<span class='pagenum'><a name="Page_106" id="Page_106">[Pg 106]</a></span> +labour employed within it, tends indirectly to +raise the real rent of land. A certain proportion +of this labour naturally goes to the land. +A greater number of men and cattle are employed +in its cultivation, the produce increases +with the increase of the stock which is thus +employed in raising it, and the rent increases +with the produce.</p> + +<p>The contrary circumstances, the neglect of +cultivation and improvement, the fall in the +real price of any part of the rude produce of +land, the rise in the real price of manufactures +from the decay of manufacturing art and industry, +the declension of the real wealth of +the society, all tend, on the other hand, to +lower the real rent of land, to reduce the real +wealth of the landlord, to diminish his power +of purchasing either the labour, or the produce +of the labour, of other people.</p> + +<p>The whole annual produce of the land and +labour of every country, or, what comes to the +same thing, the whole price of that annual +produce, naturally divides itself, it has already +been observed, into three parts; the rent of +land, the wages of labour, and the profits of +stock; and constitutes a revenue to three different +orders of people; to those who live by +rent, to these who live by wages, and to those +who live by profit. These are the three great, +original, and constituent, orders of every civilized +society, from whose revenue that of every +other order is ultimately derived.</p> + +<p>The interest of the first of those three great +orders, it appears from what has been just now +said, is strictly and inseparably connected with +the general interest of the society. Whatever +either promotes or obstructs the one, necessarily +promotes or obstructs the other. When +the public deliberates concerning any regulation +of commerce or police, the proprietors of +land never can mislead it, with a view to promote +the interest of their own particular order; +at least, if they have any tolerable knowledge +of that interest. They are, indeed, too +often defective in this tolerable knowledge. +They are the only one of the three orders +whose revenue costs them neither labour nor +care, but comes to them, as it were, of its own +accord, and independent of any plan or project +of their own. That indolence which is +the natural effect of the ease and security of +their situation, renders them too often, not +only ignorant, but incapable of that application +of mind, which is necessary in order to +foresee and understand the consequence of any +public regulation.</p> + +<p>The interest of the second order, that of +those who live by wages, is as strictly connected +with the interest of the society as that of the +first. The wages of the labourer, it has already +been shewn, are never so high as when +the demand for labour is continually rising, +or when the quantity employed is every year +increasing considerably. When this real wealth +of the society becomes stationary, his wages +are soon reduced to what is barely enough to +enable him to bring up a family, or to continue +the race of labourers. When the society +declines, they fall even below this. The +order of proprietors may perhaps gain more +by the prosperity of the society than that of +labourers; but there is no order that suffers +so cruelly from its decline. But though the +interest of the labourer is strictly connected +with that of the society, he is incapable either +of comprehending that interest, or of understanding +its connexion with his own. His +condition leaves him no time to receive the +necessary information, and his education and +habits are commonly such as to render him +unfit to judge, even though he was fully informed. +In the public deliberations, therefore, +his voice is little heard, and less regarded; +except upon particular occasions, when +his clamour is animated, set on, and supported +by his employers, not for him, but their +own particular purposes.</p> + +<p>His employers constitute the third order, +that of those who live by profit. It is the +stock that is employed for the sake of profit, +which puts into motion the greater part of the +useful labour of every society. The plans and +projects of the employers of stock regulate and +direct all the most important operations of labour, +and profit is the end proposed by all +those plans and projects. But the rate of +profit does not, like rent and wages, rise with +the prosperity, and fall with the declension of +the society. On the contrary, it is naturally +low in rich, and high in poor countries, and +it is always highest in the countries which are +going fastest to ruin. The interest of this +third order, therefore, has not the same connexion +with the general interest of the society, +as that of the other two. Merchants and +master manufacturers are, in this order, the +two classes of people who commonly employ +the largest capitals, and who by their wealth +draw to themselves the greatest share of the +public consideration. As during their whole +lives they are engaged in plans and projects, +they have frequently more acuteness of understanding +than the greater part of country +gentlemen. As their thoughts, however, are +commonly exercised rather about the interest +of their own particular branch of business +than about that of the society, their judgment, +even when given with the greatest candour +(which it has not been upon every occasion), +is much more to be depended upon with regard +to the former of those two objects, than +with regard to the latter. Their superiority +over the country gentleman is, not so much in +their knowledge of the public interest, as in +their having a better knowledge of their own +interest than he has of his. It is by this superior +knowledge of their own interest that +they have frequently imposed upon his generosity, +and persuaded him to give up both his +own interest and that of the public, from a<span class='pagenum'><a name="Page_107" id="Page_107">[Pg 107]</a></span> +very simple but honest conviction, that their +interest, and not his, was the interest of the +public. The interest of the dealers, however, +in any particular branch of trade or manufactures, +is always in some respects different from, +and even opposite to, that of the public. To +widen the market, and to narrow the competition, +is always the interest of the dealers. +To widen the market may frequently be agreeable +enough to the interest of the public; but +to narrow the competition must always be +against it, and can only serve to enable the +dealers, by raising their profits above what +they naturally would be, to levy, for their own +benefit, an absurd tax upon the rest of their +fellow-citizens. The proposal of any new law +or regulation of commerce which comes from +this order, ought always to be listened to with +great precaution, and ought never to be adopted +till after having been long and carefully +examined, not only with the most scrupulous, +but with the most suspicious attention. It +comes from an order of men, whose interest +is never exactly the same with that of the public, +who have generally an interest to deceive +and even to oppress the public, and who accordingly +have, upon many occasions, both deceived +and oppressed it.<span class='pagenum'><a name="Page_108" id="Page_108">[Pg 108]</a></span></p> + + + +<h4>PRICES OF WHEAT.</h4> + + +<div class='center'> +<table border="0" cellpadding="8" cellspacing="2" summary="" rules="cols"> +<tr> +<th class='bbox'>Years<br />XII.</th> +<th class='bbox'>Price of the <br /> Quarter of <br /> Wheat each <br /> Year.</th> +<th class='bbox'>Average of <br /> the different <br /> Prices of the <br /> same Year.</th> +<th class='bbox'>The Average Price <br /> of each Year <br /> in Money of <br /> the present times.</th> +</tr> +<tr><td align='right'></td><td align='right'> L. s. d.</td><td align='right'> L. s. d.</td><td align='right'> L. s. d.</td></tr> +<tr><td align='right'> 1202</td><td align='right'> 0 12 0</td><td align='right'> - - -</td><td align='right'> 1 16 0</td></tr> +<tr><td align='right'> 1205</td><td align='right'> 0 12 0<br />0 13 4<br />0 15 0</td><td align='right'>0 13 5</td><td align='right'> 2 0 3</td></tr> +<tr><td align='right'> 1223</td><td align='right'> 0 12 0</td><td align='right'> - - -</td><td align='right'> 1 16 0</td></tr> +<tr><td align='right'> 1237</td><td align='right'> 0 3 4</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> +<tr><td align='right'> 1243</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 6 0</td></tr> +<tr><td align='right'> 1244</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 6 0</td></tr> +<tr><td align='right'> 1246</td><td align='right'> 0 16 0</td><td align='right'> - - -</td><td align='right'> 2 8 0</td></tr> +<tr><td align='right'> 1247</td><td align='right'> 0 13 5</td><td align='right'> - - -</td><td align='right'> 2 0 0</td></tr> +<tr><td align='right'> 1257</td><td align='right'> 1 4 0</td><td align='right'> - - -</td><td align='right'> 3 12 0</td></tr> +<tr><td align='right'> 1258</td><td align='right'> 1 0 0<br />0 15 0<br />0 16 0</td><td align='right'>0 17 0</td><td align='right'> 2 11 0</td></tr> +<tr><td align='right'> 1270</td><td align='right'>4 16 0<br />6 8 0</td><td align='right'>5 12 0</td><td align='right'> 16 16 0</td></tr> +<tr><td align='right'> 1286</td><td align='right'>0 2 8<br />0 16 0</td><td align='right'>0 9 4</td><td align='right'> 1 8 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='bbox'> 35 9 3</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Average price,</td><td class='fracpart'> 2 19 1¼</td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1287</td><td align='right'> 0 3 4</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> +<tr><td align='right'> 1288</td><td align='right'>0 0 8<br />0 1 0<br />0 1 4<br />0 1 6<br />0 1 8<br />0 2 0<br />0 3 4<br />0 9 4</td><td class='fracpart'> 0 3 0¼</td><td class='fracpart'> 0 9 1¾</td></tr> +<tr><td align='right'> 1289</td><td align='right'>0 12 0<br />0 6 0<br />0 2 0<br />0 10 8<br />1 0 0</td><td class='fracpart'> 0 10 1½</td><td class='fracpart'> 1 10 4½</td></tr> +<tr><td align='right'> 1290</td><td align='right'> 0 16 0</td><td align='right'> - - -</td><td align='right'> 2 8 0</td></tr> +<tr><td align='right'> 1294</td><td align='right'> 0 16 0</td><td align='right'> - - -</td><td align='right'> 2 8 0</td></tr> +<tr><td align='right'> 1302</td><td align='right'> 0 4 0</td><td align='right'> - - -</td><td align='right'> 0 12 0</td></tr> +<tr><td align='right'> 1309</td><td align='right'> 0 7 2</td><td align='right'> - - -</td><td align='right'> 1 1 6</td></tr> +<tr><td align='right'> 1315</td><td align='right'> 1 0 0</td><td align='right'> - - -</td><td align='right'> 3 0 0</td></tr> +<tr><td align='right'> 1316</td><td align='right'> 1 0 0<br />1 10 0<br />1 12 0<br />2 0 0</td><td align='right'> 1 10 6</td><td align='right'> 4 11 6</td></tr> +<tr><td align='right'> 1317</td><td align='right'> 2 4 0<br />0 14 0<br />2 13 0<br />4 0 0<br />0 6 8</td><td align='right'> 1 19 6</td><td align='right'> 5 18 6</td></tr> +<tr><td align='right'> 1336</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 6 0</td></tr> +<tr><td align='right'> 1338</td><td align='right'> 0 3 4</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='fracpart bbox'> 23 4 11¼</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Average price,</td><td align='right'> 1 18 8 </td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1339</td><td align='right'> 0 9 0</td><td align='right'> - - -</td><td align='right'> 1 7 0</td></tr> +<tr><td align='right'> 1349</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 5 2</td></tr> +<tr><td align='right'> 1359</td><td align='right'> 1 6 8</td><td align='right'> - - -</td><td align='right'> 3 2 2</td></tr> +<tr><td align='right'> 1361</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 4 8</td></tr> +<tr><td align='right'> 1363</td><td align='right'> 0 15 0</td><td align='right'> - - -</td><td align='right'> 1 15 0</td></tr> +<tr><td align='right'> 1369</td><td align='right'> 1 0 0<br />1 4 0</td><td align='right'> 1 2 0</td><td align='right'> 2 9 4</td></tr> +<tr><td align='right'> 1379</td><td align='right'> 0 4 0</td><td align='right'> - - -</td><td align='right'> 0 9 4</td></tr> +<tr><td align='right'> 1387</td><td align='right'> 0 2 0</td><td align='right'> - - -</td><td align='right'> 0 4 8</td></tr> +<tr><td align='right'> 1390</td><td align='right'> 0 13 4<br />0 14 0<br />0 16 0</td><td align='right'> 0 14 5</td><td align='right'> 1 13 7</td></tr> +<tr><td align='right'> 1401</td><td align='right'> 0 16 0</td><td align='right'> - - -</td><td align='right'> 1 17 6</td></tr> +<tr><td align='right'> 1407</td><td class='fracpart'> 0 4 4¾<br />0 3 4 </td><td class='fracpart'> 0 3 10</td><td class='fracpart'> 0 8 11</td></tr> +<tr><td align='right'> 1416</td><td align='right'> 0 16 0</td><td align='right'> - - -</td><td align='right'> 1 12 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='bbox'> 15 9 4</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Aver. price,</td><td class='fracpart'> 1 5 9½</td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1423</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 16 0</td></tr> +<tr><td align='right'> 1425</td><td align='right'> 0 4 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1434</td><td align='right'> 1 6 8</td><td align='right'> - - -</td><td align='right'> 2 13 4</td></tr> +<tr><td align='right'> 1435</td><td align='right'> 0 5 4</td><td align='right'> - - -</td><td align='right'> 0 10 8</td></tr> +<tr><td align='right'> 1439</td><td align='right'> 1 0 0<br />1 6 8</td><td align='right'> 1 3 4</td><td align='right'> 2 6 8</td></tr> +<tr><td align='right'> 1440</td><td align='right'> 1 4 0</td><td align='right'> - - -</td><td align='right'> 2 8 0</td></tr> +<tr><td align='right'> 1444</td><td align='right'> 0 4 4<br />0 4 0</td><td align='right'> 0 4 2</td><td align='right'> 0 8 4</td></tr> +<tr><td align='right'> 1445</td><td align='right'> 0 4 6</td><td align='right'> - - -</td><td align='right'> 0 9 0</td></tr> +<tr><td align='right'> 1447</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 16 0</td></tr> +<tr><td align='right'> 1448</td><td align='right'> 0 6 8</td><td align='right'> - - -</td><td align='right'> 0 13 4</td></tr> +<tr><td align='right'> 1449</td><td align='right'> 0 5 0</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> +<tr><td align='right'> 1451</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 16 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='bbox'> 12 15 4</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Aver. price,</td><td class='fracpart'> 1 1 3⅓</td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1453</td><td align='right'> 0 5 4</td><td align='right'> - - -</td><td align='right'> 0 10 8</td></tr> +<tr><td align='right'> 1455</td><td align='right'> 0 1 2</td><td align='right'> - - -</td><td align='right'> 0 2 4</td></tr> +<tr><td align='right'> 1457</td><td align='right'> 0 7 8</td><td align='right'> - - -</td><td align='right'> 0 15 4</td></tr> +<tr><td align='right'> 1459</td><td align='right'> 0 5 0</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> +<tr><td align='right'> 1460</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 16 0</td></tr> +<tr><td align='right'> 1463</td><td align='right'> 0 2 0<br />0 1 8</td><td align='right'> 0 1 10</td><td align='right'> 0 3 8</td></tr> +<tr><td align='right'> 1464</td><td align='right'> 0 6 8</td><td align='right'> - - -</td><td align='right'> 0 10 0</td></tr> +<tr><td align='right'> 1486</td><td align='right'> 1 4 0</td><td align='right'> - - -</td><td align='right'> 1 17 0</td></tr> +<tr><td align='right'> 1491</td><td align='right'> 0 14 8</td><td align='right'> - - -</td><td align='right'> 1 2 0</td></tr> +<tr><td align='right'> 1494</td><td align='right'> 0 4 0</td><td align='right'> - - -</td><td align='right'> 0 6 0</td></tr> +<tr><td align='right'> 1495</td><td align='right'> 0 3 4</td><td align='right'> - - -</td><td align='right'> 0 5 0</td></tr> +<tr><td align='right'> 1497</td><td align='right'> 1 0 0</td><td align='right'> - - -</td><td align='right'> 1 11 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='bbox'> 8 9 0</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Aver. price,</td><td align='right'> 0 14 1</td></tr> + +<tr><td class='bb'><span class='pagenum'><a name="Page_109" id="Page_109">[Pg 109]</a></span></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1499</td><td align='right'> 0 4 0</td><td align='right'> - - -</td><td align='right'> 0 6 0</td></tr> +<tr><td align='right'> 1504</td><td align='right'> 0 5 8</td><td align='right'> - - -</td><td align='right'> 0 8 6</td></tr> +<tr><td align='right'> 1521</td><td align='right'> 1 0 0</td><td align='right'> - - -</td><td align='right'> 1 10 0</td></tr> +<tr><td align='right'> 1551</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1553</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1554</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1555</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1556</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1957</td><td align='right'> 0 4 0<br />0 5 0<br />0 8 0<br />2 13 4</td><td align='right'> 0 17 8½</td><td class='fracpart'> 0 17 8½</td></tr> +<tr><td align='right'> 1558</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1559</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1560</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='fracpart bbox'> 6 0 2½</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Average price,</td><td class='fracpart'> 0 10 0<sup>5</sup>⁄<sub>12</sub></td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +<tr><td align='right'> 1561</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1562</td><td align='right'> 0 8 0</td><td align='right'> - - -</td><td align='right'> 0 8 0</td></tr> +<tr><td align='right'> 1574</td><td align='right'> 2 16 0<br />1 4 0</td><td align='right'> 2 0 0</td><td align='right'> 2 0 0</td></tr> +<tr><td align='right'> 1587</td><td align='right'> 3 4 0</td><td align='right'> - - -</td><td align='right'> 3 4 0</td></tr> +<tr><td align='right'> 1594</td><td align='right'> 2 16 0</td><td align='right'> - - -</td><td align='right'> 2 16 0</td></tr> +<tr><td align='right'> 1595</td><td align='right'> 2 13 0</td><td align='right'> - - -</td><td align='right'> 2 13 0</td></tr> +<tr><td align='right'> 1596</td><td align='right'> 4 0 0</td><td align='right'> - - -</td><td align='right'> 4 0 0</td></tr> +<tr><td align='right'> 1597</td><td align='right'> 5 4 0<br />4 0 0</td><td align='right'> 4 12 0</td><td align='right'> 4 12 0</td></tr> +<tr><td align='right'> 1598</td><td align='right'> 2 16 8</td><td align='right'> - - -</td><td align='right'> 2 16 8</td></tr> +<tr><td align='right'> 1599</td><td align='right'> 1 19 2</td><td align='right'> - - -</td><td align='right'> 1 19 2</td></tr> +<tr><td align='right'> 1600</td><td align='right'> 1 17 8</td><td align='right'> - - -</td><td align='right'> 1 17 8</td></tr> +<tr><td align='right'> 1601</td><td align='right'> 1 14 10</td><td align='right'> - - -</td><td align='right'> 1 14 10</td></tr> + +<tr><td align='right'></td><td align='right'></td><td align='right'>Total,</td><td align='right' class='bbox'> 28 9 4</td></tr> +<tr><td align='right' class='bb'></td><td align='right' class='bb'></td><td align='right' class='bb'>Average price,</td><td class='fracpart'> 2 7 5⅓</td></tr> + +<tr><td class='bb'></td><td class='bb'></td><td class='bb'></td><td class='bb'></td></tr> + +</table></div> + +<p> </p> + +<h4>PRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT AT WINDSOR +MARKET, ON LADY-DAY AND MICHAELMAS, FROM 1595 TO 1764, BOTH INCLUSIVE; THE +PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE HIGHEST PRICES OF THOSE TWO +MARKET-DAYS.</h4> + + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1595</td><td align='right'>2</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1596</td><td align='right'>2</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1597</td><td align='right'>3</td><td align='right'>9</td><td align='right'>6</td></tr> +<tr><td align='right'>1598</td><td align='right'>2</td><td align='right'>16</td><td align='right'>8</td></tr> +<tr><td align='right'>1599</td><td align='right'>1</td><td align='right'>19</td><td align='right'>2</td></tr> +<tr><td align='right'>1600</td><td align='right'>1</td><td align='right'>17</td><td align='right'>8</td></tr> +<tr><td align='right'>1601</td><td align='right'>1</td><td align='right'>14</td><td align='right'>10</td></tr> +<tr><td align='right'>1602</td><td align='right'>1</td><td align='right'>9</td><td align='right'>4</td></tr> +<tr><td align='right'>1603</td><td align='right'>1</td><td align='right'>15</td><td align='right'>4</td></tr> +<tr><td align='right'>1604</td><td align='right'>1</td><td align='right'>10</td><td align='right'>8</td></tr> +<tr><td align='right'>1605</td><td align='right'>1</td><td align='right'>15</td><td align='right'>10</td></tr> +<tr><td align='right'>1606</td><td align='right'>1</td><td align='right'>13</td><td align='right'>0</td></tr> +<tr><td align='right'>1607</td><td align='right'>1</td><td align='right'>16</td><td align='right'>8</td></tr> +<tr><td align='right'>1608</td><td align='right'>2</td><td align='right'>16</td><td align='right'>8</td></tr> +<tr><td align='right'>1609</td><td align='right'>2</td><td align='right'>10</td><td align='right'>0</td></tr> +<tr><td align='right'>1610</td><td align='right'>1</td><td align='right'>15</td><td align='right'>10</td></tr> +<tr><td align='right'>1611</td><td align='right'>1</td><td align='right'>18</td><td align='right'>8</td></tr> +<tr><td align='right'>1612</td><td align='right'>2</td><td align='right'>2</td><td align='right'>4</td></tr> +<tr><td align='right'>1613</td><td align='right'>2</td><td align='right'>8</td><td align='right'>8</td></tr> +<tr><td align='right'>1614</td><td align='right'>2</td><td align='right'>1</td><td align='right'>8½</td></tr> +<tr><td align='right'>1615</td><td align='right'>1</td><td align='right'>18</td><td align='right'>8</td></tr> +<tr><td align='right'>1616</td><td align='right'>2</td><td align='right'>0</td><td align='right'>4</td></tr> +<tr><td align='right'>1617</td><td align='right'>2</td><td align='right'>8</td><td align='right'>8</td></tr> +<tr><td align='right'>1618</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1619</td><td align='right'>1</td><td align='right'>15</td><td align='right'>4</td></tr> +<tr><td align='right'>1620</td><td align='right'>1</td><td align='right'>10</td><td align='right'>4</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>26)54</td><td align='right'>0</td><td align='right'>6½</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>2</td><td align='right'>1</td><td align='right'>6<sup>9</sup>⁄<sub>13</sub></td></tr> +</table></div> + +<p> </p> + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1621</td><td align='right'>1</td><td align='right'>10</td><td align='right'>4</td></tr> +<tr><td align='right'>1622</td><td align='right'>2</td><td align='right'>18</td><td align='right'>8</td></tr> +<tr><td align='right'>1623</td><td align='right'>2</td><td align='right'>12</td><td align='right'>0</td></tr> +<tr><td align='right'>1624</td><td align='right'>2</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1625</td><td align='right'>2</td><td align='right'>12</td><td align='right'>0</td></tr> +<tr><td align='right'>1626</td><td align='right'>2</td><td align='right'>9</td><td align='right'>4</td></tr> +<tr><td align='right'>1627</td><td align='right'>1</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1628</td><td align='right'>1</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1629</td><td align='right'>2</td><td align='right'>2</td><td align='right'>0</td></tr> +<tr><td align='right'>1630</td><td align='right'>2</td><td align='right'>15</td><td align='right'>8</td></tr> +<tr><td align='right'>1631</td><td align='right'>3</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1632</td><td align='right'>2</td><td align='right'>13</td><td align='right'>4</td></tr> +<tr><td align='right'>1633</td><td align='right'>2</td><td align='right'>18</td><td align='right'>0</td></tr> +<tr><td align='right'>1634</td><td align='right'>2</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1635</td><td align='right'>2</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1636</td><td align='right'>2</td><td align='right'>16</td><td align='right'>8</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>16)40</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>2</td><td align='right'>10</td><td align='right'>0</td></tr> +</table></div> + +<p> </p> + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1637</td><td align='right'>2</td><td align='right'>13</td><td align='right'>0</td></tr> +<tr><td align='right'>1638</td><td align='right'>2</td><td align='right'>17</td><td align='right'>4</td></tr> +<tr><td align='right'>1639</td><td align='right'>2</td><td align='right'>4</td><td align='right'>10</td></tr> +<tr><td align='right'>1640</td><td align='right'>2</td><td align='right'>4</td><td align='right'>8</td></tr> +<tr><td align='right'>1641</td><td align='right'>2</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1642<a name="FNanchor_26_26" id="FNanchor_26_26"></a><a href="#Footnote_26_26" class="fnanchor">[26]</a></td><td align='right'>0</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1643<a href="#Footnote_26_26" class="fnanchor">[26]</a></td><td align='right'>0</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1644<a href="#Footnote_26_26" class="fnanchor">[26]</a></td><td align='right'>0</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1645<a href="#Footnote_26_26" class="fnanchor">[26]</a></td><td align='right'>0</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1646</td><td align='right'>2</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1647</td><td align='right'>3</td><td align='right'>13</td><td align='right'>0</td></tr> +<tr><td align='right'>1648</td><td align='right'>4</td><td align='right'>5</td><td align='right'>0</td></tr> +<tr><td align='right'>1649</td><td align='right'>4</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1650</td><td align='right'>3</td><td align='right'>16</td><td align='right'>8</td></tr> +<tr><td align='right'>1651</td><td align='right'>3</td><td align='right'>13</td><td align='right'>4</td></tr> +<tr><td align='right'>1652</td><td align='right'>2</td><td align='right'>9</td><td align='right'>6</td></tr> +<tr><td align='right'>1653</td><td align='right'>1</td><td align='right'>15</td><td align='right'>6</td></tr> +<tr><td align='right'>1654</td><td align='right'>1</td><td align='right'>6</td><td align='right'>0</td></tr> +<tr><td align='right'>1655</td><td align='right'>1</td><td align='right'>13</td><td align='right'>4</td></tr> +<tr><td align='right'>1656</td><td align='right'>2</td><td align='right'>3</td><td align='right'>0</td></tr> +<tr><td align='right'>1657</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1658</td><td align='right'>3</td><td align='right'>5</td><td align='right'>0</td></tr> +<tr><td align='right'>1659</td><td align='right'>3</td><td align='right'>6</td><td align='right'>0</td></tr> +<tr><td align='right'>1660</td><td align='right'>2</td><td align='right'>16</td><td align='right'>6</td></tr> +<tr><td align='right'>1661</td><td align='right'>3</td><td align='right'>10</td><td align='right'>0</td></tr> +<tr><td align='right'>1662</td><td align='right'>3</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1663</td><td align='right'>2</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1664</td><td align='right'>2</td><td align='right'>0</td><td align='right'>6</td></tr> +<tr><td align='right'>1665</td><td align='right'>2</td><td align='right'>9</td><td align='right'>4</td></tr> +<tr><td align='right'>1666</td><td align='right'>1</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1667</td><td align='right'>1</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1668</td><td align='right'>2</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1669</td><td align='right'>2</td><td align='right'>4</td><td align='right'>4</td></tr> +<tr><td align='right'>1670</td><td align='right'>2</td><td align='right'>1</td><td align='right'>8</td></tr> +<tr><td align='right'>1671</td><td align='right'>2</td><td align='right'>2</td><td align='right'>0</td></tr> +<tr><td align='right'>1672</td><td align='right'>2</td><td align='right'>1</td><td align='right'>0</td></tr> +<tr><td align='right'>1673</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1674</td><td align='right'>3</td><td align='right'>8</td><td align='right'>8</td></tr> +<tr><td align='right'>1675</td><td align='right'>3</td><td align='right'>4</td><td align='right'>8</td></tr> +<tr><td align='right'>1676</td><td align='right'>1</td><td align='right'>18</td><td align='right'>0</td></tr> +<tr><td align='right'>1677</td><td align='right'>2</td><td align='right'>2</td><td align='right'>0</td></tr> +<tr><td align='right'>1678</td><td align='right'>2</td><td align='right'>19</td><td align='right'>0</td></tr> +<tr><td align='right'>1679</td><td align='right'>3</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1680</td><td align='right'>2</td><td align='right'>5</td><td align='right'>0</td></tr> +<tr><td align='right'>1681</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1682</td><td align='right'>2</td><td align='right'>4</td><td align='right'>0</td></tr> +<tr><td align='right'>1683</td><td align='right'>2</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1684</td><td align='right'>2</td><td align='right'>4</td><td align='right'>0</td></tr> +<tr><td align='right'>1685</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1686</td><td align='right'>1</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1687</td><td align='right'>1</td><td align='right'>5</td><td align='right'>2</td></tr> +<tr><td align='right'>1688</td><td align='right'>2</td><td align='right'>6</td><td align='right'>0</td></tr> +<tr><td align='right'>1689</td><td align='right'>1</td><td align='right'>10</td><td align='right'>0</td></tr> +<tr><td align='right'>1690</td><td align='right'>1</td><td align='right'>14</td><td align='right'>8</td></tr> +<tr><td align='right'>1691</td><td align='right'>1</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1692</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1693</td><td align='right'>3</td><td align='right'>7</td><td align='right'>8</td></tr> +<tr><td align='right'>1694</td><td align='right'>3</td><td align='right'>4</td><td align='right'>0</td></tr> +<tr><td align='right'>1695</td><td align='right'>2</td><td align='right'>13</td><td align='right'>0</td></tr> +<tr><td align='right'>1696</td><td align='right'>3</td><td align='right'>11</td><td align='right'>0</td></tr> +<tr><td align='right'>1697</td><td align='right'>3</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1698</td><td align='right'>3</td><td align='right'>8</td><td align='right'>4</td></tr> +<tr><td align='right'>1699</td><td align='right'>3</td><td align='right'>4</td><td align='right'>0</td></tr> +<tr><td align='right'>1700</td><td align='right'>2</td><td align='right'>0</td><td align='right'>0</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>60)153</td><td align='right'>1</td><td align='right'>8</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>2</td><td align='right'>11</td><td align='right'>0½</td></tr> +</table></div> + +<p> <span class='pagenum'><a name="Page_110" id="Page_110">[Pg 110]</a></span></p> + +<p> </p> + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1701</td><td align='right'>1</td><td align='right'>17</td><td align='right'>8</td></tr> +<tr><td align='right'>1702</td><td align='right'>1</td><td align='right'>9</td><td align='right'>6</td></tr> +<tr><td align='right'>1703</td><td align='right'>1</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1704</td><td align='right'>2</td><td align='right'>6</td><td align='right'>6</td></tr> +<tr><td align='right'>1705</td><td align='right'>1</td><td align='right'>10</td><td align='right'>0</td></tr> +<tr><td align='right'>1706</td><td align='right'>1</td><td align='right'>6</td><td align='right'>0</td></tr> +<tr><td align='right'>1707</td><td align='right'>1</td><td align='right'>8</td><td align='right'>6</td></tr> +<tr><td align='right'>1708</td><td align='right'>2</td><td align='right'>1</td><td align='right'>6</td></tr> +<tr><td align='right'>1709</td><td align='right'>3</td><td align='right'>18</td><td align='right'>6</td></tr> +<tr><td align='right'>1710</td><td align='right'>3</td><td align='right'>18</td><td align='right'>0</td></tr> +<tr><td align='right'>1711</td><td align='right'>2</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1712</td><td align='right'>2</td><td align='right'>6</td><td align='right'>4</td></tr> +<tr><td align='right'>1713</td><td align='right'>2</td><td align='right'>11</td><td align='right'>0</td></tr> +<tr><td align='right'>1714</td><td align='right'>2</td><td align='right'>10</td><td align='right'>4</td></tr> +<tr><td align='right'>1715</td><td align='right'>2</td><td align='right'>3</td><td align='right'>0</td></tr> +<tr><td align='right'>1716</td><td align='right'>2</td><td align='right'>8</td><td align='right'>0</td></tr> +<tr><td align='right'>1717</td><td align='right'>2</td><td align='right'>5</td><td align='right'>8</td></tr> +<tr><td align='right'>1718</td><td align='right'>1</td><td align='right'>18</td><td align='right'>10</td></tr> +<tr><td align='right'>1719</td><td align='right'>1</td><td align='right'>15</td><td align='right'>0</td></tr> +<tr><td align='right'>1720</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1721</td><td align='right'>1</td><td align='right'>17</td><td align='right'>6</td></tr> +<tr><td align='right'>1722</td><td align='right'>1</td><td align='right'>16</td><td align='right'>0</td></tr> +<tr><td align='right'>1723</td><td align='right'>1</td><td align='right'>14</td><td align='right'>8</td></tr> +<tr><td align='right'>1724</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1725</td><td align='right'>2</td><td align='right'>8</td><td align='right'>6</td></tr> +<tr><td align='right'>1726</td><td align='right'>2</td><td align='right'>6</td><td align='right'>0</td></tr> +<tr><td align='right'>1727</td><td align='right'>2</td><td align='right'>2</td><td align='right'>0</td></tr> +<tr><td align='right'>1728</td><td align='right'>2</td><td align='right'>14</td><td align='right'>6</td></tr> +<tr><td align='right'>1729</td><td align='right'>2</td><td align='right'>6</td><td align='right'>10</td></tr> +<tr><td align='right'>1730</td><td align='right'>1</td><td align='right'>16</td><td align='right'>6</td></tr> +<tr><td align='right'>1731</td><td align='right'>1</td><td align='right'>12</td><td align='right'>10</td></tr> +<tr><td align='right'>1732</td><td align='right'>1</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1733</td><td align='right'>1</td><td align='right'>8</td><td align='right'>4</td></tr> +<tr><td align='right'>1734</td><td align='right'>1</td><td align='right'>18</td><td align='right'>10</td></tr> +<tr><td align='right'>1735</td><td align='right'>2</td><td align='right'>3</td><td align='right'>0</td></tr> +<tr><td align='right'>1736</td><td align='right'>2</td><td align='right'>0</td><td align='right'>4</td></tr> +<tr><td align='right'>1737</td><td align='right'>1</td><td align='right'>18</td><td align='right'>0</td></tr> +<tr><td align='right'>1738</td><td align='right'>1</td><td align='right'>15</td><td align='right'>6</td></tr> +<tr><td align='right'>1739</td><td align='right'>1</td><td align='right'>18</td><td align='right'>6</td></tr> +<tr><td align='right'>1740</td><td align='right'>2</td><td align='right'>10</td><td align='right'>8</td></tr> +<tr><td align='right'>1741</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1742</td><td align='right'>1</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1743</td><td align='right'>1</td><td align='right'>4</td><td align='right'>10</td></tr> +<tr><td align='right'>1744</td><td align='right'>1</td><td align='right'>4</td><td align='right'>10</td></tr> +<tr><td align='right'>1745</td><td align='right'>1</td><td align='right'>7</td><td align='right'>6</td></tr> +<tr><td align='right'>1746</td><td align='right'>1</td><td align='right'>19</td><td align='right'>0</td></tr> +<tr><td align='right'>1747</td><td align='right'>1</td><td align='right'>14</td><td align='right'>10</td></tr> +<tr><td align='right'>1748</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1749</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1750</td><td align='right'>1</td><td align='right'>12</td><td align='right'>6</td></tr> +<tr><td align='right'>1751</td><td align='right'>1</td><td align='right'>18</td><td align='right'>6</td></tr> +<tr><td align='right'>1752</td><td align='right'>2</td><td align='right'>1</td><td align='right'>10</td></tr> +<tr><td align='right'>1753</td><td align='right'>2</td><td align='right'>4</td><td align='right'>8</td></tr> +<tr><td align='right'>1754</td><td align='right'>1</td><td align='right'>14</td><td align='right'>8</td></tr> +<tr><td align='right'>1755</td><td align='right'>1</td><td align='right'>13</td><td align='right'>10</td></tr> +<tr><td align='right'>1756</td><td align='right'>2</td><td align='right'>5</td><td align='right'>3</td></tr> +<tr><td align='right'>1757</td><td align='right'>3</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'>1758</td><td align='right'>2</td><td align='right'>10</td><td align='right'>0</td></tr> +<tr><td align='right'>1759</td><td align='right'>1</td><td align='right'>19</td><td align='right'>10</td></tr> +<tr><td align='right'>1760</td><td align='right'>1</td><td align='right'>16</td><td align='right'>6</td></tr> +<tr><td align='right'>1761</td><td align='right'>1</td><td align='right'>10</td><td align='right'>3</td></tr> +<tr><td align='right'>1762</td><td align='right'>1</td><td align='right'>19</td><td align='right'>0</td></tr> +<tr><td align='right'>1763</td><td align='right'>2</td><td align='right'>0</td><td align='right'>9</td></tr> +<tr><td align='right'>1764</td><td align='right'>2</td><td align='right'>6</td><td align='right'>9</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>64)129</td><td align='right'>13</td><td align='right'>6</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>2</td><td align='right'>0</td><td align='right'>6<sup>18</sup>⁄<sub>64</sub></td></tr> +</table></div> + +<p> </p> + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1731</td><td align='right'>1</td><td align='right'>12</td><td align='right'>10</td></tr> +<tr><td align='right'>1732</td><td align='right'>1</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1733</td><td align='right'>1</td><td align='right'>8</td><td align='right'>4</td></tr> +<tr><td align='right'>1734</td><td align='right'>1</td><td align='right'>18</td><td align='right'>10</td></tr> +<tr><td align='right'>1735</td><td align='right'>2</td><td align='right'>3</td><td align='right'>0</td></tr> +<tr><td align='right'>1736</td><td align='right'>2</td><td align='right'>0</td><td align='right'>4</td></tr> +<tr><td align='right'>1737</td><td align='right'>1</td><td align='right'>18</td><td align='right'>0</td></tr> +<tr><td align='right'>1738</td><td align='right'>1</td><td align='right'>15</td><td align='right'>6</td></tr> +<tr><td align='right'>1739</td><td align='right'>1</td><td align='right'>18</td><td align='right'>6</td></tr> +<tr><td align='right'>1740</td><td align='right'>2</td><td align='right'>10</td><td align='right'>8</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>10)18</td><td align='right'>12</td><td align='right'>8</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>1</td><td align='right'>17</td><td align='right'>3<sup>1</sup>⁄<sub>5</sub></td></tr> +</table></div> + +<hr style='width: 15%;' /> + + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th></th><th colspan='3'>Wheat per Quarter.</th></tr> +<tr><th align='right'>Years.</th><th align='right'>L.</th><th align='right'>s.</th><th align='right'>d.</th></tr> +<tr><td align='right'>1741</td><td align='right'>2</td><td align='right'>6</td><td align='right'>8</td></tr> +<tr><td align='right'>1742</td><td align='right'>1</td><td align='right'>14</td><td align='right'>0</td></tr> +<tr><td align='right'>1743</td><td align='right'>1</td><td align='right'>4</td><td align='right'>10</td></tr> +<tr><td align='right'>1744</td><td align='right'>1</td><td align='right'>4</td><td align='right'>10</td></tr> +<tr><td align='right'>1745</td><td align='right'>1</td><td align='right'>7</td><td align='right'>6</td></tr> +<tr><td align='right'>1746</td><td align='right'>1</td><td align='right'>19</td><td align='right'>0</td></tr> +<tr><td align='right'>1747</td><td align='right'>1</td><td align='right'>14</td><td align='right'>10</td></tr> +<tr><td align='right'>1748</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1749</td><td align='right'>1</td><td align='right'>17</td><td align='right'>0</td></tr> +<tr><td align='right'>1750</td><td align='right'>1</td><td align='right'>12</td><td align='right'>6</td></tr> + +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>10)16</td><td align='right'>18</td><td align='right'>2</td></tr> +<tr><td></td><td colspan='3'>————————</td></tr> +<tr><td align='right'></td><td align='right'>1</td><td align='right'>13</td><td align='right'>9<sup>4</sup>⁄<sub>5</sub></td></tr> +</table></div> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_111" id="Page_111">[Pg 111]</a></span></p> +<h2><a name="BOOK_II" id="BOOK_II"></a>BOOK II.</h2> + + +<h4>OF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK.</h4> + + + +<hr style="width: 15%;" /> +<h4>INTRODUCTION.</h4> + + +<p>In that rude state of society, in which there +is no division of labour, in which exchanges +are seldom made, and in which every man +provides every thing for himself, it is not necessary +that any stock should be accumulated, +or stored up before-hand, in order to carry on +the business of the society. Every man endeavours +to supply, by his own industry, his +own occasional wants, as they occur. When +he is hungry, he goes to the forest to hunt; +when his coat is worn out, he clothes himself +with the skin of the first large animal he +kills; and when his hut begins to go to ruin, +he repairs it, as well as he can, with the trees +and the turf that are nearest it.</p> + +<p>But when the division of labour has once +been thoroughly introduced, the produce of a +man's own labour can supply but a very small +part of his occasional wants. The far greater +part of them are supplied by the produce of +other men's labour, which he purchases with +the produce, or, what is the same thing, with +the price of the produce, of his own. But +this purchase cannot be made till such time +as the produce of his own labour has not only +been completed, but sold. A stock of goods +of different kinds, therefore, must be stored +up somewhere, sufficient to maintain him, and +to supply him with the materials and tools of +his work, till such time at least as both these +events can be brought about. A weaver cannot +apply himself entirely to his peculiar business, +unless there is before-hand stored up +somewhere, either in his own possession, or +in that of some other person, a stock sufficient +to maintain him, and to supply him with the +materials and tools of his work, till he has not +only completed, but sold his web. This accumulation +must evidently be previous to his +applying his industry for so long a time to +such a peculiar business.</p> + +<p>As the accumulation of stock must, in the +nature of things, be previous to the division +of labour, so labour can be more and more +subdivided in proportion only as stock is previously +more and more accumulated. The +quantity of materials which the same number +of people can work up, increases in a great +proportion as labour comes to be more and +more subdivided; and as the operations of +each workman are gradually reduced to a +greater degree of simplicity, a variety of new +machines come to be invented for facilitating +and abridging these operations. As the division +of labour advances, therefore, in order +to give constant employment to an equal number +of workman, an equal stock of provisions, +and a greater stock of materials and tools +than what would have been necessary in a +ruder state of things, must be accumulated +before-hand. But the number of workmen in +every branch of business generally increases +with the division of labour in that branch; or +rather it is the increase of their number which +enables them to class and subdivide themselves +in this manner.</p> + +<p>As the accumulation of stock is previously +necessary for carrying on this great improvement +in the productive powers of labour, so +that accumulation naturally leads to this improvement. +The person who employs his stock +in maintaining labour, necessarily wishes to +employ it in such a manner as to produce as +great a quantity of work as possible. He endeavours, +therefore, both to make among his +workmen the most proper distribution of employment, +and to furnish them with the best +machines which he can either invent or afford +to purchase. His abilities, in both these respects, +are generally in proportion to the extent +of his stock, or to the number of people +whom it can employ. The quantity of industry, +therefore, not only increases in every +country with the increase of the stock which +employs it, but, in consequence of that increase, +the same quantity of industry produces +a much greater quantity of work.</p> + +<p>Such are in general the effects of the increase +of stock upon industry and its productive +powers.<span class='pagenum'><a name="Page_112" id="Page_112">[Pg 112]</a></span></p> + +<p>In the following book, I have endeavoured +to explain the nature of stock, the effects +of its accumulation into capital of different +kinds, and the effects of the different employments +of those capitals. This book is divided +into five chapters. In the first chapter, I have +endeavoured to shew what are the different +parts or branches into which the stock, either +of an individual, or of a great society, naturally +divides itself. In the second, I have endeavoured +to explain the nature and operation +of money, considered as a particular branch +of the general stock of the society. The stock +which is accumulated into a capital, may either +be employed by the person to whom it +belongs, or it may be lent to some other person. +In the third and fourth chapters, I have +endeavoured to examine the manner in which +it operates in both these situations. The fifth +and last chapter treats of the different effects +which the different employments of capital immediately +produce upon the quantity, both of +national industry, and of the annual produce +of land and labour.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. I.</h3> + +<h4>OF THE DIVISION OF STOCK.</h4> + + +<p>When the stock which a man possesses is no +more than sufficient to maintain him for a few +days or a few weeks, he seldom thinks of deriving +any revenue from it. He consumes it +as sparingly as he can, and endeavours, by his +labour, to acquire something which may supply +its place before it be consumed altogether. +His revenue is, in this case, derived from his +labour only. This is the state of the greater +part of the labouring poor in all countries.</p> + +<p>But when he possesses stock sufficient to +maintain him for months or years, he naturally +endeavours to derive a revenue from the +greater part of it, reserving only so much for +his immediate consumption as may maintain +him till this revenue begins to come in. His +whole stock, therefore, is distinguished into +two parts. That part which he expects is to +afford him this revenue is called his capital. +The other is that which supplies his immediate +consumption, and which consists either, +first, in that portion of his whole stock which +was originally reserved for this purpose; or, +secondly, in his revenue, from whatever source +derived, as it gradually comes in; or, thirdly, +in such things as had been purchased by either +of these in former years, and which are +not yet entirely consumed, such as a stock of +clothes, household furniture, and the like. In +one or other, or all of these three articles, consists +the stock which men commonly reserve +for their own immediate consumption.</p> + +<p>There are two different ways in which a +capital may be employed so as to yield a revenue +or profit to its employer.</p> + +<p>First, it may be employed in raising, manufacturing, +or purchasing goods, and selling +them again with a profit. The capital employed +in this manner yields no revenue or profit to +its employer, while it either remains in his +possession, or continues in the same shape. +The goods of the merchant yield him no revenue +or profit till he sells them for money, +and the money yields him as little till it is +again exchanged for goods. His capital is +continually going from him in one shape, and +returning to him in another; and it is only +by means of such circulation, or successive +changes, that it can yield him any profit. +Such capitals, therefore, may very properly be +called circulating capitals.</p> + +<p>Secondly, it may be employed in the improvement +of land, in the purchase of useful +machines and instruments of trade, or in such +like things as yield a revenue or profit without +changing masters, or circulating any further. +Such capitals, therefore, may very properly +be called fixed capitals.</p> + +<p>Different occupations require very different +proportions between the fixed and circulating +capitals employed in them.</p> + +<p>The capital of a merchant, for example, is +altogether a circulating capital. He has occasion +for no machines or instruments of trade, +unless his shop or warehouse be considered as +such.</p> + +<p>Some part of the capital of every master +artificer or manufacturer must be fixed in the +instruments of his trade. This part, however, +is very small in some, and very great in others. +A master tailor requires no other instruments +of trade but a parcel of needles. Those of the +master shoemaker are a little, though but a +very little, more expensive. Those of the +weaver rise a good deal above those of the +shoemaker. The far greater part of the capital +of all such master artificers, however, is +circulated either in the wages of their workmen, +or in the price of their materials, and +repaid, with a profit, by the price of the work.</p> + +<p>In other works a much greater fixed capital +is required. In a great iron-work, for example, +the furnace for melting the ore, the +forge, the slit-mill, are instruments of trade +which cannot be erected without a very great +expense. In coal works, and mines of every +kind, the machinery necessary, both for drawing +out the water, and for other purposes, is +frequently still more expensive.</p> + +<p>That part of the capital of the farmer which +is employed in the instruments of agriculture +is a fixed, that which is employed in the wages +and maintenance of his labouring servants is +a circulating capital. He makes a profit of +the one by keeping it in his own possession, +and of the other by parting with it. The +price or value of his labouring cattle is a fixed<span class='pagenum'><a name="Page_113" id="Page_113">[Pg 113]</a></span> +capital, in the same manner as that of the instruments +of husbandry; their maintenance +is a circulating capital, in the same manner as +that of the labouring servants. The farmer +makes his profit by keeping the labouring +cattle, and by parting with their maintenance. +Both the price and the maintenance of the cattle +which are bought in and fattened, not for +labour, but for sale, are a circulating capital. +The farmer makes his profit by parting with +them. A flock of sheep or a herd of cattle, +that, in a breeding country, is brought in neither +for labour nor for sale, but in order to +make a profit by their wool, by their milk, +and by their increase, is a fixed capital. The +profit is made by keeping them. Their maintenance +is a circulating capital. The profit is +made by parting with it; and it comes back +with both its own profit and the profit upon +the whole price of the cattle, in the price of +the wool, the milk, and the increase. The +whole value of the seed, too, is properly a +fixed capital. Though it goes backwards and +forwards between the ground and the granary, +it never changes masters, and therefore +does not properly circulate. The farmer +makes his profit, not by its sale, but by its +increase.</p> + +<p>The general stock of any country or society +is the same with that of all its inhabitants +or members; and, therefore, naturally divides +itself into the same three portions, each of +which has a distinct function or office.</p> + +<p>The first is that portion which is reserved +for immediate consumption, and of which +the characteristic is, that it affords no revenue +or profit. It consists in the stock of food, +clothes, household furniture, &c. which have +been purchased by their proper consumers, +but which are not yet entirely consumed. The +whole stock of mere dwelling-houses, too, +subsisting at any one time in the country, +make a part of this first portion. The stock +that is laid out in a house, if it is to be the +dwelling-house of the proprietor, ceases from +that moment to serve in the function of a capital, +or to afford any revenue to its owner. +A dwelling-house, as such, contributes nothing +to the revenue of its inhabitant; and though +it is, no doubt, extremely useful to him, it is +as his clothes and household furniture are useful +to him, which, however, make a part of +his expense, and not of his revenue. If it is +to be let to a tenant for rent, as the house itself +can produce nothing, the tenant must always +pay the rent out of some other revenue, +which he derives, either from labour, or stock, +or land. Though a house, therefore, may yield +a revenue to its proprietor, and thereby serve +in the function of a capital to him, it cannot +yield any to the public, nor serve in the function +of a capital to it, and the revenue of +the whole body of the people can never be +in the smallest degree increased by it. Clothes +and household furniture, in the same manner, +sometimes yield a revenue, and thereby +serve in the function of a capital to particular +persons. In countries where masquerades +are common, it is a trade to let out +masquerade dresses for a night. Upholsterers +frequently let furniture by the month +or by the year. Undertakers let the furniture +of funerals by the day and by the +week. Many people let furnished houses, and +get a rent, not only for the use of the house, +but for that of the furniture. The revenue, +however, which is derived from such things, +must always be ultimately drawn from some +other source of revenue. Of all parts of the +stock, either of an individual or of a society, +reserved for immediate consumption, what is +laid out in houses is most slowly consumed. +A stock of clothes may last several years; a +stock of furniture half a century or a century; +but a stock of houses, well built and properly +taken care of, may last many centuries. +Though the period of their total consumption, +however, is more distant, they are still as +really a stock reserved for immediate consumption +as either clothes or household furniture.</p> + +<p>The second of the three portions into which +the general stock of the society divides itself, +is the fixed capital; of which the characteristic +is, that it affords a revenue or profit without +circulating or changing masters. It +consists chiefly of the four following articles.</p> + +<p>First, of all useful machines and instruments +of trade, which facilitate and abridge +labour.</p> + +<p>Secondly, of all those profitable buildings +which are the means of procuring a revenue, +not only to the proprietor who lets them for +a rent, but to the person who possesses them, +and pays that rent for them; such as shops, +warehouses, workhouses, farm-houses, with all +their necessary buildings, stables, granaries, +&c. These are very different from mere dwelling-houses. +They are a sort of instruments +of trade, and may be considered in the same +light.</p> + +<p>Thirdly, of the improvements of land, of +what has been profitably laid out in clearing, +draining, inclosing, manuring, and reducing +it into the condition most proper for tillage +and culture. An improved farm may very +justly be regarded in the same light as those +useful machines which facilitate and abridge +labour, and by means of which an equal circulating +capital can afford a much greater revenue +to its employer. An improved farm is +equally advantageous and more durable than +any of those machines, frequently requiring +no other repairs than the most profitable application +of the farmer's capital employed in +cultivating it.</p> + +<p>Fourthly, of the acquired and useful abilities +of all the inhabitants and members of +the society. The acquisition of such talents, +by the maintenance of the acquirer during his<span class='pagenum'><a name="Page_114" id="Page_114">[Pg 114]</a></span> +education, study, or apprenticeship, always +costs a real expense, which is a capital fixed +and realised, as it were, in his person. Those +talents, as they make a part of his fortune, so +do they likewise that of the society to which +he belongs. The improved dexterity of a +workman may be considered in the same light +as a machine or instrument of trade which +facilitates and abridges labour, and which, +though it costs a certain expense, repays that +expense with a profit.</p> + +<p>The third and last of the three portions into +which the general stock of the society naturally +divides itself, is the circulating capital, +of which the characteristic is, that it affords +a revenue only by circulating or changing +masters. It is composed likewise of four +parts.</p> + +<p>First, of the money, by means of which all +the other three are circulated and distributed +to their proper consumers.</p> + +<p>Secondly, of the stock of provisions which +are in the possession of the butcher, the grazier, +the farmer, the corn-merchant, the brewer, +&c. and from the sale of which they expect to +derive a profit.</p> + +<p>Thirdly, of the materials, whether altogether +rude, or more or less manufactured, of +clothes, furniture, and building which are not +yet made up into any of those three shapes, +but which remain in the hands of the growers, +the manufacturers, the mercers, and drapers, +the timber-merchants, the carpenters and +joiners, the brick-makers, &c.</p> + +<p>Fourthly, and lastly, of the work which is +made up and completed, but which is still in +the hands of the merchant and manufacturer, +and not yet disposed of or distributed to the +proper consumers; such as the finished work +which we frequently find ready made in the +shops of the smith, the cabinet-maker, the +goldsmith, the jeweller, the china-merchant, +&c. The circulating capital consists, in this +manner, of the provisions, materials, and finished +work of all kinds that are in the hands +of their respective dealers, and of the money +that is necessary for circulating and distributing +them to those who are finally to use or to +consume them.</p> + +<p>Of these four parts, three—provisions, materials, +and finished work, are either annually +or in a longer or shorter period, regularly +withdrawn from it, and placed either in the +fixed capital, or in the stock reserved for immediate +consumption.</p> + +<p>Every fixed capital is both originally derived +from, and requires to be continually supported +by, a circulating capital. All useful +machines and instruments of trade are originally +derived from a circulating capital, which +furnishes the materials of which they are +made, and the maintenance of the workmen +who make them. They require, too, a capital +of the same kind to keep them in constant +repair.</p> + +<p>No fixed capital can yield any revenue but +by means of a circulating capital. The most +useful machines and instruments of trade will +produce nothing, without the circulating capital, +which affords the materials they are employed +upon, and the maintenance of the +workmen who employ them. Land, however +improved, will yield no revenue without a circulating +capital, which maintains the labourers +who cultivate and collect its produce.</p> + +<p>To maintain and augment the stock which +may be reserved for immediate consumption, +is the sole end and purpose both of the fixed +and circulating capitals. It is this stock which +feeds, clothes, and lodges the people. Their +riches or poverty depend upon the abundant +or sparing supplies which those two capitals +can afford to the stock reserved for immediate +consumption.</p> + +<p>So great a part of the circulating capital +being continually withdrawn from it, in order +to be placed in the other two branches of the +general stock of the society, it must in its +turn require continual supplies without which +it would soon cease to exist. These supplies +are principally drawn from three sources; the +produce of land, of mines, and of fisheries. +These afford continual supplies of provisions +and materials, of which part is afterwards +wrought up into finished work and by which +are replaced the provisions, materials, and +finished work, continually withdrawn from +the circulating capital. From mines, too, is +drawn what is necessary for maintaining and +augmenting that part of it which consists in +money. For though, in the ordinary course +of business, this part is not, like the other +three, necessarily withdrawn from it, in order +to be placed in the other two branches of the +stock of the society, it must, however, +like all other things, be wasted and worn out +at last, and sometimes, too, be either lost or +sent abroad, and must, therefore, require continual, +though no doubt much smaller, supplies.</p> + +<p>Lands, mines, and fisheries, require all +both a fixed and circulating capital to cultivate +them; and their produce replaces, with a +profit not only those capitals, but all the +others in the society. Thus the farmer annually +replaces to the manufacturer the provisions +which he had consumed, and the materials +which he had wrought up the year before; +and the manufacturer replaces to the +farmer the finished work which he had wasted +and worn out in the same time. This is the +real exchange that is annually made between +those two orders of people, though it seldom +happens that the rude produce of the one, and +the manufactured produce of the other, are +directly bartered for one another; because it +seldom happens that the farmer sells his corn +and his cattle, his flax and his wool, to the +very same person of whom he chuses to purchase +the clothes, furniture, and instruments<span class='pagenum'><a name="Page_115" id="Page_115">[Pg 115]</a></span> +of trade, which he wants. He sells, therefore, +his rude produce for money, with which he +can purchase, wherever it is to be had, the +manufactured produce he has occasion for. +Land even replaces, in part at least, the capitals +with which fisheries and mines are cultivated. +It is the produce of land which draws +the fish from the waters; and it is the produce +of the surface of the earth which extracts the +minerals from its bowels.</p> + +<p>The produce of land, mines, and fisheries, +when their natural fertility is equal, is in proportion +to the extent and proper application of +the capitals employed about them. When the +capitals are equal, and equally well applied, it +is in proportion to their natural fertility.</p> + +<p>In all countries where there is a tolerable +security, every man of common understanding +will endeavour to employ whatever stock he +can command, in procuring either present enjoyment +or future profit. If it is employed +in procuring present enjoyment, it is a stock +reserved for immediate consumption. If it is +employed in procuring future profit, it must +procure this profit either by staying with him, +or by going from him. In the one case it is +a fixed, in the other it is a circulating capital. +A man must be perfectly crazy, who, where +there is a tolerable security, does not employ +all the stock which he commands, whether it +be his own, or borrowed of other people, in +some one or other of those three ways.</p> + +<p>In those unfortunate countries, indeed, +where men are continually afraid of the violence +of their superiors, they frequently bury +or conceal a great part of their stock, in order +to have it always at hand to carry with +them to some place of safety, in case of their +being threatened with any of those disasters +to which they consider themselves at all times +exposed. This is said to be a common practice +in Turkey, in Indostan, and, I believe, in +most other governments of Asia. It seems to +have been a common practice among our ancestors +during the violence of the feudal government. +Treasure-trove was, in these times, +considered as no contemptible part of the revenue +of the greatest sovereigns in Europe. +It consisted in such treasure as was found +concealed in the earth, and to which no particular +person could prove any right. This was +regarded, in those times, as so important an +object, that it was always considered as belonging +to the sovereign, and neither to the +finder nor to the proprietor of the land, unless +the right to it had been conveyed to the latter +by an express clause in his charter. It was +put upon the same footing with gold and silver +mines, which, without a special clause in +the charter, were never supposed to be comprehended +in the general grant of the lands, +though mines of lead, copper, tin, and coal +were, as things of smaller consequence.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP II.</h3> + +<h4>OF MONEY, CONSIDERED AS A PARTICULAR +BRANCH OF THE GENERAL STOCK OF THE +SOCIETY, OR OF THE EXPENSE OF MAINTAINING +THE NATIONAL CAPITAL.</h4> + + +<p>It has been shown in the First Book, that the +price of the greater part of commodities resolves +itself into three parts, of which one pays +the wages of the labour, another the profits of +the stock, and a third the rent of the land +which had been employed in producing and +bringing them to market: that there are, indeed, +some commodities of which the price is +made up of two of those parts only, the wages +of labour, and the profits of stock; and a very +few in which it consists altogether in one, the +wages of labour; but that the price of every +commodity necessarily resolves itself into +some one or other, or all, of those three parts; +every part of it which goes neither to rent nor +to wages, being necessarily profit to somebody.</p> + +<p>Since this is the case, it has been observed, +with regard to every particular commodity, +taken separately, it must be so with regard to +all the commodities which compose the whole +annual produce of the land and labour of +every country, taken complexly. The whole +price or exchangeable value of that annual +produce must resolve itself into the same three +parts, and be parcelled out among the different +inhabitants of the country, either as the +wages of their labour, the profits of their +their stock, or the rent of their land.</p> + +<p>But though the whole value of the annual +produce of the land and labour of every country, +is thus divided among, and constitutes a +revenue to, its different inhabitants; yet, as in +the rent of a private estate, we distinguish between +the gross rent and the neat rent, so may +we likewise in the revenue of all the inhabitants +of a great country.</p> + +<p>The gross rent of a private estate comprehends +whatever is paid by the farmer; the +neat rent, what remains free to the landlord, +after deducting the expense of management, +of repairs, and all other necessary +charges; or what, without hurting his estate, +he can afford to place in his stock reserved for +immediate consumption, or to spend upon his +table, equipage, the ornaments of his house +and furniture, his private enjoyments and +amusements. His real wealth is in proportion, +not to his gross, but to his neat rent.</p> + +<p>The gross revenue of all the inhabitants +of a great country comprehends the whole +annual produce of their land and labour; +the neat revenue, what remains free to them, +after deducting the expense of maintaining, +first, their fixed, and, secondly, their circulating +capital, or what, without encroaching up<span class='pagenum'><a name="Page_116" id="Page_116">[Pg 116]</a></span>on +their capital, they can place in their stock reserved +for immediate consumption, or spend upon +their subsistence, conveniencies, and amusements. +Their real wealth, too, is in proportion, +not to their gross, but to their neat revenue.</p> + +<p>The whole expense of maintaining the fixed +capital must evidently be excluded from the +neat revenue of the society. Neither the materials +necessary for supporting their useful +machines and instruments of trade, their profitable +buildings, &c. nor the produce of the +labour necessary for fashioning those materials +into the proper form, can ever make any part +of it. The price of that labour may indeed +make a part of it; as the workmen so employed +may place the whole value of their +wages in their stock reserved for immediate +consumption. But in other sorts of labour, +both the price and the produce go to this stock; +the price to that of the workmen, the produce +to that of other people, whose subsistence, conveniencies, +and amusements, are augmented +by the labour of those workmen.</p> + +<p>The intention of the fixed capital is to increase +the productive powers of labour, or to +enable the same number of labourers to perform +a much greater quantity of work. In a +farm where all the necessary buildings, fences, +drains, communications, &c. are in the most +perfect good order, the same number of labourers +and labouring cattle will raise a much +greater produce, than in one of equal extent +and equally good ground, but not furnished +with equal conveniencies. In manufactures, +the same number of hands, assisted with the +best machinery, will work up a much greater +quantity of goods than with more imperfect +instruments of trade. The expense which is +properly laid out upon a fixed capital of any +kind, is always repaid with great profit, and +increases the annual produce by a much greater +value than that of the support which such improvements +require. This support, however, +still requires a certain portion of that produce. +A certain quantity of materials, and the labour +of a certain number of workmen, both +of which might have been immediately employed +to augment the food, clothing, and +lodging, the subsistence and conveniencies of +the society, are thus diverted to another employment, +highly advantageous indeed, but still +different from this one. It is upon this account +that all such improvements in mechanics, +as enable the same number of workmen to +perform an equal quantity of work with +cheaper and simpler machinery than had been +usual before, are always regarded as advantageous +to every society. A certain quantity of +materials, and the labour of a certain number +of workmen, which had before been employed +in supporting a more complex and expensive +machinery, can afterwards be applied to augment +the quantity of work which that or any +other machinery is useful only for performing. +The undertaker of some great manufactory, +who employs a thousand a-year in the maintenance +of his machinery, if he can reduce +this expense to five hundred, will naturally +employ the other five hundred in purchasing +an additional quantity of materials, to be +wrought up by an additional number of workmen. +The quantity of that work, therefore, +which his machinery was useful only for performing, +will naturally be augmented, and +with it all the advantage and conveniency +which the society can derive from that work.</p> + +<p>The expense of maintaining the fixed capital +in a great country, may very properly be +compared to that of repairs in a private estate. +The expense of repairs may frequently be necessary +for supporting the produce of the estate, +and consequently both the gross and the +neat rent of the landlord. When by a more +proper direction, however, it can be diminished +without occasioning any diminution of +produce, the gross rent remains at least the +same as before, and the neat rent is necessarily +augmented.</p> + +<p>But though the whole expense of maintaining +the fixed capital is thus necessarily excluded +from the neat revenue of the society, it +is not the same case with that of maintaining +the circulating capital. Of the four parts of +which this latter capital is composed, money, +provisions, materials, and finished work, the +three last, it has already been observed, are +regularly withdrawn from it, and placed either +in the fixed capital of the society, or in +their stock reserved for immediate consumption. +Whatever portion of those consumable +goods is not employed in maintaining the former, +goes all to the latter, and makes a part of +the neat revenue of the society. The maintenance +of those three parts of the circulating +capital, therefore, withdraws no portion of the +annual produce from the neat revenue of the +society, besides what is necessary for maintaining +the fixed capital.</p> + +<p>The circulating capital of a society is in this +respect different from that of an individual. +That of an individual is totally excluded from +making any part of his neat revenue, which +must consist altogether in his profits. But +though the circulating capital of every individual +makes a part of that of the society to +which he belongs, it is not upon that account +totally excluded from making a part likewise +of their neat revenue. Though the whole +goods in a merchant's shop must by no means +be placed in his own stock reserved for immediate +consumption, they may in that of other +people, who, from a revenue derived from +other funds, may regularly replace their value +to him, together with its profits, without +occasioning any diminution either of his capital +or of theirs.</p> + +<p>Money, therefore, is the only part of the circulating +capital of a society, of which the +maintenance can occasion any diminution in +their neat revenue.<span class='pagenum'><a name="Page_117" id="Page_117">[Pg 117]</a></span></p> + +<p>The fixed capital, and that part of the circulating +capital which consists in money, so +far as they affect the revenue of the society, +bear a very great resemblance to one another.</p> + +<p>First, as those machines and instruments of +trade, &c. require a certain expense, first to +erect them, and afterwards to support them, +both which expenses, though they make a +part of the gross, are deductions from the neat +revenue of the society; so the stock of money +which circulates in any country must require +a certain expense, first to collect it, and afterwards +to support it; both which expenses, +though they make a part of the gross, are, in +the same manner, deductions from the neat +revenue of the society. A certain quantity of +very valuable materials, gold and silver, and +of very curious labour, instead of augmenting +the stock reserved for immediate consumption, +the subsistence, conveniencies, and amusements +of individuals, is employed in supporting that +great but expensive instrument of commerce, +by means of which every individual in the society +has his subsistence, conveniencies, and +amusements, regularly distributed to him in +their proper proportions.</p> + +<p>Secondly, as the machines and instruments +of trade, &c. which compose the fixed capital +either of an individual or of a society, make +no part either of the gross or of the neat revenue +of either; so money, by means of which +the whole revenue of the society is regularly +distributed among all its different members, +makes itself no part of that revenue. The +great wheel of circulation is altogether different +from the goods which are circulated by +means of it. The revenue of the society consists +altogether in those goods, and not in the +wheel which circulates them. In computing either +the gross or the neat revenue of any society, +we must always, from the whole annual circulation +of money and goods, deduct the whole +value of the money, of which not a single +farthing can ever make any part of either.</p> + +<p>It is the ambiguity of language only which +can make this proposition appear either doubtful +or paradoxical. When properly explained +and understood, it is almost self-evident.</p> + +<p>When we talk of any particular sum of +money, we sometimes mean nothing but the +metal pieces of which it is composed, and +sometimes we include in our meaning some +obscure reference to the goods which can be +had in exchange for it, or to the power of purchasing +which the possession of it conveys. +Thus, when we say that the circulating money +of England has been computed at eighteen +millions, we mean only to express the amount +of the metal pieces, which some writers have +computed, or rather have supposed, to circulate +in that country. But when we say that a +man is worth fifty or a hundred pounds a-year, +we mean commonly to express, not only the +amount of the metal pieces which are annually +paid to him, but the value of the goods +which he can annually purchase or consume; +we mean commonly to assertain what is or +ought to be his way of living, or the quantity +and quality of the necessaries and conveniencies +of life in which he can with propriety +indulge himself.</p> + +<p>When, by any particular sum of money, +we mean not only to express the amount of +the metal pieces of which it is composed, but +to include in its signification some obscure reference +to the goods which can be had in exchange +for them, the wealth or revenue which +it in this case denotes, is equal only to one of +the two values which are thus intimated somewhat +ambiguously by the same word, and to the +latter more properly than to the former, to the +money's worth more properly than to the money.</p> + +<p>Thus, if a guinea be the weekly pension of +a particular person, he can in the course of +the week purchase with it a certain quantity of +subsistence, conveniencies, and amusements. +In proportion as this quantity is great or +small, so are his real riches, his real weekly +revenue. His weekly revenue is certainly not +equal both to the guinea and to what can be +purchased with it, but only to one or other of +those two equal values, and to the latter more +properly than to the former, to the guinea's +worth rather than to the guinea.</p> + +<p>If the pension of such a person was paid +to him, not in gold, but in a weekly bill for a +guinea, his revenue surely would not so properly +consist in the piece of paper, as in +what he could get for it. A guinea may be +considered as a bill for a certain quantity of +necessaries and conveniencies upon all the +tradesmen in the neighbourhood. The revenue +of the person to whom it is paid, does not +so properly consist in the piece of gold, as in +what he can get for it, or in what he can exchange +it for. If it could be exchanged for +nothing, it would, like a bill upon a bankrupt, +be of no more value than the most useless +piece of paper.</p> + +<p>Though the weekly or yearly revenue of all +the different inhabitants of any country, in the +same manner, may be, and in reality frequently +is, paid to them in money, their real riches, +however, the real weekly or yearly revenue of +all of them taken together, must always be +great or small, in proportion to the quantity +of consumable goods which they can all of +them purchase with this money. The whole +revenue of all of them taken together is evidently +not equal to both the money and the +consumable goods, but only to one or other of +those two values, and to the latter more properly +than to the former.</p> + +<p>Though we frequently, therefore, express a +person's revenue by the metal pieces which are +annually paid to him, it is because the amount +of those pieces regulates the extent of his +power of purchasing, or the value of the goods +which he can annually afford to consume. +We still consider his revenue as consisting in<span class='pagenum'><a name="Page_118" id="Page_118">[Pg 118]</a></span> +this power of purchasing or consuming, and +not in the pieces which convey it.</p> + +<p>But if this is sufficiently evident, even with +regard to an individual, it is still more so with +regard to a society. The amount of the metal +pieces which are annually paid to an individual, +is often precisely equal to his revenue, +and is upon that account the shortest and best +expression of its value. But the amount of +the metal pieces which circulate in a society, +can never be equal to the revenue of all its +members. As the same guinea which pays +the weekly pension of one man to-day, may +pay that of another to-morrow, and that of a +third the day thereafter, the amount of the +metal pieces which annually circulate in any +country, must always be of much less value +than the whole money pensions annually paid +with them. But the power of purchasing, or +the goods which can successively be bought +with the whole of those money pensions, as +they are successively paid, must always be precisely +of the same value with those pensions; +as must likewise be the revenue of the different +persons to whom they are paid. That revenue, +therefore, cannot consist in those metal +pieces, of which the amount is so much inferior +to its value, but in the power of purchasing, +in the goods which can successively be +bought with them as they circulate from hand +to hand.</p> + +<p>Money, therefore, the great wheel of circulation, +the great instrument of commerce, +like all other instruments of trade, though it +makes a part, and a very valuable part, of the +capital, makes no part of the revenue of the +society to which it belongs; and though the +metal pieces of which it is composed, in the +course of their annual circulation, distribute +to every man the revenue which properly belongs +to him, they make themselves no part of +that revenue.</p> + +<p>Thirdly, and lastly, the machines and instruments +of trade, &c. which compose the +fixed capital, bear this further resemblance to +that part of the circulating capital which consists +in money; that as every saving in the +expense of erecting and supporting those machines, +which does not diminish the introductive +powers of labour, is an improvement of +the neat revenue of the society; so every saving +in the expense of collecting and supporting +that part of the circulating capital which +consists in money is an improvement of exactly +the same kind.</p> + +<p>It is sufficiently obvious, and it has partly, +too, been explained already, in what manner +every saving in the expense of supporting the +fixed capital is an improvement of the neat +revenue of the society. The whole capital of +the undertaker of every work is necessarily +divided between his fixed and his circulating +capital. While his whole capital remains the +same, the smaller the one part, the greater +must necessarily be the other. It is the circulating +capital which furnishes the materials +and wages of labour, and puts industry into +motion. Every saving, therefore, in the expense +of maintaining the fixed capital, which +does not diminish the productive powers of +labour, must increase the fund which puts industry +into motion, and consequently the annual +produce of land and labour, the real revenue +of every society.</p> + +<p>The substitution of paper in the room of +gold and silver money, replaces a very expensive +instrument of commerce with one much +less costly, and sometimes equally convenient. +Circulation comes to be carried on by a new +wheel, which it costs less both to erect and to +maintain than the old one. But in what manner +this operation is performed, and in what +manner it tends to increase either the gross or +the neat revenue of the society, is not altogether +so obvious, and may therefore require +some further explication.</p> + +<p>There are several different sorts of paper +money; but the circulating notes of banks +and bankers are the species which is best +known, and which seems best adapted for this +purpose.</p> + +<p>When the people of any particular country +have such confidence in the fortune, probity +and prudence of a particular banker, as to believe +that he is always ready to pay upon demand +such of his promissory notes as are likely +to be at any time presented to him, those notes +come to have the same currency as gold and +silver money, from the confidence that such +money can at any time be had for them.</p> + +<p>A particular banker lends among his customers +his own promissory notes, to the extent, +we shall suppose, of a hundred thousand +pounds. As those notes serve all the purposes +of money, his debtors pay him the same interest +as if he had lent them so much money. +This interest is the source of his gain. Though +some of those notes are continually coming +back upon him for payment, part of them +continue to circulate for months and years together. +Though he has generally in circulation, +therefore, notes to the extent of a hundred +thousand pounds, twenty thousand pounds +in gold and silver may, frequently, be a sufficient +provision for answering occasional demands. +By this operation, therefore, twenty +thousand pounds in gold and silver perform +all the functions which a hundred thousand +could otherwise have performed. The same +exchanges may be made, the same quantity of +consumable goods may be circulated and distributed +to their proper consumers, by means +of his promissory notes, to the value of a hundred +thousand pounds, as by an equal value +of gold and silver money. Eighty thousand +pounds of gold and silver, therefore, can in +this manner be spared from the circulation of +the country; and if different operations of the +same kind should, at the same time, be +carried on by many different banks and bank<span class='pagenum'><a name="Page_119" id="Page_119">[Pg 119]</a></span>ers, +the whole circulation may thus be conducted +with a fifth part only of the gold and +silver which would otherwise have been requisite.</p> + +<p>Let us suppose, for example, that the whole +circulating money of some particular country +amounted, at a particular time, to one million +sterling, that sum being then sufficient for +circulating the whole annual produce of their +land and labour; let us suppose, too, that +some time thereafter, different banks and +bankers issued promissory notes payable to +the bearer, to the extent of one million, reserving +in their different coffers two hundred +thousand pounds for answering occasional demands; +there would remain, therefore, in circulation, +eight hundred thousand pounds in +gold and silver, and a million of bank notes, +or eighteen hundred thousand pounds of paper +and money together. But the annual produce +of the land and labour of the country +had before required only one million to circulate +and distribute it to its proper consumers, +and that annual produce cannot be immediately +augmented by those operations of +banking. One million, therefore, will be sufficient +to circulate it after them. The goods +to be bought and sold being precisely the same +as before, the same quantity of money will be +sufficient for buying and selling them. The +channel of circulation, if I may be allowed +such an expression, will remain precisely the +same as before. One million we have supposed +sufficient to fill that channel. Whatever, +therefore, is poured into it beyond this +sum, cannot run into it, but must overflow. +One million eight hundred thousand pounds +are poured into it. Eight hundred thousand +pounds, therefore, must overflow, that sum +being over and above what can be employed +in the circulation of the country. But though +this sum cannot be employed at home, it is +too valuable to be allowed to lie idle. It will, +therefore, be sent abroad, in order to seek that +profitable employment which it cannot find at +home. But the paper cannot go abroad; because +at a distance from the banks which issue +it, and from the country in which payment of +it can be exacted by law, it will not be received +in common payments. Gold and silver, +therefore, to the amount of eight hundred +thousand pounds, will be sent abroad, +and the channel of home circulation will remain +filled with a million of paper instead of +a million of those metals which filled it before.</p> + +<p>But though so great a quantity of gold and +silver is thus sent abroad, we must not imagine +that it is sent abroad for nothing, or that +its proprietors make a present of it to foreign +nations. They will exchange it for foreign +goods of some kind or another, in order to +supply the consumption either of some other +foreign country, or of their own.</p> + +<p>If they employ it in purchasing goods in +one foreign country, in order to supply the +consumption of another, or in what is called +the carrying trade, whatever profit they make +will be in addition to the neat revenue of their +own country. It is like a new fund, created +for carrying on a new trade; domestic business +being now transacted by paper, and the +gold and silver being converted into a fund +for this new trade.</p> + +<p>If they employ it in purchasing foreign +goods for home consumption, they may either, +first, purchase such goods as are likely to be +consumed by idle people, who produce nothing, +such as foreign wines, foreign silks, +&c.; or, secondly, they may purchase an additional +stock of materials, tools, and provisions, +in order to maintain and employ an additional +number of industrious people, who +reproduce, with a profit, the value of their +annual consumption.</p> + +<p>So far as it is employed in the first way, is +promotes prodigality, increases expense and +consumption, without increasing production, +or establishing any permanent fund for supporting +that expense, and is in every respect +hurtful to the society.</p> + +<p>So far as it is employed in the second way, +it promotes industry; and though it increases +the consumption of the society, it provides a +permanent fund for supporting that consumption; +the people who consume reproducing, +with a profit, the whole value of their annual +consumption. The gross revenue of the society, +the annual produce of their land and +labour, is increased by the whole value which +the labour of these workmen adds to the materials +upon which they are employed, and +their neat revenue by what remains of this value, +after deducting what is necessary for +supporting the tools and instruments of their +trade.</p> + +<p>That the greater part of the gold and silver +which being forced abroad by those operations +of banking, is employed in purchasing +foreign goods for home consumption, is, and +must be, employed in purchasing those of this +second kind, seems not only probable, but almost +unavoidable. Though some particular +men may sometimes increase their expense +very considerably, though their revenue does +not increase at all, we may be assured that +no class or order of men ever does so; because, +though the principles of common prudence +do not always govern the conduct of +every individual, they always influence that of +the majority of every class or order. But the +revenue of idle people, considered as a class +or order, cannot, in the smallest degree, be +increased by those operations of banking. +Their expense in general, therefore, cannot +be much increased by them, though that of a +few individuals among them may, and in +reality sometimes is. The demand of idle +people, therefore, for foreign goods, being the +same, or very nearly the same as before, a<span class='pagenum'><a name="Page_120" id="Page_120">[Pg 120]</a></span> +very small part of the money which, being +forced abroad by those operations of banking, +is employed in purchasing foreign goods for +home consumption, is likely to be employed in +purchasing those for their use. The greater +part of it will naturally be destined for the +employment of industry, and not for the maintenance +of idleness.</p> + +<p>When we compute the quantity of industry +which the circulating capital of any society +can employ, we must always have regard to +those parts of it only which consist in provisions, +materials, and finished work; the other, +which consists in money, and which serves +only to circulate those three, must always be +deducted. In order to put industry into motion, +three things are requisite; materials to +work upon, tools to work with, and the wages +or recompence for the sake of which the work +is done. Money is neither a material to work +upon, nor a tool to work with; and though +the wages of the workman are commonly paid +to him in money, his real revenue, like +that of all other men, consists, not in the money, +but in the money's worth; not in the +metal pieces, but in what can be got for +them.</p> + +<p>The quantity of industry which any capital +can employ, must evidently be equal to the +number of workmen whom it can supply with +materials, tools, and a maintenance suitable to +the nature of the work. Money may be requisite +for purchasing the materials and tools +of the work, as well as the maintenance of the +workmen; but the quantity of industry which +the whole capital can employ, is certainly not +equal both to the money which purchases, and +to the materials, tools, and maintenance, which +are purchased with it, but only to one or other +of those two values, and to the latter more +properly than to the former.</p> + +<p>When paper is substituted in the room of +gold and silver money, the quantity of the materials, +tools, and maintenance, which the whole +circulating capital can supply, may be increased +by the whole value of gold and silver which +used to be employed in purchasing them. The +whole value of the great wheel of circulation +and distribution is added to the goods which +are circulated and distributed by means of it. +The operation, in some measure, resembles +that of the undertaker of some great work, +who, in consequence of some improvement in +mechanics, takes down his old machinery, and +adds the difference between its price and that +of the new to his circulating capital, to the +fund from which he furnishes materials and +wages to his workmen.</p> + +<p>What is the proportion which the circulating +money of any country bears to the whole +value of the annual produce circulated by +means of it, it is perhaps impossible to determine. +It has been computed by different authors +at a fifth, at a tenth, at a twentieth, and +at a thirtieth, part of that value. But how +small soever the proportion which the circulating +money may bear to the whole value of +the annual produce, as but a part, and frequently +but a small part, of that produce, is +ever destined for the maintenance of industry, +it must always bear a very considerable +proportion to that part. When, therefore, by +the substitution of paper, the gold and silver +necessary for circulation is reduced to, perhaps, +a fifth part of the former quantity, if +the value of only the greater part of the +other four-fifths be added to the funds which +are destined for the maintenance of industry, +it must make a very considerable addition +to the quantity of that industry, and, +consequently, to the value of the annual produce +of land and labour.</p> + +<p>An operation of this kind has, within these +five-and-twenty or thirty years, been performed +in Scotland, by the erection of new banking +companies in almost every considerable +town, and even in some country villages. +The effects of it have been precisely those +above described. The business of the country +is almost entirely carried on by means of the +paper of those different banking companies, +with which purchases and payments of all +kinds are commonly made. Silver very seldom +appears, except in the change of a twenty +shilling bank note, and gold still seldomer. +But though the conduct of all those different +companies has not been unexceptionable, and +has accordingly required an act of parliament +to regulate it, the country, notwithstanding, +has evidently derived great benefit from their +trade. I have heard it asserted, that the trade +of the city of Glasgow doubled in about fifteen +years after the first erection of the banks +there; and that the trade of Scotland has +more than quadrupled since the first erection +of the two public banks at Edinburgh; of +which the one, called the Bank of Scotland, +was established by act of parliament in 1695, +and the other, called the Royal Bank, by royal +charter in 1727. Whether the trade, either +of Scotland in general, or of the city of Glasgow +in particular, has really increased in so +great a proportion, during so short a period, I +do not pretend to know. If either of them has +increased in this proportion, it seems to be an +effect too great to be accounted for by the sole +operation of this cause. That the trade and +industry of Scotland, however, have increased +very considerably during this period, and that +the banks have contributed a good deal to this +increase, cannot be doubted.</p> + +<p>The value of the silver money which circulated +in Scotland before the Union in 1707, and +which, immediately after it, was brought into +the Bank of Scotland, in order to be recoined, +amounted to £411,117 : 10 : 9 sterling. No +account has been got of the gold coin; but it +appears from the ancient accounts of the mint +of Scotland, that the value of the gold annually +coined somewhat exceeded that of the sil<span class='pagenum'><a name="Page_121" id="Page_121">[Pg 121]</a></span>ver<a name="FNanchor_27_27" id="FNanchor_27_27"></a><a href="#Footnote_27_27" class="fnanchor">[27]</a>. +There were a good many people, too, +upon this occasion, who, from a diffidence of +repayment, did not bring their silver into +the Bank of Scotland; and there was, besides, +some English coin, which was not called in. +The whole value of the gold and silver, therefore, +which circulated in Scotland before the +Union, cannot be estimated at less than a million +sterling. It seems to have constituted +almost the whole circulation of that country; +for though the circulation of the Bank of +Scotland, which had then no rival, was considerable, +it seems to have made but a very +small part of the whole. In the present times, +the whole circulation of Scotland cannot be +estimated at less than two millions, of which +that part which consists in gold and silver, +most probably, does not amount to half a million. +But though the circulating gold and +silver of Scotland have suffered so great a diminution +during this period, its real riches and +prosperity do not appear to have suffered any. +Its agriculture, manufactures, and trade, on +the contrary, the annual produce of its land +and labour, have evidently been augmented.</p> + +<p>It is chiefly by discounting bills of exchange, +that is, by advancing money upon them +before they are due, that the greater part of +banks and bankers issue their promissory notes. +They deduct always, upon whatever sum they +advance, the legal interest till the bill shall +become due. The payment of the bill, when it +becomes due, replaces to the bank the value +of what had been advanced, together with a +clear profit of the interest. The banker, who +advances to the merchant whose bill he discounts, +not gold and silver, but his own promissory +notes, has the advantage of being able +to discount to a greater amount by the whole +value of his promissory notes, which he finds, +by experience, are commonly in circulation. +He is thereby enabled to make his clear gain +of interest on so much a larger sum.</p> + +<p>The commerce of Scotland, which at present +is not very great, was still more inconsiderable +when the two first banking companies +were established; and those companies would +have had but little trade, had they confined +their business to the discounting of bills of exchange. +They invented, therefore, another +method of issuing their promissory notes; by +granting what they called cash accounts, that is, +by giving credit, to the extent of a certain sum +(two or three thousand pounds for example), +to any individual who could procure two persons +of undoubted credit and good landed estate +to become surety for him, that whatever +money should be advanced to him, within the +sum for which the credit had been given, +should be repaid upon demand, together with +the legal interest. Credits of this kind are, I +believe, commonly granted by banks and +bankers in all different parts of the world. +But the easy terms upon which the Scotch +banking companies accept of repayment are, +so far as I know, peculiar to them, and have, +perhaps, been the principal cause, both of the +great trade of those companies, and of the benefit +which the country has received from it.</p> + +<p>Whoever has a credit of this kind with one +of those companies, and borrows a thousand +pounds upon it, for example, may repay this +sum piece-meal, by twenty and thirty pounds +at a time, the company discounting a proportionable +part of the interest of the great sum, +from the day on which each of those small +sums is paid in, till the whole be in this manner +repaid. All merchants, therefore, and almost +all men of business, find it convenient to +keep such cash accounts with them, and are +thereby interested to promote the trade of +those companies, by readily receiving their +notes in all payments, and by encouraging all +those with whom they have any influence to do +the same. The banks, when their customers +apply to them for money, generally advance it +to them in their own promissory notes. These +the merchants pay away to the manufacturers +for goods, the manufacturers to the farmers +for materials and provisions, the farmers to +their landlords for rent; the landlords repay +them to the merchants for the conveniencies +and luxuries with which they supply them, +and the merchants again return them to the +banks in order to balance their cash accounts, +or to replace what they may have borrowed of +them; and thus almost the whole money business +of the country is transacted by means of +them. Hence the great trade of those companies.</p> + +<p>By means of those cash accounts, every merchant +can, without imprudence, carry on a +greater trade than he otherwise could do. If +there are two merchants, one in London and +the other in Edinburgh, who employ equal +stocks in the same branch of trade, the Edinburgh +merchant can, without imprudence, +carry on a greater trade, and give employment +to a greater number of people, than the London +merchant. The London merchant must +always keep by him a considerable sum of +money, either in his own coffers, or in those +of his banker, who gives him no interest for +it, in order to answer the demands continually +coming upon him for payment of the goods +which he purchases upon credit. Let the ordinary +amount of this sum be supposed five +hundred pounds; the value of the goods in his +warehouse must always be less, by five hundred +pounds, than it would have been, had he +not been obliged to keep such a sum unemployed. +Let us suppose that he generally disposes +of his whole stock upon hand, or of +goods to the value of his whole stock upon +hand, once in the year. By being obliged to +keep so great a sum unemployed, he must sell +in a year five hundred pounds worth less goods<span class='pagenum'><a name="Page_122" id="Page_122">[Pg 122]</a></span> +than he might otherwise have done. His annual +profits must be less by all that he could +have made by the sale of five hundred pounds +worth more goods; and the number of people +employed in preparing his goods for the market +must be less by all those that five hundred +pounds more stock could have employed. +The merchant in Edinburgh, on the other +hand, keeps no money unemployed for answering +such occasional demands. When +they actually come upon him, he satisfies them +from his cash account with the bank, and gradually +replaces the sum borrowed with the +money or paper which comes in from the occasional +sales of his goods. With the same +stock, therefore, he can, without imprudence, +have at all times in his warehouse a larger +quantity of goods than the London merchant; +and can thereby both make a greater profit +himself, and give constant employment to a +greater number of industrious people who prepare +those goods for the market. Hence the +great benefit which the country has derived +from this trade.</p> + +<p>The facility of discounting bills of exchange, +it may be thought, indeed, gives the English +merchants a conveniency equivalent to the cash +accounts of the Scotch merchants. But the +Scotch merchants, it must be remembered, +can discount their bills of exchange as easily +as the English merchants; and have, besides, +the additional conveniency of their cash accounts.</p> + +<p>The whole paper money of every kind which +can easily circulate in any country, never can +exceed the value of the gold and silver, of +which it supplies the place, or which (the commerce +being supposed the same) would circulate +there, if there was no paper money. If +twenty shilling notes, for example, are the +lowest paper money current in Scotland, the +whole of that currency which can easily circulate +there, cannot exceed the sum of gold and +silver which would be necessary for transacting +the annual exchanges of twenty shillings +value and upwards usually transacted within +that country. Should the circulating paper +at any time exceed that sum, as the excess +could neither be sent abroad nor be employed +in the circulation of the country, it must immediately +return upon the banks, to be exchanged +for gold and silver. Many people +would immediately perceive that they had +more of this paper than was necessary for +transacting their business at home; and as +they could not send it abroad, they would immediately +demand payment for it from the +banks. When this superfluous paper was +converted into gold and silver, they could easily +find a use for it, by sending it abroad; +but they could find none while it remained in +the shape of paper. There would immediately, +therefore, be a run upon the banks to the +whole extent of this superfluous paper, and if +they showed any difficulty or backwardness in +payment, to a much greater extent; the alarm +which this would occasion necessarily increasing +the run.</p> + +<p>Over and above the expenses which are common +to every branch of trade, such as the expense +of house-rent, the wages of servants, +clerks, accountants, &c. the expenses peculiar +to a bank consist chiefly in two articles: first, +in the expense of keeping at all times in its +coffers, for answering the occasional demands +of the holders of its notes, a large sum of money, +of which it loses the interest; and, secondly, +in the expense of replenishing those +coffers as fast as they are emptied by answering +such occasional demands.</p> + +<p>A banking company which issues more paper +than can be employed in the circulation +of the country, and of which the excess is continually +returning upon them for payment, +ought to increase the quantity of gold and silver +which they keep at all times in their coffers, +not only in proportion to this excessive +increase of their circulation, but in a much +greater proportion; their notes returning upon +them much faster than in proportion to the +excess of their quantity. Such a company, +therefore, ought to increase the first article of +their expense, not only in proportion to this +forced increase of their business, but in a much +greater proportion.</p> + +<p>The coffers of such a company, too, though +they ought to be filled much fuller, yet must +empty themselves much faster than if their +business was confined within more reasonable +bounds, and must require not only a more violent, +but a more constant and uninterrupted +exertion of expense, in order to replenish them. +The coin, too, which is thus continually drawn +in such large quantities from their coffers, +cannot be employed in the circulation of the +country. It comes in place of a paper which +is over and above what can be employed in +that circulation, and is, therefore, over and above +what can be employed in it too. But as +that coin will not be allowed to lie idle, it +must, in one shape or another, be sent abroad, +in order to find that profitable employment +which it cannot find at home; and this continual +exportation of gold and silver, by enhancing +the difficulty, must necessarily enhance +still farther the expense of the bank, in +finding new gold and silver in order to replenish +those coffers, which empty themselves +so very rapidly. Such a company, therefore, +must in proportion to this forced increase of +their business, increase the second article of +their expense still more than the first.</p> + +<p>Let us suppose that all the paper of a particular +bank, which the circulation of the country +can easily absorb and employ, amounts exactly +to forty thousand pounds, and that, for +answering occasional demands, this bank is +obliged to keep at all times in its coffers ten +thousand pounds in gold and silver. Should +this bank attempt to circulate forty-four thous<span class='pagenum'><a name="Page_123" id="Page_123">[Pg 123]</a></span>and +pounds, the four thousand pounds which +are over and above what the circulation can +easily absorb and employ, will return upon it +almost as fast as they are issued. For answering +occasional demands, therefore, this +bank ought to keep at all times in its coffers, +not eleven thousand pounds only, but fourteen +thousand pounds. It will thus gain nothing +by the interest of the four thousand +pounds excessive circulation; and it will lose +the whole expense of continually collecting +four thousand pounds in gold and silver, which +will be continually going out of its coffers as +fast as they are brought into them.</p> + +<p>Had every particular banking company always +understood and attended to its own particular +interest, the circulation never could +have been overstocked with paper money. But +every particular banking company has not always +understood or attended to its own particular +interest, and the circulation has frequently +been overstocked with paper money.</p> + +<p>By issuing too great a quantity of paper, of +which the excess was continually returning, +in order to be exchanged for gold and silver, +the Bank of England was for many years together +obliged to coin gold to the extent of +between eight hundred thousand pounds and +a million a-year; or, at an average, about +eight hundred and fifty thousand pounds. +For this great coinage, the bank (in consequence +of the worn and degraded state into +which the gold coin had fallen a few years +ago) was frequently obliged to purchase gold +bullion at the high price of four pounds an +ounce, which it soon after issued in coin at +L.3 : 17 : 10½ an ounce, losing in this manner +between two and a half and three per +cent. upon the coinage of so very large a sum. +Though the bank, therefore, paid no seignorage, +though the government was properly at +the expense of this coinage, this liberality of +government did not prevent altogether the expense +of the bank.</p> + +<p>The Scotch banks, in consequence of an excess +of the same kind, were all obliged to employ +constantly agents at London to collect +money for them, at an expense which was seldom +below one and a half or two per cent. +This money was sent down by the waggon, +and insured by the carriers at an additional expense +of three quarters per cent. or fifteen +shillings on the hundred pounds. Those agents +were not always able to replenish the +coffers of their employers so fast as they were +emptied. In this case, the resource of the +banks was, to draw upon their correspondents +in London bills of exchange, to the extent of +the sum which they wanted. When those +correspondents afterwards drew upon them +for the payment of this sum, together with +the interest and commission, some of those +banks, from the distress into which their excessive +circulation had thrown them, had sometimes +no other means of satisfying this draught, +but by drawing a second set of bills, either +upon the same, or upon some other correspondents +in London; and the same sum, or rather +bills for the same sum, would in this +manner make sometimes more than two or +three journeys; the debtor bank paying always +the interest and commission upon the whole +accumulated sum. Even those Scotch banks +which never distinguished themselves by their +extreme imprudence, were sometimes obliged +to employ this ruinous resource.</p> + +<p>The gold coin which was paid out, either +by the Bank of England or by the Scotch +banks, in exchange for that part of their paper +which was over and above what could be employed +in the circulation of the country, being +likewise over and above what could be employed +in that circulation, was sometimes sent +abroad in the shape of coin, sometimes melted +down and sent abroad in the shape of bullion, +and sometimes melted down and sold to the +Bank of England at the high price of four +pounds an ounce. It was the newest, the +heaviest, and the best pieces only, which were +carefully picked out of the whole coin, and +either sent abroad or melted down. At home, +and while they remained in the shape of coin, +these heavy pieces were of no more value than +the light; but they were of more value abroad, +or when melted down into bullion at home. +The Bank of England, notwithstanding their +great annual coinage, found, to their astonishment, +that there was every year the same scarcity +of coin as there had been the year before; +and that, notwithstanding the great quantity +of good and new coin which was every year +issued from the bank, the state of the coin, +instead of growing better and better, became +every year worse and worse. Every year they +found themselves under the necessity of coining +nearly the same quantity of gold as they +had coined the year before; and from the continual +rise in the price of gold bullion, in +consequence of the continual wearing and clipping +of the coin, the expense of this great annual +coinage became, every year, greater and +greater. The Bank of England, it is to be +observed, by supplying its own coffers with +coin, is indirectly obliged to supply the whole +kingdom, into which coin is continually flowing +from those coffers in a great variety of +ways. Whatever coin, therefore, was wanted +to support this excessive circulation both of +Scotch and English paper money, whatever +vacuities this excessive circulation occasioned +in the necessary coin of the kingdom, the +Bank of England was obliged to supply them. +The Scotch banks, no doubt, paid all of them +very dearly for their own imprudence and inattention: +but the Bank of England paid very +dearly, not only for its own imprudence, but +for the much greater imprudence of almost all +the Scotch banks.</p> + +<p>The over-trading of some bold projectors +in both parts of the united kingdom, was the<span class='pagenum'><a name="Page_124" id="Page_124">[Pg 124]</a></span> +original cause of this excessive circulation of +paper money.</p> + +<p>What a bank can with propriety advance to +a merchant or undertaker of any kind, is not +either the whole capital with which he trades, +or even any considerable part of that capital; +but that part of it only which he would otherwise +be obliged to keep by him unemployed +and in ready money, for answering occasional +demands. If the paper money which the bank +advances never exceeds this value, it can never +exceed the value of the gold and silver which +would necessarily circulate in the country if +there was no paper money; it can never exceed +the quantity which the circulation of the +country can easily absorb and employ.</p> + +<p>When a bank discounts to a merchant a +real bill of exchange, drawn by a real creditor +upon a real debtor, and which, as soon as +it becomes due, is really paid by that debtor; +it only advances to him a part of the value +which he would otherwise be obliged to keep +by him unemployed and in ready money, for +answering occasional demands. The payment +of the bill, when it becomes due, replaces to +the bank the value of what it had advanced, +together with the interest. The coffers of the +bank, so far as its dealings are confined to +such customers, resemble a water-pond, from +which, though a stream is continually running +out, yet another is continually running in, +fully equal to that which runs out; so that, +without any further care or attention, the +pond keeps always equally, or very near equally +full. Little or no expense can ever be necessary +for replenishing the coffers of such a +bank.</p> + +<p>A merchant, without over-trading, may frequently +have occasion for a sum of ready money, +even when he has no bills to discount. +When a bank, besides discounting his bills, +advances him likewise, upon such occasions, +such sums upon his cash account, and accepts +of a piece-meal repayment, as the money comes +in from the occasional sale of his goods, upon +the easy terms of the banking companies +of Scotland; it dispenses him entirely from +the necessity of keeping any part of his stock +by him unemployed and in ready money for +answering occasional demands. When such +demands actually come upon him, he can answer +them sufficiently from his cash account. +The bank, however, in dealing with such customers, +ought to observe with great attention, +whether, in the course of some short period +(of four, five, six, or eight months, for example), +the sum of the repayments which it +commonly receives from them, is, or is not, +fully equal to that of the advances which it +commonly makes to them. If, within the +course of such short periods, the sum of the +repayments from certain customers is, upon +most occasions, fully equal to that of the advances, +it may safely continue to deal with +such customers. Though the stream which +is in this case continually running out from +its coffers may be very large, that which is +continually running into them must be at least +equally large: so that, without any further +care or attention, those coffers are likely to be +always equally or very near equally full, and +scarce ever to require any extraordinary expense +to replenish them. If, on the contrary, +the sum of the repayments from certain other +customers, falls commonly very much short of +the advances which it makes to them, it cannot +with any safety continue to deal with such +customers, at least if they continue to deal +with it in this manner. The stream which is in +this case continually running out from its coffers, +is necessarily much larger than that which +is continually running in; so that, unless they +are replenished by some great and continual +effort of expense, those coffers must soon be +exhausted altogether.</p> + +<p>The banking companies of Scotland, accordingly, +were for a long time very careful +to require frequent and regular repayments +from all their customers, and did not care to +deal with any person, whatever might be his +fortune or credit, who did not make, what +they called, frequent and regular operations +with them. By this attention, besides saving +almost entirely the extraordinary expense of +replenishing their coffers, they gained two other +very considerable advantages.</p> + +<p>First, by this attention they were enabled +to make some tolerable judgment concerning +the thriving or declining circumstances of their +debtors, without being obliged to look out for +any other evidence besides what their own +books afforded them; men being, for the most +part, either regular or irregular in their repayments, +according as their circumstances are +either thriving or declining. A private man +who lends out his money to perhaps half a +dozen or a dozen of debtors, may, either by +himself or his agents, observe and inquire both +constantly and carefully into the conduct and +situation of each of them. But a banking +company, which lends money to perhaps five +hundred different people, and of which the +attention is continually occupied by objects of +a very different kind, can have no regular information +concerning the conduct and circumstances +of the greater part of its debtors, beyond +what its own books afford it. In requiring +frequent and regular repayments from +all their customers, the banking companies +of Scotland had probably this advantage in +view.</p> + +<p>Secondly, by this attention they secured +themselves from the possibility of issuing more +paper money than what the circulation of the +country could easily absorb and employ. When +they observed, that within moderate periods +of time, the repayments of a particular customer +were, upon most occasions, fully equal +to the advances which they had made to him, +they might he assured that the paper money<span class='pagenum'><a name="Page_125" id="Page_125">[Pg 125]</a></span> +which they had advanced to him had not, at +any time, exceeded the quantity of gold and +silver which he would otherwise have been +obliged to keep by him for answering occasional +demands; and that, consequently, the +paper money, which they had circulated by +his means, had not at any time exceeded the +quantity of gold and silver which would have +circulated in the country, had there been no +paper money. The frequency, regularity, and +amount of his repayments, would sufficiently +demonstrate that the amount of their advances +had at no time exceeded that part of +his capital which he would otherwise have +been obliged to keep by him unemployed, and +in ready money, for answering occasional demands; +that is, for the purpose of keeping +the rest of his capital in constant employment. +It is this part of his capital only which, within +moderate periods of time, is continually returning +in every dealer in the shape of money, +whether paper or coin, and continually going +from him in the same shape. If the advances +of the bank had commonly exceeded this part +of his capital, the ordinary amount of his repayments +could not, within moderate periods +of time, have equalled the ordinary amount +of its advances. The stream which, by means +of his dealings, was continually running into +the coffers of the bank, could not have been +equal to the stream which, by means of the +same dealings was continually running out. +The advances of the bank paper, by exceeding +the quantity of gold and silver which, had +there been no such advances, he would have +been obliged to keep by him for answering occasional +demands, might soon come to exceed +the whole quantity of gold and silver which +(the commerce being supposed the same) would +have circulated in the country, had there been +no paper money; and, consequently, to exceed +the quantity which the circulation of the +country could easily absorb and employ; and +the excess of this paper money would immediately +have returned upon the bank, in order +to be exchanged for gold and silver. This +second advantage, though equally real, was +not, perhaps, so well understood by all the +different banking companies in Scotland as +the first.</p> + +<p>When, partly by the conveniency of discounting +bills, and partly by that of cash accounts, +the creditable traders of any country +can be dispensed from the necessity of keeping +any part of their stock by them unemployed, +and in ready money, for answering +occasional demands, they can reasonably expect +no farther assistance from banks and +bankers, who, when they have gone thus far, +cannot, consistently with their own interest +and safety, go farther. A bank cannot, consistently +with its own interest, advance to a +trader the whole, or even the greater part +of the circulating capital with which he trades; +because, though that capital is continually returning +to him in the shape of money, and +going from him in the same shape, yet the +whole of the returns is too distant from the +whole of the outgoings, and the sum of his +the repayments could not equal the sum of his +advances within much moderate periods of time +as suit the conveniency of a bank. Still less +could a bank afford to advance him any considerable +part of his fixed capital; of the capital +which the undertaker of an iron forge, +for example, employs in erecting his forge and +smelting-houses, his work-houses, and warehouses, +the dwelling-houses of his workmen, +&c.; of the capital which the undertaker of a +mine employs in sinking his shafts, in erecting +engines for drawing out the water, in +making roads and waggon-ways, &c.; of the +capital which the person who undertakes to +improve land employs in clearing, draining, +inclosing, manuring, and ploughing waste +and uncultivated fields; in building farm-houses, +with all their necessary appendages +of stables, granaries, &c. The returns of +the fixed capital are, in almost all cases, +much slower than those of the circulating capital: +and such expenses, even when laid out +with the greatest prudence and judgment, +mean very seldom return to the undertaker till after +period of many years, a period by far too +distant to suit the conveniency of a bank. +Traders and other undertakers may, no doubt +with great propriety, carry on a very considerable +part of their projects with borrowed money. +In justice to their creditors, however, their +own capital ought in this case to be sufficient +to insure, if I may say so, the capital of those +creditors; or to render it extremely improbable +that those creditors should incur any +loss, even though the success of the project +should fall very much short of the expectation +of the projectors. Even with this precaution, +too, the money which is borrowed, and which +it is meant should not be repaid till after a +period of several years, ought not to be borrowed +of a bank, but ought to be borrowed +upon bond or mortgage, of such private people +as propose to live upon the interest of their +money, without taking the trouble themselves +to employ the capital, and who are, upon that +account, willing to lend that capital to such +people of good credit as are likely lo keep it +for several years. A bank, indeed, which lends +its money without the expense of stamped paper, +or of attorneys' fees for drawing bonds +and mortgages, and which accepts of repayment +upon the easy terms of the banking companies +of Scotland, would, no doubt, be a +very convenient creditor to such traders and +undertakers. But such traders and undertakers +would surely be most inconvenient debtors +to such a bank.</p> + +<p>It is now more than five and twenty years +since the paper money issued by the different +banking companies of Scotland was fully +equal, or rather was somewhat more than fully<span class='pagenum'><a name="Page_126" id="Page_126">[Pg 126]</a></span> +equal, to what the circulation of the country +could easily absorb and employ. Those companies, +therefore, had so long ago given all +the assistance to the traders and other undertakers +of Scotland which it is possible for +banks and bankers, consistently with their own +interest, to give. They had even done somewhat +more. They had over-traded a little, +and had brought upon themselves that loss, +or at least that diminution of profit, which, in +this particular business, never fails to attend the +smallest degree of over-trading. Those traders +and other undertakers, having got so much +assistance from banks and bankers, wished to +get still more. The banks, they seem to have +thought, could extend their credits to whatever +sum might be wanted, without incurring +any other expense besides that of a few reams +of paper. They complained of the contracted +views and dastardly spirit of the directors of +those banks, which did not, they said, extend +their credits in proportion to the extension of +the trade of the country; meaning, no doubt, +by the extension of that trade, the extension +of their own projects beyond what they could +carry on either with their own capital, or with +what they had credit to borrow of private +people in the usual way of bond or mortgage. +The banks, they seem to have thought, +were in honour bound to supply the deficiency, +and to provide them with all the capital +which they wanted to trade with. The +banks, however, were of a different opinion +and upon their refusing to extend their credits, +some of those traders had recourse to an +expedient which, for a time, served their +purpose, though at a much greater expense, +yet as effectually as the utmost extension of +bank credits could have done. This expedient +was no other than the well known shift of +drawing and redrawing; the shift to which +unfortunate traders have sometimes recourse, +when they are upon the brink of bankruptcy. +The practice of raising money in this manner +had been long known in England; and, during +the course of the late war, when the high +profits of trade afforded a great temptation to +over-trading, is said to have been carried on +to a very great extent. From England it was +brought into Scotland, where, in proportion +to the very limited commerce, and to the very +moderate capital of the country, it was soon +carried on to a much greater extent than it +ever had been in England.</p> + +<p>The practice of drawing and redrawing is +so well known to all men of business, that it +may, perhaps, be thought unnecessary to give +any account of it. But as this book may come +into the hands of many people who are not +men of business, and as the effects of this +practice upon the banking trade are not, perhaps, +generally understood, even by men of +business themselves, I shall endeavour to explain +it as distinctly as I can.</p> + +<p>The customs of merchants, which were established +when the barbarous laws of Europe +did not enforce the performance of their contracts, +and which, during the course of the +two last centuries, have been adopted into the +laws of all European nations, have given such +extraordinary privileges to bills of exchange, +that money is more readily advanced upon +them than upon any other species of obligation; +especially when they are made payable +within so short a period as two or three months +after their date. If, when the bill becomes +due, the acceptor does not pay it as soon as it +is presented, he becomes from that moment a +bankrupt. The bill is protested, and returns +upon the drawer, who, if he does not immediately +pay it, becomes likewise a bankrupt. +If, before it came to the person who presents +it to the acceptor for payment, it had passed +through the hands of several other persons, +who had successively advanced to one another +the contents of it, either in money or goods, +and who, to express that each of them had in +his turn received those contents, had all of +them in their order indorsed, that is, written +their names upon the back of the bill; each +indorser becomes in his turn liable to the +owner of the bill for those contents, and, if +he fails to pay, he becomes too, from that moment, +a bankrupt. Though the drawer, acceptor, +and indorsers of the bill, should all of +them be persons of doubtful credit; yet, still +the shortness of the date gives some security +to the owner of the bill. Though all of them +may be very likely to become bankrupts, it is +a chance if they all become so in so short a +time. The house is crazy, says a weary traveller +to himself, and will not stand very +long; but it is a chance if it falls to-night, +and I will venture, therefore, to sleep in it +to-night.</p> + +<p>The trader A in Edinburgh, we shall suppose, +draws a bill upon B in London, payable +two months after date. In reality B in London +owes nothing to A in Edinburgh; but he +agrees to accept of A's bill, upon condition, that +before the term of payment he shall redraw upon +A in Edinburgh for the same sum, together +with the interest and a commission, another +bill, payable likewise two months after +date. B accordingly, before the expiration +of the first two months, redraws this bill upon +A in Edinburgh; who, again before the expiration +of the second two months, draws a second +bill upon B in London, payable likewise +two months after date; and before the expiration +of the third two months, B in London redraws +upon A in Edinburgh another bill payable +also two months after date. This practice +has sometimes gone on, not only for several +months, but for several years together, the +bill always returning upon A in Edinburgh +with the accumulated interest and commission +of all the former bills. The interest was five +per cent. in the year, and the commission was +never less than one half per cent. on each<span class='pagenum'><a name="Page_127" id="Page_127">[Pg 127]</a></span> +draught. This commission being repeated +more than six times in the year, whatever money +A might raise by this expedient might necessarily +have cost him something more than +eight per cent in the year and sometimes a +great deal more, when either the price of the +commission happened to rise, or when he was +obliged to pay compound interest upon the +interest and commission of former bills. This +practice was called raising money by circulation.</p> + +<p>In a country where the ordinary profits of +stock, in the greater part of mercantile projects, +are supposed to run between six and ten per +cent. it must have been a very fortunate speculation, +of which the returns could not only +repay the enormous expense at which the money +was thus borrowed for carrying it on, but +afford, besides, a good surplus profit to the +projector. Many vast and extensive projects, +however, were undertaken, and for several +years carried on, without any other fund to +support them besides what was raised at this +enormous expense. The projectors, no doubt, +had in their golden dreams the most distinct +vision of this great profit. Upon their awakening, +however, either at the end of their projects, +or when they were no longer able to +carry them on, they very seldom, I believe, +had the good fortune to find it.<a name="FNanchor_28_28" id="FNanchor_28_28"></a><a href="#Footnote_28_28" class="fnanchor">[28]</a></p> + +<p>The bills which A in Edinburgh drew upon +B in London, he regularly discounted two +months before they were due, with some bank +or banker in Edinburgh; and the bills which +B in London redrew upon A in Edinburgh, +he as regularly discounted, either with the +Bank of England, or with some other banker +in London. Whatever was advanced upon +such circulating bills was in Edinburgh advanced +in the paper of the Scotch banks; and +in London, when they were discounted at the +Bank of England in the paper of that bank. +Though the bills upon which this paper had +been advanced were all of them repaid in their +turn as soon as they became due, yet the value +which had been really advanced upon the last +bill was never really returned to the banks +which advanced it, because, before each bill +became due, another bill was always drawn +to somewhat a greater amount than the bill +which was soon to be paid: and the discounting +of this other bill was essentially necessary +towards the payment of that which was soon +to be due. This payment, therefore, was altogether +fictitious. The stream which, by means +of those circulating bills of exchange, had once +been made to run out from the coffers of the +banks, was never replaced by any stream which +really run into them.</p> + +<p>The paper which was issued upon those circulating +bills of exchange amounted, upon +many occasions, to the whole fund destined +for carrying on some vast and extensive project +of agriculture, commerce, or manufactures; +and not merely to that part of it which, +had there been no paper money, the projector +would have been obliged to keep by him unemployed, +and in ready money, for answering +occasional demands. The greater part of this +paper was, consequently, over and above the +value of the gold and silver which would have +circulated in the country, had there been no +paper money. It was over and above, therefore, +what the circulation of the country could +easily absorb and employ, and upon that account, +immediately returned upon the banks, +in order to be exchanged for gold and silver, +which they were to find as they could. It +was a capital which those projectors had very +artfully contrived to draw from those banks, +not only without their knowledge or deliberate +consent, but for some time, perhaps, without +their having the most distant suspicion +that they had really advanced it.</p> + +<p>When two people, who are continually +drawing and redrawing upon one another, +discount their bills always with the same banker, +he must immediately discover what they +are about, and see clearly that they are trading, +not with any capital of their own, but +with the capital which he advances to them. +But this discovery is not altogether so easy +when they discount their bills sometimes with +one banker, and sometimes with another, and +when the two same persons do not constantly +draw and redraw upon one another, but occasionally +run the round of a great circle of projectors, +who find it for their interest to assist +one another in this method of raising money<span class='pagenum'><a name="Page_128" id="Page_128">[Pg 128]</a></span> +and to render it, upon that account, as difficult +as possible to distinguish between a real +and a fictitious bill of exchange, between a +bill drawn by a real creditor upon a real debtor, +and a bill for which there was properly no +real creditor but the bank which discounted +it, nor any real debtor but the projector who +made use of the money. When a banker had +even made this discovery, he might sometimes +make it too late, and might find that he had +already discounted the bills of those projectors +to so great an extent, that, by refusing to +discount any more, he would necessarily make +them all bankrupts; and thus by ruining them, +might perhaps ruin himself. For his own interest +and safety, therefore, he might find it +necessary, in this very perilous situation, to +go on for some time, endeavouring, however, +to withdraw gradually, and, upon that account, +making every day greater and greater difficulties +about discounting, in order to force +these projectors by degrees to have recourse, +either to other bankers, or to other methods +of raising money: so as that he himself might, +as soon as possible, get out of the circle. The +difficulties, accordingly, which the Bank of +England, which the principal bankers in London, +and which even the more prudent Scotch +banks began, after a certain time, and when +all of them had already gone too far, to make +about discounting, not only alarmed, but enraged, +in the highest degree, those projectors. +Their own distress, of which this prudent and +necessary reserve of the banks was, no doubt, +the immediate occasion, they called the distress +of the country; and this distress of the country, +they said, was altogether owing to the ignorance, +pusillanimity, and bad conduct of +the banks, which did not give a sufficiently-liberal +aid to the spirited undertakings of those +who exerted themselves in order to beautify, +improve, and enrich the country. It was the +duty of the banks, they seemed to think, to +lend for as long a time, and to as great an extent, +as they might wish to borrow. The +banks, however, by refusing in this manner to +give more credit to those to whom they had +already given a great deal too much, took the +only method by which it was now possible to +save either their own credit, or the public credit +of the country.</p> + +<p>In the midst of this clamour and distress, a +new bank was established in Scotland, for the +express purpose of relieving the distress of the +country. The design was generous; but the +execution was imprudent, and the nature and +causes of the distress which it meant to relieve, +were not, perhaps, well understood. This bank +was more liberal then any other had ever been, +both in granting cash-accounts, and in discounting +bills of exchange. With regard to +the latter, it seems to have made scarce any +distinction between real and circulating bills, +but to have discounted all equally. It was the +avowed principle of this bank to advance upon +any reasonable security, the whole capita, +which was to be employed in those improvements +of which the returns are the most slow +and distant, such as the improvements of land. +To promote such improvements was even said +to be the chief or the public-spirited purposes +for which it was instituted. By its liberality +in granting cash-accounts, and in discounting +bills of exchange, it, no doubt, issued great +quantities of its bank notes. But those bank +notes being, the greater part of them, over +and above what the circulation of the country +could easily absorb and employ, returned upon +it, in order to be exchanged for gold and silver, +as fast as they were issued. Its coffers were +never well filled. The capital which had been +subscribed to this bank, at two different subscriptions, +amounted to one hundred and sixty +thousand pounds, of which eighty per cent. +only was paid up. This sum ought to have +been paid in at several different instalments. +A great part of the proprietors, when they paid +in their first instalment, opened a cash-account +with the bank; and the directors, thinking +themselves obliged to treat their own proprietors +with the same liberality with which they +treated all other man, allowed many of them +to borrow upon this cash-account what they +paid in upon all their subsequent instalments. +Such payments, therefore, only put into one +coffer what had the moment before been taken +out of another. But had the coffers of this +bank been filled ever so well, its excessive circulation +must have emptied them faster than +they could have been replenished by any other +expedient but the ruinous one of drawing upon +London; and when the bill became due, +paying it, together with interest and commission, +by another draught upon the same place. +Its coffers having been filled so very ill, it is +said to have been driven to this resource within +a very few months after it began to do business. +The estates of the proprietors of this +bank were worth several millions, and, by +their subscription to the original bond or contract +of the bank, were really pledged for answering +all its engagements. By means of +the great credit which so great a pledge necessarily +gave it, it was, notwithstanding its +too liberal conduct, enabled to entry on business +for more than two years. When it was +obliged to stop, it had in the circulation about +two hundred thousand pounds in bank notes. +In order to support the circulation of those +notes, which were continually returning upon +it as fast as they were issued, it had been constantly +in the practice of drawing bills of exchange +upon London, of which the number +and value were continually increasing, and, +when it stopt, amounted to upwards of six +hundred thousand pounds. This bank, therefore, +had, in little more than the course of two +years, advanced to different people upwards of +eight hundred thousand pounds at five per +cent. Upon the two hundred thousand pounds<span class='pagenum'><a name="Page_129" id="Page_129">[Pg 129]</a></span> +which it circulated in bank notes, this five per +cent. might perhaps be considered as a clear +gain, without any other deduction besides the +expense of management. But upon upwards of +six hundred thousand pounds, for which it was +continually drawing bills of exchange upon +London, it was paying, in the way of interest +and commission, upwards of eight per cent. +and was consequently losing more than three +per cent. upon more than three-fourths of all +its dealings.</p> + +<p>The operations of this bank seem to have +produced effects quite opposite to those which +were intended by the particular persons who +planned and directed it. They seem to have +intended to support the spirited undertakings, +for as such they considered them, which were +at that time carrying on in different parts of +the country; and, at the some time, by drawing +the whole banking business to themselves, +to supplant all the other Scotch banks, particularly +those established at Edinburgh, +whose backwardness in discounting bills of +exchange had given some offence. This bank, +no doubt, gave some temporary relief to those +projectors, and enabled them to carry on their +projects for about two years longer than they +could otherwise have done. But it thereby +only enabled them to get so much deeper into +debt; so that, when rain came, it fell so much +the heavier both upon them and upon their their +creditors. The operations of this bank, therefore, +instead of relieving, in reality aggravated +in the long-run the distress which those projectors +had brought both upon themselves and +upon their country. It would have been +much better for themselves, their creditors, +and their country, had the greater part of them +been obliged to stop two years sooner than +they actually did. The temporary relief, +however, which this bank afforded to those +projectors, proved a real and permanent relief +to the other Scotch banks. All the dealers +in circulating bills of exchange, which +those other banks had become so backward in +discounting, had recourse to this new bank, +where they were received with open arms. +Those other banks, therefore, were enabled to +get very easily out of that fatal circle, from +which they could not otherwise have disengaged +themselves without incurring a considerable +loss, and perhaps, too, even some degree +of discredit.</p> + +<p>In the long-run, therefore, the operations of +this bank increased the real distress of the +country, which it meant to relieve; and effectually +relieved, from a very great distress, +those rivals whom it meant to supplant.</p> + +<p>At the first setting out of this bank, it was +the opinion of some people, that how fast soever +its coffers might be emptied, it might +easily replenish them, by raising money upon +the securities of those to whom it had advanced +its paper. Experience, I believe, soon convinced +them that this method of raising money +was by much too slow to answer their +purpose; and that coffers which originally +were so ill filled, and which emptied themselves +so very fast, could be replenished by no +other expedient but the ruinous one of drawing +bills upon London, and when they became +due, paying them by other draughts on +the same place, with accumulated interest and +commission. But though they had been able +by this method to raise money as fast as they +wanted it, yet, instead of making a profit, +they must have suffered a loss of every such +operation; so that in the long-run they must +have ruined themselves as a mercantile company, +though perhaps not so soon as by the +more expensive practice of drawing and redrawing. +They could still have made nothing +by the interest of the paper, which, being over +and above what the circulation of the country +could absorb and employ, returned upon them +in order to be exchanged for gold and silver, +as fast as they issued it; and for the payment +of which they were themselves continually obliged +to borrow money. On the contrary, +the whole expense of this borrowing, of employing +agents to look out for people who had +money to lend, of negotiating with those people, +and of drawing the proper bond or assignment, +must have fallen upon them, and have +been so much clear loss upon the balance of +their accounts. The project of replenishing +their coffers in this manner may be compared +to that of a man who had a water-pond from +which a stream was continually running out, +and into which no stream was continually running, +but who proposed to keep it always +equally full, by employing a number of people +to go continually with buckets to a well at +some miles distance, in order to bring water +to replenish it.</p> + +<p>But though this operation had proved not +only practicable, but profitable to the bank, +as a mercantile company; yet the country +could have derived no benefit from it, but, on +the contrary, must have suffered a very considerable +loss by it. This operation could not +augment, in the smallest degree, the quantity +of money to be lent. It could only have erected +this bank into a sort of general loan +office for the whole country. Those who +wanted to borrow must have applied to this +bank, instead of applying to the private persons +who had lent it their money. But a +bank which lends money, perhaps to five hundred +different people, the greater part of whom +its directors can know very little about, is not +likely to be more judicious in the choice of +its debtors than a private person who lends +out his money among a few people whom he +knows, and in whose sober and frugal conduct +he thinks he has good reason to confide. +The debtors of such a bank as that whose conduct +I have been giving some account of +were likely, the greater part of them, to be +chimerical projectors, the drawers and re<span class='pagenum'><a name="Page_130" id="Page_130">[Pg 130]</a></span>drawers +of circulating bills of exchange, who +would employ the money in extravagant undertakings, +which, with all the assistance that +could be given them, they would probably +never be able to complete, and which, if they +should be completed, would never repay the +expense which they had really cost, would never +afford a fund capable of maintaining a +quantity of labour equal to that which had +been employed about them. The sober and +frugal debtors of private persons, on the contrary, +would be more likely to employ the money +borrowed in sober undertakings which +were proportioned to their capitals, and which, +though they might have less of the grand and +the marvellous, would have more of the solid +and the profitable; which would repay with a +large profit whatever had been laid out upon +them, and which would thus afford a fund +capable of maintaining a much greater quantity +of labour than that which had been employed +about them. The success of this operation, +therefore, without increasing in the +smallest degree the capital of the country, +would only have transferred a great part of +it from prudent and profitable to imprudent +and unprofitable undertakings.</p> + +<p>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, which he +seems to have imagined might issue paper to +the amount of the whole value of all the lands +in the country, he proposed to remedy this +want of money. The parliament of Scotland, +when he first proposed his project, did not +think proper to adopt it. It was afterwards +adopted, with some variations, by the Duke +of Orleans, at that time regent of France. +The idea of the possibility of multiplying paper +money to almost any extent was the real +foundation of what is called the Mississippi +scheme, the most extravagant project, both of +banking and stock-jobbing, that perhaps the +world ever saw. The different operations of +this scheme are explained so fully, so clearly, +and with so much order and distinctness, by +Mr Du Verney, in his Examination of the +Political Reflections upon commerce and finances +of Mr Du Tot, that I shall not give +any account of them. The principles upon +which it was founded are explained by Mr +Law himself, in a discourse concerning money +and trade, which he published in Scotland +when he first proposed his project. The +splendid but visionary ideas which are set forth +in that and some other works upon the same +principles, still continue to make an impression +upon many people, and have, perhaps, in +part, contributed to that excess of banking, +which has of late been complained of, both in +Scotland and in other places.</p> + +<p>The Bank of England is the greatest bank +of circulation in Europe. It was incorporated, +in pursuance of an act of parliament, by a +charter under the great seal, dated the 27th of +July 1694. It at that time advanced to government +the sum of L.1,200,000 for an annuity +of L.100,000, or for L.96,000 a-year, +interest at the rate of eight per cent. and +L.4,000 a-year for the expense of management. +The credit of the new government, +established by the Revolution, we may believe, +must have been very low, when it was obliged +to borrow at so high an interest.</p> + +<p>In 1697, the bank was allowed to enlarge +its capital stock, by an ingraftment of +L.1,001,171 : 10s. Its whole capital stock, +therefore, amounted at this time to L.2,201,171 : 10s. +This ingraftment is said to have been +for the support of public credit. In 1696, +tallies had been at forty, and fifty, and sixty +per cent. discount, and bank notes at twenty +per cent.<a name="FNanchor_29_29" id="FNanchor_29_29"></a><a href="#Footnote_29_29" class="fnanchor">[29]</a> During the great re-coinage of +the silver, which was going on at this time, +the bank had thought proper to discontinue +the payment of its notes, which necessarily +occasioned their discredit.</p> + +<p>In pursuance of the 7th Anne, c. 7, the +bank advanced and paid into the exchequer +the sum of L.400,000; making in all the sum +of L.1,600,000, which it had advanced upon +its original annuity of L.96,000 interest, and +L.4,000 for expense of management. In +1708, therefore, the credit of government was +as good as that of private persons, since it could +borrow at six per cent. interest, the common +legal and market rate of those times. In pursuance +of the same act, the bank cancelled +exchequer bills to the amount of L.1,775,027 17s. 10½d. +at six per cent. interest, and was +at the same time allowed to take in subscriptions +for doubling its capital. In 1708, +therefore, the capital of the bank amounted to +L.4,402,343; and it had advanced to government +the sum of L.3,375,027 : 17 : 10½.</p> + +<p>By a call of fifteen per cent. in 1709, there +was paid in, and made stock, L.656,204 : 1 : 9d.; +and by another of ten per cent. in 1710, +L.501,448 : 12 : 11. In consequence of those +two calls, therefore, the bank capital amounted +to L.5,559,995 : 14 : 8.</p> + +<p>In pursuance of the 3d George I. c. 8, the +bank delivered up two millions of exchequer +bills to be cancelled. It had at this time, therefore, +advanced to government L.5,375,027 : 17 : 10d. +In pursuance of the 8th George I. c. 21, +the bank purchased of the South-sea company, +stock to the amount of L.4,000,000; and in +1722, in consequence of the subscriptions +which it had taken in for enabling it to make +this purchase, its capital stock was increased +by L.3,400,000. At this time, therefore, the +bank had advanced to the public L.9,375,027 17s. 10½d.; +and its capital stock amounted +only to L.8,959,995 : 14 : 8. It was upon +this occasion that the sum which the bank had<span class='pagenum'><a name="Page_131" id="Page_131">[Pg 131]</a></span> +advanced to the public, and for which it received +interest, began first to exceed its capital +stock, or the sum for which it paid a dividend +to the proprietors of bank stock; or, in +other words, that the bank began to have an +undivided capital, over and above its divided +one. It has continued to have an undivided +capital of the same kind ever since. In 1746, +the bank had, upon different occasions, advanced +to the public L.11,686,800, and its divided +capital had been raised by different calls +and subscriptions to L.10,780,000. The state +of those two sums has continued to be the same +ever since. In pursuance of the 4th of George +III. c. 25, the bank agreed to pay to government +for the renewal of its charter L.110,000, +without interest or re-payment. This sum, +therefore did not increase either of these two +other sums.</p> + +<p>The dividend of the bank has varied according +to the variations in the rate of the interest +which it has, at different times, received for the +money it had advanced to the public, as well +as according to other circumstances. This +rate of interest has gradually been reduced +from eight to three per cent. For some years +past, the bank dividend has been at five and a +half per cent.</p> + +<p>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 sustain any loss. No +other banking company in England can be +established by act of parliament, or can consist +of more than six members. It acts, not +only as an ordinary bank, but as a great engine +of state. It receives and pays the greater +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, which +are frequently not paid up till some years thereafter. +In these different operations, its duty +to the public may sometimes have obliged it, +without any fault of its directors, to overstock +the circulation with paper money. It likewise +discounts merchants' bills, and has upon +several different occasions, supported the credit +of the principal houses, not only of England, +but of Hamburgh and Holland. Upon one +occasion, in 1768, it is said to have advanced +for this purpose, in one week, about +L.1,600,000, a great part of it in bullion. I do +not, however, pretend to warrant either the +greatness of the sum, or the shortness of the +time. Upon other occasions, this great company +has been reduced to the necessity of paying +in sixpences.</p> + +<p>It is not by augmenting the capital of the +country, but by rendering a greater part of +that capital active and productive than would +otherwise be so, that the must judicious operations +of banking can increase the industry of +the country. That part of his capital which +a dealer is obliged to keep by him unemployed +and in ready money, for answering occasional +demands, is so much dead stock, which, +so long as it remains in this situation, produces +nothing, either to him or to his country. +The judicious operations of banking enable +him to convert this dead stock into active and +productive stock; into materials to work upon; +into tools to work with and into provisions +and subsistence to work for; into stock +which produces something both to himself and +to his country. The gold and silver money +which circulates in any country, and by means +of which, the produce of its land and labour +is annually circulated and distributed +to the proper consumers, is, in the same manner +as the ready money of the dealer, all dead +stock. It is a very valuable part of the capital +of the country, which produces nothing to +the country. The judicious operations of +banking, by substituting paper in the room of +a great part of this gold and silver, enable the +country to convert a great part of this dead +stock into active and productive stock; into +stock which produces something to the country. +The gold and silver money which circulates +in any country may very properly be +compared to a highway, which, while it circulates +and carries to market all the grass and +corn of the country, produces itself not a single +pile of either. The judicious operations +of banking, by providing, if I may be allowed +so violent a metaphor, a sort of waggon-way +through the air, enable the country to convert, +as it were, a great part of its highways into +good pastures, and corn fields, and thereby to +increase, very considerably, the annual produce +of its land and labour. The commerce +and industry of the country, however, it must +be acknowledged, though they may be somewhat +augmented, cannot be altogether so secure, +when they are thus, as it were, suspended +upon the Dædalian wings of paper money, +as when they travel about upon the solid +ground of gold and silver. Over and above +the accidents to which they are exposed from +the unskilfulness of the conductors of this paper +money, they are liable to several others, +from which no prudence or skill of those +conductors can guard them.</p> + +<p>An unsuccessful war, for example, in which +the enemy got possession of the capital, and +consequently of that treasure which supported +the credit of the paper money, would occasion +much greater confusion in a country where +the whole circulation was carried on by paper, +than in one where the greater part of it was +carried on by gold and silver. The usual +instrument of commerce having lost its value, +no exchanges could be made but either by +barter or upon credit. All taxes having been +usually paid in paper money, the prince would +not have wherewithal either to pay his troops, +or to furnish his magazines; and the state of +the country would be much more irretrievable +than if the greater part of its circulation had<span class='pagenum'><a name="Page_132" id="Page_132">[Pg 132]</a></span> +consisted in gold and silver. A prince, anxious +to maintain his dominions at all times in +the state in which he can most easily defend +them, ought upon this account to guard not +only against that excessive multiplication of +paper money which ruins the very banks +which issue it, but even against that multiplication +of it which enables them to fill the greater +part of the circulation of the country with +it.</p> + +<p>The circulation of every country may +be considered as divided into two different +branches; the circulation of the dealers with +one another, and the circulation between the +dealers and the consumers. Though the same +pieces of money, whether paper or metal, may +be employed sometimes in the one circulation +and sometimes in the other; yet as both are +constantly going on at the same time, each requires +a certain stock of money, of one kind +or another, to carry it on. The value of the +goods circulated between the different dealers +never can exceed the value of those circulated +between the dealers and the consumers; whatever +is bought by the dealers being ultimately +destined to be sold to the consumers. The +circulation between the dealers, as it is carried +on by wholesale, requires generally a pretty +large sum for every particular transaction. +That between the dealers and the consumers, +on the contrary, as it is generally carried on +by retail, frequently requires but very small +ones, a shilling, or even a halfpenny, being often +sufficient. But small sums circulate much +faster than large ones. A shilling changes +masters more frequently than a guinea, and a +halfpenny more frequently than a shilling. +Though the annual purchases of all the consumers, +therefore, are at least equal in value +to those of all the dealers, they can generally +be transacted with a much smaller quantity of +money; the same pieces, by a more rapid circulation, +serving as the instrument of many +more purchases of the one kind than of the other.</p> + +<p>Paper money may be so regulated as either +to confine itself very much to the circulation +between the different dealers, or to extend itself +likewise to a great part of that between +the dealers and the consumers. Where no +bank notes are circulated under £10 value, as +in London, paper money confines itself very +much to the circulation between the dealers. +When a ten pound bank note comes into the +hands of a consumer, he is generally obliged +to change it at the first shop where he has occasion +to purchase five shillings worth of +goods; so that it often returns into the hands +of a dealer before the consumer has spent the +fortieth part of the money. Where bank +notes are issued for so small sums as 20s. as +in Scotland, paper money extends itself to +considerable part of the circulation between +dealers and consumers. Before the act of +parliament which put a stop to the circulation +of ten and five shilling notes, it filled a still +greater part of that circulation. In the currencies +of North America, paper was commonly +issued for so small a sum as a shilling, and +filled almost the whole of that circulation. In +some paper currencies of Yorkshire, it was issued +even for so small a sum as a sixpence.</p> + +<p>Where the issuing of bank notes for such +very small sums is allowed, and commonly +practised, many mean people are both enabled +and encouraged to become bankers. A person +whose promissory note for £5, or even for +20s. would be rejected by everybody, will get +it to be received without scruple when it is issued +for so small a sum as a sixpence. But +the frequent bankruptcies to which such beggarly +bankers must be liable, may occasion a +very considerable inconveniency, and sometimes +even a very great calamity, to many +poor people who had received their notes in +payment.</p> + +<p>It were better, perhaps, that no bank notes +were issued in any part of the kingdom for a +smaller sum than £5. Paper money would +then, probably, confine itself, in every part of +the kingdom, to the circulation between the +different dealers, as much as it does at present +in London, where no bank notes are issued +under L.10 value; L.5 being, in most part of +the kingdom, a sum which, though it will purchase, +perhaps, little more than half the quantity +of goods, is as much considered, and is as +seldom spent all at once, as L.10 are amidst +the profuse expense of London.</p> + +<p>Where paper money, it is to be observed, is +pretty much confined to the circulation between +dealers and dealers, as at London, +there is always plenty of gold and silver. +Where it extends itself to a considerable part +of the circulation between dealers and consumers, +as in Scotland, and still more in +North America, it banishes gold and silver +almost entirely from the country; almost all +the ordinary transactions of its interior commerce +being thus carried on by paper. The +suppression of ten and five shilling bank notes, +somewhat relieved the scarcity of gold and +silver in Scotland; and the suppression of +twenty shilling notes will probably relieve it +still more. Those metals are said to have become +more abundant in America, since the +suppression or some of their paper currencies. +They are said, likewise, to have been more +abundant before the institution of those currencies.</p> + +<p>Though paper money should be pretty +much confined to the circulation between dealers +and dealers, yet banks and bankers might +still be able to give nearly the same assistance +to the industry and commerce of the country, +as they had done when paper money filled almost +the whole circulation. The ready money +which a dealer is obliged to keep by him, +for answering occasional demands, is destined +altogether for the circulation between himself<span class='pagenum'><a name="Page_133" id="Page_133">[Pg 133]</a></span> +and other dealers of whom he buys goods. He +has no occasion to keep any by him for the +circulation between himself and the consumers, +who are his customers, and who bring +ready money to him, instead of taking any +from him. Though no paper money, therefore, +was allowed to be issued, but for such +sums as would confine it pretty much to the +circulation between dealers and dealers; yet +partly by discounting real bills of exchange, +and partly by lending upon cash-accounts, +banks and bankers might still be able to relieve +the greater part of those dealers from the +necessity of keeping any considerable part of +their stock by them unemployed, and in ready +money, for answering occasional demands. +They might still be able to give the utmost +assistance which banks and bankers can with +propriety give to traders of every kind.</p> + +<p>To restrain private people, it may be said, +from receiving in payment the promissory +notes of a banker for any sum, whether great +or small, when they themselves are willing to +receive them; or, to restrain a banker from +issuing such notes, when all his neighbours +are willing to accept of them, is a manifest +violation of that natural liberty, which it is +the proper business of law not to infringe, but +to support. Such regulations may, no doubt, +be considered as in some respect a violation of +natural liberty. But those exertions of the +natural liberty of a few individuals, which +might endanger the security of the whole society, +are, and ought to be, restrained by the +laws of all governments; of the most free, as +well as of the most despotical. The obligation +of building party walls, in order to prevent +the communication of fire, is a violation +of natural liberty, exactly of the same kind +with the regulations of the banking trade which +are here proposed.</p> + +<p>A paper money, consisting in bank notes, +issued by people of undoubted credit, payable +upon demand, without any condition, +and, in fact, always readily paid as soon as +presented, is, in every respect, equal in value +to gold and silver money, since gold and silver +money can at any time be had for it. +Whatever is either bought or sold for such +paper, must necessarily be bought or sold as +cheap as it could have been for gold and silver.</p> + +<p>The increase of paper money, it has been +said, by augmenting the quantity, and consequently +diminishing the value, of the whole +currency, necessarily augments the money +price of commodities. But as the quantity of +gold and silver, which is taken from the currency, +is always equal to the quantity of paper +which is added to it, paper money does +not necessarily increase the quantity of the +whole currency. From the beginning of the +last century to the present time, provisions +never were cheaper in Scotland than in 1759, +though, from the circulation of ten and five +shilling bank notes, there was then more paper +money in the country than at present. +The proportion between the price of provisions +in Scotland and that in England is the +same now as before the great multiplication +of banking companies in Scotland. Corn is, +upon most occasions, fully as cheap in England +as in France, though there is a great deal +of paper money in England, and scarce any +in France. In 1751 and 1752, when Mr +Hume published his Political Discourses, and +soon after the great multiplication of paper +money in Scotland, there was a very sensible +rise in the price of provisions, owing, probably, +to the badness of the seasons, and not +to the multiplication of paper money.</p> + +<p>It would be otherwise, indeed, with a paper +money, consisting in promissory notes, of +which the immediate payment depended, in +any respect, either upon the good will of those +who issued them, or upon a condition which +the holder of the notes might not always have +it in his power to fulfil, or of which the payment +was not exigible till after a certain +number of years, and which, in the meantime, +bore no interest. Such a paper money +would, no doubt, fall more or less below the +value of gold and silver, according as the difficulty +or uncertainty of obtaining immediate +payment was supposed to be greater or less, +or according to the greater or less distance of +time at which payment was exigible.</p> + +<p>Some years ago the different banking companies +of Scotland were in the practice of inserting +into their bank notes, what they called +an optional clause; by which they promised +payment to the bearer, either as soon as the +note should be presented, or, in the option of +the directors, six months after such presentment, +together with the legal interest for the +said six months. The directors of some of those +banks sometimes took advantage of this optional +clause, and sometimes threatened those +who demanded gold and silver in exchange +for a considerable number of their notes, that +they would take advantage of it, unless such +demanders would content themselves with a +part of what they demanded. The promissory +notes of those banking companies constituted, +at that time, the far greater part of the currency +of Scotland, which this uncertainty of +payment necessarily degraded below the value +of gold and silver money. During the +continuance of this abuse (which prevailed +chiefly in 1762, 1763, and 1764), while the +exchange between London and Carlisle was at +par, that between London and Dumfries would +sometimes be four per cent. against Dumfries, +though this town is not thirty miles distant +from Carlisle. But at Carlisle, bills were +paid in gold and silver; whereas at Dumfries +they were paid in Scotch bank notes; and the +uncertainty of getting those bank notes exchanged +for gold and silver coin, had thus degraded +them four per cent. below the value of<span class='pagenum'><a name="Page_134" id="Page_134">[Pg 134]</a></span> +that coin. The same act of parliament which +suppressed ten and five shilling bank notes, +suppressed likewise this optional clause, and +thereby restored the exchange between England +and Scotland to its natural rate, or to +what the course of trade and remittances might +happen to make it.</p> + +<p>In the paper currencies of Yorkshire, the +payment of so small a sum as 6d. sometimes +depended upon the condition, that the holder +of the note should bring the change of a guinea +to the person who issued it; a condition +which the holders of such notes might frequently +find it very difficult to fulfil, and which +must have degraded this currency below the +value of gold and silver money. An act of parliament, +accordingly, declared all such clauses +unlawful, and suppressed, in the same manner +as in Scotland, all promissory notes, payable +to the bearer, under 20s. value.</p> + +<p>The paper currencies of North America +consisted, not in bank notes payable to the +bearer on demand, but in a government paper, +of which the payment was not exigible till +several years after it was issued; and though +the colony governments paid no interest to the +holders of this paper, they declared it to be, +and in fact rendered it, a legal tender of payment +for the full value for which it was issued. +But allowing the colony security to +be perfectly good, L.100, payable fifteen years +hence, for example, in a country where interest +is at six per cent., is worth little more than +L.40 ready money. To oblige a creditor, +therefore, to accept of this as full payment +for a debt of L.100, actually paid down in +ready money, was an act of such violent injustice, +as has scarce, perhaps, been attempted +by the government of any other country which +pretended to be free. It bears the evident +marks of having originally been, what the honest +and downright Doctor Douglas assures +us it was, a scheme of fraudulent debtors to +cheat their creditors. The government of +Pennsylvania, indeed, pretended, upon their +first emission of paper money, in 1722, to +render their paper of equal value with gold +and silver, by enacting penalties against all +those who made any difference in the price of +their goods when they sold them for a colony +paper, and when they sold them for gold and +silver; a regulation equally tyrannical, but +much less effectual, than that which it was +meant to support. A positive law may render +a shilling a legal tender for a guinea, because +it may direct the courts of justice to +discharge the debtor who has made that tender; +but no positive law can oblige a person +who sells goods, and who is at liberty to sell +or not to sell as he pleases, to accept of a shilling +as equivalent to a guinea in the price of +them. Notwithstanding any regulation of this +kind, it appeared, by the course of exchange +with Great Britain, that L.100 sterling was +occasionally considered an equivalent, in some +of the colonies, to L.130, and in others to so +great a sum as L.1100 currency; this difference +in the value arising from the difference +in the quantity of paper emitted in the different +colonies, and in the distance and probability +of the term of its final discharge and +redemption.</p> + +<p>No law, therefore, could be more equitable +than the act of parliament, so unjustly complained +of in the colonies, which declared, +that no paper currency to be emitted there in +time coming, should be a legal tender of payment.</p> + +<p>Pennsylvania was always more moderate in +its emissions of paper money than any other +of our colonies. Its paper currency, accordingly, +is said never to have sunk below the +value of the gold and silver which was current +in the colony before the first emission of +its paper money. Before that emission, the +colony had raised the denomination of its coin, +and had, by act of assembly, ordered 5s. sterling +to pass in the colonies for 6s. 3d., and +afterwards for 6s. 8d. A pound, colony currency, +therefore, even when that currency was +gold and silver, was more than thirty per +cent. below the value of L.1 sterling; and +when that currency was turned into paper, it +was seldom much more than thirty per cent. +below that value. The pretence for raising +the denomination of the coin was to prevent +the exportation of gold and silver, by making +equal quantities of those metals pass for +greater sums in the colony than they did in +the mother country. It was found, however, +that the price of all goods from the mother +country rose exactly in proportion as they +raised the denomination of their coin, so that +their gold and silver were exported as fast as +ever.</p> + +<p>The paper of each colony being received in +the payment of the provincial taxes, for the +full value for which it had been issued, it necessarily +derived from this use some additional +value, over and above what it would have +had, from the real or supposed distance of the +term of its final discharge and redemption. +This additional value was greater or less, according +as the quantity of paper issued was +more or less above what could be employed in +the payment of the taxes of the particular colony +which issued it. It was in all the colonies +very much above what could be employed +in this manner.</p> + +<p>A prince, who should enact that a certain +proportion of his taxes should be paid in a paper +money of a certain kind, might thereby +give a certain value to this paper money, even +though the term of its final discharge and redemption +should depend altogether upon the +will of the prince. If the bank which issued +this paper was careful to keep the quantity of +it always somewhat below what could easily +be employed in this manner, the demand for +it might be such as to make it even bear a<span class='pagenum'><a name="Page_135" id="Page_135">[Pg 135]</a></span> +premium, or sell for somewhat more in the +market than the quantity of gold or silver currency +for which it was issued. Some people +account in this manner for what is called the +agio of the bank of Amsterdam, or for the superiority +of bank money over current money, +though this bank money, as they pretend, cannot +be taken out of the bank at the will of the +owner. The greater part of foreign bills of exchange +must be paid in bank money, that is, by +a transfer in the books of the bank, and the directors +of the bank, they allege, are careful to +keep the whole quantity of bank money always +below what this use occasions a demand +for. It is upon this account, they say, the +bank money sells for a premium, or bears an +agio of four or five per cent. above the same +nominal sum of the gold and silver currency +of the country. This account of the bank of +Amsterdam, however, it will appear hereafter, +is in a great measure chimerical.</p> + +<p>A paper currency which falls below the value +of gold and silver coin, does not thereby +sink the value of those metals, or occasion +equal quantities of them to exchange for a +smaller quantity of goods of any other kind. +The proportion between the value of gold and +silver and that of goods of any other kind, depends +in all cases, not upon the nature and +quantity of any particular paper money, which +may be current in any particular country, but +upon the richness or poverty of the mines, +which happen at any particular time to supply +the great market of the commercial world +with those metals. It depends upon the proportion +between the quantity of labour which +is necessary in order to bring a certain quantity +of gold and silver to market, and that +which is necessary in order to bring thither a +certain quantity of any other sort of goods.</p> + +<p>If bankers are restrained from issuing any +circulating bank notes, or notes payable to +the bearer, for less than a certain sum; and +if they are subjected to the obligation of an +immediate and unconditional payment of such +bank notes as soon as presented, their trade +may, with safety to the public, be rendered in +all other respects perfectly free. The late +multiplication of banking companies in both +parts of the united kingdom, an event by +which many people have been much alarmed, +instead of diminishing, increases the security +of the public. It obliges all of them to be +more circumspect in their conduct, and, by +not extending their currency beyond its due +proportion to their cash, to guard themselves +against those malicious runs, which the rivalship +of so many competitors is always ready +to bring upon them. It restrains the circulation +of each particular company within a +narrower circle, and reduces their circulating +notes to a smaller number. By dividing the +whole circulation into a greater number of +parts, the failure of any one company, an accident +which, in the course of things, must +sometimes happen, becomes of less consequence +to the public. This free competition, +too, obliges all bankers to be more liberal +in their dealings with their customers, lest +their rivals should carry them away. In general, +if any branch of trade, or any division +of labour, be advantageous to the public, the +freer and more general the competition, it will +always be the more so.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. III.</h3> + +<h4>OF THE ACCUMULATION OF CAPITAL, OR OF +PRODUCTIVE AND UNPRODUCTIVE LABOUR.</h4> + + +<p>There is one sort of labour which adds to the +value of the subject upon which it is bestowed; +there is another which has no such effect. +The former as it produces a value, may be +called productive, the latter, unproductive<a name="FNanchor_30_30" id="FNanchor_30_30"></a><a href="#Footnote_30_30" class="fnanchor">[30]</a> labour. +Thus the labour of a manufacturer +adds generally to the value of the materials +which he works upon, that of his own maintenance, +and of his master's profit. The labour +of a menial servant, on the contrary, adds +to the value of nothing. Though the manufacturer +has his wages advanced to him by his +master, he in reality costs him no expense, +the value of those wages being generally restored, +together with a profit, in the improved +value of the subject upon which his labour is +bestowed. But the maintenance of a menial +servant never is restored. A man grows rich +by employing a multitude of manufacturers; +he grows poor by maintaining a multitude of +menial servants. The labour of the latter, +however, has its value, and deserves its reward +as well as that of the former. But the +labour of the manufacturer fixes and realizes +itself in some particular subject or vendible +commodity, which lasts for some time at least +after that labour is past. It is, as it were, a +certain quantity of labour stocked and stored +up, to be employed, if necessary, upon some +other occasion. That subject, or, what is the +same thing, the price of that subject, can afterwards, +if necessary, put into motion a +quantity of labour equal to that which had +originally produced it. The labour of the +menial servant, on the contrary, does not fix +or realize itself in any particular subject or +vendible commodity. His services generally +perish in the very instant of their performance, +and seldom leave any trace of value behind +them, for which an equal quantity of service +could afterwards be procured.</p> + +<p>The labour of some of the most respectable<span class='pagenum'><a name="Page_136" id="Page_136">[Pg 136]</a></span> +orders in the society is, like that of menial +servants, unproductive of any value, and does +not fix or realize itself in any permanent subject, +or vendible commodity, which endures +after that labour is past, and for which an +equal quantity of labour could afterwards be +procured. The sovereign, for example, with +all the officers both of justice and war who +serve under him, the whole army and navy, +are unproductive labourers. They are the +servants of the public, and are maintained by +a part of the annual produce of the industry +of other people. Their service, how honourable, +how useful, or how necessary soever, +produces nothing for which an equal quantity +of service can afterwards be procured. The +protection, security, and defence, of the commonwealth, +the effect of their labour this year, +will not purchase its protection, security, and +defence, for the year to come. In the same +class must be ranked, some both of the gravest +and most important, and some of the most +frivolous professions; churchmen, lawyers, +physicians, men of letters of all kinds; players, +buffoons, musicians, opera-singers, opera-dancers, +&c. The labour of the meanest of +these has a certain value, regulated by the +very same principles which regulate that of +every other sort of labour; and that of the +noblest and most useful produces nothing +which could afterwards purchase or procure +an equal quantity of labour. Like the declamation +of the actor, the harangue of the +orator, or the tune of the musician, the work +of all of them perishes in the very instant of +its production.</p> + +<p>Both productive and unproductive labourers, +and those who do not labour at all, are +all equally maintained by the annual produce +of the land and labour of the country. This +produce, how great soever, can never be infinite, +but must have certain limits. According, +therefore, as a smaller or greater proportion +of it is in any one year employed in maintaining +unproductive hands, the more in the +one case, and the less in the other, will remain +for the productive, and the next year's +produce will be greater or smaller accordingly; +the whole annual produce, if we except +the spontaneous productions of the earth, being +the effect of productive labour.</p> + +<p>Though the whole annual produce of the +land and labour of every country is no doubt +ultimately destined for supplying the consumption +of its inhabitants, and for procuring +a revenue to them; yet when it first comes +either from the ground, or from the hands of +the productive labourers, it naturally divides +itself into two parts. One of them, and frequently +the largest, is, in the first place, destined +for replacing a capital, or for renewing +the provisions, materials, and finished work, +which had been withdrawn from a capital; the +other for constituting a revenue either to the +owner of this capital, as the profit of his stock, +or to some other person, as the rent of his +land. Thus, of the produce of land, one part +replaces the capital of the farmer; the other +pays his profit and the rent of the landlord; +and thus constitutes a revenue both to the +owner of this capital, as the profits of his stock, +and to some other person as the rent of his +land. Of the produce of a great manufactory, +in the same manner, one part, and that always +the largest, replaces the capital of the undertaker +of the work; the other pays his profit, +and thus constitutes a revenue to the owner +of this capital.</p> + +<p>That part of the annual produce of the land +and labour of any country which replaces a +capital, never is immediately employed to maintain +any but productive hands. It pays the +wages of productive labour only. That which +is immediately destined for constituting a revenue, +either as profit or as rent, may maintain +indifferently either productive or unproductive +hands.</p> + +<p>Whatever part of his stock a man employs +as a capital, he always expects it to be replaced +to him with a profit. He employs it, +therefore, in maintaining productive hands +only; and after having served in the function +of a capital to him, it constitutes a revenue to +them. Whenever he employs any part of it +in maintaining unproductive hands of any +kind, that part is from that moment withdrawn +from his capital, and placed in his stock reserved +for immediate consumption.</p> + +<p>Unproductive labourers, and those who do +not labour at all, are all maintained by revenue; +either, first, by that part of the annual +produce which is originally destined for constituting +a revenue to some particular persons, +either as the rent of land, or as the profits +of stock; or, secondly, by that part which, +though originally destined for replacing a capital, +and for maintaining productive labourers +only, yet when it comes into their hands, +whatever part of it is over and above their necessary +subsistence, may be employed in maintaining +indifferently either productive or unproductive +hands. Thus, not only the great +landlord or the rich merchant, but even the +common workman, if his wages are considerable, +may maintain a menial servant; or he +may sometimes go to a play or a puppet-show, +and so contribute his share towards maintaining +one set of unproductive labourers; or he +may pay some taxes, and thus help to maintain +another set, more honourable and useful, +indeed, but equally unproductive. No part +of the annual produce, however, which had +been originally destined to replace a capital, +is ever directed towards maintaining unproductive +hands, till after it has put into motion +its full complement of productive labour, or +all that it could put into motion in the way in +which it was employed. The workman must +have earned his wages by work done, before +he can employ any part of them in this man<span class='pagenum'><a name="Page_137" id="Page_137">[Pg 137]</a></span>ner. +That part, too, is generally but a small +one. It is his spare revenue only, of which +productive labourers have seldom a great deal. +They generally have some, however; and in +the payment of taxes, the greatness of their +number may compensate, in some measure, +the smallness of their contribution. The rent +of land and the profits of stock are everywhere, +therefore, the principal sources from which +unproductive hands derive their subsistence. +These are the two sorts of revenue of which +the owners have generally most to spare. +They might both maintain indifferently, either +productive or unproductive hands. They +seem, however, to have some predilection for +the latter. The expense of a great lord feeds +generally more idle than industrious people. +The rich merchant, though with his capital +he maintains industrious people only, yet by +his expense, that is, by the employment of his +revenue, he feeds commonly the very same +sort as the great lord.</p> + +<p>The proportion, therefore, between the productive +and unproductive hands, depends very +much in every country upon the proportion +between that part of the annual produce, +which, as soon as it comes either from the +ground, or from the hands of the productive +labourers, is destined for replacing a capital, +and that which is destined for constituting a +revenue, either as rent or as profit. This proportion +is very different in rich from what it +is in poor countries.</p> + +<p>Thus, at present, in the opulent countries +of Europe, every large, frequently the largest, +portion of the produce of the land, is destined +for replacing the capital of the rich and independent +farmer; the other for paying his profits, +and the rent of the landlord. But anciently, +during the prevalency of the feudal +government, a very small portion of the produce +was sufficient to replace the capital employed +in cultivation. It consisted commonly +in a few wretched cattle, maintained altogether +by the spontaneous produce of uncultivated +land, and which might, therefore, be +considered as a part of that spontaneous produce. +It generally, too, belonged to the landlord, +and was by him advanced to the occupiers +of the land. All the rest of the produce +properly belonged to him too, either as rent +for his land, or as profit upon this paltry capital. +The occupiers of land were generally +bondmen, whose persons and effects were +equally his property. Those who were not +bondmen were tenants at will; and though +the rent which they paid was often nominally +little more than a quit-rent, it really amounted +to the whole produce of the land. Their +lord could at all times command their labour +in peace and their service in war. Though +they lived at a distance from his house, they +were equally dependent upon him as his retainers +who lived in it. But the whole produce +of the land undoubtedly belongs to him, +who can dispose of the labour and service of +all those whom it maintains. In the present +state of Europe, the share of the landlord seldom +exceeds a third, sometimes not a fourth +part of the whole produce of the land. The +rent of land, however, in all the improved +parts of the country, has been tripled and quadrupled +since those ancient times; and this +third or fourth part of the annual produce is, +it seems, three or four times greater than the +whole had been before. In the progress of +improvement, rent, though it increases in proportion +to the extent, diminishes in proportion +to the produce of the land.</p> + +<p>In the opulent countries of Europe, great +capitals are at present employed in trade and +manufactures. In the ancient state, the little +trade that was stirring, and the few homely +and coarse manufactures that were carried on, +required but very small capitals. These, however, +must have yielded very large profits. +The rate of interest was nowhere less than ten +per cent. and their profits must have been sufficient +to afford this great interest. At present, +the rate of interest, in the improved parts +of Europe, is nowhere higher than six per +cent.; and in some of the most improved, it +is so low as four, three, and two per cent. +Though that part of the revenue of the inhabitants +which is derived from the profits of +stock, is always much greater in rich than in +poor countries, it is because the stock is much +greater; in proportion to the stock, the profits +are generally much less.</p> + +<p>That part of the annual produce, therefore, +which, as soon as it comes either from the +ground, or from the hands of the productive +labourers, is destined for replacing a capital, +is not only much greater in rich than in poor +countries, but bears a much greater proportion +to that which is immediately destined for +constituting a revenue either as rent or as profit. +The funds destined for the maintenance +of productive labour are not only much greater +in the former than in the latter, but bear a +much greater proportion to those which, though +they may be employed to maintain either productive +or unproductive hands, have generally +a predilection for the latter.</p> + +<p>The proportion between those different +funds necessarily determines in every country +the general character of the inhabitants as to +industry or idleness. We are more industrious +than our forefathers, because, in the present +times, the funds destined for the maintenance +of industry are much greater in proportion +to those which are likely to be employed +in the maintenance of idleness, than they were +two or three centuries ago. Our ancestors +were idle for want of a sufficient encouragement +to industry. It is better, says the proverb, +to play for nothing, than to work for nothing. +In mercantile and manufacturing +towns, where the inferior ranks of people are +chiefly maintained by the employment of ca<span class='pagenum'><a name="Page_138" id="Page_138">[Pg 138]</a></span>pital, +they are in general industrious, sober, +and thriving; as in many English, and in +most Dutch towns. In those towns which are +principally supported by the constant or occasional +residence of a court, and in which the +inferior ranks of people are chiefly maintained +by the spending of revenue, they are in general +idle, dissolute, and poor; as at Rome, +Versailles, Compeigne, and Fontainbleau. If +you except Rouen and Bourdeaux, there is +little trade or industry in any of the parliament +towns of France; and the inferior ranks +of people, being chiefly maintained by the expense +of the members of the courts of justice, +and of those who come to plead before them, +are in general idle and poor. The great +trade of Rouen and Bourdeaux seems to be +altogether the effect of their situation. Rouen +is necessarily the entrepot of almost all the +goods which are brought either from foreign +countries, or from the maritime provinces of +France, for the consumption of the great city +of Paris. Bourdeaux is, in the same manner, +the entrepot of the wines which grow upon +the banks of the Garronne, and of the rivers +which run into it, one of the richest wine +countries in the world, and which seems to +produce the wine fittest for exportation, or best +suited to the taste of foreign nations. Such +advantageous situations necessarily attract a +great capital by the great employment which +they afford it; and the employment of this capital +is the cause of the industry of those two +cities. In the other parliament towns of +France, very little more capital seems to be +employed than what is necessary for supplying +their own consumption; that is, little +more than the smallest capital which can be +employed in them. The same thing may be +said of Paris, Madrid, and Vienna. Of those +three cities, Paris is by far the most industrious, +but Paris itself is the principal market of +all the manufactures established at Paris, and +its own consumption is the principal object of +all the trade which it carries on. London, +Lisbon, and Copenhagen, are, perhaps, the +only three cities in Europe, which are both +the constant residence of a court, and can at +the same time be considered as trading cities, +or as cities which trade not only for their own +consumption, but for that of other cities and +countries. The situation of all the three is +extremely advantageous, and naturally fits +them to be the entrepots of a great part of the +goods destined for the consumption of distant +places. In a city where a great revenue is +spent, to employ with advantage a capital for +any other purpose than for supplying the consumption +of that city, is probably more difficult +than in one in which the inferior ranks of +people have no other maintenance but what +they derive from the employment of such a +capital. The idleness of the greater part of +the people who are maintained by the expense +of revenue, corrupts, it is probable, the industry +of those who ought to be maintained by +the employment of capital, and renders it less +advantageous to employ a capital there than in +other places. There was little trade or industry +in Edinburgh before the Union. When +the Scotch parliament was no longer to be assembled +in it, when it ceased to be the necessary +residence of the principal nobility and +gentry of Scotland, it became a city of some +trade and industry. It still continues, however, +to be the residence of the principal +courts of justice in Scotland, of the boards of +customs and excise, &c. A considerable revenue, +therefore, still continues to be spent in +it. In trade and industry, it is much inferior +to Glasgow, of which the inhabitants are +chiefly maintained by the employment of capital. +The inhabitants of a large village, it +has sometimes been observed, after having +made considerable progress in manufactures, +have become idle and poor, in consequence of +a great lord's having taken up his residence in +their neighbourhood.</p> + +<p>The proportion between capital and revenue, +therefore, seems everywhere to regulate +the proportion between industry and idleness. +Wherever capital predominates, industry prevails; +wherever revenue, idleness. Every increase +or diminution of capital, therefore, naturally +tends to increase or diminish the real +quantity of industry, the number of productive +hands, and consequently the exchangeable +value of the annual produce of the land and +labour of the country, the real wealth and revenue +of all its inhabitants.</p> + +<p>Capitals are increased by parsimony, and +diminished by prodigality and misconduct.</p> + +<p>Whatever a person saves from his revenue he +adds to his capital, and either employs it himself +in maintaining an additional number of +productive hands, or enables some other person +to do so, by lending it to him for an interest, +that is, for a share of the profits. As the +capital of an individual can be increased only +by what he saves from his annual revenue or +his annual gains, so the capital of a society, +which is the same with that of all the individuals +who compose it, can be increased only +in the same manner.</p> + +<p>Parsimony, and not industry, is the immediate +cause of the increase of capital. Industry, +indeed, provides the subject which parsimony +accumulates; but whatever industry +might acquire, if parsimony did not save and +store up, the capital would never be the +greater.</p> + +<p>Parsimony, by increasing the fund which is +destined for the maintenance of productive +hands, tends to increase the number of those +hands whose labour adds to the value of the +subject upon which it is bestowed. It tends, +therefore, to increase the exchangeable value +of the annual produce of the land and labour<span class='pagenum'><a name="Page_139" id="Page_139">[Pg 139]</a></span> +of the country. It puts into motion an additional +quantity of industry, which gives an additional +value to the annual produce.</p> + +<p>What is annually saved, is as regularly consumed +as what is annually spent, and nearly +in the same time too; but it is consumed by a +different set of people. That portion of his +revenue which a rich man annually spends, is, +in most cases, consumed by idle guests and +menial servants, who leave nothing behind +them in return for their consumption. That +portion which he annually saves, as, for the +sake of the profit, it is immediately employed +as a capital, is consumed in the same manner, +and nearly in the same time too, but by a different +set of people: by labourers, manufacturers, +and artificers, who re-produce, with a +profit, the value of their annual consumption. +His revenue, we shall suppose, is paid him in +money. Had he spent the whole, the food, +clothing, and lodging, which the whole could +have purchased, would have been distributed +among the former set of people. By saving a +part of it, as that part is, for the sake of the +profit, immediately employed as a capital, either +by himself or by some other person, the +food, clothing, and lodging, which may be +purchased with it, are necessarily reserved for +the latter. The consumption is the same, but +the consumers are different.</p> + +<p>By what a frugal man annually saves, he +not only affords maintenance to an additional +number of productive hands, for that of the +ensuing year, but like the founder of a public +work-house he establishes, as it were, a perpetual +fund for the maintenance of an equal +number in all times to come. The perpetual +allotment and destination of this fund, indeed, +is not always guarded by any positive law, by +any trust-right or deed of mortmain. It is +always guarded, however, by a very powerful +principle, the plain and evident interest of every +individual to whom any share of it shall +ever belong. No part of it can ever afterwards +be employed to maintain any but productive +hands, without an evident loss to the +person who thus perverts it from its proper +destination.</p> + +<p>The prodigal perverts it in this manner: +By not confining his expense within his income, +he encroaches upon his capital. Like +him who perverts the revenues of some pious +foundation to profane purposes, he pays the +wages of idleness with those funds which the +frugality of his forefathers had, as it were, +consecrated to the maintenance of industry. +By diminishing the funds destined for the employment +of productive labour, he necessarily +diminishes, so far as it depends upon him, the +quantity of that labour which adds a value to +the subject upon which it is bestowed, and, +consequently, the value of the annual produce +of the land and labour of the whole country, +the real wealth and revenue of its inhabitants. +If the prodigality of some was not compensated +by the frugality of others, the conduct +of every prodigal, by feeding the idle with the +bread of the industrious, tends not only to +beggar himself, but to impoverish his country.</p> + +<p>Though the expense of the prodigal should +be altogether in home made, and no part of it +in foreign commodities, its effect upon the +productive funds of the society would still be +the same. Every year there would still be a +certain quantity of food and clothing, which +ought to have maintained productive, employed +in maintaining unproductive hands. Every +year, therefore, there would still be some +diminution in what would otherwise have been +the value of the annual produce of the land +and labour of the country.</p> + +<p>This expense, it may be said, indeed, not +being in foreign goods, and not occasioning +any exportation of gold and silver, the same +quantity of money would remain in the country +as before. But if the quantity of food and +clothing, which were thus consumed by unproductive, +had been distributed among productive +hands, they would have reproduced, together +with a profit, the full value of their consumption. +The same quantity of money would, in +this case, equally have remained in the country, +and there would, besides, have been a reproduction +of an equal value of consumable +goods. There would have been two values +instead of one.</p> + +<p>The same quantity of money, besides, cannot +long remain in any country in which the +value of the annual produce diminishes. The +sole use of money is to circulate consumable +goods. By means of it, provisions, materials, +and finished work, are bought and sold, and +distributed to their proper consumers. The +quantity of money, therefore, which can be +annually employed in any country, must be +determined by the value of the consumable +goods annually circulated within it. These +must consist, either in the immediate produce +of the land and labour of the country itself, or +in something which had been purchased with +some part of that produce. Their value, +therefore, must diminish as the value of that +produce diminishes, and along with it the +quantity of money which can be employed in +circulating them. But the money which, by +this annual diminution of produce, is annually +thrown out of domestic circulation, will not +be allowed to lie idle. The interest of whoever +possesses it requires that it should be employed; +but having no employment at home, +it will, in spite of all laws and prohibitions, be +sent abroad, and employed in purchasing consumable +goods, which may be of some use at +home. Its annual exportation will, in this +manner, continue for some time to add something +to the annual consumption of the country +beyond the value of its own annual +produce. What in the days of its prosperity +had been saved from that annual produce, and +employed in purchasing gold and silver will<span class='pagenum'><a name="Page_140" id="Page_140">[Pg 140]</a></span> +contribute, for some little time, to support its +consumption in adversity. The exportation +of gold and silver is, in this case, not the cause, +but the effect of its declension, and may even, +for some little time, alleviate the misery of +that declension.</p> + +<p>The quantity of money, on the contrary, +must in every country naturally increase as +the value of the annual produce increases. +The value of the consumable goods annually +circulated within the society being greater, +will require a greater quantity of money to circulate +them. A part of the increased produce, +therefore, will naturally be employed in purchasing, +wherever it is to be had, the additional +quantity of gold and silver necessary for circulating +the rest. The increase of those metals +will, in this case, be the effect, not the +cause, of the public prosperity. Gold and silver +are purchased everywhere in the same +manner. The food, clothing, and lodging, the +revenue and maintenance, of all those whose +labour or stock is employed in bringing them +from the mine to the market, is the price paid +for them in Peru as well as in England. The +country which has this price to pay, will never +be long without the quantity of those metals +which it has occasion for; and no country +will ever long retain a quantity which it has +no occasion for.</p> + +<p>Whatever, therefore, we may imagine the +real wealth and revenue of a country to consist +in, whether in the value of the annual produce +of its land and labour, as plain reason +seems to dictate, or in the quantity of the precious +metals which circulate within it, as vulgar +prejudices suppose; in either view of the matter, +every prodigal appears to be a public enemy, +and every frugal man a public benefactor.</p> + +<p>The effects of misconduct are often the +same as those of prodigality. Every injudicious +and unsuccessful project in agriculture, +mines, fisheries, trade, or manufactures, tends +in the same manner to diminish the funds destined +for the maintenance of productive labour. +In every such project, though the capital is +consumed by productive hands only, yet as, +by the injudicious manner in which they are +employed, they do not reproduce the full value +of their consumption, there must always +be some diminution in what would otherwise +have been the productive funds of the society.</p> + +<p>It can seldom happen, indeed, that the circumstances +of a great nation can be much affected +either by the prodigality or misconduct +of individuals; the profusion or imprudence +of some being always more than compensated +by the frugality and good conduct of others.</p> + +<p>With regard to profusion, the principle +which prompts to expense is the passion for +present enjoyment; which, though sometimes +violent and very difficult to be restrained, is in +general only momentary occasional. But +the principle which prompts to save, is the +desire of bettering our condition; a desire +which, though generally calm and dispassionate, +comes with us from the womb, and never +leaves us till we go into the grave. In the +whole interval which separates those two moments, +there is scarce, perhaps, a single instance, +in which any man is so perfectly and +completely satisfied with his situation, as to be +without any wish of alteration or improvement +of any kind. An augmentation of fortune +is the means by which the greater part +of men propose and wish to better their condition. +It is the means the most vulgar and +the most obvious; and the most likely way of +augmenting their fortune, is to save and accumulate +some part of what they acquire, either +regularly and annually, or upon some extraordinary +occasion. Though the principle of +expense, therefore, prevails in almost all men +upon some occasions, and in some men upon +almost all occasions; yet in the greater part of +men, taking the whole course of their life at +an average, the principle of frugality seems +not only to predominate, but to predominate +very greatly.</p> + +<p>With regard to misconduct, the number of +prudent and successful undertakings is everywhere +much greater than that of injudicious +and unsuccessful ones. After all our complaints +of the frequency of bankruptcies, the +unhappy men who fall into this misfortune, +make but a very small part of the whole number +engaged in trade, and all other sorts of +business; not much more, perhaps, than one +in a thousand. Bankruptcy is, perhaps, the +greatest and most humiliating calamity which +can befal an innocent man. The greater part +of men, therefore, are sufficiently careful to +avoid it. Some, indeed, do not avoid it; as +some do not avoid the gallows.</p> + +<p>Great nations are never impoverished by +private, though they sometimes are by public +prodigality and misconduct. The whole, or +almost the whole public revenue is, in most +countries, employed in maintaining unproductive +hands. Such are the people who compose +a numerous and splendid court, a great ecclesiastical +establishment, great fleets and armies, +who in time of peace produce nothing, and in +time of war acquire nothing which can compensate +the expense of maintaining them, even +while the war lasts. Such people, as they +themselves produce nothing, are all maintained +by the produce of other men's labour. +When multiplied, therefore, to an unnecessary +number, they may in a particular year consume +so great a share of this produce, as not +to leave a sufficiency for maintaining the productive +labourers, who should reproduce it +next year. The next year's produce, therefore, +will be less than that of the foregoing; +and if the same disorder should continue, that +of the third year will be still less than that of +the second. Those unproductive hands who +should be maintained by a part only of the<span class='pagenum'><a name="Page_141" id="Page_141">[Pg 141]</a></span> +spare revenue of the people, may consume so +great a share of their whole revenue, and thereby +oblige so great a number to encroach upon +their capitals, upon the funds destined for the +maintenance of productive labour, that all the +frugality and good conduct of individuals may +not be able to compensate the waste and degradation +of produce occasioned by this violent +and forced encroachment.</p> + +<p>This frugality and good conduct, however, +is upon most occasions, it appears from experience, +sufficient to compensate, not only the +private prodigality and misconduct of individuals, +but the public extravagance of government. +The uniform, constant, and uninterrupted +effort of every man to better his condition, +the principle from which public and national, +as well as private opulence is originally +derived, is frequently powerful enough to +maintain the natural progress of things towards +improvement, in spite both of the extravagance +of government, and of the greatest +errors of administration. Like the unknown +principle of animal life, it frequently restores +health and vigour to the constitution, in spite +not only of the disease, but of the absurd prescriptions +of the doctor.</p> + +<p>The annual produce of the land and labour +of any nation can be increasing in its value by +no other means, but by increasing either the +number of its productive labourers, or the +productive powers of those labourers who had +before been employed. The number of its +productive labourers, it is evident, can never +be much increased, but in consequence of an +increase of capital, or of the funds destined for +maintaining them. The productive powers +of the same number of labourers cannot be increased, +but in consequence either of some +addition and improvement to those machines +and instruments which facilitate and abridge +labour, or of more proper division and distribution +of employment. In either case, an additional +capital is almost always required. It +is by means of an additional capital only, that +the undertaker of any work can either provide +his workmen with better machinery, or make +a more proper distribution of employment +among them. When the work to be done +consists of a number of parts, to keep every +man constantly employed in one way, requires +a much greater capital than where every man +is occasionally employed in every different +part of the work. When we compare, therefore, +the state of a nation at two different periods, +and find that the annual produce of its +land and labour is evidently greater at the latter +than at the former, that its lands are better +cultivated, its manufactures more numerous +and more flourishing, and its trade more extensive; +we may be assured that its capital +must have increased during the interval between +those two periods, and that more must +have been added to it by the good conduct of +some, than had been taken from it either by +the private misconduct of others, or by the +public extravagance of government. But we +shall find this to have been the case of almost +all nations, in all tolerably quiet and peaceable +times, even of those who have not enjoyed +the most prudent and parsimonious governments. +To form a right judgment of it, indeed, +we must compare the state of the country +at periods somewhat distant from one another. +The progress is frequently so gradual, +that, at near periods, the improvement is not +only not sensible, but, from the declension +either of certain branches of industry, or of certain +districts of the country, things which +sometimes happen, though the country in general +is in great prosperity, there frequently +arises a suspicion, that the riches and industry +of the whole are decaying.</p> + +<p>The annual produce of the land and labour +of England, for example, is certainly much +greater than it was a little more than a century +ago, at the restoration of Charles II. +Though at present few people, I believe, +doubt of this, yet during this period five years +have seldom passed away, in which some book +or pamphlet has not been published, written, +too, with such abilities as to gain some authority +with the public, and pretending to demonstrate +that the wealth of the nation was +fast declining; that the country was depopulated, +agriculture neglected, manufactures decaying, +and trade undone. Nor have these +publications been all party pamphlets, the +wretched offspring of falsehood and venality. +Many of them have been written by very candid +and very intelligent people, who wrote nothing +but what they believed, and for no other +reason but because they believed it.</p> + +<p>The annual produce of the land and labour +of England, again, was certainly much greater +at the Restoration than we can suppose it +to have been about a hundred years before, at +the accession of Elizabeth. At this period, +too, we have all reason to believe, the country +was much more advanced in improvement, +than it had been about a century before, towards +the close of the dissensions between the +houses of York and Lancaster. Even then it +was, probably, in a better condition than it +had been at the Norman conquest: and at the +Norman conquest, than during the confusion +of the Saxon heptarchy. Even at this early +period, it was certainly a more improved country +than at the invasion of Julius Cæsar, when +its inhabitants were nearly in the same state +with the savages in North America.</p> + +<p>In each of those periods, however, there +was not only much private and public profusion, +many expensive and unnecessary wars, +great perversion of the annual produce from +maintaining productive to maintain unproductive +hands; but sometimes, in the confusion +of civil discord, such absolute waste and destruction +of stock, as might he supposed, not +only to retard, as it certainly did, the natural<span class='pagenum'><a name="Page_142" id="Page_142">[Pg 142]</a></span> +accumulation of riches, but to have left the +country, at the end of the period, poorer than +at the beginning, Thus, in the happiest and +most fortunate period of them all, that which +has passed since the Restoration, how many +disorders and misfortunes have occurred, +which, could they have been foreseen, not only +the impoverishment, but the total ruin of the +country would have been expected from them? +The fire and the plague of London, the two +Dutch wars, the disorders of the revolution, +the war in Ireland, the four expensive French +wars of 1688, 1701, 1742, and 1756, together +with the two rebellions of 1715 and 1745. In +the course of the four French wars, the nation +has contracted more than L.145,000,000 of +debt, over and above all the other extraordinary +annual expense which they occasioned; +so that the whole cannot be computed at less +than L.200,000,000. So great a share of the +annual produce of the land and labour of the +country, has, since the Revolution, been employed +upon different occasions, in maintaining +an extraordinary number of unproductive +hands. But had not those wars given this +particular direction to so large a capital, the +greater part of it would naturally have been +employed in maintaining productive hands, +whose labour would have replaced, with a profit, +the whole value of their consumption. The +value of the annual produce of the land and +labour of the country would have been considerably +increased by it every year, and every +year's increase would have augmented still +more that of the following year. More houses +would have been built, more lands would have +been improved, and those which had been improved +before would have been better cultivated; +more manufactures would have been +established, and those which had been established +before would have been more extended; +and to what height the real wealth and revenue +of the country might by this time have +been raised, it is not perhaps very easy even +to imagine.</p> + +<p>But though the profusion of government +must undoubtedly have retarded the natural +progress of England towards wealth and improvement, +it has not been able to stop it. +The annual produce of its land and labour is +undoubtedly much greater at present than it +was either at the Restoration or at the Revolution. +The capital, therefore, annually employed +in cultivating this land, and in maintaining +this labour, must likewise be much +greater. In the midst of all the exactions of +government, this capital has been silently and +gradually accumulated by the private frugality +and good conduct of individuals, by their +universal, continual, and uninterrupted effort +to better their own condition. It is this effort, +protected by law, and allowed by liberty to +exert itself in the manner that is most advantageous, +which has maintained the progress +of England towards opulence and improvement +in almost all former times, and which, +it is to be hoped, will do so in all future +times. England, however, as it has never +been blessed with a very parsimonious government, +so parsimony has at no time been +the characteristic virtue of its inhabitants. It +is the highest impertinence and presumption, +therefore, in kings and ministers to pretend to +watch over the economy of private people, +and to restrain their expense, either by sumptuary +laws, or by prohibiting the importation +of foreign luxuries. They are themselves always, +and without any exception, the greatest +spendthrifts in the society. Let them look +well after their own expense, and they may +safely trust private people with theirs. If +their own extravagance does not ruin the state, +that of the subject never will.</p> + +<p>As frugality increases, and prodigality diminishes, +the public capital, so the conduct of +those whose expense just equals their revenue, +without either accumulating or encroaching, +neither increases nor diminishes it. Some +modes of expense, however, seem to contribute +more to the growth of public opulence +than others.</p> + +<p>The revenue of an individual may be spent, +either in things which are consumed immediately, +and in which one day's expense can neither +alleviate nor support that of another; or it +may be spent in things more durable, which +can therefore be accumulated, and in which +every every day's expense may, as he chooses, either +alleviate, or support and heighten, the effect +of that of the following day. A man of fortune, +for example, may either spend his revenue +in a profuse and sumptuous table, and in +maintaining a great number of menial servants, +and a multitude of dogs and horses; +or, contenting himself with a frugal table, +and few attendants, he may lay out the greater +part of it in adorning his house or his country +villa, in useful or ornamental buildings, +in useful or ornamental furniture, in collecting +books, statues, pictures; or in things more +frivolous, jewels, baubles, ingenious trinkets +of different kinds; or, what is must trifling +of all, in amassing a great wardrobe of fine +clothes, like the favourite and minister of a +great prince who died a few years ago. Were +two men of equal fortune to spend their revenue, +the one chiefly in the one way, the other +in the other, the magnificence of the person +whose expense had been chiefly in durable +commodities, would be continually increasing, +every day's expense contributing something +to support and heighten the effect of that of +the following day; that of the other, on the +contrary, would be no greater at the end of +the period than at the beginning. The former +too would, at the end of the period, be +the richer man of the two. He would have +a stock of goods of some kind or other, which, +though it might not be worth all that it cost, +would always be worth something. No trace<span class='pagenum'><a name="Page_143" id="Page_143">[Pg 143]</a></span> +or vestige of the expense of the latter would +remain, and the effects of ten or twenty years' +profusion would be as completely annihilated +as if they had never existed.</p> + +<p>As the one mode of expense is more favourable +than the other to the opulence of an individual, +so is it likewise to that of a nation. +The houses, the furniture, the clothing of the +rich, in a little time, become useful to the inferior +and middling ranks of people. They +are able to purchase them when their superiors +grow weary of them; and the general accommodation +of the whole people is thus gradually +improved, when this mode of expense +becomes universal among men of fortune. In +countries which have long been rich, you will +frequently find the inferior ranks of people in +possession both of houses and furniture perfectly +good and entire, but of which neither +the one could have been built, nor the other +have been made for their use. What was formerly +a seat of the family of Seymour, is now +an inn upon the Bath road. The marriage-bed +of James I. of Great Britain, which his +queen brought with her from Denmark, as a +present fit for a sovereign to make to a sovereign, +was, a few years ago, the ornament of +an alehouse at Dunfermline. In some ancient +cities, which either have been long stationary, +or have gone somewhat to decay, you +will sometimes scarce find a single house +which could have been built for its present +inhabitants. If you go into those houses, +too, you will frequently find many excellent, +though antiquated pieces of furniture, which +are still very fit for use, and which could as +little have been made for them. Noble palaces, +magnificent villas, great collections of +books, statues, pictures, and other curiosities, +are frequently both an ornament and an honour, +not only to the neighbourhood, but to +the whole country to which they belong. Versailles +is an ornament and an honour to France, +Stowe and Wilton to England. Italy still +continues to command some sort of veneration, +by the number of monuments of this +kind which it possesses, though the wealth +which produced them has decayed, and though +the genius which planned them seems to be +extinguished, perhaps from not having the +same employment.</p> + +<p>The expense, too, which is laid out in durable +commodities, is favourable not only to +accumulation, but to frugality. If a person +should at any time exceed in it, he can easily +reform without exposing himself to the censure +of the public. To reduce very much the +number of his servants, to reform his table +from great profusion to great frugality, to lay +down his equipage after he has once set it up, +are changes which cannot escape the observation +of his neighbours, and which are supposed +to imply some acknowledgment of preceding +bad conduct. Few, therefore, of those +who have once been so unfortunate as to launch +out too far into this sort of expense, have afterwards +the courage to reform, till ruin and +bankruptcy oblige them. But if a person has, +at any time, been at too great an expense in +building, in furniture, in books, or pictures, +no imprudence can be inferred from his changing +his conduct. These are things in which +further expense is frequently rendered unnecessary +by former expense; and when a person +stops short, he appears to do so, not because +he has exceeded his fortune, but because +he has satisfied his fancy.</p> + +<p>The expense, besides, that is laid out in +durable commodities, gives maintenance, commonly, +to a greater number of people than +that which is employed in the most profuse +hospitality. Of two or three hundred weight +of provisions, which may sometimes be served +up at a great festival, one half, perhaps, is +thrown to the dunghill, and there is always a +great deal wasted and abused. But if the expense +of this entertainment had been employed +in setting to work masons, carpenters, upholsterers, +mechanics, &c. a quantity of provisions +of equal value would have been distributed +among a still greater number of people, who +would have bought them in pennyworths and +pound weights, and not have lost or thrown +away a single ounce of them. In the one way, +besides, this expense maintains productive, in +the other unproductive hands. In the one +way, therefore, it increases, in the other it +does not increase the exchangeable value of +the annual produce of the land and labour of +the country.</p> + +<p>I would not, however, by all this, be understood +to mean, that the one species of expense +always betokens a more liberal or generous +spirit than the other. When a man of +fortune spends his revenue chiefly in hospitality, +he shares the greater part of it with his +friends and companions; but when he employs +it in purchasing such durable commodities, +he often spends the whole upon his +own person, and gives nothing to any body +without an equivalent. The latter species of +expense, therefore, especially when directed +towards frivolous objects, the little ornaments +of dress and furniture, jewels, trinkets, gewgaws, +frequently indicates, not only a trifling, +but a base and selfish disposition. All that I +mean is, that the one sort of expense, as it +always occasions some accumulation of valuable +commodities, as it is more favourable to +private frugality, and, consequently, to the increase +of the public capital, and as it maintains +productive rather than unproductive +hands, conduces more than the other to the +growth of public opulence.<span class='pagenum'><a name="Page_144" id="Page_144">[Pg 144]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IV.</h3> + +<h4>OF STOCK LENT AT INTEREST.</h4> + + +<p>The stock which is lent at interest is always +considered as a capital by the lender. He +expects that in due time it is to be restored to +him, and that, in the mean time, the borrower +is to pay him a certain annual rent for the use +of it. The borrower may use it either as a +capital, or as a stock reserved for immediate +consumption. If he uses it as a capital, he +employs it in the maintenance of productive +labourers, who reproduce the value, with a +profit. He can, in this case, both restore the +capital, and pay the interest, without alienating +or encroaching upon any other source of +revenue. If he uses it as a stock reserved for +immediate consumption, he acts the part of a +prodigal, and dissipates, in the maintenance +of the idle, what was destined for the support +of the industrious. He can, in this case, neither +restore the capital nor pay the interest, +without either alienating or encroaching upon +some other source of revenues such as the property +or the rent of land.</p> + +<p>The stock which is lent at interest is, no +doubt, occasionally employed in both these +ways, but in the former much more frequently +than in the latter. The man who borrows in +order to spend will soon be ruined, and he +who lends to him will generally have occasion +to repent of his folly. To borrow or to lend +for such a purpose, therefore, is, in all cases, +where gross usury is out of the question, contrary +to the interest of both parties; and +though it no doubt happens sometimes, that +people do both the one and the other, yet, +from the regard that all men have for their +own interest, we may be assured, that it cannot +happen so very frequently as we are sometimes +apt to imagine. Ask any rich man of common +prudence, to which of the two sorts of +people he has lent the greater part of his stock, +to those who he thinks will employ it profitably, +or to those who will spend it idly, and he +will laugh at you for proposing the question. +Even among borrowers, therefore, not the +people in the world most famous for frugality, +the number of the frugal and industrious +surpasses considerably that of the prodigal +and idle.</p> + +<p>The only people to whom stock is commonly +lent, without their being expected to make any +very profitable use of it, are country gentlemen, +who borrow upon mortgage. Even they +scarce ever borrow merely to spend. What +they borrow, one may say, is commonly spent +before they borrow it. They have generally +consumed so great a quantity of goods, advanced +to them upon credit by shop-keepers +and tradesmen, that they find it necessary to +borrow at interest, in order to pay the debt. +The capital borrowed replaces the capitals of +those shop-keepers and tradesmen which the +country gentlemen could not have replaced +from the rents of their estates. It is not properly +borrowed in order to be spent, but in +order to replace a capital which had been spent +before.</p> + +<p>Almost all loans at interest are made in +money, either of paper, or of gold and silver; +but what the borrower really wants, and what +the lender readily supplies him with, is not +the money, but the money's worth, or the +goods which it can purchase. If he wants it +as a stock for immediate consumption, it is +those goods only which he can place in that +stock. If he wants it as a capital for employing +industry, it is from those goods only that +the industrious can be furnished with the tools, +materials, and maintenance necessary for carrying +on their work. By means of the loan, +the lender, as it were, assigns to the borrower +his right to a certain portion of the annual +produce of the land and labour of the country, +to be employed as the borrower pleases.</p> + +<p>The quantity of stock, therefore, or, as it is +commonly expressed, of money, which can be +lent at interest in any country, is not regulated +by the value of the money, whether paper +or coin, which serves as the instrument +of the different loans made in that country, +but by the value of that part of the annual +produce, which, as soon as it comes either from +the ground, or from the hands of the productive +labourers, is destined, not only for replacing +a capital, but such a capital as the +owner does not care to be at the trouble of +employing himself. As such capitals are commonly +lent out and paid back in money, they +constitute what is called the monied interest. +It is distinct, not only from the landed, but +from the trading and manufacturing interests, +as in these last the owners themselves employ +their own capitals. Even in the monied interest, +however, the money is, as it were, but +the deed or assignment, 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 any +proportion, than the amount of the money +which serves as the instrument of their conveyance; +the same pieces of money successively +serving for many different loans, as well +as for many different purchases. A, for example, +lends to W L.1000, with which W +immediately purchases of B L.1000 worth of +goods. B having no occasion for the money +himself, lends the identical pieces to X, with +which X immediately purchases of C another +L.1000 worth of goods. C, in the same manner, +and for the same reason, lends them to +Y, who again purchases goods with them of +D. In this manner, the same pieces, either +of coin or of paper, may, in the course of a<span class='pagenum'><a name="Page_145" id="Page_145">[Pg 145]</a></span> +few days, serve as the instrument of three different +loans, and of three different purchases, +each of which is, in value, equal to the whole +amount of those pieces. What the three monied +men, A, B, and C, assigned to the three +borrowers, W, X, and Y, is the power of +making those purchases. In this power consist +both the value and the use of the loans. +The stock lent by the three monied men is +equal to the value of the goods which can be +purchased with it, and is three times greater +than that of the money with which the purchases +are made. Those loans, however, may +be all perfectly well secured, the goods purchased +by the different debtors being so employed +as, in due time, to bring back, with a +profit, an equal value either of coin or of paper. +And as the same pieces of money can +thus serve as the instrument of different loans +to three, or, for the same reason, to thirty +times their value, so they may likewise successively +serve as the instrument of repayment.</p> + +<p>A capital lent at interest may, in this manner, +be considered as an assignment, from the +lender to the borrower, of a certain considerable +portion of the annual produce, upon condition +that the borrower in return shall, during +the continuation of the loan, annually assign +to the lender a small portion, called the +interest; and, at the end of it, a portion equally +considerable with that which had originally +been assigned to him, called the repayment. +Though money, either coin or paper, serves +generally as the deed of assignment, both to +the smaller and to the more considerable portion, +it is itself altogether different from what +is assigned by it.</p> + +<p>In proportion as that share of the annual +produce which, as soon as it comes either from +the ground, or from the hands of the productive +labourers, is destined for replacing a capital, +increases in any country, what is called +the monied interest naturally increases with +it. The increase of those particular capitals +from which the owners wish to derive a revenue, +without being at the trouble of employing +them themselves, naturally accompanies +the general increase of capitals; or, in other +words, as stock increases, the quantity of stock +to be lent at interest grows gradually greater +and greater.</p> + +<p>As the quantity of stock to be lent at interest +increases, the interest, or the price which +must be paid for the use of that stock, necessarily +diminishes, not only from those general +causes which make the market price of things +commonly diminish as their quantity increases, +but from other causes which are peculiar to +this particular case. As capitals increase in +any country, the profits which can be made +by employing them necessarily diminish. It +becomes gradually more and more difficult to +find within the country a profitable method of +employing any new capital. There arises, in +consequence, a competition between different +capitals, the owner of one endeavouring to +get possession of that employment which is +occupied by another; but, upon most occasions, +he can hope to justle that other out of +this employment by no other means but by +dealing upon more reasonable terms. He must +not only sell what he deals in somewhat cheaper, +but, in order to get it to sell, he must +sometimes, too, buy it dearer. The demand for +productive labour, by the increase of the funds +which are destined for maintaining it, grows +every day greater and greater. Labourers easily +find employment; but the owners of capitals +find it difficult to get labourers to employ. +Their competition raises the wages of +labour, and sinks the profits of stock. But +when the profits which can be made by the +use of a capital are in this manner diminished, +as it were, at both ends, the price which +can be paid for the use of it, that is, the rate +of interest, must necessarily be diminished +with them.</p> + +<p>Mr Locke, Mr Lawe, and Mr Montesquieu, +as well as many other writers, seem to have +imagined that the increase of the quantity of +gold and silver, in consequence of the discovery +of the Spanish West Indies, was the real +cause of the lowering of the rate of interest +through the greater part of Europe. Those +metals, they say, having become of less value +themselves, the use of any particular portion +of them necessarily became of less value too, +and, consequently, the price which could be +paid for it. This notion, which at first sight +seems so plausible, has been so fully exposed +by Mr Hume, that it is, perhaps, unnecessary +to say any thing more about it. The following +very short and plain argument, however, +may serve to explain more distinctly the fallacy +which seems to have misled those gentlemen.</p> + +<p>Before the discovery of the Spanish West +Indies, ten per cent. seems to have been the +common rate of interest through the greater +part of Europe. It has since that time, in +different countries, sunk to six, five, four, and +three per cent. Let us suppose, that in every +particular country the value of silver has sunk +precisely in the same proportion as the rate of +interest; and that in those countries, for example, +where interest has been reduced from +ten to five per cent. the same quantity of silver +can now purchase just half the quantity of +goods which it could have purchased before. +This supposition will not, I believe, be found +anywhere agreeable to the truth; but it is the +most favourable to the opinion which we are +going to examine; and, even upon this supposition, +it is utterly impossible that the lowering +of the value of silver could have the +smallest tendency to lower the rate of interest. +If £100 are in those countries now of no +more value than £50 were then, £10 must +now be of no more value than £5 were then.<span class='pagenum'><a name="Page_146" id="Page_146">[Pg 146]</a></span> +Whatever were the causes which lowered the +value of the capital, the same must necessarily +have lowered that of the interest, and exactly +in the same proportion. The proportion between +the value of the capital and that of the +interest must have remained the same, though +the rate had never been altered. By altering +the rate, on the contrary, the proportion between +those two values is necessarily altered. +If L.100 now are worth no more than L.50 +were then, L.5 now can be worth no more +than L.2, 10s. were then. By reducing the +rate of interest, therefore, from ten to five per +cent. we give for the use of a capital, which +is supposed to be equal to one half of its former +value, an interest which is equal to one +fourth only of the value of the former interest.</p> + +<p>An increase in the quantity of silver, while +that of the commodities circulated by means +of it remained the same, could have no other +effect than to diminish the value of that metal. +The nominal value of all sorts of goods would +be greater, but their real value would be precisely +the same as before. They would be exchanged +for a greater number of pieces of silver; +but the quantity of labour which they +could command, the number of people whom +they could maintain and employ, would be +precisely the same. The capital of the country +would be the same, though a greater number +of pieces might be requisite for conveying any +equal portion of it from one hand to another. +The deeds of assignment, like the conveyances +of a verbose attorney, would be more cumbersome; +but the thing assigned would be precisely +the same as before, and could produce +only the same effects. The funds for maintaining +productive labour being the same, the +demand for it would be the same. Its price +or wages, therefore, though nominally greater, +would really be the same. They would be +paid in a greater number of pieces of silver, +but they would purchase only the same quantity +of goods. The profits of stock would be +the same, both nominally and really. The +wages of labour are commonly computed by +the quantity of silver which is paid to the labourer. +When that is increased, therefore, +his wages appear to be increased, though they +may sometimes be no greater than before. +But the profits of stock 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 whole capital employed. +Thus, in a particular country, 5s. a-week are +said to be the common wages of labour, and +ten per cent. the common profits of stock; but +the whole capital of the country being the +same as before, the competition between the +different capitals of individuals into which it +was divided would likewise be the same. +They would all trade with the same advantages +and disadvantages. The common proportion +between capital and profit, therefore, +would be the same, and consequently the common +interest of money; what can commonly +be given for the use of money being necessarily +regulated by what can commonly be made +by the use of it.</p> + +<p>Any increase in the quantity of commodities +annually circulated within the country, +while that of the money which circulated them +remained the same, would, on the contrary, +produce many other important effects, besides +that of raising the value of the money. The +capital of the country, though it might nominally +be the same, would really be augmented. +It might continue to be expressed by the same +quantity of money, but it would command a +greater quantity of labour. The quantity of +productive labour which it could maintain and +employ would be increased, and consequently +the demand for that labour. Its wages would +naturally rise with the demand, and yet might +appear to sink. They might be paid with a +smaller quantity of money, but that smaller +quantity might purchase a greater quantity of +goods than a greater had done before. The +profits of stock would be diminished, both +really and in appearance. The whole capital +of the country being augmented, the competition +between the different capitals of which +it was composed would naturally be augmented +along with it. The owners of those particular +capitals would be obliged to content +themselves with a smaller proportion of the +produce of that labour which their respective +capitals employed. The interest of money, +keeping pace always with the profits of stock, +might, in this manner, be greatly diminished, +though the value of money, or the quantity of +goods which any particular sum could purchase, +was greatly augmented.</p> + +<p>In some countries the interest of money +has been prohibited by law. But as something +can everywhere be made by the use of +money, something ought everywhere to be +paid for the use of it. This regulation, instead +of preventing, has been found from experience +to increase the evil of usury. The +debtor being obliged to pay, not only for the +use of the money, but for the risk which his +creditor runs by accepting a compensation for +that use, he is obliged, if one may say so, to +insure his creditor from the penalties of usury.</p> + +<p>In countries where interest is permitted, the +law in order to prevent the extortion of usury, +generally fixes the highest rate which can be +taken without incurring a penalty. This rate +ought always to be somewhat above the lowest +market price, or the price which is commonly +paid for the use of money by those who +can give the most undoubted security. If +this legal rate should be fixed below the lowest +market rate, the effects of this fixation +must be nearly the same as those of a total +prohibition of interest. The creditor will not +lend his money for less than the use of it is +worth, and the debtor must pay him for the +risk which he runs by accepting the full va<span class='pagenum'><a name="Page_147" id="Page_147">[Pg 147]</a></span>lue +of that use. If it is fixed precisely at the +lowest market price, it ruins, with honest people +who respect the laws of their country, the +credit of all those who cannot give the very +best security, and obliges them to have recourse +to exorbitant usurers. In a country +such as Great Britain, where money is lent to +government at three per cent. and to private +people, upon good security, at four and four +and a-half, the present legal rate, five per cent. +is perhaps as proper as any.</p> + +<p>The legal rate, it is to be observed, though +it ought to be somewhat above, ought not to +be much above the lowest market rate. If +the legal rate of interest in Great Britain, +for example, was fixed so high as eight or ten +per cent. the greater part of the money which +was to be lent, would be lent to prodigals and +projectors, who alone would be willing to give +this high interest. Sober people, who will +give for the use of money no more than a +part of what they are likely to make by the +use of it, would not venture into the competition. +A great part of the capital of the +country would thus be kept out of the hands +which were most likely to make a profitable +and advantageous use of it, and thrown into +those which were most likely to waste and destroy +it. Where the legal rate of interest, on +the contrary, is fixed but a very little above +the lowest market rate, sober people are universally +preferred, as borrowers, to prodigals +and projectors. The person who lends money +gets nearly as much interest from the former +as he dares to take from the latter, and his +money is much safer in the hands of the one +set of people than in those of the other. A +great part of the capital of the country is thus +thrown into the hands in which it is most +likely to be employed with advantage.</p> + +<p>No law can reduce the common rate of interest +below the lowest ordinary market rate +at the time when that law is made. Notwithstanding +the edict of 1766, by which the +French king attempted to reduce the rate of +interest from five to four per cent. money +continued to be lent in France at five per +cent. the law being evaded in several different +ways.</p> + +<p>The ordinary market price of land, it is to +be observed, depends everywhere upon the ordinary +market rate of interest. The person +who has a capital from which he wishes to derive +a revenue, without taking the trouble to +employ it himself, deliberates whether he +should buy land with it, or lend it out at interest. +The superior security of land, together +with some other advantages which almost +everywhere attend upon this species of +property, will generally dispose him to content +himself with a smaller revenue from land, +than what he might have by lending out his +money at interest. These advantages are sufficient +to compensate a certain difference of +revenue; but they will compensate a certain +difference only; and if the rent of land should +fall short of the interest of money by a greater +difference, nobody would buy land, which +would soon reduce its ordinary price. On +the contrary, if the advantages should much +more than compensate the difference, everybody +would buy land, which again would +soon raise its ordinary price. When interest +was at ten per cent. land was commonly sold +for ten or twelve years purchase. As interest +sunk to six, five, and four per cent. the price +of land rose to twenty, five-and-twenty, and +thirty years purchase. The market rate of +interest is higher in France than in England, +and the common price of land is lower. In +England it commonly sells at thirty, in France +at twenty years purchase.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. V.</h3> + +<h4>OF THE DIFFERENT EMPLOYMENTS OF +CAPITALS.</h4> + + +<p>Though all capitals are destined for the maintenance +of productive labour only, yet the +quantity of that labour which equal capitals +are capable of putting into motion, varies extremely +according to the diversity of their employment; +as does likewise the value which +that employment adds to the annual produce +of the land and labour of the country.</p> + +<p>A capital may be employed in four different +ways; either, first, in procuring the rude +produce annually required for the use and +consumption of the society; or, secondly, in +manufacturing and preparing that rude produce +for immediate use and consumption; or, +thirdly in transporting either the rude or manufactured +produce from the places where +they abound to those where they are wanted; +or, lastly, in dividing particular portions of +either into such small parcels as suit the occasional +demands of those who want them. +In the first way are employed the capitals of +all those who undertake improvement or cultivation +of lands, mines, or fisheries; in the +second, those of all master manufacturers; in +the third, those of all wholesale merchants; +and in the fourth, those of all retailers. It is +difficult to conceive that a capital should be +employed in any way which may not be classed +under some one or other of these four.</p> + +<p>Each of those four methods of employing +a capital is essentially necessary, either to the +existence or extension of the other three, or +to the general conveniency of the society.</p> + +<p>Unless a capital was employed in furnishing +rude produce to a certain degree of abundance, +neither manufactures nor trade of any kind +could exist.</p> + +<p>Unless a capital was employed in manufac<span class='pagenum'><a name="Page_148" id="Page_148">[Pg 148]</a></span>turing +that part of the rude produce which +requires a good deal of preparation before it +can be fit for use and consumption, it either +would never he produced, because there could +be no demand for it; or if it was produced +spontaneously, it would be of no value in exchange, +and could add nothing to the wealth +of the society.</p> + +<p>Unless a capital was employed in transporting +either the rude or manufactured produce +from the places where it abounds to +those where it is wanted, no more of either +could be produced than was necessary for the +consumption of the neighbourhood. The capital +of the merchant exchanges the surplus +produce of one place for that of another, and +thus encourages the industry, and increases +the enjoyments of both.</p> + +<p>Unless a capital was employed in breaking +and dividing certain portions either of the +rude or manufactured produce into such small +parcels as suit the occasional demands of those +who want them, every man would be obliged +to purchase a greater quantity of the goods +he wanted than his immediate occasions required. +If there was no such trade as a +butcher, for example, every man would be +obliged to purchase a whole ox or a whole +sheep at a time. This would generally be inconvenient +to the rich, and much more so to +the poor. If a poor workman was obliged to +purchase a month's or six months' provisions +at a time, a great part of the stock which he +employs as a capital in the instruments of his +trade, or in the furniture of his shop, and +which yields him a revenue, he would be +forced to place in that part of his stock which +is reserved for immediate consumption, and +which yields him no revenue. Nothing can be +more convenient for such a person than to be +able to purchase his subsistence from day to +day, or even from hour to hour, as he wants +it. He is thereby enabled to employ almost +his whole stock as a capital. He is thus enabled +to furnish work to a greater value; and +the profit which he makes by it in this way +much more than compensates the additional +price which the profit of the retailer imposes +upon the goods. The prejudices of some political +writers against shopkeepers and tradesmen +are altogether without foundation. So +far is it from being necessary either to tax +them, or to restrict their numbers, that they +can never be multiplied so as to hurt the public, +though they may so as to hurt one another. +The quantity of grocery goods, for +example, which can be sold in a particular +town, is limited by the demand of that town +and its neighbourhood. The capital, therefore, +which can be employed in the grocery +trade, cannot exceed what is sufficient to purchase +that quantity. If this capital is divided +between two different grocers, their competition +will tend to make both of them sell cheaper +than if it were in the hands of one only; +and if it were divided among twenty, their +competition would be just so much the greater, +and the chance of their combining together, +in order to raise the price, just so +much the less. Their competition might, perhaps, +ruin some of themselves; but to take +care of this, is the business of the parties +concerned, and it may safely be trusted to +their discretion. It can never hurt either the +consumer or the producer; on the contrary, +it must tend to make the retailers both sell +cheaper and buy dearer, than if the whole +trade was monopolized by one or two persons. +Some of them, perhaps, may sometimes decoy +a weak customer to buy what he has no occasion +for. This evil, however, is of too little +importance to deserve the public attention, +nor would it necessarily be prevented by restricting +their numbers. It is not the multitude +of alehouses, to give the most suspicious +example, that occasions a general disposition +to drunkenness among the common people; +but that disposition, arising from other causes, +necessarily gives employment to a multitude +of alehouses.</p> + +<p>The persons whose capitals are employed +in any of those four ways, are themselves productive +labourers. Their labour, when properly +directed, fixes and realizes itself in the +subject or vendible commodity upon which +it is bestowed, and generally adds to its price +the value at least of their own maintenance +and consumption. The profits of the farmer, +of the manufacturer, of the merchant, and retailer, +are all drawn from the price of the +goods which the two first produce, and the +two last buy and sell. Equal capitals, however, +employed in each of those four different +ways, will immediately put into motion very +different quantities of productive labour; and +augment, too, in very different proportions, +the value of the annual produce of the land +and labour of the society to which they belong.</p> + +<p>The capital of the retailer replaces, together +with its profits, that of the merchant of whom +he purchases goods, and thereby enables him +to continue his business. The retailer himself +is the only productive labourer whom it +immediately employs. In his profit consists +the whole value which its employment adds to +the annual produce of the land and labour of +the society.</p> + +<p>The capital of the wholesale merchant replaces, +together with their profits, the capitals +of the farmers and manufacturers of whom he +purchases the rude and manufactured produce +which he deals in, and thereby enables +them to continue their respective trades. It +is by this service chiefly that he contributes +indirectly to support the productive labour of +the society, and to increase the value of its annual +produce. His capital employs, too, the +sailors and carriers who transport his goods +from one place to another; and it augments<span class='pagenum'><a name="Page_149" id="Page_149">[Pg 149]</a></span> +the price of those goods by the value, not only +of his profits, but of their wages. This is +all the productive labour which it immediately +puts into motion, and all the value which +it immediately adds to the annual produce. +Its operation in both these respects is a good +deal superior to that of the capital of the retailer.</p> + +<p>Part of the capital of the master manufacturer +is employed as a fixed capital in the instruments +of his trade, and replaces, together +with its profits, that of some other artificer of +whom he purchases them. Part of his circulating +capital is employed in purchasing materials, +and replaces, with their profits, the capitals +of the farmers and miners of whom he +purchases them. But a great part of it is always, +either annually, or in a much shorter +period, distributed among the different workmen +whom he employs. It augments the value +of these materials by their wages, and by +their masters' profits upon the whole stock of +wages, materials, and instruments of trade employed +in the business. It puts immediately +into motion, therefore, a much greater quantity +of productive labour, and adds a much +greater value to the annual produce of the +land and labour of the society, than an equal +capital in the hands of any wholesale merchant.</p> + +<p>No equal capital puts into motion a greater +quantity of productive labour than that of the +farmer. Not only his labouring servants, but +his labouring cattle, are productive labourers. +In agriculture, too, Nature labours along with +man; and though her labour cost no expense, +its produce has its value, as well as that of +the must expensive workmen. The most important +operations of agriculture seem intended, +not so much to increase, though they do +that too, as to direct the fertility of Nature towards +the production of the plants must profitable +to man. A field overgrown with briars +and brambles, may frequently produce as great +a quantity of vegetables as the best cultivated +vineyard or corn field. Planting and tillage +frequently regulate more than they animate +the active fertility of Nature; and after all +their labour, a great part of the work always +remains to be done by her. The labourers +and labouring cattle, therefore, employed in +agriculture, not only occasion, like the workmen +in manufactures, the reproduction of a +value equal to their own consumption, or to +the capital which employs them, together with +its owner's profits, but of a much greater value. +Over and above the capital of the farmer, +and all its profits, they regularly occasion +the reproduction of the rent of the landlord. +This rent may be considered as the produce +of those powers of Nature, the use of which +the landlord lends to the farmer. It is greater +or smaller, according to the supposed extent +of those powers, or, in other words, according +to the supposed natural or improved +fertility of the land. It is the work of Nature +which remains, after deducting or compensating +every thing which can be regarded +as the work of man. It is seldom less than a +fourth, and frequently more than a third, of +the whole produce. No equal quantity of +productive labour employed in manufactures, +can ever occasion so great reproduction. In +them Nature does nothing; man does all; and +the reproduction must always be in proportion +to the strength of the agents that occasion it. +The capital employed in agriculture, therefore, +not only puts into motion a greater quantity +of productive labour than any equal capital +employed in manufactures; but in proportion, +too, to the quantity of productive labour +which it employs, it adds a much greater +value to the annual produce of the land +and labour of the country, to the real wealth +and revenue of its inhabitants. Of all the +ways in which a capital can be employed, it is +by far the most advantageous to society.</p> + +<p>The capitals employed in the agriculture +and in the retail trade of any society, must always +reside within that society. Their employment +is confined almost to a precise spot, +to the farm, and to the shop of the retailer. +They must generally, too, though there are +some exceptions to this, belong to resident +members of the society.</p> + +<p>The capital of a wholesale merchant, on the +contrary, seems to have no fixed or necessary +residence anywhere, but may wander about +from place to place, according as it can either +buy cheap or sell dear.</p> + +<p>The capital of the manufacturer must, no +doubt, reside where the manufacture is carried +on; but where this shall be, is not always +necessarily determined. It may frequently be +at a great distance, both from the place where +the materials grow, and from that where the +complete manufacture is consumed. Lyons +is very distant, both from the places which +afford the materials of its manufactures, and +from those which consume them. The people +of fashion in Sicily are clothed in silks +made in other countries, from the materials +which their own produces. Part of the wool +of Spain is manufactured in Great Britain, +and some part of that cloth is afterwards sent +back to Spain.</p> + +<p>Whether the merchant whose capital exports +the surplus produce of any society, be a native +or a foreigner, is of very little importance. +If he is a foreigner, the number of their productive +labourers is necessarily less than if he +had been a native, by one man only; and the +value of their annual produce, by the profits of +that one man. The sailors or carriers whom +he employs, may still belong indifferently either +to his country, or to their country, or to +some third country, in the same manner as if +he had been a native. The capital of a foreigner +gives a value to their surplus produce +equally with that of a native, by exchanging<span class='pagenum'><a name="Page_150" id="Page_150">[Pg 150]</a></span> +it for something for which there is a demand +at home. It as effectually replaces the capital +of the person who produces that surplus, and +as effectually enables him to continue his business, +the service by which the capital of a +wholesale merchant chiefly contributes to support +the productive labour, and to augment +the value of the annual produce of the society +to which he belongs.</p> + +<p>It is of more consequence that the capital +of the manufacturer should reside within the +country. It necessarily puts into motion a +greater quantity of productive labour, and adds +a greater value to the annual produce of the +land and labour of the society. It may, however, +be very useful to the country, though it +should not reside within it. The capitals of +the British manufacturers who work up the +flax and hemp annually imported from the +coasts of the Baltic, are surely very useful to +the countries which produce them. Those +materials are a part of the surplus produce of +those countries, which, unless it was annually +exchanged for something which is in demand +there, would be of no value, and would soon +cease to be produced. The merchants who +export it, replace the capitals of the people +who produce it, and thereby encourage them +to continue the production; and the British +manufacturers replace the capitals of those +merchants.</p> + +<p>A particular country, in the same manner +as a particular person, may frequently not +have capital sufficient both to improve +cultivate all its lands, to manufacture and prepare +their whole rude produce for immediate +use and consumption, and to transport the +surplus part either of the rude or manufactured +produce to those distant markets, where it +can be exchanged for something for which +there is a demand at home. The inhabitants +of many different parts of Great Britain have +not capital sufficient to improve and cultivate +all their lands. The wool of the southern +counties of Scotland is, a great part of it, after +a long land carriage through very bad +roads, manufactured in Yorkshire, for want of +a capital to manufacture it at home. There +are many little manufacturing towns in Great +Britain, of which the inhabitants have not capital +sufficient to transport the produce of +their own industry to those distant markets +where there is demand and consumption for it. +If there are any merchants among them, they +are, properly, only the agents of wealthier +merchants who reside in some of the great +commercial cities.</p> + +<p>When the capital of any country is not sufficient +for all those three purposes, in proportion +as a greater share of it is employed in agriculture, +the greater will be the quantity of +productive labour which it puts into motion +within the country; as will likewise be the value +which its employment adds to the annual +produce of the land and labour of the society. +After agriculture, the capital employed in manufactures +puts into motion the greatest quantity +of productive labour, and adds the greatest +value to the annual produce. That which +is employed in the trade of exportation has the +least effect of any of the three.</p> + +<p>The country, indeed, which has not capital +sufficient for all those three purposes, has not +arrived at that degree of opulence for which +it seems naturally destined. To attempt, +however, prematurely, and with an insufficient +capital, to do all the three, is certainly not the +shortest way for a society, no more than it +would be for an individual, to acquire a sufficient +one. The capital of all the individuals +of a nation has its limits, in the same manner +as that of a single individual, and is capable of +executing only certain purposes. The capital +of all the individuals of a nation is increased in +the same manner as that of a single individual, +by their continually accumulating and adding +to it whatever they save out of their revenue. +It is likely to increase the fastest, therefore, +when it is employed in the way that affords +the greatest revenue to all the inhabitants of +the country, as they will thus be enabled to +make the greatest savings. But the revenue +of all the inhabitants of the country is necessarily +in proportion to the value of the annual +produce of their land and labour.</p> + +<p>It has been the principal cause of the rapid +progress of our American colonies towards +wealth and greatness, that almost their whole +capitals have hitherto been employed in agriculture. +They have no manufactures, those +household and coarser manufactures excepted, +which necessarily accompany the progress of +agriculture, and which are the work of the +women and children in every private family. +The greater part, both of the exportation and +coasting trade of America, is carried on by +the capitals of merchants who reside in Great +Britain. Even the stores and warehouses from +which goods are retailed in some provinces, +particularly in Virginia and Maryland, belong +many of them to merchants who reside in the +mother country, and afford one of the few +instances of the retail trade of a society being +carried on by the capitals of those who are +not resident members of it. Were the Americans, +either by combination, or by any other +sort of violence, to stop the importation of +European manufactures, and, by thus giving +a monopoly to such of their own countrymen +as could manufacture the like goods, divert +any considerable part of their capital into this +employment, they would retard, instead of accelerating, +the further increase in the value +of their annual produce, and would obstruct, +instead of promoting, the progress of their +country towards real wealth and greatness. +This would be still more the case, were they +to attempt, in the same manner, to monopolize +to themselves their whole exportation +trade.<span class='pagenum'><a name="Page_151" id="Page_151">[Pg 151]</a></span></p> + +<p>The course of human prosperity, indeed, +seems scarce ever to have been of so long continuance +as to enable any great country to acquire +capital sufficient for all those three purposes; +unless, perhaps, we give credit to the +wonderful accounts of the wealth and cultivation +of China, of those of ancient Egypt, +and of the ancient state of Indostan. Even +those three countries, the wealthiest, according +to all accounts, that ever were in the world, +are chiefly renowned for their superiority in +agriculture and manufactures. They do not +appear to have been eminent for foreign trade. +The ancient Egyptians had a superstitious antipathy +to the sea; a superstition nearly of the +same kind prevails among the Indians; and +the Chinese have never excelled in foreign +commerce. The greater part of the surplus +produce of all those three countries seems to +have been always exported by foreigners, who +gave in exchange for it something else, for +which they found a demand there, frequently +gold and silver.</p> + +<p>It is thus that the same capital will in any +country put into motion a greater or smaller +quantity of productive labour, and add a +greater or smaller value to the annual produce +of its land and labour, according to the +different proportions in which it is employed +in agriculture, manufactures, and wholesale +trade. The difference, too, is very great, according +to the different sorts of wholesale +trade in which any part of it is employed.</p> + +<p>All wholesale trade, all buying in order to +sell again by wholesale, may be reduced to +three different sorts: the home trade, the foreign +trade of consumption, and the carrying +trade. The home trade is employed in purchasing +in one part of the same country, and +selling in another, the produce of the industry +of that country. It comprehends both the inland +and the coasting trade. The foreign +trade of consumption is employed in purchasing +foreign goods for home consumption. The +carrying trade is employed in transacting the +commerce of foreign countries, or in carrying +the surplus produce of one to another.</p> + +<p>The capital which is employed in purchasing +in one part of the country, in order to +sell in another, the produce of the industry of +that country, generally replaces, by every such +operation, two distinct capitals, that had both +been employed in the agriculture or manufactures +of that country, and thereby enables +them to continue that employment. When it +sends out from the residence of the merchant +a certain value of commodities, it generally +brings back in return at least an equal value +of other commodities. When both are the +produce of domestic industry, it necessarily +replaces, by every such operation, two distinct +capitals, which had both been employed in +supporting productive labour, and thereby enables +them to continue that support. The +capital which sends Scotch manufactures to +London, and brings back English corn and +manufactures to Edinburgh, necessarily replaces, +by every such operation, two British +capitals, which had both been employed +in the agriculture or manufactures of Great +Britain.</p> + +<p>The capital employed in purchasing foreign +goods for home consumption, when this purchase +is made with the produce of domestic +industry, replaces, too, by every such operation, +two distinct capitals; but one of them +only is employed in supporting domestic industry. +The capital which sends British goods +to Portugal, and brings back Portuguese goods +to Great Britain, replaces, by every such operation, +only one British capital. The other is +a Portuguese one. Though the returns, therefore, +of the foreign trade of consumption, +should be as quick as those of the home trade, +the capital employed in it will give but one +half the encouragement to the industry or +productive labour of the country.</p> + +<p>But the returns of the foreign trade of consumption +are very seldom so quick as those +of the home trade. The returns of the home +trade generally come in before the end of the +year, and sometimes three or four times in +the year. The returns of the foreign trade +of consumption seldom come in before the end +of the year, and sometimes not till after two +or three years. A capital, therefore, employed +in the home trade, will sometimes make twelve +operations, or be sent out and returned twelve +times, before a capital employed in the foreign +trade of consumption has made one. If +the capitals are equal, therefore, the one will +give four-and-twenty times more encouragement +and support to the industry of the country +than the other.</p> + +<p>The foreign goods for home consumption +may sometimes be purchased, not with the +produce of domestic industry, but with some +other foreign goods. These last, however, +must have been purchased, either immediately +with the produce of domestic industry, or +with something else that had been purchased +with it; for, the case of war and conquest +excepted, foreign goods can never be acquired, +but in exchange for something that had been +produced at home, either immediately, or after +two or more different exchanges. The effects, +therefore, of a capital employed in such a +round-about foreign trade of consumption, +are, in every respect, the same as those of one +employed in the most direct trade of the same +kind, except that the final returns are likely +to be still more distant, as they must depend +upon the returns of two or three distinct foreign +trades. If the hemp and flax of Riga +are purchased with the tobacco of Virginia, +which had been purchased with British manufactures, +the merchant must wait for the +returns of two distinct foreign trades, before +he can employ the same capital in repurchasing +a like quantity of British manufactures.<span class='pagenum'><a name="Page_152" id="Page_152">[Pg 152]</a></span> +If the tobacco of Virginia had been purchased, +not with British manufactures, but with +the sugar and rum of Jamaica, which had +been purchased with those manufactures, he +must wait for the returns of three. If those +two or three distinct foreign trades should +happen to be carried on by two or three distinct +merchants, of whom the second buys +the goods imported by the first, and the third +buys those imported by the second, in order +to export them again, each merchant, indeed, +will, in this case, receive the returns of his +own capital more quickly; but the final returns +of the whole capital employed in the +trade will be just as slow as ever. Whether +the whole capital employed in such a round-about +trade belong to one merchant or to +three, can make no difference with regard to +the country, though it may with regard to the +particular merchants. Three times a greater +capital must in both cases be employed, in order +to exchange a certain value of British +manufactures for a certain quantity of flax +and hemp, than would have been necessary, +had the manufactures and the flax and hemp +been directly exchanged for one another. The +whole capital employed, therefore, in such a +round-about foreign trade of consumption, +will generally give less encouragement and +support to the productive labour of the country, +than an equal capital employed in a more +direct trade of the same kind.</p> + +<p>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 encouragement and support which it +can give to the productive labour of the country +from which it is carried on. If they are +purchased with the gold of Brazil, for example, +or with the silver of Peru, this gold +and silver, like the tobacco of Virginia, must +have been purchased with something that either +was the produce of the industry of the +country, or that had been purchased with +something else that was so. So far, therefore, +as the productive labour of the country is concerned, +the foreign trade of consumption, which +is carried on by means of gold and silver, has +all the advantages and all the inconveniences +of any other equally round-about foreign trade +of consumption; and will replace, just as fast, +or just as slow, the capital which is immediately +employed in supporting that productive +labour. It seems even to have one advantage +over any other equally round-about +foreign trade. The transportation of those +metals from one place to another, on account +of their small bulk and great value, is less expensive +than that of almost any other foreign +goods of equal value. Their freight is much less, +and their insurance not greater; and no goods, +besides, are less liable to suffer by the carriage. +An equal quantity of foreign goods, therefore, +may frequently be purchased with a smaller +quantity of the produce of domestic industry, +by the intervention of gold and silver, than +by that of any other foreign goods. The demand +of the country may frequently, in this +manner, be supplied more completely, and at +a smaller expense, than in any other. Whether, +by the continual exportation of those +metals, a trade of this kind is likely to impoverish +the country from which it is carried on +in any other way, I shall have occasion to examine +at great length hereafter.</p> + +<p>That part of the capital of any country +which is employed in the carrying trade, is +altogether withdrawn from supporting the productive +labour of that particular country, to +support that of some foreign countries. Though +it may replace, by every operation, two distinct +capitals, yet neither of them belongs to +that particular country. The capital of the +Dutch merchant, which carries the corn of +Poland to Portugal, and brings back the +fruits and wines of Portugal to Poland, replaces +by every such operation two capitals, +neither of which had been employed in supporting +the productive labour of Holland; +but one of them in supporting that of Poland, +and the other that of Portugal. The +profits only return regularly to Holland, and +constitute the whole addition which this trade +necessarily makes to the annual produce of the +land and labour of that country. When, indeed, +the carrying trade of any particular +country is carried on with the ships and sailors +of that country, that part of the capital +employed in it which pays the freight is distributed +among, and puts into motion, a certain +number of productive labourers of that +country. Almost all nations that have had +any considerable share of the carrying trade +have, in fact, carried it on in this manner. +The trade itself has probably derived its name +from it, the people of such countries being +the carriers to other countries. It does not, +however, seem essential to the nature of the +trade that it should be so. A Dutch merchant +may, for example, employ his capital in transacting +the commerce of Poland and Portugal, +by carrying part of the surplus produce of the +one to the other, not in Dutch, but in British +bottoms. It may be presumed, that he actually +does so upon some particular occasions. +It is upon this account, however, that the carrying +trade has been supposed peculiarly advantageous +to such a country as Great Britain, +of which the defence and security depend +upon the number of its sailors and shipping. +But the same capital may employ as many +sailors and shipping, either in the foreign trade +of consumption, or even in the home trade, +when carried on by coasting vessels, as it +could in the carrying trade. The number of +sailors and shipping which any particular capital +can employ, does not depend upon the +nature of the trade, but partly upon the bulk +of the goods, in proportion to their value, and<span class='pagenum'><a name="Page_153" id="Page_153">[Pg 153]</a></span> +partly upon the distance of the ports between +which they are to be carried; chiefly upon +the former of those two circumstances. The +coal trade from Newcastle to London, for example, +employs more shipping than all the carrying +trade of England, though the ports are +at no great distance. To force, therefore, by +extraordinary encouragements, a larger share +of the capital of any country into the carrying +trade, than what would naturally go to it, +will not always necessarily increase the shipping +of that country.</p> + +<p>The capital, therefore, employed in the +home trade of any country, will generally +give encouragement and support to a greater +quantity of productive labour in that country, +and increase the value of its annual produce, +more than an equal capital employed in the +foreign trade of consumption; and the capital +employed in this latter trade has, in both these +respects, a still greater advantage over an +equal capital employed in the carrying trade. +The riches, and so far as power depends upon +riches, the power of every country must always +be in proportion to the value of its annual +produce, the fund from which all taxes +must ultimately be paid. But the great object +of the political economy of every country, +is to increase the riches and power of that +country. It ought, therefore, to give no preference +nor superior encouragement to the foreign +trade of consumption above the home +trade, nor to the carrying trade above either of +the other two. It ought neither to force nor +to allure into either of those two channels a +greater share of the capital of the country, +than what would naturally flow into them of +its own accord.</p> + +<p>Each of those different branches of trade, +however, is not only advantageous, but necessary +and unavoidable, when the course of +things, without any constraint or violence, naturally +introduces it.</p> + +<p>When the produce of any particular branch +of industry exceeds what the demand of the +country requires, the surplus must be sent +abroad, and exchanged for something for +which there is a demand at home. Without +such exportation, a part of the productive +labour of the country must cease, and +the value of its annual produce diminish. +The land and labour of Great Britain produce +generally more corn, woollens, and hardware, +than the demand of the home market requires. +The surplus part of them, therefore, must be +sent abroad, and exchanged for something for +which there is a demand at home. It is only +by means of such exportation, that this surplus +can acquire a value sufficient to compensate +the labour and expense of producing it. The +neighbourhood of the sea-coast, and the banks +of all navigable rivers, are advantageous situations +for industry, only because they facilitate +the exportation and exchange of such surplus +produce for something else which is more in +demand there.</p> + +<p>When the foreign goods which are thus purchased +with the surplus produce of domestic +industry exceed the demand of the home market, +the surplus part of them must be sent +abroad again, and exchanged for something +more in demand at home. About 96,000 +hogsheads of tobacco are annually purchased +in Virginia and Maryland with a part of the +surplus produce of British industry. But the +demand of Great Britain does not require, +perhaps, more than 14,000. If the remaining +82,000, therefore, could not be sent abroad, +and exchanged for something more in +demand at home, the importation of them must +cease immediately, and with it the productive +labour of all those inhabitants of Great Britain +who are at present employed in preparing the +goods with which these 82,000 hogsheads are +annually purchased. Those goods, which are +part of the produce of the land and labour of +Great Britain, having no market at home, and +being deprived of that which they had abroad, +must cease to be produced. The most round-about +foreign trade of consumption, therefore, +may, upon some occasions, be as necessary for +supporting the productive labour of the country, +and the value of its annual produce, as +the most direct.</p> + +<p>When the capital stock of any country is +increased to such a degree that it cannot be all +employed in supplying the consumption, and +supporting the productive labour of that particular +country, the surplus part of it naturally +disgorges itself into the carrying trade, and +is employed in performing the same offices +to other countries. The carrying trade is the +natural effect and symptom of great national +wealth; but it does not seem to be the natural +cause of it. Those statesmen who have been +disposed to favour it with particular encouragement, +seem to have mistaken the effect and +symptom for the cause. Holland, in proportion +to the extent of the land and the number +of its inhabitants, by far the richest country in +Europe, has accordingly the greatest share of +the carrying trade of Europe. England, perhaps +the second richest country of Europe, is +likewise supposed to have a considerable share +in it; though what commonly passes for the +carrying trade of England will frequently, +perhaps, be found to be no more than a round-about +foreign trade of consumption. Such +are, in a great measure, the trades which carry +the goods of the East and West Indies and of +America to the different European markets. +Those goods are generally purchased, either +immediately with the produce of British industry, +or with something else which had been +purchased with that produce, and the final returns +of those trades are generally used or consumed +in Great Britain. The trade which is +carried on in British bottoms between the dif<span class='pagenum'><a name="Page_154" id="Page_154">[Pg 154]</a></span>ferent +ports of the Mediterranean, and some +trade of the same kind carried on by British +merchants between the different parts of India, +make, perhaps, the principal branches of +what is properly the carrying trade of Great +Britain.</p> + +<p>The extent of the home trade, and of the +capital which can be employed in it, is necessarily +limited by the value of the surplus produce +of all those distant places within the +country which have occasion to exchange their +respective productions with one another; 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 different countries +in the world. Its possible extent, therefore, +is in a manner infinite in comparison of +that of the other two, and is capable of absorbing +the greatest capitals.</p> + +<p>The consideration of his own private profit +is the sole motive which determines the owner +of any capital to employ it either in agriculture, +in manufactures, or in some particular +branch of the wholesale or retail trade. The +different quantities of productive labour which +it may put into motion, and the different values +which it may add to the annual produce +of the land and labour of the society, according +as it is employed in one or other of those +different ways, never enter into his thoughts. +In countries, therefore, where agriculture is +the most profitable of all employments, and +farming and improving the most direct roads +to a splendid fortune, the capitals of individuals +will naturally be employed in the manner +most advantageous to the whole society. +The profits of agriculture, however, seem to +have no superiority over those of other employments +in any part of Europe. Projectors, +indeed, in every corner of it, have, within +these few years, amused the public with most +magnificent accounts of the profits to be made +by the cultivation and improvement of land. +Without entering into any particular discussion +of their calculations, a very simple observation +may satisfy us that the result of them +must be false. We see, every day, the most +splendid fortunes, that have been acquired in +the course of a single life, by trade and manufactures, +frequently from a very small capital, +sometimes from no capital. A single instance +of such a fortune, acquired by agriculture +in the same time, and from such a capital, +has not, perhaps, occurred in Europe, during +the course of the present century. In all the +great countries of Europe, however, much +good land still remains uncultivated; and the +greater part of what is cultivated, is far from +being improved to the degree of which it is +capable. Agriculture, therefore, is almost +everywhere capable of absorbing a much greater +capital than has ever yet been employed in +it. What circumstances in the policy of Europe +have given the trades which are carried +on in towns so great an advantage over that +which is carried on in the country, that private +persons frequently find it more for their advantage +to employ their capitals in the most +distant carrying trades of Asia and America, +than in the improvement and cultivation of +the most fertile fields in their own neighbourhood, +I shall endeavour to explain at full +length in the two following books.</p> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_155" id="Page_155">[Pg 155]</a></span></p> +<h2><a name="BOOK_III" id="BOOK_III"></a>BOOK III.</h2> + +<h4>OF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS</h4> + + + +<hr style="width: 15%;" /> +<h3>CHAP. I.</h3> + +<h4>OF THE NATURAL PROGRESS OF OPULENCE.</h4> + + +<p>The great commerce of every civilized society +is that carried on between the inhabitants of +the town and those of the country. It consists +in the exchange of rude for manufactured +produce, either immediately, or by the intervention +of money, or of some sort of paper +which represents money. The country supplies +the town with the means of subsistence +and the materials of manufacture. The town +repays this supply, by sending back a part of +the manufactured produce to the inhabitants +of the country. The town, in which there +neither is nor can be any reproduction of substances, +may very properly be said to gain its +whole wealth and subsistence from the country. +We must not, however, upon this account, +imagine that the gain of the town is the +loss of the country. The gains of both are +mutual and reciprocal, and the division of labour +is in this, as in all other cases, advantageous +to all the different persons employed in +the various occupations into which it is subdivided. +The inhabitants of the country purchase +of the town a greater quantity of manufactured +goods with the produce of a much +smaller quantity of their own labour, than +they must have employed had they attempted +to prepare them themselves. The town affords +a market for the surplus produce of the country, +or what is over and above the maintenance +of the cultivators; and it is there that the inhabitants +of the country exchange it for something +else which is in demand among them. +The greater the number and revenue of the +inhabitants of the town, the more extensive is +the market which it affords to those of the +country; and the more extensive that market, +it is always the more advantageous to a great +number. The corn which grows within a mile +of the town, sells there for the same price with +that which comes from twenty miles distance. +But the price of the latter must, generally, +not only pay the expense of raising it and +bringing it to market, but afford, too, the ordinary +profits of agriculture to the farmer. +The proprietors and cultivators of the country, +therefore, which lies in the neighbourhood +of the town, over and above the ordinary profits +of agriculture, gain, in the price of what +they sell, the whole value of the carriage of +the like produce that is brought from more +distant parts; and they save, besides, the whole +value of this carriage in the price of what they +buy. Compare the cultivation of the lands in +the neighbourhood of any considerable town, +with that of those which lie at some distance +from it, and you will easily satisfy yourself +how much the country is benefited by the commerce +of the town. Among all the absurd +speculations that have been propagated concerning +the balance of trade, it has never been +pretended that either the country loses by its +commerce with the town, or the town by that +with the country which maintains it.</p> + +<p>As subsistence is, in the nature of things, +prior to conveniency and luxury, so the industry +which procures the former, must necessarily +be prior to that which ministers to the +latter. The cultivation and improvement of +the country, therefore, which affords subsistence, +must, necessarily, be prior to the increase +of the town, which furnishes only the +means of conveniency and luxury. It is the +surplus produce of the country only, or what +is over and above the maintenance of the cultivators, +that constitutes the subsistence of the +town, which can therefore increase only with +the increase of the surplus produce. The +town, indeed, may not always derive its whole +subsistence from the country in its neighbourhood, +or even from the territory to which it +belongs, but from very distant countries; and +this, though it forms no exception from the +general rule, has occasioned considerable variations +in the progress of opulence in different +ages and nations.</p> + +<p>That order of things which necessity imposes, +in general, though not in every particu<span class='pagenum'><a name="Page_156" id="Page_156">[Pg 156]</a></span>lar +country, is in every particular country promoted +by the natural inclinations of man. If +human institutions had never thwarted those +natural inclinations, the towns could nowhere +have increased beyond what the improvement +and cultivation of the territory in which they +were situated could support; till such time, +at least, as the whole of that territory was +completely cultivated and improved. Upon +equal, or nearly equal profits, most men will +choose to employ their capitals, rather in the +improvement and cultivation of land, than +either in manufactures or in foreign trade. +The man who employs his capital in land, has +it more under his view and command; and his +fortune is much less liable to accidents than +that of the trader, who is obliged frequently +to commit it, not only to the winds and the +waves, but to the more uncertain elements of +human folly and injustice, by giving great +credits, in distant countries, to men with whose +character and situation he can seldom be +thoroughly acquainted. The capital of the +landlord, on the contrary, which is fixed in +the improvement of his land, seems to be as +well secured as the nature of human affairs +can admit of. The beauty of the country, besides, +the pleasure of a country life, the tranquillity +of mind which it promises, and, wherever +the injustice of human laws does not disturb +it, the independency which it really affords, +have charms that, more or less, attract +everybody; and as to cultivate the ground +was the original destination of man, so, in +every stage of his existence, he seems to retain +a predilection for this primitive employment.</p> + +<p>Without the assistance of some artificers, +indeed, the cultivation of land cannot be carried +on, but with great inconveniency and +continual interruption. Smiths, carpenters, +wheelwrights and ploughwrights, masons and +bricklayers, tanners, shoemakers, and tailors, +are people whose service the farmer has frequent +occasion for. Such artificers, too, stand +occasionally in need of the assistance of one +another; and as their residence is not, like +that of the farmer, necessarily tied down to a +precise spot, they naturally settle in the neighbourhood +of one another, and thus form a +small town or village. The butcher, the +brewer, and the baker, soon join them, together +with many other artificers and retailers, +necessary or useful for supplying their occasional +wants, and who contribute still further +to augment the town. The inhabitants +of the town, and those of the country, are mutually +the servants of one another. The town +is a continual fair or market, to which the inhabitants +of the country resort, in order to exchange +their rude for manufactured produce. +It is this commerce which supplies the inhabitants +of the town, both with the materials of +their work, and the means of their subsistence. +The quantity of the finished work which they +sell to the inhabitants of the country, necessarily +regulates the quantity of the materials and +provisions which they buy. Neither their employment +nor subsistence, therefore, can augment, +but in proportion to the augmentation +of the demand from the country for finished +work; and this demand can augment only in +proportion to the extension of improvement +and cultivation. Had human institutions, +therefore, never disturbed the natural course +of things, the progressive wealth and increase +of the towns would, in every political society, +be consequential, and in proportion to the improvement +and cultivation of the territory or +country.</p> + +<p>In our North American colonies, where +uncultivated land is still to be had upon easy +terms, no manufactures for distant sale have +ever yet been established in any of their towns. +When an artificer has acquired a little more +stock than is necessary for carrying on his own +business in supplying the neighbouring country, +he does not, in North America, attempt +to establish with it a manufacture for more +distant sale, but employs it in the purchase +and improvement of uncultivated land. From +artificer he becomes planter; and neither the +large wages nor the easy subsistence which +that country affords to artificers, can bribe him +rather to work for other people than for himself. +He feels that an artificer is the servant +of his customers, from whom he derives his +subsistence; but that a planter who cultivates +his own land, and derives his necessary subsistence +from the labour of his own family, is +really a master, and independent of all the +world.</p> + +<p>In countries, on the contrary, where there +is either no uncultivated land, or none that +can be had upon easy terms, every artificer +who has acquired more stock than he can employ +in the occasional jobs of the neighbourhood, +endeavours to prepare work for more +distant sale. The smith erects some sort of +iron, the weaver some sort of linen or woollen +manufactory. Those different manufactures +come, in process of time, to be gradually subdivided, +and thereby improved and refined in +a great variety of ways, which may easily be +conceived, and which it is therefore unnecessary +to explain any further.</p> + +<p>In seeking for employment to a capital, manufactures +are, upon equal or nearly equal +profits, naturally preferred to foreign commerce, +for the same reason that agriculture is +naturally preferred to manufactures. As the +capital of the landlord or farmer is more secure +than that of the manufacturer, so the capital +of the manufacturer, being at all times +more within his view and command, is more +secure than that of the foreign merchant. In +every period, indeed, of every society, the surplus +part both of the rude and manufactured +produce, or that for which there is no demand +at home, must be sent abroad, in order to be<span class='pagenum'><a name="Page_157" id="Page_157">[Pg 157]</a></span> +exchanged for something for which there is +some demand at home. But whether the capital +which carries this surplus produce abroad +be a foreign or a domestic one, is of very little +importance. If the society has not acquired +sufficient capital, both to cultivate all its lands, +and to manufacture in the completest manner +the whole of its rude produce, there is even a +considerable advantage that the rude produce +should be exported by a foreign capital, in +order that the whole stock of the society may +be employed in more useful purposes. The +wealth of ancient Egypt, that of China and +Indostan, sufficiently demonstrate that a nation +may attain a very high degree of opulence, +though the greater part of its exportation +trade be carried on by foreigners. The +progress of our North American and West +Indian colonies, would have been much less +rapid, had no capital but what belonged to +themselves been employed in exporting their +surplus produce.</p> + +<p>According to the natural course of things, +therefore, the greater part of the capital of +every growing society is, first, directed to agriculture, +afterwards to manufactures, and, +last of all, to foreign commerce. This order +of things is so very natural, that in every society +that had any territory, it has always, I +believe, been in some degree observed. Some +of their lands must have been cultivated before +any considerable towns could be established, +and some sort of coarse industry of +the manufacturing kind must have been carried +on in those towns, before they could well +think of employing themselves in foreign commerce.</p> + +<p>But though this natural order of things must +have taken place in some degree in every such +society, it has, in all the modern states of Europe, +been in many respects entirely inverted. +The foreign commerce of some of their cities +has introduced all their finer manufactures, or +such as were fit for distant sale; and manufactures +and foreign commerce together have +given birth to the principal improvements of +agriculture. The manners and customs which +the nature of their original government introduced, +and which remained after that government +was greatly altered, necessarily forced +them into this unnatural and retrograde order.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. II.</h3> + +<h4>OF THE DISCOURAGEMENT OF AGRICULTURE IN +THE ANCIENT STATE OF EUROPE, AFTER THE +FALL OF THE ROMAN EMPIRE.</h4> + + +<p>When the German and Scythian nations overran +the western provinces of the Roman empire, +the confusions which followed so great a +revolution lasted for several centuries. The +rapine and violence which the barbarians exercised +against the ancient inhabitants, interrupted +the commerce between the towns and +the country. The towns were deserted, and +the country was left uncultivated; and the +western provinces of Europe, which had enjoyed +a considerable degree of opulence under +the Roman empire, sunk into the lowest state +of poverty and barbarism. During the continuance +of those confusions, the chiefs and +principal leaders of those nations acquired, or +usurped to themselves, the greater part of the +lands of those countries. A great part of +them was uncultivated; but no part of them, +whether cultivated or uncultivated, was left +without a proprietor. All of them were engrossed, +and the greater part by a few great +proprietors.</p> + +<p>This original engrossing of uncultivated +lands, though a great, might have been but a +transitory evil. They might soon have been +divided again, and broke into small parcels, +either by succession or by alienation. The +law of primogeniture hindered them from being +divided by succession; the introduction of entails +prevented their being broke into small +parcels by alienation.</p> + +<p>When land, like moveables, is considered +as the means only of subsistence and enjoyment, +the natural law of succession divides it, +like them, among all the children of the family; +of all of whom the subsistence and enjoyment +may be supposed equally dear to the father. +This natural law of succession, accordingly, +took place among the Romans, who +made no more distinction between elder and +younger, between male and female, in the inheritance +of lands, than we do in the distribution +of moveables. But when land was considered +as the means, not of subsistence merely, +but of power and protection, it was thought +better that it should descend undivided to one. +In those disorderly times, every great landlord +was a sort of petty prince. His tenants were +his subjects. He was their judge, and in some +respects their legislator in peace and their +leader in war. He made war according to +his own discretion, frequently against his +neighbours, and sometimes against his sovereign. +The security of a landed estate, therefore, +the protection which its owner could afford +to those who dwelt on it, depended upon +its greatness. To divide it was to ruin it, and +to expose every part of it to be oppressed and +swallowed up by the incursions of its neighbours. +The law of primogeniture, therefore, +came to take place, not immediately indeed, +but in process of time, in the succession of +landed estates, for the same reason that it has +generally taken place in that of monarchies, +though not always at their first institution. +That the power, and consequently the security +of the monarchy, may not be weakened by division, +it must descend entire to one of the<span class='pagenum'><a name="Page_158" id="Page_158">[Pg 158]</a></span> +children. To which of them so important a +preference shall be given, must be determined +by some general rule, founded not upon the +doubtful distinctions of personal merit, but +upon some plain and evident difference which +can admit of no dispute. Among the children +of the same family there can be no indisputable +differences but that of sex, and that of +age. The male sex is universally preferred +to the female; and when all other things are +equal, the elder everywhere takes place of the +younger. Hence the origin of the right of +primogeniture, and of what is called lineal +succession.</p> + +<p>Laws frequently continue in force long after +the circumstances which first gave occasion +to them, and which could alone render +them reasonable, are no more. In the present +state of Europe, the proprietor of a single acre +of land is as perfectly secure in his possession +as the proprietor of 100,000. The right of +primogeniture, however, still continues to be +respected; and as of all institutions it is the +fittest to support the pride of family distinctions, +it is still likely to endure for many centuries. +In every other respect, nothing can +be more contrary to the real interest of a numerous +family, than a right which, in order +to enrich one, beggars all the rest of the children.</p> + +<p>Entails are the natural consequences of the +law of primogeniture. They were introduced +to preserve a certain lineal succession, of +which the law of primogeniture first gave the +idea, and to hinder any part of the original +estate from being carried out of the proposed +line, either by gift, or device, or alienation; +either by the folly, or by the misfortune of +any of its successive owners. They were altogether +unknown to the Romans. Neither +their substitutions, nor fidei-commisses, bear +any resemblance to entails, though some +French lawyers have thought proper to dress +the modern institution in the language and +garb of those ancient ones.</p> + +<p>When great landed estates were a sort of +principalities, entails might not be unreasonable. +Like what are called the fundamental +laws of some monarchies, they might frequently +hinder the security of thousands from being +endangered by the caprice or extravagance of +one man. But in the present state of Europe, +when small as well as great estates derive their +security from the laws of their country, nothing +can be more completely absurd. They +are founded upon the most absurd of all suppositions, +the supposition that every successive +generation of men have not an equal right to +the earth, and to all that it possesses; but that +the property of the present generation should +be restrained and regulated according to the the +fancy of those who died, perhaps five hundred +years ago. Entails, however, are still respected, +through the greater part of Europe; +in those countries, particularly, in which noble +birth is a necessary qualification for the +enjoyment either of civil or military honours. +Entails are thought necessary for maintaining +this exclusive privilege of the nobility to the +great offices and honours of their country; +and that order having usurped one unjust advantage +over the rest of their fellow-citizens, +lest their poverty should render it ridiculous, +it is thought reasonable that they should have +another. The common law of England, indeed, +is said to abhor perpetuities, and they +are accordingly more restricted there than in +any other European monarchy; though even +England is not altogether without them. In +Scotland, more than one fifth, perhaps more +one third part of the whole lands in the +country, are at present supposed to be under +strict entail.</p> + +<p>Great tracts of uncultivated land were in +this manner not only engrossed by particular +families, but the possibility of their being divided +again was as much as possible precluded +for ever. It seldom happens, however, +that a great proprietor is a great improver. +In the disorderly times which gave birth to +those barbarous institutions, the great proprietor +was sufficiently employed in defending his +own territories, or in extending his jurisdiction +and authority over those of his neighbours. +He had no leisure to attend to the +cultivation and improvement of land. When +the establishment of law and order afforded +this leisure, he often wanted the inclination, +and almost always the requisite abilities. +If the expense of his house and person either +equalled or exceeded his revenue, as it did +very frequently, he had no stock to employ in +this manner. If he was an economist, he generally +found it more profitable to employ his +annual savings in new purchases than in the +improvement of his old estate. To improve +land with profit, like all other commercial projects, +requires an exact attention to small savings +and small gains, of which a man born to +a great fortune, even though naturally frugal, +is very seldom capable. The situation of such +a person naturally disposes him to attend rather +to ornament, which pleases his fancy, than +to profit, for which he has so little occasion. +The elegance of his dress, of his equipage, of +his house and household furniture, are objects +which, from his infancy, he has been accustomed +to have some anxiety about. The turn +of mind which this habit naturally forms, follows +him when he comes to think of the improvement +of land. He embellishes, perhaps, +four or five hundred acres in the neighbourhood +of his house, at ten times the expense +which the land is worth after all his improvements; +and finds, that if he was to improve +his whole estate in the same manner, and he +has little taste for any other, he would be a +bankrupt before he had finished the tenth part +of it. There still remain, in both parts of the +united kingdom, some great estates which have<span class='pagenum'><a name="Page_159" id="Page_159">[Pg 159]</a></span> +continued, without interruption, in the hands +of the same family since the times of feudal +anarchy. Compare the present condition of +those estates with the possessions of the small +proprietors in their neighbourhood, and you +will require no other argument to convince +you how unfavourable such extensive property +is to improvement.</p> + +<p>If little improvement was to be expected +from such great proprietors, still less was to +be hoped for from those who occupied the land +under them. In the ancient state of Europe, +the occupiers of land were all tenants at will. +They were all, or almost all, slaves, but their +slavery was of a milder kind than that known +among the ancient Greeks and Romans, or +even in our West Indian colonies. They were +supposed to belong more directly to the land +than to their master. They could, therefore, +be sold with it, but not separately. They could +marry, provided it was with the consent of +their master; and he could not afterwards +dissolve the marriage by selling the man and +wife to different persons. If he maimed or +murdered any of them, he was liable to some +penalty, though generally but to a small one. +They were not, however, capable of acquiring +property. Whatever they acquired was acquired +to their master, and he could take it +from them at pleasure. Whatever cultivation +and improvement could be carried on by means +of such slaves, was properly carried on by their +master. It was at his expense. The seed, the +cattle, and the instruments of husbandry, were +all his. It was for his benefit. Such slaves +could acquire nothing but their daily maintenance. +It was properly the proprietor himself, +therefore, that in this case occupied his +own lands, and cultivated them by his own +bondmen. This species of slavery still subsists +in Russia, Poland, Hungary, Bohemia, +Moravia, and other parts of Germany. It is +only in the western and south-western provinces +of Europe that it has gradually been +abolished altogether.</p> + +<p>But if great improvements are seldom to +be expected from great proprietors, they are +least of all to be expected when they employ +slaves for their workmen. The experience of +all ages and nations, I believe, demonstrates +that the work done by slaves, though it appears +to cost only their maintenance, is in the +end the dearest of any. A person who can acquire +no property can have no other interest +but to eat as much and to labour as little as +possible. Whatever work he does beyond what +is sufficient to purchase his own maintenance, +can be squeezed out of him by violence only, +and not by any interest of his own. In ancient +Italy, how much the cultivation of corn +degenerated, how unprofitable it became to +the master, when is fell under the management +of slaves, is remarked both by Pliny and +Columella. In the time of Aristotle, it had +not been much better in ancient Greece. +Speaking of the ideal republic described in the +laws of Plato, to maintain 5000 idle men (the +number of warriors supposed necessary for its +defence), together with their women and servants, +would require, he says, a territory of +boundless extent and fertility, like the plains +of Babylon.</p> + +<p>The pride of man makes him love to domineer, +and nothing mortifies him to much as +to be obliged to condescend to persuade his +inferiors. Wherever the law allows it, and +the nature of the work can afford it, therefore, +he will generally prefer the service of +slaves to that of freemen. The planting of +sugar and tobacco can afford the expense of +slave cultivation. The raising of corn, it +seems, in the present times, cannot. In the +English colonies, of which the principal produce +is corn, the far greater part of the work +is done by freemen. The late resolution of +the Quakers in Pennsylvania, to set at liberty +all their negro slaves, may satisfy us that +their number cannot be very great. Had they +made any considerable part of their property, +such a resolution could never have been agreed +to. In our sugar colonies, on the contrary, +the whole work is done by slaves, and in our +tobacco colonies a very great part of it. The +profits of a sugar plantation in any of our +West Indian colonies, are generally much +greater than those of any other cultivation that +is known either in Europe or America; and +the profits of a tobacco plantation, though inferior +to those of sugar, are superior to those +of corn, as has already been observed. Both +can afford the expense of slave cultivation, +but sugar can afford it still better than tobacco. +The number of negroes, accordingly, is +much greater, in proportion to that of whites, +in our sugar than in our tobacco colonies.</p> + +<p>To the slave cultivators of ancient times, gradually +succeeded a species of farmers, known +at present in France by the name of metayers. +They are called in Latin <i>Coloni Partiarii</i>. +They have been so long in disuse in England, +that at present I know no English name for +them. The proprietor furnished them with +the seed, cattle, and instruments of husbandry, +the whole stock, in short, necessary for cultivating +the farm. The produce was divided +equally between the proprietor and the farmer, +after setting aside what was judged necessary +for keeping up the stock, which was +restored to the proprietor, when the farmer +either quitted or was turned out of the farm.</p> + +<p>Land occupied by such tenants is properly +cultivated at the expense of the proprietors, as +much as that occupied by slaves. There is, +however, one very essential difference between +them. Such tenants being freemen, are capable +of acquiring property; and having a +certain proportion of the produce of the land, +they have a plain interest that the whole produce +should be as great as possible, in order +that their own proportion may be so. A slave,<span class='pagenum'><a name="Page_160" id="Page_160">[Pg 160]</a></span> +on the contrary, who can acquire nothing but +his maintenance, consults his own ease, by +making the land produce as little as possible +over and above that maintenance. It is probable +that it was partly upon account of this +advantage, and partly upon account of the encroachments +which the sovereigns, always jealous +of the great lords, gradually encouraged +their villains to make upon their authority, +and which seem, at least, to have been such as +rendered this species of servitude altogether +inconvenient, that tenure in villanage gradually +wore out through the greater part of Europe. +The time and manner, however, in +which so important a revolution was brought +about, is one of the most obscure points in +modern history. The church of Rome claims +great merit in it; and it is certain, that so early +as the twelfth century, Alexander III. published +a bull for the general emancipation of +slaves. It seems, however, to have been rather +a pious exhortation, than a law to which +exact obedience was required from the faithful. +Slavery continued to take place almost +universally for several centuries afterwards, +till it was gradually abolished by the joint operation +of the two interests above mentioned; +that of the proprietor on the one hand, and +that of the sovereign on the other. A villain, +enfranchised, and at the same time allowed to +continue in possession of the land, having no +stock of his own, could cultivate it only by +means of what the landlord advanced to him, +and must therefore have been what the French +call a metayer.</p> + +<p>It could never, however, be the interest +even of this last species of cultivators, to lay +out, in the further improvement of the land, +any part of the little stock which they might +save from their own share of the produce; because +the landlord, who laid out nothing, was +to get one half of whatever it produced. The +tithe, which is but a tenth of the produce, is +found to be a very great hindrance to improvement. +A tax, therefore, which amounted to +one half, must have been an effectual bar to it. +It might be the interest of a metayer to make +the land produce as much as could be brought +out of it by means of the stock furnished by +the proprietor; but it could never be his interest +to mix any part of his own with it. In +France, where five parts out of six of the +whole kingdom are said to be still occupied by +this species of cultivators, the proprietors complain, +that their metayers take every opportunity +of employing their master's cattle rather +in carriage than in cultivation; because, in the +one case, they get the whole profits to themselves, +in the other they share them with their +landlord. This species of tenants still subsists +in some parts of Scotland. They are +called steel-bow tenants. Those ancient English +tenants, who are said by Chief-Baron Gilbert +and Dr Blackstone to have been rather +bailiffs of the landlord than farmers, properly +so called, were probably of the same kind.</p> + +<p>To this species of tenantry succeeded, though +by very slow degrees, farmers, properly so called, +who cultivated the land with their own +stock, paying a rent certain to the landlord. +When such farmers have a lease for a term of +years, they may sometimes find it for their interest +to lay out part of their capital in the further +improvement of the farm; because they +may sometimes expect to recover it, with a +large profit, before the expiration of the lease. +The possession, even of such farmers, however, +was long extremely precarious, and still +is so in many parts of Europe. They could, +before the expiration of their term, be legally +ousted of their leases by a new purchaser; +in England, even, by the fictitious action of +a common recovery. If they were turned out +illegally by the violence of their master, the +action by which they obtained redress was extremely +imperfect. It did not always reinstate +them in the possession of the land, but +gave them damages, which never amounted to +a real loss. Even in England, the country, +perhaps of Europe, where the yeomanry has +always been most respected, it was not till about +the 14th of Henry VII. that the action +of ejectment was invented, by which the tenant +recovers, not damages only, but possession, +and in which his claim is not necessarily concluded +by the uncertain decision of a single assize. +This action has been found so effectual +a remedy, that, in the modern practice, when +the landlord has occasion to sue for the possession +of the land, he seldom makes use of +the actions which properly belong to him as a +landlord, the writ of right or the writ of entry, +but sues in the name of his tenant, by the +writ of ejectment. In England, therefore +the security of the tenant is equal to that of +the proprietor. In England, besides, a lease +for life of forty shillings a-year value is a freehold, +and entitles the lessee to a vote for a +member of parliament; and as a great part of +the yeomanry have freeholds of this kind, the +whole order becomes respectable to their landlords, +on account of the political consideration +which this gives them. There is, I believe, +nowhere in Europe, except in England, any +instance of the tenant building upon the land +of which he had no lease, and trusting that the +honour of his landlord would take no advantage +of so important an improvement. Those +laws and customs, so favourable to the yeomanry, +have perhaps contributed more to the +present grandeur of England, than all their +boasted regulations of commerce taken together.</p> + +<p>The law which secures the longest leases against +successors of every kind, is, so far as I +know, peculiar to Great Britain. It was introduced +into Scotland so early as 1449, by a +law of James II. Its beneficial influence,<span class='pagenum'><a name="Page_161" id="Page_161">[Pg 161]</a></span> +however, has been much obstructed by entails; +the heirs of entail being generally restrained +from letting leases for any long term of years, +frequently for more than one year. A late +act of parliament has, in this respect, somewhat +slackened their fetters, though they are +still by much too strait. In Scotland, besides, +as no leasehold gives a vote for a member of +parliament, the yeomanry are upon this account +less respectable to their landlords than +in England.</p> + +<p>In other parts of Europe, after it was found +convenient to secure tenants both against heirs +and purchasers, the term of their security was +still limited to a very short period; in France, +for example, to nine years from the commencement +of the lease. It has in that country, +indeed, been lately extended to twenty-seven, +a period still too short to encourage the +tenant to make the most important improvements. +The proprietors of land were anciently +the legislators of every part of Europe. +The laws relating to land, therefore, were all +calculated for what they supposed the interest +of the proprietor. It was for his interest, they +had imagined, that no lease granted by any of +his predecessors should hinder him from enjoying, +during a long term of years, the full +value of his land. Avarice and injustice are +always short-sighted, and they did not foresee +how much this regulation must obstruct improvement, +and thereby hurt, in the long-run, +the real interest of the landlord.</p> + +<p>The farmers, too, besides paying the rent, +were anciently, it was supposed, bound to perform +a great number of services to the landlord, +which were seldom either specified in +the lease, or regulated by any precise rule, but +by the use and wont of the manor or barony. +These services, therefore, being almost entirely +arbitrary, subjected the tenant to many vexations. +In Scotland the abolition of all services +not precisely stipulated in the lease, has, +in the course of a few years, very much altered +for the better the condition of the yeomanry +of that country.</p> + +<p>The public services to which the yeomanry +were bound, were not less arbitrary than the +private ones. To make and maintain the +high roads, a servitude which still subsists, I +believe, everywhere, though with different degrees +of oppression in different countries, was +not the only one. When the king's troops, +when his household, or his officers of any kind, +passed through any part of the country, the +yeomanry were bound to provide them with +horses, carriages, and provisions, at a price regulated +by the purveyor. Great Britain is, I +believe, the only monarchy in Europe where +the oppression of purveyance has been entirely +abolished. It still subsists in France and +Germany.</p> + +<p>The public taxes, to which they were subject, +were as irregular and oppressive as the +services. The ancient lords, though extremely +unwilling to grant, themselves, any pecuniary +aid to their sovereign, easily allowed him +to tallage, as they called it, their tenants, and +had not knowledge enough to foresee how +much this must, in the end, affect their own +revenue. The taille, as it still subsists in +France, may serve as an example of those ancient +tallages. It is a tax upon the supposed +profits of the farmer, which they estimate by +the stock that he has upon the farm. It is +his interest, therefore, to appear to have as little +as possible, and consequently to employ as +little as possible in its cultivation, and none +in its improvement. Should any stock happen +to accumulate in the hands of a French +farmer, the taille is almost equal to a prohibition +of its ever being employed upon the +land. This tax, besides, is supposed to dishonour +whoever is subject to it, and to degrade +him below, not only the rank of a gentleman, +but that of a burgher; and whoever rents the +lands of another becomes subject to it. No +gentleman, nor even any burgher, who has +stock, will submit to this degradation. This +tax, therefore, not only hinders the stock which +accumulates upon the land from being employed +in its improvement, but drives away all +other stock from it. The ancient tenths and +fifteenths, so usual in England in former +times, seem, so far as they affected the land, to +have been taxes of the same nature with the +taille.</p> + +<p>Under all these discouragements, little improvement +could be expected from the occupiers +of land. That order of people, with all +the liberty and security which law can give, +must always improve under great disadvantage. +The farmer, compared with the proprietor, +is as a merchant who trades with borrowed +money, compared with one who trades +with his own. The stock of both may improve; +but that of the one, with only equal +good conduct, must always improve more +slowly than that of the other, on account of +the large share of the profits which is consumed +by the interest of the loan. The lands cultivated +by the farmer must, in the same manner, +with only equal good conduct, be improved +more slowly than those cultivated by the +proprietor, on account of the large share of +the produce which is consumed in the rent, +and which, had the farmer been proprietor, he +might have employed in the further improvement +of the land. The station of a farmer, +besides, is, from the nature of things, inferior +to that of a proprietor. Through the greater +part of Europe, the yeomanry are regarded as +an inferior rank of people, even to the better +sort of tradesmen and mechanics, and in all +parts of Europe to the great merchants and +master manufacturers. It can seldom happen, +therefore, that a man of any considerable +stock should quit the superior, in order to +place himself in an inferior station. Even in +the present state of Europe, therefore, little<span class='pagenum'><a name="Page_162" id="Page_162">[Pg 162]</a></span> +stock is likely to go from any other profession +to the improvement of land in the way of +farming. More does, perhaps, in Great Britain +than in any other country, though even +there the great stocks which are in some places +employed in farming, have generally been acquired +by farming, the trade, perhaps, in which, +of all others, stock is commonly acquired most +slowly. After small proprietors, however, +rich and great farmers are in every country +the principal improvers. There are more such, +perhaps, in England than in any other European +monarchy. In the republican governments +of Holland, and of Berne in Switzerland, +the farmers are said to be not inferior to those +of England.</p> + +<p>The ancient policy of Europe was, over and +above all this, unfavourable to the improvement +and cultivation of land, whether carried +on by the proprietor or by the farmer; first, +by the general prohibition of the exportation +of corn, without a special licence, which seems +to have been a very universal regulation; and, +secondly, by the restraints which were laid upon +the inland commerce, not only of corn, but +of almost every other part of the produce of +the farm, by the absurd laws against engrossers, +regraters, and forestallers, and by the privileges +of fairs and markets. It has already +been observed in what manner the prohibition +of the exportation of corn, together with some +encouragement given to the importation of foreign +corn, obstructed the cultivation of ancient +Italy, naturally the most fertile country +in Europe, and at that time the seat of the +greatest empire in the world. To what degree +such restraints upon the inland commerce +of this commodity, joined to the general prohibition +of exportation, must have discouraged +the cultivation of countries less fertile, and +less favourably circumstanced, it is not, perhaps, +very easy to imagine.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. III.</h3> + +<h4>OF THE RISE AND PROGRESS OF CITIES AND +TOWNS, AFTER THE FALL OF THE ROMAN +EMPIRE.</h4> + + +<p>The inhabitants of cities and towns were, after +the fall of the Roman empire, not more +favoured than those of the country. They +consisted, indeed, of a very different order of +people from the first inhabitants of the ancient +republics of Greece and Italy. These +last were composed chiefly of the proprietors +of lands, among whom the public territory +was originally divided, and who found it convenient +to build their houses in the neighbourhood +of one another, and to surround +them with a wall, for the sake of common defence. +After the fall of the Roman empire, +on the contrary, the proprietors of land seem +generally to have lived in fortified castles on +their own estates, and in the midst of their +own tenants and dependents. The towns were +chiefly inhabited by tradesmen and mechanics, +who seem, in those days, to have been of servile, +or very nearly of servile condition. The +privileges which we find granted by ancient +charters to the inhabitants of some of the principal +towns in Europe, sufficiently show what +they were before those grants. The people +to whom it is granted as a privilege, that they +might give away their own daughters in marriage +without the consent of their lord, that +upon their death their own children, and not +their lord, should succeed to their goods, and +that they might dispose of their own effects by +will, must, before those grants, have been either +altogether, or very nearly, in the same +state of villanage with the occupiers of land +in the country.</p> + +<p>They seem, indeed, to have been a very +poor, mean set of people, who seemed to travel +about with their goods from place to place +and from fair to fair, like the hawkers and +pedlars of the present times. In all the different +countries of Europe then, in the same +manner as in several of the Tartar governments +of Asia at present, taxes used to be levied +upon the persons and goods of travellers, +when they passed through certain manors, +when they went over certain bridges, when +they carried about their goods from place to +place in a fair, when they erected in it a booth +or stall to sell them in. These different taxes +were known in England by the names of passage, +pontage, lastage, and stallage. Sometimes +the king, sometimes a great lord, who +had, it seems, upon some occasions, authority +to do this, would grant to particular traders, +to such particularly as lived in their own demesnes, +a general exemption from such taxes. +Such traders, though in other respects of servile, +or very nearly of servile condition, were +upon this account called free traders. They, +in return, usually paid to their protector a +sort of annual poll-tax. In those days protection +was seldom granted without a valuable +consideration, and this tax might perhaps +be considered as compensation for what their +patrons might lose by their exemption from +other taxes. At first, both those poll-taxes +and those exemptions seem to have been altogether +personal, and to have affected only particular +individuals, during either their lives, or +the pleasure of their protectors. In the very +imperfect accounts which have been published +from Doomsday-book, of several of the towns +of England, mention is frequently made, sometimes +of the tax which particular burghers +paid, each of them, either to the king, or to +some other great lord, for this sort of protec<span class='pagenum'><a name="Page_163" id="Page_163">[Pg 163]</a></span>tion, +and sometimes of the general amount +only of all those taxes.<a name="FNanchor_31_31" id="FNanchor_31_31"></a><a href="#Footnote_31_31" class="fnanchor">[31]</a></p> + +<p>But how servile soever may have been originally +the condition of the inhabitants of the +towns, it appears evidently, that they arrived +at liberty and independency much earlier than +the occupiers of land in the country. That +part of the king's revenue which arose from +such poll-taxes in any particular town, used +commonly to be let in farm, during a term of +years, for a rent certain, sometimes to the sheriff +of the county, and sometimes to other persons. +The burghers themselves frequently +got credit enough to be admitted to farm the +revenues of this sort which arose out of their +own town, they becoming jointly and severally +answerable for the whole rent.<a name="FNanchor_32_32" id="FNanchor_32_32"></a><a href="#Footnote_32_32" class="fnanchor">[32]</a> To let a +farm in this manner, was quite agreeable to +the usual economy of, I believe, the sovereigns +of all the different countries of Europe, who +used frequently to let whole manors to all the +tenants of those manors, they becoming jointly +and severally answerable for the whole rent; +but in return being allowed to collect it in +their own way, and to pay it into the king's +exchequer by the hands of their own bailiff, +and being thus altogether freed from the insolence +of the king's officers; a circumstance +in those days regarded as of the greatest importance.</p> + +<p>At first, the farm of the town was probably +let to the burghers, in the same manner as it +had been to other farmers, for a term of years +only. In process of time, however, it seems +to have become the general practice to grant +it to them in fee, that is for ever, reserving a +rent certain, never afterwards to be augmented. +The payment having thus became perpetual, +the exemptions, in return, for which +it was made, naturally became perpetual too. +Those exemptions, therefore, ceased to be personal, +and could not afterwards be considered +as belonging to individuals, as individuals, +but as burghers of a particular burgh, which, +upon this account, was called a free burgh, +for the same reason that they had been called +free burghers or free traders.</p> + +<p>Along with this grant, the important privileges, +above mentioned, that they might give +away their own daughters in marriage, that +their children should succeed to them, and +that they might dispose of their own effects by +will, were generally bestowed upon the burghers +of the town to whom it was given. Whether +such privileges had before been usually +granted, along with the freedom of trade, to +particular burghers, as individuals, I know not. +I reckon it not improbable that they were, +though I cannot produce any direct evidence +of it. But however this may have been, the +principal attributes of villanage and slavery +being thus taken away from them, they now +at least became really free, in our present +sense of the word freedom.</p> + +<p>Nor was this all. They were generally at +the same time erected into a commonalty or +corporation, with the privilege of having magistrates +and a town-council of their own, of +making bye-laws for their own government, +of building walls for their own defence, and +of reducing all their inhabitants under a sort +of military discipline, by obliging them to +watch and ward; that is, as anciently understood, +to guard and defend those walls against +all attacks and surprises, by night as well as +by day. In England they were generally +exempted from suit to the hundred and county +courts; and all such pleas as should arise +among them, the pleas of the crown excepted, +were left to the decision of their own magistrates. +In other countries, much greater +and more extensive jurisdictions were frequently +granted to them.<a name="FNanchor_33_33" id="FNanchor_33_33"></a><a href="#Footnote_33_33" class="fnanchor">[33]</a></p> + +<p>It might, probably, be necessary to grant to +such towns as were admitted to farm their +own revenues, some sort of compulsive jurisdiction +to oblige their own citizens to make +payment. In those disorderly times, it might +have been extremely inconvenient to have left +them to seek this sort of justice from any +other tribunal. But it must seem extraordinary, +that the sovereigns of all the different +countries of Europe should have exchanged +in this manner for a rent certain, never more +to be augmented, that branch of their revenue, +which was, perhaps, of all others, the most +likely to be improved by the natural course of +things, without either expense or attention of +their own; and that they should, besides, have +in this manner voluntarily erected a sort of +independent republics in the heart of their +own dominions.</p> + +<p>In order to understand this, it must be remembered, +that, in those days, the sovereign +of perhaps no country in Europe was able to +protect, through the whole extent of his dominions, +the weaker part of his subjects from +the oppression of the great lords. Those whom +the law could not protect, and who were not +strong enough to defend themselves, were obliged +either to have recourse to the protection +of some great lord, and in order to obtain it, +to become either his slaves or vassals; or to +enter into a league of mutual defence for the +common protection of one another. The inhabitants +of cities and burghs, considered as +single individuals, had no power to defend +themselves; but by entering into a league of +mutual defence with their neighbours, they +were capable of making no contemptible resistance. +The lords despised the burghers, +whom they considered not only as a different +order, but as a parcel of emancipated slaves,<span class='pagenum'><a name="Page_164" id="Page_164">[Pg 164]</a></span> +almost of a different species from themselves. +The wealth of the burghers never failed to +provoke their envy and indignation, and they +plundered them upon every occasion without +mercy or remorse. The burghers naturally +hated and feared the lords. The king hated +and feared them too; but though, perhaps, he +might despise, he had no reason either to hate +or fear the burghers. Mutual interest, therefore, +disposed them to support the king, and +the king to support them against the lords. +They were the enemies of his enemies, and it +was his interest to render them as secure and +independent of those enemies as he could. +By granting them magistrates of their own, +the privilege of making bye-laws for their own +government, that of building walls for their own +defence, and that of reducing all their inhabitants +under a sort of military discipline, he +gave them all the means of security and independency +of the barons which it was in his +power to bestow. Without the establishment +of some regular government of this kind, +without some authority to compel their inhabitants +to act according to some certain plan +or system, no voluntary league of mutual defence +could either have afforded them any permanent +security, or have enabled them to give +the king any considerable support. By granting +them the farm of their own town in fee, +he took away from those whom he wished to +have for his friends, and, if one may say so, for +his allies, all ground of jealousy and suspicion, +that he was ever afterwards to oppress them, +either by raising the farm-rent of their town, +or by granting it to some other farmer.</p> + +<p>The princes who lived upon the worst terms +with their barons, seem accordingly to have +been the most liberal in grants of this kind to +their burghs. King John of England, for +example, appears to have been a most munificent +benefactor to his towns.<a name="FNanchor_34_34" id="FNanchor_34_34"></a><a href="#Footnote_34_34" class="fnanchor">[34]</a> Philip I. of +France lost all authority over his barons. Towards +the end of his reign, his son Lewis, +known afterwards by the name of Lewis the +Fat, consulted, according to Father Daniel, +with the bishops of the royal demesnes, concerning +the most proper means of restraining +the violence of the great lords. Their advice +consisted of two different proposals. One was +to erect a new order of jurisdiction, by establishing +magistrates and a town-council in every +considerable town of his demesnes. The other +was to form a new militia, by making the +inhabitants of those towns, under the command +of their own magistrates, march out upon +proper occasions to the assistance of the +king. It is from this period, according to +the French antiquarians, that we are to date +the institution of the magistrates and councils +of cities in France. It was during the unprosperous +reigns of the princes of the house +of Suabia, that the greater part of the free +towns of Germany received the first grants of +their privileges, and that the famous Hanseatic +league first became formidable.<a name="FNanchor_35_35" id="FNanchor_35_35"></a><a href="#Footnote_35_35" class="fnanchor">[35]</a></p> + +<p>The militia of the cities seems, in those +times, not to have been inferior to that of the +country; and as they could be more readily +assembled upon any sudden occasion, they +frequently had the advantage in their disputes +with the neighbouring lords. In countries +such as Italy or Switzerland, in which, on account +either of their distance from the principal +seat of government, of the natural strength +of the country itself, or of some other reason, +the sovereign came to lose the whole of his +authority; the cities generally became independent +republics, and conquered all the nobility +in their neighbourhood; obliging them +to pull down their castles in the country, and +to live, like other peaceable inhabitants, in the +city. This is the short history of the republic +of Berne, as well as of several other cities in +Switzerland. If you except Venice, for of +that city the history is somewhat different, it +is the history of all the considerable Italian +republics, of which so great a number arose +and perished between the end of the twelfth +and the beginning of the sixteenth century.</p> + +<p>In countries such as France and England, +where the authority of the sovereign, though +frequently very low, never was destroyed altogether, +the cities had no opportunity of becoming +entirely independent. They became, +however, so considerable, that the sovereign +could impose no tax upon them, besides the +stated farm-rent of the town, without their +own consent. They were, therefore, called +upon to send deputies to the general assembly +of the states of the kingdom, where they might +join with the clergy and the barons in granting, +upon urgent occasions, some extraordinary +aid to the king. Being generally, too, +more favourable to his power, their deputies +seem sometimes to have been employed by +him as a counterbalance in these assemblies +to the authority of the great lords. Hence +the origin of the representation of burghs in +the states-general of all great monarchies in +Europe.</p> + +<p>Order and good government, and along +with them the liberty and security of individuals, +were in this manner established in cities, +at a time when the occupiers of land in the +country, were exposed to every sort of violence. +But men in this defenceless state naturally +content themselves with their necessary +subsistence; because, to acquire more, might +only tempt the injustice of their oppressors. +On the contrary, when they are secure of enjoying +the fruits of their industry, they naturally +exert it to better their condition, and to +acquire not only the necessaries, but the conveniencies +and elegancies of life. That industry, +therefore, which aims at something<span class='pagenum'><a name="Page_165" id="Page_165">[Pg 165]</a></span> +more than necessary subsistence, was established +in cities long before it was commonly +practised by the occupiers of land in the country. +If, in the hands of a poor cultivator, oppressed +with the servitude of villanage, some +little stock should accumulate, he would naturally +conceal it with great care from his +master, to whom it would otherwise have belonged, +and take the first opportunity of running +away to a town. The law was at that +time so indulgent to the inhabitants of towns, +and so desirous of diminishing the authority +of the lords over those of the country, that if +he could conceal himself there from the pursuit +of his lord for a year, he was free for +ever. Whatever stock, therefore, accumulated +in the hands of the industrious part of the +inhabitants of the country, naturally took refuge +in cities, as the only sanctuaries in which +it could be secure to the person that acquired +it.</p> + +<p>The inhabitants of a city, it is true, must +always ultimately derive their subsistence, and +the whole materials and means of their industry, +from the country. But those of a city, +situated near either the sea-coast or the banks +of a navigable river, are not necessarily confined +to derive them from the country in their +neighbourhood. They have a much wider +range, and may draw them from the most remote +corners of the world, either in exchange +for the manufactured produce of their own industry, +or by performing the office of carriers +between distant countries, and exchanging the +produce of one for that of another. A city +might, in this manner, grow up to great wealth +and splendour, while not only the country in +its neighbourhood, but all those to which it +traded, were in poverty and wretchedness. +Each of those countries, perhaps, taken singly, +could afford it but a small part, either of its +subsistence or of its employment; but all of +them taken together, could afford it both a +great subsistence and a great employment. +There were, however, within the narrow circle +of the commerce of those times, some countries +that were opulent and industrious. Such +was the Greek empire as long as it subsisted, +and that of the Saracens during the reigns of +the Abassides. Such, too, was Egypt till it +was conquered by the Turks, some part of the +coast of Barbary, and all those provinces of +Spain which were under the government of +the Moors.</p> + +<p>The cities of Italy seem to have been the +first in Europe which were raised by commerce +to any considerable degree of opulence. +Italy lay in the centre of what was at that +time the improved and civilized part of the +world. The crusades, too, though, by the +great waste of stock and destruction of inhabitants +which they occasioned, they must necessarily +have retarded the progress of the +greater part of Europe, were extremely favourable +to that of some Italian cities. The +great armies which marched from all parts to +the conquest of the Holy Land, gave extraordinary +encouragement to the shipping of Venice, +Genoa, and Pisa, sometimes in transporting +them thither, and always in supplying +them with provisions. They were the commissaries, +if one may say so, of those armies; +and the most destructive frenzy that ever befel +the European nations, was a source of opulence +to those republics.</p> + +<p>The inhabitants of trading cities, by importing +the improved manufactures and expensive +luxuries of richer countries, afforded some food +to the vanity of the great proprietors, who eagerly +purchased them with great quantities of +the rude produce of their own lands. The +commerce of a great part of Europe in those +times, accordingly, consisted chiefly in the exchange +of their own rude, for the manufactured +produce of more civilized nations. Thus +the wool of England used to be exchanged for +the wines of France, and the fine cloths of +Flanders, in the same manner as the corn in +Poland is at this day, exchanged for the wines +and brandies of France, and for the silks and +velvets of France and Italy.</p> + +<p>A taste for the finer and more improved +manufactures was, in this manner, introduced +by foreign commerce into countries where no +such works were carried on. But when this +taste became so general as to occasion a considerable +demand, the merchants, in order to +save the expense of carriage, naturally endeavoured +to establish some manufactures of the +same kind in their own country. Hence the +origin of the first manufactures for distant +sale, that seem to have been established in the +western provinces of Europe, after the fall of +the Roman empire.</p> + +<p>No large country, it must be observed, ever +did or could subsist without some sort of manufactures +being carried on in it; and when it +is said of any such country that it has no manufactures, +it must always be understood of +the finer and more improved, or of such as are +fit for distant sale. In every large country, +both the clothing and household furniture of +the far greater part of the people, are the produce +of their own industry. This is even +more universally the case in those poor countries +which are commonly said to have no manufactures, +than in those rich ones that are +said to abound in them. In the latter you will +generally find, both in the clothes and household +furniture of the lowest rank of people, a +much greater proportion of foreign productions +than in the former.</p> + +<p>Those manufactures which are fit for distant +sale, seem to have been introduced into +different countries in two different ways.</p> + +<p>Sometimes they have been introduced in the +manner above mentioned, by the violent operation, +if one may say so, of the stocks of particular +merchants and undertakers, who established +them in imitation of some foreign ma<span class='pagenum'><a name="Page_166" id="Page_166">[Pg 166]</a></span>nufactures +of the same kind. Such manufactures, +therefore, are the offspring of foreign +commerce; and such seem to have been the +ancient manufactures of silks, velvets, and brocades, +which flourished in Lucca during the +thirteenth century. They were banished from +thence by the tyranny of one of Machiavel's +heroes, Castruccio Castracani. In 1810, nine +hundred families were driven out of Lucca, +of whom thirty-one retired to Venice, and offered +to introduce there the silk manufacture.<a name="FNanchor_36_36" id="FNanchor_36_36"></a><a href="#Footnote_36_36" class="fnanchor">[36]</a> +Their offer was accepted, many privileges +were conferred upon them, and they began +the manufacture with three hundred workmen. +Such, too, seem to have been the manufactures +of fine cloths that anciently flourished +in Flanders, and which were introduced +into England in the beginning of the reign of +Elizabeth, and such are the present silk manufactures +of Lyons and Spitalfields. Manufactures +introduced in this manner are generally +employed upon foreign materials, being +imitations of foreign manufactures. When +the Venetian manufacture was first established, +the materials were all brought from Sicily +and the Levant. The more ancient manufacture +of Lucca was likewise carried on with foreign +materials. The cultivation of mulberry +trees, and the breeding of silk-worms, seem +not to have been common in the northern parts +of Italy before the sixteenth century. Those +arts were not introduced into France till the +reign of Charles IX. The manufactures of +Flanders were carried on chiefly with Spanish +and English wool. Spanish wool was the material, +not of the first woollen manufacture of +England, but of the first that was fit for distant +sale. More than one half the materials +of the Lyons manufacture is at this day foreign +silk; when it was first established, the +whole, or very nearly the whole, was so. No +part of the materials of the Spitalfields manufacture +is ever likely to be the produce of +England. The seat of such manufactures, as +they are generally introduced by the scheme +and project of a few individuals, is sometimes +established in a maritime city, and sometimes +in an inland town, according as their interest, +judgment, or caprice, happen to determine.</p> + +<p>At other times, manufactures for distant +sale grow up naturally, and as it were of their +own accord, by the gradual refinement of +those household and coarser manufactures +which must at all times be carried on even in +the poorest and rudest countries. Such manufactures +are generally employed upon the +materials which the country produces, and +they seem frequently to have been first refined +and improved in such inland countries as were +not, indeed, at a very great, but at a considerable +distance from the sea-coast, and sometimes +even from all water carriage. An inland +country, naturally fertile and easily cultivated, +produces a great surplus of provisions +beyond what is necessary for maintaining the +cultivators; and on account of the expense of +land carriage, and inconveniency of river navigation, +it may frequently be difficult to send +this surplus abroad. Abundance, therefore, +renders provisions cheap, and encourages a +great number of workmen to settle in the +neighbourhood, who find that their industry +can there procure them more of the necessaries +and conveniences of life than in other +places. They work up the materials of manufacture +which the land produces, and exchange +their finished work, or, what is the +same thing, the price of it, for more materials +and provisions. They give a new value to the +surplus part of the rude produce, by saving +the expense of carrying it to the water-side, or +to some distant market; and they furnish the +cultivators with something in exchange for it, +that is either useful or agreeable to them, upon +easier terms than they could have obtained +it before. The cultivators get a better price +for their surplus produce, and can purchase +cheaper other conveniences which they have +occasion for. They are thus both encouraged +and enabled to increase this surplus produce +by a further improvement and better cultivation +of the land; and as the fertility of the +land had given birth to the manufacture, so +the progress of the manufacture re-acts upon +the land, and increases still further its fertility. +The manufacturers first supply the neighbourhood, +and afterwards, as their work improves +and refines, more distant markets. For +though neither the rude produce, nor even the +coarse manufacture, could, without the greatest +difficulty, support the expense of a considerable +land-carriage, the refined and improved +manufacture easily may. In a small bulk +it frequently contains the price of a great +quantity of rude produce. A piece of fine +cloth, for example which weighs only eighty +pounds, contains in it the price, not only of +eighty pounds weight of wool, but sometimes +of several thousand weight of corn, the maintenance +of the different working people, and +of their immediate employers. The corn which +could with difficulty have been carried abroad +in its own shape, is in this manner virtually +exported in that of the complete manufacture, +and may easily be sent to the remotest corners +of the world. In this manner have grown up +naturally, and, as it were, of their own accord, +the manufactures of Leeds, Halifax, Sheffield, +Birmingham, and Wolverhampton. Such manufactures +are the offspring of agriculture. +In the modern history of Europe, their extension +and improvement have generally been +posterior to those which were the offspring of +foreign commerce. England was noted for +the manufacture of fine cloths made of Spanish +wool, more than a century before any of those +which now flourish in the places above men<span class='pagenum'><a name="Page_167" id="Page_167">[Pg 167]</a></span>tioned +were fit for foreign sale. The extension +and improvement of these last could not +take place but in consequence of the extension +and improvement of agriculture, the last and +greatest effect of foreign commerce, and of +the manufactures immediately introduced by +it, and which I shall now proceed to explain.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IV.</h3> + +<h4>HOW THE COMMERCE OF TOWNS CONTRIBUTED +TO THE IMPROVEMENT OF THE COUNTRY.</h4> + + +<p>The increase and riches of commercial and +manufacturing towns contributed to the improvement +and cultivation of the countries to +which they belonged, in three different ways:</p> + +<p>First, by affording a great and ready market +for the rude produce of the country, they +gave encouragement to its cultivation and further +improvement. This benefit was not even +confined to the countries in which they were +situated, but extended more or less to all those +with which they had any dealings. To all of +them they afforded a market for some part +either of their rude or manufactured produce, +and, consequently, gave some encouragement +to the industry and improvement of all. Their +own country, however, on account of its neighbourhood, +necessarily derived the greatest benefit +from this market. Its rude produce being +charged with less carriage, the traders +could pay the growers a better price for it, +and yet afford it as cheap to the consumers as +that of more distant countries.</p> + +<p>Secondly, the wealth acquired by the inhabitants +of cities was frequently employed in +purchasing such lands as were to be sold, of +which a great part would frequently be uncultivated. +Merchants are commonly ambitious +of becoming country gentlemen, and, when +they do, they are generally the best of all improvers. +A merchant is accustomed to employ +his money chiefly in profitable projects; +whereas a mere country gentleman is accustomed +to employ it chiefly in expense. The one +often sees his money go from him, and return +to him again with a profit; the other, when +once he parts with it, very seldom expects to +see any more of it. Those different habits +naturally affect their temper and disposition +in every sort of business. The merchant is +commonly a bold, a country gentleman a timid +undertaker. The one is not afraid to lay +out at once a large capital upon the improvement +of his land, when he has a probable prospect +of raising the value of it in proportion to +the expense; the other, if he has any capital, +which is not always the case, seldom ventures +to employ it in this manner. If he improves +at all, it is commonly not with a capital, but +with what he can save out of his annual revenue. +Whoever has had the fortune to live in +a mercantile town, situated in an unimproved +country, must have frequently observed how +much more spirited the operations of merchants +were in this way, than those of mere country +gentlemen. The habits, besides, of order, economy, +and attention, to which mercantile +business naturally forms a merchant, render +him much fitter to execute, with profit and +success, any project of improvement.</p> + +<p>Thirdly, and lastly, commerce and manufactures +gradually introduced order and good +government, and with them the liberty and security +of individuals, among the inhabitants +of the country, who had before lived almost +in a continual state of war with their neighbours, +and of servile dependency upon their +superiors. This, though it has been the least +observed, is by far the most important of all +their effects. Mr Hume is the only writer +who, so far as I know, has hitherto taken notice +of it.</p> + +<p>In a country which has neither foreign commerce +nor any of the finer manufactures, a +great proprietor, having nothing for which he +can exchange the greater part of the produce +of his lands which is over and above the maintenance +of the cultivators, consumes the whole +in rustic hospitality at home. If this surplus +produce is sufficient to maintain a hundred or +a thousand men, he can make use of it in no +other way than by maintaining a hundred or +a thousand men. He is at all times, therefore, +surrounded with a multitude of retainers +and dependents, who, having no equivalent +to give in return for their maintenance, +but being fed entirely by his bounty, must +obey him, for the same reason that soldiers +obey the prince who pays them. Before +the extension of commerce and manufactures +in Europe, the hospitality of the rich and the +great, from the sovereign down to the smallest +baron, exceeded every thing which, in the +present times, we can easily form a notion of. +Westminster-hall was the dining-room of William +Rufus, and might frequently, perhaps, +not be too large for his company. It was +reckoned a piece of magnificence in Thomas +Becket, that he strewed the floor of his hall +with clean hay or rushes in the season, in order +that the knights and squires, who could +not get seats, might not spoil their fine clothes +when they sat down on the floor to eat their +dinner. The great Earl of Warwick is said +to have entertained every day, at his different +manors, 30,000 people; and though the number +here may have been exaggerated, it must, +however, have been very great to admit of +such exaggeration. A hospitality nearly of +the same kind was exercised not many years +ago in many different parts of the Highlands +of Scotland. It seems to be common in all +nations to whom commerce and manufactures +are little known. I have seen, says Doctor<span class='pagenum'><a name="Page_168" id="Page_168">[Pg 168]</a></span> +Pocock, an Arabian chief dine in the streets +of a town where he had come to sell his cattle, +and invited all passengers, even common beggars, +to sit down with him and partake of his +banquet.</p> + +<p>The occupiers of land were in every respect +as dependent upon the great proprietor +as his retainers. Even such of them as were +not in a state of villanage, were tenants at +will, who paid a rent in no respect equivalent +to the subsistence which the land afforded +them. A crown, half a crown, a sheep, a +lamb, was some years ago, in the Highlands +of Scotland, a common rent for lands which +maintained a family. In some places it is so +at this day; nor will money at present purchase +a greater quantity of commodities there +than in other places. In a country where the +surplus produce of a large estate must be consumed +upon the estate itself, it will frequently +be more convenient for the proprietor, that +part of it be consumed at a distance from his +own house, provided they who consume it are +as dependent upon him as either his retainers +or his menial servants. He in thereby saved +from the embarrassment of either too large a +company, or too large a family. A tenant at +will, who possesses land sufficient to maintain +his family for little more than a quit-rent, is +as dependent upon the proprietor as any servant +or retainer whatever, and must obey him +with as little reserve. Such a proprietor, as +he feeds his servants and retainers at his own +house, so he feeds his tenants at their houses. +The subsistence of both is derived from his +bounty, and its continuance depends upon his +good pleasure.</p> + +<p>Upon the authority which the great proprietors +necessarily had, in such a state of +things, over their tenants and retainers, was +founded the power of the ancient barons. +They necessarily became the judges in peace, +and the leaders in war, of all who dwelt upon +their estates. They could maintain order, and +execute the law, within their respective demesnes, +because each of them could there turn +the whole force of all the inhabitants against +the injustice of any one. No other person +had sufficient authority to do this. The king, +in particular, had not. In those ancient times, +he was little more than the greatest proprietor +in his dominions, to whom, for the sake of +common defence against their common enemies, +the other great proprietors paid certain +respects. To have enforced payment of a +small debt within the lands of a great proprietor, +where all the inhabitants were armed, +and accustomed to stand by one another, would +have cost the king, had he attempted it by his +own authority, almost the same effort as to +extinguish a civil war. He was, therefore, obliged +to abandon the administration of justice, +through the greater part of the country, to +those who were capable of administering it; +and, for the same reason, to leave the command +of the country militia to those whom +that militia would obey.</p> + +<p>It is a mistake to imagine that those territorial +jurisdictions took their origin from the +feudal law. Not only the highest jurisdictions, +both civil and criminal, but the power +of levying troops, of coining money, and even +that of making bye-laws for the government +of their own people, were all rights possessed +allodially by the great proprietors of land, several +centuries before even the name of the +feudal law was known in Europe. The authority +and jurisdiction of the Saxon lords in +England appear to have been as great before +the Conquest as that of any of the Norman +lords after it. But the feudal law is not supposed +to have become the common law of +England till after the Conquest. That the +most extensive authority and jurisdictions were +possessed by the great lords in France allodially, +long before the feudal law was introduced +into that country, is a matter of fact +that admits of no doubt. That authority, and +those jurisdictions, all necessarily flowed from +the state of property and manners just now +described. Without remounting to the remote +antiquities of either the French or English +monarchies, we may find, in much later times, +many proofs that such effects must always flow +from such causes. It is not thirty years ago +since Mr Cameron of Lochiel, a gentleman of +Lochaber in Scotland, without any legal warrant +whatever, not being what was then called +a lord of regality, nor even a tenant in chief, +but a vassal of the Duke of Argyll, and without +being so much as a justice of peace, used, +notwithstanding, to exercise the highest criminal +jurisdictions over his own people. He +is said to have done so with great equity, +though without any of the formalities of justice; +and it is not improbable that the state +of that part of the country at that time made +it necessary for him to assume this authority, +in order to maintain the public peace. That +gentleman, whose rent never exceeded L.500 +a-year, carried, in 1745, 800 of his own people +into the rebellion with him.</p> + +<p>The introduction of the feudal law, so far +from extending, may be regarded as an attempt +to moderate, the authority of the great +allodial lords. It established a regular subordination, +accompanied with a long train of +services and duties, from the king down to +the smallest proprietor. During the minority +of the proprietor, the rent, together with the +management of his lands, fell into the hands +of his immediate superior; and, consequently, +those of all great proprietors into the hands +of the king, who was charged with the maintenance +and education of the pupil, and who, +from his authority as guardian, was supposed +to have a right of disposing of him in marriage, +provided it was in a manner not unsuitable +to his rank. But though this institution +necessarily tended to strengthen the autho<span class='pagenum'><a name="Page_169" id="Page_169">[Pg 169]</a></span>rity +of the king, and to weaken that of the +great proprietors, it could not do either sufficiently +for establishing order and good government +among the inhabitants of the country; +because it could not alter sufficiently +that state of property and manners from which +the disorders arose. The authority of government +still continued to be, as before, too weak +in the head, and too strong in the inferior +members; and the excessive strength of the +inferior members was the cause of the weakness +of the head. After the institution of feudal +subordination, the king was as incapable +of restraining the violence of the great lords +as before. They still continued to make war +according to their own discretion, almost continually +upon one another, and very frequently +upon the king; and the open country still +continued to be a scene of violence, rapine, +and disorder.</p> + +<p>But what all the violence of the feudal institutions +could never have effected, the silent +and insensible operation of foreign commerce +and manufactures gradually brought about. +These gradually furnished the great proprietors +with something for which they could exchange +the whole surplus produce of their +lands, and which they could consume themselves, +without sharing it either with tenants +or retainers. All for ourselves, and nothing +for other people, seems, in every age of the +world, to have been the vile maxim of the +masters of mankind. As soon, therefore, as +they could find a method of consuming the +whole value of their rents themselves, they +had no disposition to share them with any +other persons. For a pair of diamond buckles, +perhaps, or for something as frivolous and +useless, they exchanged the maintenance, or, +what in the same thing, the price of the maintenance +of 1000 men for a year, and with it +the whole weight and authority which it could +give them. The buckles, however, were to be +all their own, and no other human creature +was to have any share of them; whereas, in +the more ancient method of expense, they +must have shared with at least 1000 people. +With the judges that were to determine the +preference, this difference was perfectly decisive; +and thus, for the gratification of the +most childish, the meanest, and the most sordid +of all vanities they gradually bartered +their whole power and authority.</p> + +<p>In a country where there is no foreign commerce, +nor any of the finer manufactures, a man +of L.10,000 a-year cannot well employ his revenue +in any other way than in maintaining, +perhaps, 1000 families, who are all of them +necessarily at his command. In the present +state of Europe, a man of L.10,000 a-year +can spend his whole revenue, and he generally +does so, without directly maintaining twenty +people, or being able to command more than +ten footmen, not worth the commanding. Indirectly, +perhaps, he maintains as great, or +even a greater number of people, than he +could have done by the ancient method of expense. +For though the quantity of precious +productions for which he exchanges his whole +revenue be very small, the number of workmen +employed in collecting and preparing it +must necessarily have been very great. Its +great price generally arises from the wages of +their labour, and the profits of all their immediate +employers. By paying that price, he +indirectly pays all those wages and profits, +and thus indirectly contributes to the maintenance +of all the workmen and their employers. +He generally contributes, however, but a very +small proportion to that of each; to a very +few, perhaps, not a tenth, to many not a hundredth, +and to some not a thousandth, or even +a ten thousandth part of their whole annual +maintenance. Though he contributes, therefore, +to the maintenance of them all, they are +all more or less independent of him, because +generally they can all be maintained without +him.</p> + +<p>When the great proprietors of land spend +their rents in maintaining their tenants and +retainers, each of them maintains entirely all +his own tenants and all his own retainers. +But when they spend them in maintaining +tradesmen and artificers, they may, all of them +taken together, perhaps maintain as great, or, +on account of the waste which attends rustic +hospitality, a greater number of people than +before. Each of them, however, taken singly, +contributes often but a very small share to the +maintenance of any individual of this greater +number. Each tradesman or artificer derives +his subsistence from the employment, not of +one, but of a hundred or a thousand different +customers. Though in some measure obliged +to them all, therefore, he is not absolutely dependent +upon any one of them.</p> + +<p>The personal expense of the great proprietors +having in this manner gradually increased, +it was impossible that the number of their +retainers should not as gradually diminish, +till they were at last dismissed altogether. +The same cause gradually led them to dismiss +the unnecessary part of their tenants. Farms +were enlarged, and the occupiers of land, notwithstanding +the complaints of depopulation, +reduced to the number necessary for cultivating +it, according to the imperfect state of +cultivation and improvement in those times. +By the removal of the unnecessary mouths, +and by exacting from the farmer the full value +of the farm, a greater surplus, or, what is +the same thing, the price of a greater surplus, +was obtained for the proprietor, which the +merchants and manufacturers soon furnished +him with a method of spending upon his own +person, in the same manner as he had done +the rest. The cause continuing to operate, +he was desirous to raise his rents above what +his lands, in the actual state of their improvement, +could afford. His tenants could agree<span class='pagenum'><a name="Page_170" id="Page_170">[Pg 170]</a></span> +to this upon one condition only, that they +should be secured in their possession for such +a term of years as might give them time to +recover, with profit, whatever they should lay +out in the further improvement of the land. +The expensive vanity of the landlord made +him willing to accept of this condition; and +hence the origin of long leases.</p> + +<p>Even a tenant at will, who pays the full +value of the land, is not altogether dependent +upon the landlord. The pecuniary advantages +which they receive from one another are mutual +and equal, and such a tenant will expose +neither his life nor his fortune in the service +of the proprietor. But if he has a lease for +a long term of years, he is altogether independent; +and his landlord must not expect +from him even the most trifling service, beyond +what is either expressly stipulated in the +lease, or imposed upon him by the common +and known law of the country.</p> + +<p>The tenants having in this manner become +independent, and the retainers being dismissed, +the great proprietors were no longer capable +of interrupting the regular execution of +justice, or of disturbing the peace of the country. +Having sold their birth-right, not like +Esau, for a mess of pottage in time of hunger +and necessity, but, in the wantonness of plenty, +for trinkets and baubles, fitter to be the +playthings of children than the serious pursuits +of men, they became as insignificant as +any substantial burgher or tradesmen in a +city. A regular government was established +in the country as well as in the city, nobody +having sufficient power to disturb its operations +in the one, any more than in the other.</p> + +<p>It does not, perhaps, relate to the present +subject, but I cannot help remarking it, that +very old families, such as have possessed some +considerable estate from father to son for +many successive generations, are very rare in +commercial countries. In countries which +have little commerce, on the contrary, such as +Wales, or the Highlands of Scotland, they are +very common. The Arabian histories seem +to be all full of genealogies; and there is a +history written by a Tartar Khan, which has +been translated into several European languages, +and which contains scarce any thing +else; a proof that ancient families are very +common among those nations. In countries +where a rich man can spend his revenue in no +other way than by maintaining as many people +as it can maintain, he is apt to run out, +and his benevolence, it seems, is seldom so +violent as to attempt to maintain more than +he can afford. But where he can spend the +greatest revenue upon his own person, he frequently +has no bounds to his expense, because +he frequently has no bounds to his vanity, or +to his affection for his own person. In commercial +countries, therefore, riches, in spite +of the most violent regulations of law to prevent +their dissipation, very seldom remain long +in the same family. Among simple nations, +on the contrary, they frequently do, without +any regulations of law; for among nations of +shepherds, such as the Tartars and Arabs, +the consumable nature of their property necessarily +renders all such regulations impossible.</p> + +<p>A revolution of the greatest importance to +the public happiness, was in this manner +brought about by two different orders of people, +who had not the least intention to serve +the public. To gratify the most childish vanity +was the sole motive of the great proprietors. +The merchants and artificers, much less +ridiculous, acted merely from a view to their +own interest, and in pursuit of their own +pedlar principle of turning a penny wherever +a penny was to be got. Neither of them had +either knowledge or foresight of that great +revolution which the folly of the one, and the +industry of the other, was gradually bringing +about.</p> + +<p>It was thus, that, through the greater part +of Europe, the commerce and manufactures +of cities, instead of being the effect, have been +the cause and occasion of the improvement +and cultivation of the country.</p> + +<p>This order, however, being contrary to the +natural course of things, is necessarily both +slow and uncertain. Compare the slow progress +of those European countries of which +the wealth depends very much upon their +commerce and manufactures, with the rapid +advances of our North American colonies, of +which the wealth is founded altogether in agriculture. +Through the greater part of Europe, +the number of inhabitants is not supposed +to double in less than five hundred +years. In several of our North American colonies, +it is found to double in twenty or five-and-twenty +years. In Europe, the law of +primogeniture, and perpetuities of different +kinds, prevent the division of great estates, +and thereby hinder the multiplication of small +proprietors. A small proprietor, however, +who knows every part of his little territory, +views it with all the affection which property, +especially small property, naturally inspires, +and who upon that account takes pleasure, +not only in cultivating, but in adorning it, is +generally of all improvers the most industrious, +the most intelligent, and the most successful. +The same regulations, besides, keep +so much land out of the market, that there +are always more capitals to buy than there is +land to sell, so that what is sold always sells +at a monopoly price. The rent never pays +the interest of the purchase money, and is, besides, +burdened with repairs and other occasional +charges, to which the interest of money +is not liable. To purchase land, is, everywhere +in Europe, a most unprofitable employment +of a small capital. For the sake of the +superior security, indeed, a man of moderate +circumstances, when he retires from business,<span class='pagenum'><a name="Page_171" id="Page_171">[Pg 171]</a></span> +will sometimes choose to lay out his little capital +in land. A man of profession, too, +whose revenue is derived from another source, +often loves to secure his savings in the same +way. But a young man, who, instead of applying +to trade or to some profession, should +employ a capital of two or three thousand +pounds in the purchase and cultivation of a +small piece of land, might indeed expect to +live very happily and very independently, but +must bid adieu for ever to all hope of either +great fortune or great illustration, which, by +a different employment of his stock, he might +have had the same chance of acquiring with +other people. Such a person, too, though he +cannot aspire at being a proprietor, will often +disdain to be a farmer. The small quantity +of land, therefore, which is brought to market, +and the high price of what is brought +thither, prevents a great number of capitals +from being employed in its cultivation and +improvement, which would otherwise have +taken that direction. In North America, on +the contrary, fifty or sixty pounds is often +found a sufficient stock to begin a plantation +with. The purchase and improvement of uncultivated +land is there the most profitable employment +of the smallest as well as of the +greatest capitals, and the most direct road to +all the fortune and illustration which can be +acquired in that country. Such land, indeed, +is in North America to be had almost for nothing, +or at a price much below the value of +the natural produce; a thing impossible in +Europe, or indeed in any country where all +lands have long been private property. If +landed estates, however, were divided equally +among all the children, upon the death of any +proprietor who left a numerous family, the +estate would generally be sold. So much land +would come to market, that it could no longer +sell at a monopoly price. The free rent of +the land would go no nearer to pay the interest +of the purchase-money, and a small capital +might be employed in purchasing land +as profitable as in any other way.</p> + +<p>England, on account of the natural fertility +of the soil, of the great extent of the sea-coast +in proportion to that of the whole country, +and of the many navigable rivers which run +through it, and afford the conveniency of water +carriage to some of the most inland parts +of it, is perhaps as well fitted by nature as +any large country in Europe to be the seat of +foreign commerce, of manufactures for distant +sale, and of all the improvements which these +can occasion. From the beginning of the +reign of Elizabeth, too, the English legislature +has been peculiarly attentive to the interest +of commerce and manufactures, and in +reality there is no country in Europe, Holland +itself not excepted, of which the law is, +upon the whole, more favourable to this sort +of industry. Commerce and manufactures +have accordingly been continually advancing +during all this period. The cultivation and +improvement of the country has, no doubt, +been gradually advancing too; but it seems to +have followed slowly, and at a distance, the +more rapid progress of commerce and manufactures. +The greater part of the country +must probably have been cultivated before the +reign of Elizabeth; and a very great part of +it still remains uncultivated, and the cultivation +of the far greater part much inferior to +what it might be. The law of England, however, +favours agriculture, not only indirectly, +by the protection of commerce, but by several +direct encouragements. Except in times of +scarcity, the exportation of corn is not only free, +but encouraged by a bounty. In times of moderate +plenty, the importation of foreign corn is +loaded with duties that amount to a prohibition. +The importation of live cattle, except +from Ireland, is prohibited at all times; and +it is but of late that it was permitted from +thence. Those who cultivate the land, therefore, +have a monopoly against their countrymen +for the two greatest and most important +articles of land produce, bread and butcher's +meat. These encouragements, though at bottom, +perhaps, as I shall endeavour to show +hereafter, altogether illusory, sufficiently demonstrate +at least the good intention of the legislature +to favour agriculture. But what is +of much more importance than all of them, +the yeomanry of England are rendered as secure, +as independent, and as respectable, as +law can make them. No country, therefore, +in which the right of primogeniture takes +place, which pays tithes, and where perpetuities, +though contrary to the spirit of the law, +are admitted in some cases, can give more encouragement +to agriculture than England. +Such, however, notwithstanding, is the state +of its cultivation. What would it have been, +had the law given no direct encouragement to +agriculture besides what arises indirectly from +the progress of commerce, and had left the +yeomanry in the same condition as in most +other countries of Europe? It is now more +than two hundred years since the beginning +of the reign of Elizabeth, a period as long as +the course of human prosperity usually endures.</p> + +<p>France seems to have had a considerable +share of foreign commerce, near a century +before England was distinguished as a commercial +country. The marine of France was +considerable, according to the notions of the +times, before the expedition of Charles VIII. +to Naples. The cultivation and improvement +of France, however, is, upon the whole, inferior +to that of England. The law of the +country has never given the same direct encouragement +to agriculture.</p> + +<p>The foreign commerce of Spain and Portugal +to the other parts of Europe, though +chiefly carried on in foreign ships, is very considerable. +That to their colonies is carried<span class='pagenum'><a name="Page_172" id="Page_172">[Pg 172]</a></span> +on in their own, and is much greater, on account +of the great riches and extent of those +colonies. 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. The +foreign commerce of Portugal is of older +standing than that of any great country in +Europe, except Italy.</p> + +<p>Italy is the only great country of Europe +which seems to have been cultivated and improved +in every part, by means of foreign +commerce and manufactures for distant sale. +Before the invasion of Charles VIII., Italy, +according to Guicciardini, was cultivated not +less in the most mountainous and barren parts +of the country, than in the plainest and most +fertile. The advantageous situation of the +country, and the great number of independent +states which at that time subsisted in it, probably +contributed not a little to this general +cultivation. It is not impossible, too, notwithstanding +this general expression of one of +the most judicious and reserved of modern +historians, that Italy was not at that time better +cultivated than England is at present.</p> + +<p>The capital, however, that is acquired to +any country by commerce and manufactures, +is always a very precarious and uncertain possession, +till some part of it has been secured +and realized in the cultivation and improvement +of its lands. A merchant, it has been +said very properly, is not necessarily the citizen +of any particular country. It is in a +great measure indifferent to him from what +place he carries on his trade; and a very trifling +disgust will make him remove his capital, +and, together with it, all the industry which +it supports, from one country to another. No +part of it can be said to belong to any particular +country, till it has been spread, as it +were, over the face of that country, either in +buildings, or in the lasting improvement of +lands. No vestige now remains of the great +wealth said to have been possessed by the +greater part of the Hanse Towns, except in +the obscure histories of the thirteenth and +fourteenth centuries. It is even uncertain +where some of them were situated, or to +what towns in Europe the Latin names given +to some of them belong. But though the +misfortunes of Italy, in the end of the fifteenth +and beginning of the sixteenth centuries, +greatly diminished the commerce and manufactures +of the cities of Lombardy and Tuscany, +those countries still continue to be among +the most populous and best cultivated +in Europe. The civil wars of Flanders, and +the Spanish government which succeeded them, +chased away the great commerce of Antwerp, +Ghent, and Bruges. But Flanders still continues +to be one of the richest, best cultivated, +and most populous provinces of Europe. The +ordinary revolutions of war and government +easily dry up the sources of that wealth which +arises from commerce only. That which arises +from the more solid improvements of agriculture +is much more durable, and cannot +be destroyed but by those more violent convulsions +occasioned by the depredations of +hostile and barbarous nations continued for a +century or two together; such as those that +happened for some time before and after the +fall of the Roman empire in the western provinces +of Europe.</p> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_173" id="Page_173">[Pg 173]</a></span></p> +<h2><a name="BOOK_IV" id="BOOK_IV"></a>BOOK IV.</h2> + +<h4>OF SYSTEMS OF POLITICAL ECONOMY.</h4> + + + +<hr style="width: 15%;" /> +<h4>INTRODUCTION.</h4> + + +<p>Political economy, considered as a branch +of the science of a statesman or legislator, proposes +two distinct objects; first, to provide a +plentiful revenue or subsistence for the people, +or, more properly, to enable them to provide +such a revenue or subsistence for themselves; +and secondly, to supply the state or +commonwealth with a revenue sufficient for +the public services. It proposes to enrich +both the people and the sovereign.</p> + +<p>The different progress of opulence in different +ages and nations, has given occasion to +two different systems of political economy, +with regard to enriching the people. The one +may be called the system of commerce, the +other that of agriculture. I shall endeavour +to explain both as fully and distinctly as I can, +and shall begin with the system of commerce. +It is the modern system, and is best understood +in our own country and in our own +times.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. I.</h3> + +<h4>OF THE PRINCIPLE OF THE COMMERCIAL OR +MERCANTILE SYSTEM.</h4> + + +<p>That wealth consists in money, or in gold +and silver, is a popular notion which naturally +arises from the double function of money, as +the instrument of commerce, and as the measure +of value. In consequence of its being +the instrument of commerce, when we have +money we can more readily obtain whatever +else we have occasion for, than by means of +any other commodity. The great affair, we +always find, is to get money. When that is +obtained, there is no difficulty in making any +subsequent purchase. In consequence of its +being the measure of value, we estimate that +of all other commodities by the quantity of +money which they will exchange for. We +say of a rich man, that he is worth a great +deal, and of a poor man, that he is worth very +little money. A frugal man, or a man eager +to be rich, is said to love money; and a careless, +a generous, or a profuse man, is said to +be indifferent about it. To grow rich is to +get money; and wealth and money, in short, +are, in common language, considered as in +every respect synonymous.</p> + +<p>A rich country, in the same manner as a +rich man, is supposed to be a country abounding +in money; and to heap up gold and silver +in any country is supposed to be the readiest +way to enrich it. For some time after the +discovery of America, the first inquiry of the +Spaniards, when they arrived upon any unknown +coast, used to be, if there was any gold +or silver to be found in the neighbourhood? +By the information which they received, they +judged whether it was worth while to make a +settlement there, or if the country was worth +the conquering. Plano Carpino, a monk sent +ambassador from the king of France to one of +the sons of the famous Gengis Khan, says, +that the Tartars used frequently to ask him, if +there was plenty of sheep and oxen in the +kingdom of France? Their inquiry had the +same object with that of the Spaniards. They +wanted to know if the country was rich enough +to be worth the conquering. Among the Tartars, +as among all other nations of shepherds, +who are generally ignorant of the use of money, +cattle are the instruments of commerce +and the measures of value. Wealth, therefore, +according to them, consisted in cattle, as, +according to the Spaniards, it consisted in gold +and silver. Of the two, the Tartar notion, +perhaps, was the nearest to the truth.</p> + +<p>Mr Locke remarks a distinction between +money and other moveable goods. All other +moveable goods, he says, are of so consumable +a nature, that the wealth which consists in +them cannot be much depended on; and a +nation which abounds in them one year may,<span class='pagenum'><a name="Page_174" id="Page_174">[Pg 174]</a></span> +without any exportation, but merely by their +own waste and extravagance, be in great want +of them the next. Money, on the contrary, is +a steady friend, which, though it may travel +about from hand to hand, yet if it can be kept +from going out of the country, is not very liable +to be wasted and consumed. Gold and +silver, therefore, are, according to him, the +most solid and substantial part of the moveable +wealth of a nation; and to multiply those +metals ought, he thinks, upon that account, +to be the great object of its political economy.</p> + +<p>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. The consumable goods, +which were circulated by means of this money, +would only be exchanged for a greater or a +smaller number of pieces; but the real wealth +or poverty of the country, they allow, would +depend altogether upon the abundance or scarcity +of those consumable goods. But it is +otherwise, they think, with countries which +have connections with foreign nations, and +which are obliged to carry on foreign wars, +and to maintain fleets and armies in distant +countries. This, they say, cannot be done, +but by sending abroad money to pay them +with; and a nation cannot send much money +abroad, unless it has a good deal at home. +Every such nation, therefore, must endeavour, +in time of peace, to accumulate gold and silver, +that when occasion requires, it may have +wherewithal to carry on foreign wars.</p> + +<p>In consequence of these popular notions, all +the different nations of Europe have studied, +though to little purpose, every possible means +of accumulating gold and silver in their respective +countries. Spain and Portugal, the +proprietors of the principal mines which supply +Europe with those metals, have either prohibited +their exportation under the severest +penalties, or subjected it to a considerable duty. +The like prohibition seems anciently to +have made a part of the policy of most other +European nations. It is even to be found, +where we should least of all expect to find it, +in some old Scotch acts of Parliament, which +forbid, under heavy penalties, the carrying +gold or silver <i>forth of the kingdom</i>. The like +policy anciently took place both in France and +England.</p> + +<p>When those countries became commercial, +the merchants found this prohibition, upon +many occasions, extremely inconvenient. They +could frequently buy more advantageously +with gold and silver, than with any other commodity, +the foreign goods which they wanted, +either to import into their own, or to carry to +some other foreign country. They remonstrated, +therefore, against this prohibition as +hurtful to trade.</p> + +<p>They represented, first, that the exportation +of gold and silver, in order to purchase foreign +goods, did not always diminish the +quantity of those metals in the kingdom; that, +on the contrary, it might frequently increase +the quantity; because, if the consumption of +foreign goods was not thereby increased in the +country, those goods might be re-exported to +foreign countries, and being there sold for a +large profit, might bring back much more treasure +than was originally sent out to purchase +them. Mr Mun compares this operation of +foreign trade to the seed-time and harvest of +agriculture. 'If we only behold,' says he, +'the actions of the husbandman in the seed-time, +when he casteth away much good corn +into the ground, we shall account him rather +a madman than a husbandman. But when we +consider his labours in the harvest, which is +the end of his endeavours, we shall find the +worth and plentiful increase of his actions.'</p> + +<p>They represented, secondly, that this prohibition +could not hinder the exportation of gold +and silver, which, on account of the smallness +of their bulk in proportion to their value, +could easily be smuggled abroad. That this +exportation could only be prevented by a proper +attention to what they called the balance +of trade. That when the country exported to +a greater value than it imported, a balance became +due to it from foreign nations, which +was necessarily paid to it in gold and silver, +and thereby increased the quantity of those +metals in the kingdom. But that when it imported +to a greater value than it exported, a +contrary balance became due to foreign nations, +which was necessarily paid to them in +the same manner, and thereby diminished that +quantity: that in this case, to prohibit the exportation +of those metals, could not prevent it, +but only, by making it more dangerous, render +it more expensive: that the exchange was +thereby turned more against the country which +owed the balance, than it otherwise might +have been; the merchant who purchased a +bill upon the foreign country being obliged to +pay the banker who sold it, not only for the +natural risk, trouble, and expense of sending +the money thither, but for the extraordinary +risk arising from the prohibition; but that the +more the exchange was against any country, +the more the balance of trade became necessarily +against it; the money of that country +becoming necessarily of so much less value, in +comparison with that of the country to which +the balance was due. That if the exchange +between England and Holland, for example, +was five per cent. against England, it would +require 105 ounces of silver in England to +purchase a bill for 100 ounces of silver in +Holland: that 105 ounces of silver in England, +therefore, would be worth only 100 +ounces of silver in Holland, and would purchase +only a proportionable quantity of Dutch +goods; but that 100 ounces of silver in Holland, +on the contrary, would be worth 105 +ounces in England, and would purchase a +proportionable quantity of English goods;<span class='pagenum'><a name="Page_175" id="Page_175">[Pg 175]</a></span> +that the English goods which were sold to +Holland would be sold so much cheaper, and +the Dutch goods which were sold to England +so much dearer, by the difference of the exchange: +that the one would draw so much less +Dutch money to England, and the other so +much more English money to Holland, as +this difference amounted to: and that the balance +of trade, therefore, would necessarily be +so much more against England, and would +require a greater balance of gold and silver +be exported to Holland.</p> + +<p>Those arguments were partly solid and some +partly sophistical. They were solid, so far as +they asserted that the exportation of gold and +silver in trade might frequently be advantageous +to the country. They were solid, too, in +asserting that no prohibition could prevent +their exportation, when private people found +any advantage in exporting them. But they +were sophistical, in supposing, that either to +preserve or to augment the quantity of those +metals required more the attention of government, +than to preserve or to augment the quantity +of any other useful commodities, which +the freedom of trade, without any such attention, +never fails to supply in the proper quantity. +They were sophistical, too, perhaps, in +asserting that the high price of exchange necessarily +increased what they called the unfavourable +balance of trade, or occasioned the +exportation of a greater quantity of gold and +silver. That high price, indeed, was extremely +disadvantageous to the merchants who had +any money to pay in foreign countries. They +paid so much dearer for the bills which their +bankers granted them upon those countries. +But though the risk arising from the prohibition +might occasion some extraordinary expense +to the bankers, it would not necessarily +carry any more money out of the country. +This expense would generally be all laid out +in the country, in smuggling the money out of +it, and could seldom occasion the exportation +of a single sixpence beyond the precise sum +drawn for. The high price of exchange, too, +would naturally dispose the merchants to endeavour +to make their exports nearly balance +their imports, in order that they might have +this high exchange to pay upon as small a +sum as possible. The high price of exchange, +besides, must necessarily have operated as a +tax, in raising the price of foreign goods, and +thereby diminishing their consumption. It +would tend, therefore, not to increase, but to +diminish, what they called the unfavourable +balance of trade, and consequently the exportation +of gold and silver.</p> + +<p>Such as they were, however, those arguments +convinced the people to whom they +were addressed. They were addressed by merchants +to parliaments and to the councils of +princes, to nobles, and to country gentlemen; +by those who were supposed to understand +trade, to those who were conscious to themselves +that they knew nothing about the matter. +That foreign trade enriched the country, +experience demonstrated to the nobles and +country gentlemen, as well as to the merchants; +but how, or in what manner, none of +them well knew. The merchants knew perfectly +in what manner it enriched themselves, +it was their business to know it. But to know +in what manner it enriched the country, was +no part of their business. The subject never +came into their consideration, but when they +had occasion to apply to their country for +some change in the laws relating to foreign +trade. It then became necessary to say something +about the beneficial effects of foreign +trade, and the manner in which those effects +were obstructed by the laws as they then stood. +To the judges who were to decide the business, +it appeared a most satisfactory account +of the matter, when they were told that foreign +trade brought money into the country, +but that the laws in question hindered it from +bringing so much as it otherwise would do. +Those arguments, therefore, produced the +wished-for effect. The prohibition of exporting +gold and silver was, in France and England, +confined to the coin of those respective +countries. The exportation of foreign coin +and of bullion was made free. In Holland, +and in some other places, this liberty was extended +even to the coin of the country. The +attention of government was turned away +from guarding against the exportation of gold +and silver, to watch over the balance of trade, +as the only cause which could occasion any +augmentation or diminution of these metals. +From one fruitless care, it was turned away +to another care much more intricate, much +more embarrassing, and just equally fruitless. +The title of Mun's book, England's +Treasure in Foreign Trade, became a fundamental +maxim in the political economy, not +of England only, but of all other commercial +countries. The inland or home trade, the +most important of all, the trade in which an +equal capital affords the greatest revenue, and +creates the greatest employment to the people +of the country, was considered as subsidiary +only to foreign trade. It neither brought +money into the country, it was said, nor carried +any out of it. The country, therefore, +could never become either richer or poorer by +means of it, except so far as its prosperity or +decay might indirectly influence the state of +foreign trade.</p> + +<p>A country that has no mines of its own, +must undoubtedly draw its gold and silver from +foreign countries, in the same manner as one +that has no vineyards of its own must draw +its wines. It does not seem necessary, however, +that the attention of government should +be more turned towards the one than towards +the other object. A country that has wherewithal +to buy wine, will always get the wine +which it has occasion for; and a country that<span class='pagenum'><a name="Page_176" id="Page_176">[Pg 176]</a></span> +has wherewithal to buy gold and silver, will +never be in want of those metals. They are +to be bought for a certain price, like all +commodities; and as they are the price of all +other commodities, so all other commodities +are the price of those metals. We trust, with +perfect security, that the freedom of trade, +without any attention of government, will always +supply us with the wine which we have +occasion for; and we may trust, with equal +security, that it will always supply us with all +the gold and silver which we can afford to purchase +or to employ, either in circulating our +commodities or in other uses.</p> + +<p>The quantity of every commodity which human +industry can either purchase or produce, +naturally regulates itself in every country according +to the effectual demand, or according +to the demand of those who are willing to pay +the whole rent, labour, and profits, which +must be paid in order to prepare and bring it +to market. But no commodities regulate +themselves more easily or more exactly, according +to this effectual demand, than gold +and silver; because, on account of the small +bulk and great value of those metals, no commodities +can be more easily transported from +one place to another; from the places where they +are cheap, to those where they are dear; from +the places where they exceed, to those where +they fall short of this effectual demand. If there +were in England, for example, an effectual +demand for an additional quantity of gold, a +packet-boat could bring from Lisbon, or from +wherever else it was to be had, fifty tons of +gold, which could be coined into more than +five millions of guineas. But if there were +an effectual demand for grain to the same value, +to import it would require, at five guineas +a-ton, a million of tons of shipping, or a thousand +ships of a thousand tons each. The navy +of England would not be sufficient.</p> + +<p>When the quantity of gold and silver imported +into any country exceeds the effectual +demand, no vigilance of government can prevent +their exportation. All the sanguinary +laws of Spain and Portugal are not able to +keep their gold and silver at home. The continual +importations from Peru and Brazil exceed +the effectual demand of those countries, +and sink the price of those metals there below +that in the neighbouring countries. If, +on the contrary, in any particular country, +their quantity fell short of the effectual demand, +so as to raise their price above that of +the neighbouring countries, the government +would have no occasion to take any pains to +import them. If it were even to take pains +to prevent their importation, it would not be +able to effectuate it. Those metals, when the +Spartans had got wherewithal to purchase +them, broke through all the barriers which +the laws of Lycurgus opposed to their entrance +into Lacedæmon. All the sanguinary +laws of the customs are not able to prevent +the importation of the teas of the Dutch and +Gottenburg East India companies; because +somewhat cheaper than those of the British +company. A pound of tea, however, is about +a hundred times the bulk of one of the highest +prices, sixteen shillings, that is commonly +paid for it in silver, and more than two thousand +times the bulk of the same price in gold, +and, consequently, just so many times more +difficult to smuggle.</p> + +<p>It is partly owing to the easy transportation +of gold and silver, from the places where +they abound to those where they are wanted, +that the price of those metals does not fluctuate +continually, like that of the greater part +of other commodities, which are hindered by +their bulk from shifting their situation, when +the market happens to be either over or understocked +with them. The price of those metals, +indeed, is not altogether exempted from +variation; but the changes to which it is liable +are generally slow, gradual, and uniform. In +Europe, for example, it is supposed, without +much foundation, perhaps, that during the +course of the present and preceding century, +they have been constantly, but gradually, sinking +in their value, on account of the continual +importations from the Spanish West Indies. +But to make any sudden change in the price +of gold and silver, so as to raise or lower at +once, sensibly and remarkably, the money +price of all other commodities, requires such +a revolution in commerce as that occasioned +by the discovery of America.</p> + +<p>If, notwithstanding all this, gold and silver +should at any time fall short in a country +which has wherewithal to purchase them, there +are more expedients for supplying their place, +than that of almost any other commodity. If +the materials of manufacture are wanted, industry +must stop. If provisions are wanted, +the people must starve. But if money is +wanted, barter will supply its place, though +with a good deal of inconveniency. Buying and +selling upon credit, and the different dealers +compensating their credits with one another, +once a-month, or once a-year, will supply it +with less inconveniency. A well-regulated +paper-money will supply it not only without +any inconveniency, but, in some cases, with +some advantage. Upon every account, therefore, +the attention of government never was +so unnecessarily employed, as when directed +to watch over the preservation or increase of +the quantity of money in any country.</p> + +<p>No complaint, however, is more common +than that of a scarcity of money. Money, like +wine, must always be scarce with those who +have neither wherewithal to buy it, nor credit +to borrow it. Those who have either, will +seldom be in want either of the money, or of +the wine which they have occasion for. This +complaint, however, of the scarcity of money, +is not always confined to improvident spendthrifts. +It is sometimes general through a<span class='pagenum'><a name="Page_177" id="Page_177">[Pg 177]</a></span> +whole mercantile town and the country in its +neighbourhood. Over-trading is the common +cause of it. Sober men, whose projects have +been disproportioned to their capitals, are as +likely to have neither wherewithal to buy money, +nor credit to borrow it, as prodigals, +whose expense has been disproportioned to +their revenue. Before their projects can be +brought to bear, their stock is gone, and +credit with it. They run about everywhere +to borrow money, and everybody tells them +that they have none to lend. Even such general +complaints of the scarcity of money do +not always prove that the usual number of +gold and silver pieces are not circulating in +the country, but that many people want those +pieces who have nothing to give for them. +When the profits of trade happen to be greater +than ordinary over-trading becomes a general +error, both among great and small dealers. +They do not always send more money +abroad than usual, but they buy upon credit, +both at home and abroad, an unusual quantity +of goods, which they send to some distant +market, in hopes that the returns will come in +before the demand for payment. The demand +comes before the returns, and they have nothing +at hand with which they can either purchase +money or give solid security for borrowing. +It is not any scarcity of gold and silver, +but the difficulty which such people find in +borrowing, and which their creditor find in +getting payment, that occasions the general +complaint of the scarcity of money.</p> + +<p>It would be too ridiculous to go about seriously +to prove, that wealth does not consist +in money, or in gold and silver; but in what +money purchases, and is valuable only for purchasing. +Money, no doubt, makes always a +part of the national capital; but it has already +been shown that it generally makes but a +small part, and always the most unprofitable +part of it.</p> + +<p>It is not because wealth consists more essentially +in money than in goods, that the +merchant finds it generally more easy to buy +goods with money, than to buy money with +goods; but because money is the known and +established instrument of commerce, for which +every thing is readily given in exchange, but +which is not always with equal readiness to +be got in exchange for every thing. The +greater part of goods, besides, are more perishable +than money, and he may frequently +sustain a much greater loss by keeping them. +When his goods are upon hand, too, he is +more liable to such demands for money as he +may not be able to answer, than when he has +got their price in his coffers. Over and above +all this, his profit arises more directly from +selling than from buying; and he is, upon +all these accounts, generally much more anxious +to exchange his goods for money than his +money for goods. But though a particular +merchant, with abundance of goods in his +warehouse, may sometimes be ruined by not +being able to sell them in time, a nation or +country is not liable to the same accident. +The whole capital of a merchant frequently +consists in perishable goods destined for purchasing +money. But it is but a very small +part of the annual produce of the land and labour +of a country, which can ever be destined +for purchasing gold and silver from their +neighbours. The far greater part is circulated +and consumed among themselves; and +even of the surplus which is sent abroad, the +greater part is generally destined for the purchase +of other foreign goods. Though gold +and silver, therefore, could not be had in exchange +for the goods destined to purchase +them, the nation would not be ruined. It +might, indeed, suffer some loss and inconveniency, +and be forced upon some of those expedients +which are necessary for supplying the +place of money. The annual produce of its +land and labour, however, would be the same, +or very nearly the same as usual; because the +same, or very nearly the same consumable capital +would be employed in maintaining it. +And though goods do not always draw money +so readily as money draws goods, in the long-run +they draw it more necessarily than even +it draws them. Goods can serve many other +purposes besides purchasing money, but money +can serve no other purpose besides purchasing +goods. Money, therefore, necessarily +runs after goods, but goods do not always +necessarily run after money. The man who +buys, does not always mean to sell again, but +frequently to use or to consume; whereas he +who sells always means to buy again. The +one may frequently have done the whole, but +the other can never have done more than the +one half of his business. It is not for its +own sake that men desire money, but for the +sake of what they can purchase with it.</p> + +<p>Consumable commodities, it is said, are soon +destroyed; whereas gold and silver are of a +the more durable nature, and were it not for this +continual exportation, might be accumulated +for ages together, to the incredible augmentation +of the real wealth of the country. Nothing, +therefore, it is pretended, can be more +disadvantageous to any country, than the trade +which consists in the exchange of such lasting +for such perishable commodities. We do not, +however, reckon that trade disadvantageous, +which consists in the exchange of the hardware +of England for the wines of France, +and yet hardware is a very durable commodity, +and were it not for this continual exportation, +might too be accumulated for ages together, +to the incredible augmentation of the +pots and pans of the country. But it readily +occurs, that the number of such utensils is in +every country necessarily limited by the use +which there is for them; that it would be absurd +to have more pots and pans than were +necessary for cooking the victuals usually con<span class='pagenum'><a name="Page_178" id="Page_178">[Pg 178]</a></span>sumed +there; and that, if the quantity of +victuals were to increase, the number of pots +and pans would readily increase along with it; +a part of the increased quantity of victuals +being employed in purchasing them, or in +maintaining an additional number of workmen +whose business it was to make them. It should +as readily occur, that the quantity of gold and +silver is in every country limited by the use +which there is for those metals; that their use +consists in circulating commodities, as coin, +and in affording a species of household furniture, +as plate; that the quantity of coin in +every country is regulated by the value of the +commodities which are to be circulated by it; +increase that value, and immediately a part of +it will be sent abroad to purchase, wherever it +is to be had, the additional quantity of coin +requisite for circulating them: that the quantity +of plate is regulated by the number and +wealth of those private families who choose to +indulge themselves in that sort of magnificence; +increase the number and wealth of +such families, and a part of this increased +wealth will most probably be employed in +purchasing, wherever it is to be found, an +additional quantity of plate; that to attempt to +increase the wealth of any country, either by +introducing or by detaining in it an unnecessary +quantity of gold and silver, is as absurd +as it would be to attempt to increase the good +cheer of private families, by obliging them to +keep an unnecessary number of kitchen utensils. +As the expense of purchasing those unnecessary +utensils would diminish, instead of +increasing, either the quantity or goodness of +the family provisions; so the expense of purchasing +an unnecessary quantity of gold and +silver must, in every country, as necessarily +diminish the wealth which feeds, clothes, and +lodges, which maintains and employs the people. +Gold and silver, whether in the shape +of coin or of plate, are utensils, it must be remembered, +as much as the furniture of the +kitchen. Increase the use of them, increase +the consumable commodities which are to be +circulated, managed, and prepared by means +of them, and you will infallibly increase the +quantity; but if you attempt by extraordinary +means to increase the quantity, you will as infallibly +diminish the use, and even the quantity +too, which in these metals can never he +greater than what the use requires. Were +they ever to be accumulated beyond this quantity, +their transportation is so easy, and the +loss which attends their lying idle and unemployed +so great, that no law could prevent +their being immediately sent out of the +country.</p> + +<p>It is not always necessary to accumulate +gold and silver, in order to enable a country +to carry on foreign wars, and to maintain +fleets and armies in distant countries. Fleets +and armies are maintained, not with gold and +silver, but with consumable goods. The nation +which, from the annual produce of its +domestic industry, from the annual revenue +arising out of its lands, and labour, and consumable +stock, has wherewithal to purchase +those consumable goods in distant countries, +can maintain foreign wars there.</p> + +<p>A nation may purchase the pay and provisions +of an army in a distant country three +different ways; by sending abroad either, first, +some part of its accumulated gold and silver; +or, secondly, some part of the annual produce +of its manufactures; or, last of all, some part +of its annual rude produce.</p> + +<p>The gold and silver which can properly be +considered as accumulated, or stored up in any +country, may be distinguished into three parts; +first, the circulating money; secondly, the +plate of private families; and, last of all, the +money which may have been collected by many +years parsimony, and laid up in the treasury +of the prince.</p> + +<p>It can seldom happen that much can be +spared from the circulating money of the +country; because in that there can seldom be +much redundancy. The value of goods annually +bought and sold in any country requires +a certain quantity of money to circulate +and distribute them to their proper consumers, +and can give employment to no more.</p> + + +<p>The channel of circulation necessarily draws +to itself a sum sufficient to fill it, and never +admits any more. Something, however, is +generally withdrawn from this channel in the +case of foreign war. By the great number of +people who are maintained abroad, fewer are +maintained at home. Fewer goods are circulated +there, and less money becomes necessary +to circulate them. An extraordinary quantity +of paper money of some sort or other, +too, such as exchequer notes, navy bills, and +bank bills, in England, is generally issued upon +such occasions, and, by supplying the +place of circulating gold and silver, gives an +opportunity of sending a greater quantity of +it abroad. All this, however, could afford +but a poor resource for maintaining a foreign +war, of great expense, and several years duration.</p> + +<p>The melting down of the plate of private +families has, upon every occasion, been found +a still more insignificant one. The French, +in the beginning of the last war, did not derive +so much advantage from this expedient +as to compensate the loss of the fashion.</p> + +<p>The accumulated treasures of the prince +have in former times afforded a much greater +and more lasting resource. In the present +times, if you except the king of Prussia, to accumulate +treasure seems to be no part of the +policy of European princes.</p> + +<p>The funds which maintained the foreign +wars of the present century, the most expensive +perhaps which history records, seem to +have had little dependency upon the exportation +either of the circulating money, or of the<span class='pagenum'><a name="Page_179" id="Page_179">[Pg 179]</a></span> +plate of private families, or of the treasure of +the prince. The last French war cost Great +Britain upwards of £90,000,000, including +not only the £75,000,000 of new debt that +was contracted, but the additional 2s. in the +pound land-tax, and what was annually borrowed +of the sinking fund. More than two-thirds +of this expense were laid out in distant +countries; in Germany, Portugal, America, +in the ports of the Mediterranean, in the East +and West Indies. The kings of England had +no accumulated treasure. We never heard of +any extraordinary quantity of plate being +melted down. The circulating gold and silver +of the country had not been supposed to exceed +L.18,000,000. Since the late recoinage +of the gold, however, it is believed to have +been a good deal under-rated. Let us suppose, +therefore, according to the most exaggerated +computation which I remember to +have either seen or heard of, that, gold and silver +together, it amounted to L.30,000,000. +Had the war been carried on by means of our +money, the whole of it must, even according +to this computation, have been sent out and +returned again, at least twice in a period of +between six and seven years. Should this be +supposed, it would afford the most decisive argument, +to demonstrate how unnecessary it is +for government to watch over the preservation +of money, since, upon this supposition, the +whole money of the country must have gone +from it, and returned to it again, two different +times in so short a period, without any +body's knowing any thing of the matter. The +channel of circulation, however, never appeared +more empty than usual during any part of +this period. Few people wanted money who +had wherewithal to pay for it. The profits of +foreign trade, indeed, were greater than usual +during the whole war, but especially towards +the end of it. This occasioned, what it always +occasions, a general over-trading in all +the ports of Great Britain; and this again occasioned +the usual complaint of the scarcity of +money, which always follows over-trading. +Many people wanted it, who had neither +wherewithal to buy it, nor credit to borrow it; +and because the debtors found it difficult to +borrow, the creditors found it difficult to get +payment. Gold and silver, however, were generally +to be had for their value, by those who +had that value to give for them.</p> + +<p>The enormous expense of the late war, +therefore, must have been chiefly defrayed, +not by the exportation of gold and silver, but +by that of British commodities of some kind +or other. When the government, or those +who acted under them, contracted with a merchant +for a remittance to some foreign country, +he would naturally endeavour to pay his +foreign correspondent, upon whom he granted +a bill, by sending abroad rather commodities +than gold and silver. If the commodities of +Great Britain were not in demand in that +country, he would endeavour to send them to +some other country in which he could purchase +a bill upon that country. The transportation +of commodities, when properly suited +to the market, is always attended with a +considerable profit; whereas that of gold and +silver is scarce ever attended with any. When +those metals are sent abroad in order to purchase +foreign commodities, the merchant's profit +arises, not from the purchase, but from the +sale of the returns. But when they are sent +abroad merely to pay a debt, he gets no returns, +and consequently no profit. He naturally, +therefore, exerts his invention to find +out a way of paying his foreign debts, rather +by the exportation of commodities, than by +that of gold and silver. The great quantity +of British goods, exported during the course +of the late war, without bringing back any returns, +is accordingly remarked by the author +of the Present State of the Nation.</p> + +<p>Besides the three sorts of gold and silver above +mentioned, there is in all great commercial +countries a good deal of bullion alternately +imported and exported, for the purposes of +foreign trade. This bullion, as it circulates +among different commercial countries, in the +same manner as the national coin circulates in +every country, may be considered as the money +of the great mercantile republic. The national +coin receives its movement and direction +from the commodities circulated within +the precincts of each particular country; the +money in the mercantile republic, from those +circulated between different countries. Both +are employed in facilitating exchanges, the +one between different individuals of the same, +the other between those of different nations. +Part of this money of the great mercantile republic +may have been, and probably was, employed +in carrying on the late war. In time +of a general war, it is natural to suppose that +a movement and direction should be impressed +upon it, different from what it usually follows +in profound peace, that it should circulate +more about the seat of the war, and be more +employed in purchasing there, and in the +neighbouring countries, the pay and provisions +of the different armies. But whatever part of +this money of the mercantile republic Great +Britain may have annually employed in this +manner, it must have been annually purchased, +either with British commodities, or with something +else that had been purchased with them; +which still brings us back to commodities, to +the annual produce of the land and labour of +the country, as the ultimate resources which +enabled us to carry on the war. It is natural, +indeed, to suppose, that so great an annual expense +must have been defrayed from a great +annual produce. The expense of 1761, for +example, amounted to more than £19,000,000. +No accumulation could have supported so +great an annual profusion. There is no annual +produce, even of gold and silver, which<span class='pagenum'><a name="Page_180" id="Page_180">[Pg 180]</a></span> +could have supported it. The whole gold +and silver annually imported into both +Spain and Portugal, according to the best +accounts, does not commonly much exceed +£6,000,000 sterling, which, in some years, +would scarce have paid four months expense +of the late war.</p> + +<p>The commodities most proper for being +transported to distant countries, in order to +purchase there either the pay and provisions of +an army, or some part of the money of the +mercantile republic to be employed in purchasing +them, seem to be the finer and more +improved manufactures; such as contain a +great value in a small bulk, and can therefore +be exported to a great distance at little expense. +A country whose industry produces +a great annual surplus of such manufactures, +which are usually exported to foreign countries, +may carry on for many years a very expensive +foreign war, without either exporting +any considerable quantity of gold and silver, +or even having any such quantity to export. +A considerable part of the annual surplus of +its manufactures must, indeed, in this case, be +exported without bringing back any returns +to the country, though it does to the merchant; +the government purchasing of the merchant +his bills upon foreign countries, in order +to purchase there the pay and provisions of an +army. Some part of this surplus, however, +may still continue to bring back a return. +The manufacturers during the war will have a +double demand upon them, and be called upon +first to work up goods to be sent abroad, +for paying the bills drawn upon foreign countries +for the pay and provisions of the army; +and, secondly, to work up such as are necessary +for purchasing the common returns that +had usually been consumed in the country. In +the midst of the most destructive foreign war, +therefore, the greater part of manufactures +may frequently flourish greatly; and, on the +contrary, they may decline on the return of +peace. They may flourish amidst the ruin of +their country, and begin to decay upon the +return of its prosperity. The different state of +many different branches of the British manufactures +during the late war, and for some +time after the peace, may serve as an illustration +of what has been just now said.</p> + +<p>No foreign war, of great expense or duration, +could conveniently be carried on by the +exportation of the rude produce of the soil. +The expense of sending such a quantity of it +into a foreign country as might purchase the +pay and provisions of an army would be too +great. Few countries, too, produce much +more rude produce than what is sufficient for +the subsistence of their own inhabitants. To +send abroad any great quantity of it, therefore, +would be to send abroad a part of the necessary +subsistence of the people. It is otherwise +with the exportation of manufactures. +The maintenance of the people employed in +them is kept at home, and only the surplus +part of their work is exported. Mr Hume +frequently takes notice of the inability of the +ancient kings of England to carry on, without +interruption, any foreign war of long duration. +The English in those days had nothing wherewithal +to purchase the pay and provisions of +their armies in foreign countries, but either +the rude produce of the soil, of which no considerable +part could be spared from the home +consumption, or a few manufactures of the +coarsest kind, of which, as well as of the rude +produce, the transportation was too expensive. +This inability did not arise from the want of +money, but of the finer and more improved +manufactures. Buying and selling was transacted +by means of money in England then as +well as now. The quantity of circulating +money must have borne the same proportion +to the number and value of purchases and +sales usually transacted at that time, which it +does to those transacted at present; or, rather, +it must have borne a greater proportion, because +there was then no paper, which now occupies +a great part of the employment of gold +and silver. Among nations to whom commerce +and manufactures are little known, the +sovereign, upon extraordinary occasions, can +seldom draw any considerable aid from his +subjects, for reasons which shall be explained +hereafter. It is in such countries, therefore, +that he generally endeavours to accumulate a +treasure, as the only resource against such +emergencies. Independent of this necessity, +he is, in such a situation, naturally disposed +to the parsimony requisite for accumulation. +In that simple state, the expense even of a sovereign +is not directed by the vanity which delights +in the gaudy finery of a court, but is +employed in bounty to his tenants, and hospitality +to his retainers. But bounty and hospitality +very seldom lead to extravagance; +though vanity almost always does. Every +Tartar chief, accordingly, has a treasure. The +treasures of Mazepa, chief of the Cossacks in +the Ukraine, the famous ally of Charles XII., +are said to have been very great. The French +kings of the Merovingian race had all treasures. +When they divided their kingdom +among their different children, they divided +their treasure too. The Saxon princes, and +the first kings after the Conquest, seem likewise +to have accumulated treasures. The first +exploit of every new reign was commonly to +seize the treasure of the preceding king, as +the most essential measure for securing the +succession. The sovereigns of improved and +commercial countries are not under the same +necessity of accumulating treasures, because +they can generally draw from their subjects +extraordinary aids upon extraordinary occasions. +They are likewise less disposed to do +so. They naturally, perhaps necessarily, follow +the mode of the times; and their expense +comes to be regulated by the same extravagant<span class='pagenum'><a name="Page_181" id="Page_181">[Pg 181]</a></span> +vanity which directs that of all the other great +proprietors in their dominions. The insignificant +pageantry of their court becomes every +day more brilliant; and the expense of it not +only prevents accumulation, but frequently +encroaches upon the funds destined for more +necessary expenses. What Dercyllidas said +of the court of Persia, may be applied to that +of several European princes, that he saw there +much splendour, but little strength, and many +servants, but few soldiers.</p> + +<p>The importation of gold and silver is not +the principal, much less the sole benefit, which +a nation derives from its foreign trade. Between +whatever places foreign trade is carried +on, they all of them derive two distinct benefits +from it. It carries out that surplus part +of the produce of their land and labour for +which there is no demand among them, and +brings back in return for it something else for +which there is a demand. It gives a value to +their superfluities, by exchanging them for +something else, which may satisfy a part of +their wants and increase their enjoyments. By +means of it, the narrowness of the home market +does not hinder the division of labour in +any particular branch of art or manufacture +from being carried to the highest perfection. +By opening a more extensive market for whatever +part of the produce of their labour may +exceed the home consumption, it encourages +them to improve its productive power, and to +augment its annual produce to the utmost, and +thereby to increase the real revenue and wealth +of the society. These great and important +services foreign trade is continually occupied +in performing to all the different countries +between which it is carried on. They all derive +great benefit from it, though that in which +the merchant resides generally derives the +greatest, as he is generally more employed in +supplying the wants, and carrying out the superfluities +of his own, than of any other particular +country. To import the gold and silver +which may be wanted into the countries which +have no mines, is, no doubt, a part of the business +of foreign commerce. It is, however, +a most insignificant part of it. A country +which carried on foreign trade merely upon +this account, could scarce have occasion to +freight a ship in a century.</p> + +<p>It is not by the importation of gold and silver +that the discovery of America has enriched +Europe. By the abundance of the American +mines, those metals have become cheaper. +A service of plate can now be purchased +for about a third part of the corn, or a third +part of the labour, which it would have cost +in the fifteenth century. With the same annual +expense of labour and commodities, Europe +can annually purchase about three times +the quantity of plate which it could have purchased +at that time. But when a commodity +comes to be sold for a third part of what had +been its usual price, not only those who purchased +it before can purchase three times their +former quantity, but it is brought down to the +level of a much greater number of purchasers, +perhaps to more than ten, perhaps to more +than twenty times the former number. So +that there may be in Europe at present, not +only more than three times, but more than +twenty or thirty times the quantity of plate +which would have been in it, even in its present +state of improvement, had the discovery +of the American mines never been made. So +far Europe has, no doubt, gained a real conveniency, +though surely a very trifling one. +The cheapness of gold and silver renders those +metals rather less fit for the purposes of money +than they were before. In order to make +the same purchases, we must load ourselves +with a greater quantity of them, and carry about +a shilling in our pocket, where a groat +would have done before. It is difficult to say +which is most trifling, this inconveniency, or +the opposite conveniency. Neither the one +nor the other could have made any very essential +change in the state of Europe. The +discovery of America, however, certainly made +a most essential one. By opening a new and +inexhaustible market to all the commodities of +Europe, it gave occasion to new divisions of +labour and improvements of art, which in the +narrow circle of the ancient commerce could +never have taken place, for want of a market +to take off the greater part of their produce. +The productive powers of labour were improved, +and its produce increased in all the +different countries of Europe, and together +with it the real revenue and wealth of the inhabitants. +The commodities of Europe were +almost all new to America, and many of those +of America were new to Europe. A new set +of exchanges, therefore, began to take place, +which had never been thought of before, and +which should naturally have proved as advantageous +to the new, as it certainly did to the +old continent. The savage injustice of the +Europeans rendered an event, which ought to +have been beneficial to all, ruinous and destructive +to several of those unfortunate countries.</p> + +<p>The discovery of a passage to the East Indies +by the Cape of Good Hope, which happened +much about the same time, opened perhaps +a still more extensive range to foreign +commerce, than even that of America, notwithstanding +the greater distance. There were +but two nations in America, in any respect, +superior to the savages, and these were destroyed +almost as soon as discovered. The +rest were mere savages. But the empires of +China, Indostan, Japan, as well as several +others in the East Indies, without having +richer mines of gold or silver, were, in every +other respect, much richer, better cultivated, +and more advanced in all arts and manufactures, +than either Mexico or Peru, even though +we should credit, what plainly deserves no<span class='pagenum'><a name="Page_182" id="Page_182">[Pg 182]</a></span> +credit, the exaggerated accounts of the Spanish +writers concerning the ancient state of those +empires. But rich and civilized nations can +always exchange to a much greater value with +one another, than with savages and barbarians. +Europe, however, has hitherto derived much +less advantage from its commerce with the +East Indies, than from that with America. +The Portuguese monopolized the East India +trade to themselves for about a century; and +it was only indirectly, and through them, that +the other nations of Europe could either send +out or receive any goods from that country. +When the Dutch, in the beginning of the last +century, began to encroach upon them, they +vested their whole East India commerce in an +exclusive company. The English, French, +Swedes, and Danes, have all followed their +example; so that no great nation of Europe +has ever yet had the benefit of a free commerce +to the East Indies. No other reason +need be assigned why it has never been so advantageous +as the trade to America, which, +between almost every nation of Europe and +its own colonies, is free to all its subjects. +The exclusive privileges of those East India +companies, their great riches, the great favour +and protection which these have procured them +from their respective governments, have excited +much envy against them. This envy +has frequently represented their trade as altogether +pernicious, on account of the great +quantities of silver which it every year exports +from the countries from which it is carried +on. The parties concerned have replied, that +their trade by this continual exportation of +silver, might indeed tend to impoverish Europe +in general, but not the particular country +from which it was carried on; because, by +the exportation of a part of the returns to +other European countries, it annually brought +home a much greater quantity of that metal +than it carried out. Both the objection and +the reply are founded in the popular notion +which I have been just now examining. It is +therefore unnecessary to say any thing further +about either. By the annual exportation of +silver to the East Indies, plate is probably +somewhat dearer in Europe than it otherwise +might have been; and coined silver probably +purchases a larger quantity both of labour and +commodities. The former of these two effects +is a very small loss, the latter a very +small advantage; both too insignificant to deserve +any part of the public attention. The +trade to the East Indies, by opening a market +to the commodities of Europe, or, what +comes nearly to the same thing, to the gold +and silver which is purchased with those commodities, +must necessarily tend to increase +the annual production of European commodities, +and consequently the real wealth and +revenue of Europe. That it has hitherto increased +them so little, is probably owing to +the restraints which it everywhere labours +under.</p> + +<p>I thought it necessary, though at the hazard +of being tedious, to examine at full length +this popular notion, that wealth consists in +money or in gold and silver. Money, in +common language, as I have already observed, +frequently signifies wealth; and this ambiguity +of expression has rendered this popular notion +so familiar to us, that even they who are +convinced of its absurdity, are very apt to forget +their own principles, and, in the course of +their reasonings, to take it for granted as a +certain and undeniable truth. Some of the best +English writers upon commerce set out with +observing, that the wealth of a country consists, +not in its gold and silver only, but in its +lands, houses, and consumable goods of all +different kinds. In the course of their reasonings, +however, the lands, houses, and consumable +goods, seem to slip out of their memory; +and the strain of their argument frequently +supposes that all wealth consists in +gold and silver, and that to multiply those +metals is the great object of national industry +and commerce.</p> + +<p>The two principles being established, however, +that wealth consisted in gold and silver, +and that those metals could be brought into a +country which had no mines, only by the balance +of trade, or by exporting to a greater +value than it imported; it necessarily became +the great object of political economy to diminish +as much as possible the importation of +foreign goods for home consumption, and to +increase as much as possible the exportation +of the produce of domestic industry. Its two +great engines for enriching the country, therefore, +were restraints upon importation, and +encouragement to exportation.</p> + +<p>The restraints upon importation were of +two kinds.</p> + +<p>First, restraints upon the importation of +such foreign goods for home consumption as +could be produced at home, from whatever +country they were imported.</p> + +<p>Secondly, restraints upon the importation of +goods of almost all kinds, from those particular +countries with which the balance of +trade was supposed to be disadvantageous.</p> + +<p>Those different restraints consisted sometimes +in high duties, and sometimes in absolute +prohibitions.</p> + +<p>Exportation was encouraged sometimes by +drawbacks, sometimes by bounties, sometimes +by advantageous treaties of commerce with +foreign states, and sometimes by the establishment +of colonies in distant countries.</p> + +<p>Drawbacks were given upon two different +occasions. When the home manufactures were +subject to any duty or excise, either the whole +or a part of it was frequently drawn back upon +their exportation; and when foreign goods +liable to a duty were imported, in order to be<span class='pagenum'><a name="Page_183" id="Page_183">[Pg 183]</a></span> +exported again, either the whole or a part of +this duty was sometimes given back upon such +exportation.</p> + +<p>Bounties were given for the encouragement, +either of some beginning manufactures, or of +such sorts of industry of other kinds as were +supposed to deserve particular favour.</p> + +<p>By advantageous treaties of commerce, particular +privileges were procured in some foreign +state for the goods and merchants of the +country, beyond what were granted to those +of other countries.</p> + +<p>By the establishment of colonies in distant +countries, not only particular privileges, but +a monopoly was frequently procured for the +goods and merchants of the country which +established them.</p> + +<p>The two sorts of restraints upon importation +above mentioned, together with these four +encouragements to exportation, constitute the +six principal means by which the commercial +system proposes to increase the quantity of +gold and silver in any country, by turning the +balance of trade in its favour. I shall consider +each of them in a particular chapter, and, +without taking much farther notice of their +supposed tendency to bring money into the +country, I shall examine chiefly what are +likely to be the effects of each of them upon +the annual produce of its industry. According +as they tend either to increase or diminish +the value of this annual produce, they +must evidently tend either to increase or diminish +the real wealth and revenue of the +country.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. II.</h3> + +<h4>OF RESTRAINTS UPON IMPORTATION FROM FOREIGN +COUNTRIES OF SUCH GOODS AS CAN +BE PRODUCED AT HOME.</h4> + + +<p>By restraining, either by high duties, or by +absolute prohibitions, the importation of such +goods from foreign countries as can be produced +at home, the monopoly of the home +market is more or less secured to the domestic +industry employed in producing them. +Thus the prohibition of importing either live +cattle or salt provisions from foreign countries, +secures to the graziers of Great Britain +the monopoly of the home market for butcher's +meat. The high duties upon the importation +of corn, which, in times of moderate +plenty, amount to a prohibition, give a like +advantage to the growers of that commodity. +The prohibition of the importation of foreign +woollens is equally favourable to the woollen +manufacturers. The silk manufacture, though +altogether employed upon foreign materials, +has lately obtained the same advantage. The +linen manufacture has not yet obtained it, +but is making great strides towards it. Many +other sorts of manufactures have, in the same +manner obtained in Great Britain, either altogether, +or very nearly, a monopoly against +their countrymen. The variety of goods, of +which the importation into Great Britain is +prohibited, either absolutely, or under certain +circumstances, greatly exceeds what can easily +be suspected by those who are not well +acquainted with the laws of the customs.</p> + +<p>That this monopoly of the home market +frequently gives great encouragement to that +particular species of industry which enjoys it, +and frequently turns towards that employment +a greater share of both the labour and stock +of the society than would otherwise have gone +to it, cannot be doubted. But whether it +tends either to increase the general industry +of the society, or to give it the most advantageous +direction, is not, perhaps, altogether +so evident.</p> + +<p>The general industry of the society can +never exceed what the capital of the society +can employ. As the number of workmen +that can be kept in employment by any particular +person must bear a certain proportion +to his capital, so the number of those +that can be continually employed by all +the members of a great society must bear a +certain proportion to the whole capital of the +society, and never can exceed that proportion. +No regulation of commerce can increase the +quantity of industry in any society beyond +what its capital can maintain. It can only divert +a part of it into a direction into which +it might not otherwise have gone; and it is +by no means certain that this artificial direction +is likely to be more advantageous to the +society, than that into which it would have +gone of its own accord.</p> + +<p>Every individual is continually exerting +himself to find out the most advantageous employment +for whatever capital he can command. +It is his own advantage, indeed, and +not that of the society, which he has in view. +But the study of his own advantage naturally, +or rather necessarily, leads him to prefer that +employment which is most advantageous to +the society.</p> + +<p>First, 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, provided always +that he can thereby obtain the ordinary, or not +a great deal less than the ordinary profits of +stock.</p> + +<p>Thus, upon equal, or nearly equal profits, +every wholesale merchant naturally prefers the +home trade to the foreign trade of consumption, +and the foreign trade of consumption to +the carrying trade. In the home trade, his +capital is never so long out of his sight as it +frequently is in the foreign trade of consumption. +He can know better the character and +situation of the persons whom he trusts; and<span class='pagenum'><a name="Page_184" id="Page_184">[Pg 184]</a></span> +if he should happen to be deceived, he knows +better the laws of the country from which he +must seek redress. In the carrying trade, the +capital of the merchant is, as it were, divided +between two foreign countries, and no part of +it is ever necessarily brought home, or placed +under his own immediate view and command. +The capital which an Amsterdam merchant +employs in carrying corn from Koningsberg +to Lisbon, and fruit and wine from Lisbon +to Koningsberg, must generally be the one +half of it at Koningsberg, and the other half +at Lisbon. No part of it need ever come to +Amsterdam. The natural residence of such +a merchant should either be at Koningsberg +or Lisbon; and it can only be some very particular +circumstances which can make him +prefer the residence of Amsterdam. The uneasiness, +however, which he feels at being separated +so far from his capital, generally determines +him to bring part both of the Koningsberg +goods which he destines for the +market of Lisbon, and of the Lisbon goods +which he destines for that of Koningsberg, to +Amsterdam; and though this necessarily subjects +him to a double charge of loading and +unloading as well as to the payment of some +duties and customs, yet, for the sake of having +some part of his capital always under his +own view and command, he willingly submits +to this extraordinary charge; and it is in this +manner that every country which has any considerable +share of the carrying trade, becomes +always the emporium, or general market, for +the goods of all the different countries whose +trade it carries on. The merchant, in order +to save a second loading and unloading, endeavours +always to sell in the home market, +as much of the goods of all those different +countries as he can; and thus, so far as he +can, to convert his carrying trade into a foreign +trade of consumption. A merchant, in +the same manner, who is engaged in the foreign +trade of consumption, when he collects +goods for foreign markets, will always be +glad, upon equal or nearly equal profits, to +sell as great a part of them at home as he can. +He saves himself the risk and trouble of exportation, +when, so far as he can, he thus converts +his foreign trade of consumption into a +home trade. Home is in this manner the +centre, if I may say so, round which the capitals +of the inhabitants of every country are +continually circulating, and towards which +they are always tending, though, by particular +causes, they may sometimes be driven off and +repelled from it towards more distant employments. +But a capital employed in the home +trade, it has already been shown, necessarily +puts into motion a greater quantity of domestic +industry, and gives revenue and employment +to a greater number of the inhabitants +of the country, than an equal capital employed +in the foreign trade of consumption; and +one employed in the foreign trade of consumption +has the same advantage over an equal +capital employed in the carrying trade. Upon +equal, or only nearly equal profits, therefore, +every individual naturally inclines to +employ his capital in the manner in which it +is likely to afford the greatest support to domestic +industry, and to give revenue and employment +to the greatest number of people of +his own country.</p> + +<p>Secondly, every individual who employs his +capital in the support of domestic industry, +necessarily endeavours so to direct that industry, +that its produce may be of the greatest +possible value.</p> + +<p>The produce of industry is what it adds to +the subject or materials upon which it is employed. +In proportion as the value of this +produce is great or small, so will likewise be +the profits of the employer. But it is only +for the sake of profit that any man employs a +capital in the support of industry; and he +will always, therefore, endeavour to employ it +in the support of that industry of which the +produce is likely to be of the greatest value, +or to exchange for the greatest quantity either +of money or of other goods.</p> + +<p>But the annual revenue of every society is +always precisely equal to the exchangeable value +of the whole annual produce of its industry, +or rather is precisely the same thing +with that exchangeable value. As every individual, +therefore, endeavours as much as he +can, both to employ his capital in the support +of domestic industry, and so to direct that industry +that its produce may be of the greatest +value; every individual necessarily labours to +render the annual revenue of the society as +great as he can. He generally, indeed, neither +intends to promote the public interest, +nor knows how much he is promoting it. By +preferring the support of domestic to that of +foreign industry, he intends only his own security; +and by directing that industry in such +a manner as its produce may be of the greatest +value, he intends only his own gain; and +he is in this, as in many other cases, led by +an invisible hand to promote an end which +was no part of his intention. Nor is it always +the worse for the society that it was no +part of it. By pursuing his own interest, he +frequently promotes that of the society more +effectually than when he really intends to promote +it. I have never known much good +done by those who affected to trade for the +public good. It is an affectation, indeed, not +very common among merchants, and very few +words need be employed in dissuading them +from it.</p> + +<p>What is the species of domestic industry +which his capital can employ, and of which +the produce is likely to be of the greatest value, +every individual, it is evident, can in his +local situation judge much better than any +statesman or lawgiver can do for him. The +statesman, who should attempt to direct pri<span class='pagenum'><a name="Page_185" id="Page_185">[Pg 185]</a></span>vate +people in what manner they ought to employ +their capitals, would not only load himself +with a most unnecessary attention, but assume +an authority which could safely be trusted, +not only to no single person, but to no +council or senate whatever, and which would +nowhere be as dangerous as in the hands of a +man who had folly and presumption enough +to fancy himself fit to exercise it.</p> + +<p>To give the monopoly of the home market +to the produce of domestic industry, in any +particular art or manufacture, is in some measure +to direct private people in what manner +they ought to employ their capitals, and must +in almost all cases be either a useless or a +hurtful regulation. If the produce of domestic +can be brought there as cheap as that of +foreign industry, the regulation is evidently +useless. If it cannot, it must generally be +hurtful. It is the maxim of every prudent +master of a family, never to attempt to make +at home what it will cost him more to make +than to buy. The tailor does not attempt to +make his own shoes, but buys them of the +shoemaker. The shoemaker does not attempt +to make his own clothes, but employs a tailor. +The farmer attempts to make neither the one +nor the other, but employs those different artificers. +All of them find it for their interest +to employ their whole industry in a way in +which they have some advantage over their +neighbours, and to purchase with a part of its +produce, or, what is the same thing, with the +price of a part of it, whatever else they have +occasion for.</p> + +<p>What is prudence in the conduct of every +private family, can scarce be folly in that of a +great kingdom. If a foreign country can +supply us with a commodity cheaper than we +ourselves can make it, better buy it of them +with some part of the produce of our own industry, +employed in a way in which we have +some advantage. The general industry of +the country being always in proportion to the +capital which employs it, will not thereby be +diminished, no more than that of the above-mentioned +artificers; but only left to find out +the way in which it can be employed with the +greatest advantage. It is certainly not employed +to the greatest advantage, when it is +thus directed towards an object which it can +buy cheaper than it can make. The value of +its annual produce is certainly more or less diminished, +when it is thus turned away from +producing commodities evidently of more value +than the commodity which it is directed to +produce. According to the supposition, that +commodity could be purchased from foreign +countries cheaper than it can be made at home; +it could therefore have been purchased with a +part only of the commodities, or, what is the +same thing, with a part only of the price of +the commodities, which the industry employed +by an equal capital would have produced +at home, had it been left to follow its natural +course. The industry of the country, therefore, +is thus turned away from a more to a less +advantageous employment; and the exchangeable +value of its annual produce, instead of +being increased, according to the intention of +the lawgiver, must necessarily be diminished +by every such regulation.</p> + +<p>By means of such regulations, indeed, a +particular manufacture may sometimes be acquired +sooner than it could have been otherwise, +and after a certain time may be made at +home as cheap, or cheaper, than in the foreign +country. But though the industry of the society +may be thus carried with advantage into +a particular channel sooner than it could have +been otherwise, it will by no means follow that +the sum-total, either of its industry, or of its +revenue, can ever be augmented by any such +regulation. The industry of the society can +augment only in proportion as its capital augments, +and its capital can augment only in +proportion to what can be gradually saved +out of its revenue. But the immediate effect +of every such regulation is to diminish its revenue; +and what diminishes its revenue is +certainly not very likely to augment its capital +faster than it would have augmented of its +own accord, had both capital and industry been +left to find out their natural employments.</p> + +<p>Though, for want of such regulations, the +society should never acquire the proposed manufacture, +it would not upon that account necessarily +be the poorer in any one period of its +duration. In every period of its duration its +whole capital and industry might still have +been employed, though upon different objects, +in the manner that was most advantageous at +the time. In every period its revenue might +have been the greatest which its capital could +afford, and both capital and revenue might +have been augmented with the greatest possible +rapidity.</p> + +<p>The natural advantages which one country +has over another, in producing particular commodities, +are sometimes so great, that it is acknowledged +by all the world to be in vain to +struggle with them. By means of glasses, +hot-beds, and hot-walls, very good grapes can +be raised in Scotland, and very good wine, too, +be made of them, at about thirty times the +expense for which at least equally good can be +brought from foreign countries. Would it be +a reasonable law to prohibit the importation of +all foreign wines, merely to encourage the +making of claret and Burgundy in Scotland? +But if there would be a manifest absurdity in +turning towards any employment thirty times +more of the capital and industry of the country +than would be necessary to purchase from +foreign countries an equal quantity of the +commodities wanted, there must be an absurdity, +though not altogether so glaring, yet exactly +of the same kind, in turning towards any +such employment a thirtieth, or even a three +hundredth part more of either. Whether the<span class='pagenum'><a name="Page_186" id="Page_186">[Pg 186]</a></span> +advantages which one country has over another +be natural or acquired, is in this respect +of no consequence. As long as the one country +has those advantages, and the other wants +them, it will always be more advantageous for +the latter rather to buy of the former than to +make. It is an acquired advantage only, +which one artificer has over his neighbour, who +exercises another trade; and yet they both +find it more advantageous to buy of one another, +than to make what does not belong to +their particular trades.</p> + +<p>Merchants and manufacturers are the people +who derive the greatest advantage from this +monopoly of the home market. The prohibition +of the importation of foreign cattle and +of salt provisions, together with the high duties +upon foreign corn, which in times of moderate +plenty amount to a prohibition, are not near +so advantageous to the graziers and farmers of +Great Britain, as other regulations of the same +kind are to its merchants and manufacturers. +Manufactures, those of the finer kind especially, +are more easily transported from one +country to another than corn or cattle. It is +in the fetching and carrying manufactures, +accordingly, that foreign trade is chiefly employed. +In manufactures, a very small advantage +will enable foreigners to undersell our +own workmen, even in the home market. It +will require a very great one to enable them +to do so in the rude produce of the soil. If +the free importation of foreign manufactures +were permitted, several of the home manufactures +would probably suffer, and some of them +perhaps go to ruin altogether, and a considerable +part of the stock and industry at present +employed in them, would be forced to find +out some other employment. But the freest +importation of the rude produce of the soil +could have no such effect upon the agriculture +of the country.</p> + +<p>If the importation of foreign cattle, for example, +were made ever so free, so few could be +imported, that the grazing trade of Great Britain +could be little affected by it. Live cattle +are, perhaps, the only commodity of which +the transportation is more expensive by sea +than by land. By land they carry themselves +to market. By sea, not only the cattle, but +their food and their water too, must be carried +at no small expense and inconveniency. The +short sea between Ireland and Great Britain, +indeed, renders the importation of Irish cattle +more easy. But though the free importation +of them, which was lately permitted only for +a limited time, were rendered perpetual, it +could have no considerable effect upon the interest +of the graziers of Great Britain. Those +parts of Great Britain which border upon the +Irish sea are all grazing countries. Irish cattle +could never be imported for their use, but +must be drove through those very extensive +countries, at no small expense and inconveniency, +before they could arrive at their proper +market. Fat cattle could not be drove so far. +Lean cattle, therefore, could only be imported; +and such importation could interfere not +with the interest of the feeding or fattening +countries, to which, by reducing the price of +lean cattle it would rather be advantageous, +but with that of the breeding countries only. +The small number of Irish cattle imported +since their importation was permitted, together +with the good price at which lean cattle +still continue to sell, seem to demonstrate, +that even the breeding countries of Great Britain +are never likely to be much affected by +the free importation of Irish cattle. The common +people of Ireland, indeed, are said to +have sometimes opposed with violence the exportation +of their cattle. But if the exporters +had found any great advantage in continuing +the trade, they could easily, when the law was +on their side, have conquered this mobbish opposition.</p> + +<p>Feeding and fattening countries, besides, +must always be highly improved, whereas +breeding countries are generally uncultivated. +The high price of lean cattle, by augmenting +the value of uncultivated land, is like a bounty +against improvement. To any country +which was highly improved throughout, it +would be more advantageous to import its +lean cattle than to breed them. The province +of Holland, accordingly, is said to follow this +maxim at present. The mountains of Scotland, +Wales, and Northumberland, indeed, +are countries not capable of much improvement, +and seem destined by nature to be the +breeding countries of Great Britain. The +freest importation of foreign cattle could have +no other effect than to hinder those breeding +countries from taking advantage of the increasing +population and improvement of the rest of +the kingdom, from raising their price to an +exorbitant height, and from laying a real tax +upon all the more improved and cultivated +parts of the country.</p> + +<p>The freest importation of salt provisions, in +the same manner, could have as little effect upon +the interest of the graziers of Great Britain +as that of live cattle. Salt provisions are +not only a very bulky commodity, but when +compared with fresh meat they are a commodity +both of worse quality, and, as they cost +more labour and expense, of higher price. +They could never, therefore, come into competition +with the fresh meat, though they +might with the salt provisions of the country. +They might be used for victualling ships for +distant voyages, and such like uses, but could +never make any considerable part of the food +of the people. The small quantity of salt provisions +imported from Ireland since their importation +was rendered free, is an experimental +proof that our graziers have nothing to apprehend +from it. It does not appear that the +price of butcher's meat has ever been sensibly +affected by it.<span class='pagenum'><a name="Page_187" id="Page_187">[Pg 187]</a></span></p> + +<p>Even the free importation of foreign corn +could very little affect the interest of the +farmers of Great Britain. Corn is a much +more bulky commodity than butcher's meat. +A pound of wheat at a penny is as dear as a +pound of butcher's meat at fourpence. The +small quantity of foreign corn imported even +in times of the greatest scarcity, may satisfy +our farmers that they can have nothing to fear +from the freest importation. The average +quantity imported, one year with another, amounts +only, according to the very well informed +author of the Tracts upon the Corn +Trade, to 23,728 quarters of all sorts of grain, +and does not exceed the five hundredth and +seventy-one part of the annual consumption. +But as the bounty upon corn occasions a greater +exportation in years of plenty, so it must, +of consequence, occasion a greater importation +in years of scarcity, than in the actual state of +tillage would otherwise take place. By means +of it, the plenty of one year does not compensate +the scarcity of another; and as the average +quantity exported is necessarily augmented +by it, so must likewise, in the actual state +of tillage, the average quantity imported. If +there were no bounty, as less corn would be +exported, so it is probable that, one year with +another, less would be imported than at present. +The corn-merchants, the fetchers and +carriers of corn between Great Britain and foreign +countries, would have much less employment, +and might suffer considerably; but +the country gentlemen and farmers could suffer +very little. It is in the corn-merchants, +accordingly, rather than the country gentlemen +and farmers, that I have observed the +greatest anxiety for the renewal and continuation +of the bounty.</p> + +<p>Country gentlemen and farmers are, to their +great honour, of all people, the least subject +to the wretched spirit of monopoly. The undertaker +of a great manufactory is sometimes +alarmed if another work of the same kind is +established within twenty miles of him; the +Dutch undertaker of the woollen manufacture +at Abbeville, stipulated that no work of the +same kind should be established within thirty +leagues of that city. Farmers and country +gentlemen, on the contrary, are generally disposed +rather to promote, than to obstruct, the +cultivation and improvement of their neighbours +farms and estates. They have no secrets, +such as those of the greater part of manufacturers, +but are generally rather fond of +communicating to their neighbours, and of +extending as far as possible any new practice +which they may have found to be advantageous. +<i>Pius quæstus</i>, says old Cato, <i>stabilissimusque, +minimeque invidiosus; minimeque +male cogitantes sunt, qui in eo studio occupati +sunt.</i> Country gentlemen and farmers, dispersed +in different parts of the country, cannot +so easily combine as merchants and manufacturers, +who being collected into towns, and +accustomed to that exclusive corporation spirit +which prevails in them, naturally endeavour +to obtain, against all their countrymen, the +same exclusive privilege which they generally +possess against the inhabitants of their respective +towns. They accordingly seem to have +been the original inventors of those restraints +upon the importation of foreign goods, which +secure to them the monopoly of the home +market. It was probably in imitation of them, +and to put themselves upon a level with those +who, they found, were disposed to oppress +them, that the country gentlemen and farmers +of Great Britain so far forgot the generosity +which is natural to their station, as to demand +the exclusive privilege of supplying their +countrymen with corn and butcher's meat. +They did not, perhaps, take time to consider +how much less their interest could be affected +by the freedom of trade, than that of the people +whose example they followed.</p> + +<p>To prohibit, by a perpetual law, the importation +of foreign corn and cattle, is in reality +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> + +<p>There seem, however, to be two cases, in +which it will generally be advantageous to lay +some burden upon foreign, for the encouragement +of domestic industry.</p> + +<p>The first is, when some particular sort of +industry is necessary for the defence of the +country. The defence of Great Britain, for +example, depends very much upon the number +of its sailors and shipping. The act of +navigation, therefore, very properly endeavours +to give the sailors and shipping of Great +Britain the monopoly of the trade of their +own country, in some cases, by absolute prohibitions, +and in others, by heavy burdens upon +the shipping of foreign countries. The +following are the principal dispositions of this +act.</p> + +<p>First, All ships, of which the owners, masters, +and three-fourths of the mariners, are not +British subjects, are prohibited, upon pain of +forfeiting ship and cargo, from trading to the +British settlements and plantations, or from +being employed in the coasting trade of Great +Britain.</p> + +<p>Secondly, A great variety of the most bulky +articles of importation can be brought into +Great Britain only, either in such ships as are +above described, or in ships of the country +where those goods are produced, and of which +the owners, masters, and three-fourths of the +mariners, are of that particular country; and +when imported even in ships of this latter +kind, they are subject to double aliens duty. +If imported in ships of any other country, the +penalty is forfeiture of ship and goods. When +this act was made, the Dutch were, what they +still are, the great carriers of Europe; and +by this regulation they were entirely excluded +from being the carriers to Great Britain, or<span class='pagenum'><a name="Page_188" id="Page_188">[Pg 188]</a></span> +from importing to us the goods of any other +European country.</p> + +<p>Thirdly, A great variety of the most bulky +articles of importation are prohibited from +being imported, even in British ships, from +any country but that in which they are produced, +under pain of forfeiting ship and cargo. +This regulation, too, was probably intended +against the Dutch. Holland was then, +as now, the great emporium for all European +goods; and by this regulation, British ships +were hindered from loading in Holland the +goods of any other European country.</p> + +<p>Fourthly, Salt fish of all kinds, whale-fins, +whalebone, oil, and blubber, not caught by +and cured on board British vessels, when imported +into Great Britain, are subject to double +aliens duty. The Dutch, as they are still +the principal, were then the only fishers in +Europe that attempted to supply foreign nations +with fish. By this regulation, a very +heavy burden was laid upon their supplying +Great Britain.</p> + +<p>When the act of navigation was made, +though England and Holland were not actually +at war, the most violent animosity subsisted +between the two nations. It had begun +during the government of the long parliament, +which first framed this act, and it +broke out soon after in the Dutch wars, during +that of the Protector and of Charles II. +It is not impossible, therefore, that some of +the regulations of this famous act may have +proceeded from national animosity. They +are as wise, however, as if they had all been +dictated by the most deliberate wisdom. National +animosity, at that particular time, aimed +at the very same object which the most deliberate +wisdom would have recommended, +the diminution of the naval power of Holland, +the only naval power which could endanger +the security of England.</p> + +<p>The act of navigation is not favourable to +foreign commerce, or to the growth of that +opulence which can arise from it. The interest +of a nation, in its commercial relations to +foreign nations, is, like that of a merchant with +regard to the different people with whom he +deals, to buy as cheap, and to sell as dear as +possible. But it will be most likely to buy +cheap, when, by the most perfect freedom of +trade, it encourages all nations to bring to it +the goods which it has occasion to purchase; +and, for the same reason, it will be most likely +to sell dear, when its markets are thus filled +with the greatest number of buyers. The +act of navigation, it is true, lays no burden +upon foreign ships that come to export the +produce of British industry. Even the ancient +aliens duty, which used to be paid upon +all goods, exported as well as imported, +has, by several subsequent acts, been taken off +from the greater part of the articles of exportation. +But if foreigners, either by prohibitions +or high duties, are hindered from coming +to sell, they cannot always afford to come +to buy; because, coming without a cargo, they +must lose the freight from their own country +to Great Britain. By diminishing the +number of sellers, therefore, we necessarily +diminish that of buyers, and are thus likely +not only to buy foreign goods dearer, but to +sell our own cheaper, than if there was a more +perfect freedom of trade. As defence, however, +is of much more importance than opulence, +the act of navigation is, perhaps, the +wisest of all the commercial regulations of +England.</p> + +<p>The second case, in which it will generally +be advantageous to lay some burden upon foreign +for the encouragement of domestic industry, +is when some tax is imposed at home +upon the produce of the latter. In this case, +it seems reasonable that an equal tax should +be imposed upon the like produce of the former. +This would not give the monopoly of +the home market to domestic industry, nor +turn towards a particular employment a greater +share of the stock and labour of the country, +than what would naturally go to it. It +would only hinder any part of what would +naturally go to it from being turned away by +the tax into a less natural direction, and would +leave the competition between foreign and domestic +industry, after the tax, as nearly as +possible upon the same footing as before it. +In Great Britain, when any such tax is laid +upon the produce of domestic industry, it is +usual, at the same time, in order to stop the +clamorous complaints of our merchants and +manufacturers, that they will be undersold at +home, to lay a much heavier duty upon the +importation of all foreign goods of the same +kind.</p> + +<p>This second limitation of the freedom of +trade, according to some people, should, upon +most occasions, be extended much farther than +to the precise foreign commodities which could +come into competition with those which had +been taxed at home. When the necessaries +of life have been taxed in any country, it becomes +proper, they pretend, to tax not only +the like necessaries of life imported from other +countries, but all sorts of foreign goods +which can come into competition with any +thing that is the produce of domestic industry. +Subsistence, they say, becomes necessarily +dearer in consequence of such taxes; and +the price of labour must always rise with the +price of the labourer's subsistence. Every +commodity, therefore, which is the produce +of domestic industry, though not immediately +taxed itself, becomes dearer in consequence of +such taxes, because the labour which produces +it becomes so. Such taxes, therefore, +are really equivalent, they say, to a tax upon +every particular commodity produced at home. +In order to put domestic upon the same footing +with foreign industry, therefore, it becomes +necessary, they think, to lay some duty<span class='pagenum'><a name="Page_189" id="Page_189">[Pg 189]</a></span> +upon every foreign commodity, equal to this +enhancement of the price of the home commodities +with which it can come into competition.</p> + +<p>Whether taxes upon the necessaries of life, +such as those in Great Britain upon soap, +salt, leather, candles, &c. necessarily raise the +price of labour, and consequently that of all +other commodities, I shall consider hereafter, +when I come to treat of taxes. Supposing, +however, in the mean time, that they have +this effect, and they have it undoubtedly, this +general enhancement of the price of all commodities, +in consequence of that labour, is a +case which differs in the two following respects +from that of a particular commodity, of which +the price was enhanced by a particular tax +immediately imposed upon it.</p> + +<p><i>First</i>, It might always be known with great +exactness, how far the price of such a commodity +could be enhanced by such a tax, but +how far the general enhancement of the price +of labour might affect that of every different +commodity about which labour was employed, +could never be known with any tolerable exactness. +It would be impossible, therefore, to +proportion, with any tolerable exactness, the +tax of every foreign, to the enhancement of +the price of every home commodity.</p> + +<p><i>Secondly</i>, Taxes upon the necessaries of life +have nearly the same effect upon the circumstances +of the people as a poor soil and a bad +climate. Provisions are thereby rendered dearer, +in the same manner as if it required extraordinary +labour and expense to raise them. +As, in the natural scarcity arising from soil +and climate, it would be absurd to direct the +people in what manner they ought to employ +their capitals and industry, so is it likewise +in the artificial scarcity arising from such +taxes. To be left to accommodate, as well as +they could, their industry to their situation, +and to find out those employments in which, +notwithstanding their unfavourable circumstances, +they might have some advantage either +in the home or in the foreign market, is +what, in both cases, would evidently be most +for their advantage. To lay a new tax upon +them, because they are already overburdened +with taxes, and because they already pay too +dear for the necessaries of life, to make them +likewise pay too dear for the greater part of +other commodities, is certainly a most absurd +way of making amends.</p> + +<p>Such taxes, when they have grown up to a +certain height, are a curse equal to the barrenness +of the earth, and the inclemency of +the heavens, and yet it is in the richest and +most industrious countries that they have been +most generally imposed. No other countries +could support so great a disorder. As the +strongest bodies only can live and enjoy health +under an unwholesome regimen, so the nations +only, that in every sort of industry have +the greatest natural and acquired advantages, +can subsist and prosper under such taxes. +Holland is the country in Europe in which +they abound most, and which, from peculiar +circumstances, continues to prosper, not by +means of them, as has been most absurdly +supposed, but in spite of them.</p> + +<p>As there are two cases in which it will generally +be advantageous to lay some burden +upon foreign for the encouragement of domestic +industry, so there are two others in +which it may sometimes be a matter of deliberation, +in the one, how far it is proper to +continue the free importation of certain foreign +goods; and, in the other, how far, or +in what manner, it may be proper to restore +that free importation, after it has been for +some time interrupted.</p> + +<p>The case in which it may sometimes be a +matter of deliberation how far it is proper to +continue the free importation of certain foreign +goods, is when some foreign nation restrains, +by high duties or prohibitions, the importation +of some of our manufactures into +their country. Revenge, in this case, naturally +dictates retaliation, and that we should +impose the like duties and prohibitions upon +the importation of some or all of their manufactures +into ours. Nations, accordingly, +seldom fail to retaliate in this manner. The +French have been particularly forward to favour +their own manufactures, by restraining +the importation of such foreign goods as could +come into competition with them. In this +consisted a great part of the policy of Mr. Colbert, +who, notwithstanding his great abilities, +seems in this case to have been imposed upon +by the sophistry of merchants and manufacturers, +who are always demanding a monopoly +against their countrymen. It is at present +the opinion of the most intelligent men in +France, that his operations of this kind have +not been beneficial to his country. That minister, +by the tariff of 1667, imposed very high +duties upon a great number of foreign manufactures. +Upon his refusing to moderate them +in favour of the Dutch, they, in 1671, prohibited +the importation of the wines, brandies, +and manufactures of France. The war of +1672 seems to have been in part occasioned +by this commercial dispute. The peace of +Nimeguen put an end to it in 1678, by moderating +some of those duties in favour of the +Dutch, who in consequence took off their prohibition. +It was about the same time that +the French and English began mutually to +oppress each other's industry, by the like duties +and prohibitions, of which the French, +however, seem to have set the first example. +The spirit of hostility which has subsisted between +the two nations ever since, has hitherto +hindered them from being moderated on either +side. In 1697, the English prohibited +the importation of bone lace, the manufacture +of Flanders. The government of that country, +at that time under the domination of Spain,<span class='pagenum'><a name="Page_190" id="Page_190">[Pg 190]</a></span> +prohibited, in return, the importation of English +woollens. In 1700, the prohibition of +importing bone lace into England was taken +off, upon condition that the importation of +English woollens into Flanders should be put +on the same footing as before.</p> + +<p>There may be good policy in retaliations of +this kind, when there is a probability that they +will procure the repeal of the high duties or +prohibitions complained of. The recovery of +a great foreign market will generally more +than compensate the transitory inconveniency +of paying dearer during a short time for some +sorts of goods. To judge whether such retaliations +are likely to produce such an effect, +does not, perhaps, belong so much to the +science of a legislator, whose deliberations +ought to be governed by general principles, +which are always the same, as to the skill of +that insidious and crafty animal vulgarly called +a statesman or politician, whose councils +are directed by the momentary fluctuations of +affairs. When there is no probability that any +such repeal can be procured, it seems a bad +method of compensating the injury done to +certain classes of our people, to do another injury +ourselves, not only to those classes, but +to almost all the other classes of them. When +our neighbours prohibit some manufacture of +ours, we generally prohibit, not only the same, +for that alone would seldom affect them considerably, +but some other manufacture of +theirs. This may, no doubt, give encouragement +to some particular class of workmen +among ourselves, and, by excluding some of +their rivals, may enable them to raise their +price in the home market. Those workmen +however, who suffered by our neighbours prohibition, +will not be benefited by ours. On +the contrary, they, and almost all the other +classes of our citizens, will thereby be obliged +to pay dearer than before for certain goods. +Every such law, therefore, imposes a real tax +upon the whole country, not in favour of that +particular class of workmen who were injured +by our neighbours prohibitions, but of some +other class.</p> + +<p>The case in which it may sometimes be a +matter of deliberation, how far, or in what +manner, it is proper to restore the free importation +of foreign goods, after it has been for +some time interrupted, is when particular manufactures, +by means of high duties or prohibitions +upon all foreign goods which can come +into competition with them, have been so far +extended as to employ a great multitude of +hands. Humanity may in this case require +that the freedom of trade should be restored +only by slow gradations, and with a good deal +of reserve and circumspection. Were those +high duties and prohibitions taken away all at +once, cheaper foreign goods of the same kind +might be poured so fast into the home market, +as to deprive all at once many thousands of +our people of their ordinary employment and +means of subsistence. The disorder which +this would occasion might no doubt be very +considerable. It would in all probability, +however, be much less than is commonly imagined, +for the two following reasons.</p> + +<p><i>First</i>, All those manufactures of which any +part is commonly exported to other European +countries without a bounty, could be very little +affected by the freest importation of foreign +goods. Such manufactures must be sold as +cheap abroad as any other foreign goods of the +same quality and kind, and consequently must +be sold cheaper at home. They would still, +therefore, keep possession of the home market; +and though a capricious man of fashion +might sometimes prefer foreign wares, merely +because they were foreign, to cheaper and better +goods of the same kind that were made at +home, this folly could, from the nature of +things, extend to so few, that it could make no +sensible impression upon the general employment +of the people. But a great part of all +the different branches of our woollen manufacture, +of our tanned leather, and of our +hardware, are annually exported to other European +countries without any bounty, and +these are the manufactures which employ the +greatest number of hands. The silk, perhaps, +is the manufacture which would suffer the +most by this freedom of trade, and after it the +linen, though the latter much less than the +former.</p> + +<p><i>Secondly</i>, Though a great number of people +should, by thus restoring the freedom of trade, +be thrown all at once out of their ordinary +employment and common method of subsistence, +it would by no means follow that they +would thereby be deprived either of employment +or subsistence. By the reduction of the +army and navy at the end of the late war, +more than 100,000 soldiers and seamen, a +number equal to what is employed in the +greatest manufactures, were all at once thrown +out of their ordinary employment: but though +they no doubt suffered some inconveniency, +they were not thereby deprived of all employment +and subsistence. The greater part of +the seamen, it is probable, gradually betook +themselves to the merchant service as they +could find occasion, and in the mean time both +they and the soldiers were absorbed in the +great mass of the people, and employed in a +great variety of occupations. Not only no +great convulsion, but no sensible disorder, arose +from so great a change in the situation of +more than 100,000 men, all accustomed to +the use of arms, and many of them to rapine +and plunder. The number of vagrants was +scarce anywhere sensibly increased by it; even +the wages of labour were not reduced by it in +any occupation, so far as I have been able to +learn, except in that of seamen in the merchant +service. But if we compare together the habits +of a soldier and of any sort of manufacturer, +we shall find that those of the latter do<span class='pagenum'><a name="Page_191" id="Page_191">[Pg 191]</a></span> +not tend so much to disqualify him from being +employed in a new trade, as those of the former +from being employed in any. The manufacturer +has always been accustomed to +look for his subsistence from his labour only; +the soldier to expect it from his pay. Application +and industry have been familiar to the +one; idleness and dissipation to the other. +But it is surely much easier to change the direction +of industry from one sort of labour to +another, than to turn idleness and dissipation +to any. To the greater part of manufactures, +besides, it has already been observed, there are +other collateral manufactures of so similar a +nature, that a workman can easily transfer his +industry from one of them to another. The +greater part of such workmen, too, are occasionally +employed in country labour. The +stock which employed them in a particular +manufacture before, will still remain in the +country, to employ an equal number of people +in some other way. The capital of the +country remaining the same, the demand for +labour will likewise be the same, or very nearly +the same, though it may be exerted in different +places, and for different occupations. +Soldiers and seamen, indeed, when discharged +from the king's service, are at liberty to exercise +any trade within any town or place of +Great Britain or Ireland. Let the same natural +liberty of exercising what species of industry +they please, be restored to all his Majesty's +subjects, in the same manner as to soldiers +and seamen; that is, break down the exclusive +privileges of corporations, and repeal +the statute of apprenticeship, both which are +really encroachments upon natural liberty, +and add to those the repeal of the law of settlements, +so that a poor workman, when +thrown out of employment, either in one trade +or in one place, may seek for it in another +trade or in another place, without the fear either +of a prosecution or of a removal; and +neither the public nor the individuals will suffer +much more from the occasional disbanding +some particular classes of manufacturers, than +from that of the soldiers. Our manufacturers +have no doubt great merit with their country, +but they cannot have more than those who defend +it with their blood, nor deserve to be +treated with more delicacy.</p> + +<p>To expect, indeed, that the freedom of trade +should ever be entirely restored in Great Britain, +is as absurd as to expect that an Oceana +or Utopia should ever be established in it. +Not only the prejudices of the public, but, +what is much more unconquerable, the private +interests of many individuals, irresistibly oppose +it. Were the officers of the army to oppose, +with the same zeal and unanimity, any +reduction in the number of forces, with which +master manufacturers set themselves against +every law that is likely to increase the number +of their rivals in the home market; were +the former to animate their soldiers, in the +same manner as the latter inflame their workmen, +to attack with violence and outrage the +proposers of any such regulation; to attempt +to reduce the army would be as dangerous as +it has now become to attempt to diminish, in +any respect, the monopoly which our manufacturers +have obtained against us. This monopoly +has so much increased the number of +some particular tribes of them, that, like an +overgrown standing army, they have become +formidable to the government, and, upon many +occasions, intimidate the legislature. The +member of parliament who supports every +proposal for strengthening this monopoly, is +sure to acquire not only the reputation of understanding +trade, but great popularity and +influence with an order of men whose numbers +and wealth render them of great importance. +If he opposes them, on the contrary, +and still more, if he has authority enough to +be able to thwart them, neither the most acknowledged +probity, nor the highest rank, nor +the greatest public services, can protect him +from the most infamous abuse and detraction, +from personal insults, nor sometimes from real +danger, arising from the insolent outrage of +furious and disappointed monopolists.</p> + +<p>The undertaker of a great manufacture, +who, by the home markets being suddenly +laid open to the competition of foreigners, +should be obliged to abandon his trade, would +no doubt suffer very considerably. That part +of his capital which had usually been employed +in purchasing materials, and in paying his +workmen, might, without much difficulty, perhaps, +find another employment; but that part +of it which was fixed in workhouses, and in +the instruments of trade, could scarce be disposed +of without considerable loss. The equitable +regard, therefore, to his interest, requires +that changes of this kind should never +be introduced suddenly, but slowly, gradually, +and after a very long warning. The legislature, +were it possible that its deliberations +could be always directed, not by the clamorous +importunity of partial interests, but by an +extensive view of the general good, ought, +upon this very account, perhaps, to be particularly +careful, neither to establish any new +monopolies of this kind, nor to extend further +those which are already established. Every +such regulation introduces some degree of +real disorder into the constitution of the state, +which it will be difficult afterwards to cure +without occasioning another disorder.</p> + +<p>How far it may be proper to impose taxes +upon the importation of foreign goods, in order +not to prevent their importation, but to +raise a revenue for government, I shall consider +hereafter when I come to treat of taxes. +Taxes imposed with a view to prevent, or even +to diminish importation, are evidently as destructive +of the revenue of the customs as of +the freedom of trade.<span class='pagenum'><a name="Page_192" id="Page_192">[Pg 192]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. III.</h3> + +<h4>OF THE EXTRAORDINARY RESTRAINTS UPON +THE IMPORTATION OF GOODS OF ALMOST +ALL KINDS, FROM THOSE COUNTRIES WITH +WHICH THE BALANCE IS SUPPOSED TO BE +DISADVANTAGEOUS.</h4> + + +<h4><span class="smcap">Part I.</span>—<i>Of the Unreasonableness of those +Restraints, even upon the Principles of the +Commercial System.</i></h4> + +<p>To lay extraordinary restraints upon the importation +of goods of almost all kinds, from +these particular countries with which the balance +of trade is supposed to be disadvantageous, +is the second expedient by which the +commercial system proposes to increase the +quantity of gold and silver. Thus, in Great +Britain, Silesia lawns may be imported for +home consumption, upon paying certain duties; +but French cambrics and lawns are prohibited +to be imported, except into the port +of London, there to be warehoused for +exportation. Higher duties are imposed upon +the wines of France than upon those of Portugal, +or indeed of any other country. By +what is called the impost 1692, a duty of five-and-twenty +per cent. of the rate or value, was +laid upon all French goods; while the goods +of other nations were, the greater part of them, +subjected to much lighter duties, seldom exceeding +five per cent. The wine, brandy, +salt, and vinegar of France, were indeed excepted; +these commodities being subjected to +other heavy duties, either by other laws, or by +particular clauses of the same law. In 1696, +a second duty of twenty-five per cent. the first +not having been thought a sufficient discouragement, +was imposed upon all French goods, +except brandy; together with a new duty of +five-and-twenty pounds upon the ton of French +wine, and another of fifteen pounds upon the +ton of French vinegar. French goods have +never been omitted in any of those general +subsidies or duties of five per cent. which have +been imposed upon all, or the greater part, of +the goods enumerated in the book of rates. +If we count the one-third and two-third subsidies +as making a complete subsidy between +them, there have been five of these general +subsidies; so that, before the commencement +of the present war, seventy-five per cent. may +be considered as the lowest duty to which the +greater part of the goods of the growth, produce, +or manufacture of France, were liable. +But upon the greater part of goods, those duties +are equivalent to a prohibition. The +French, in their turn, have, I believe, treated +our goods and manufactures just as hardly; +though I am not so well acquainted with the +particular hardships which they have imposed +upon them. Those mutual restraints have +put an end to almost all fair commerce between +the two nations; and smugglers are now the +principal importers, either of British goods +into France, or of French goods into Great +Britain. The principles which I have been +examining, in the foregoing chapter, took +their origin from private interest and the spirit +of monopoly; those which I am going to +examine in this, from national prejudice and +animosity. They are, accordingly, as might +well be expected, still more unreasonable. +They are so, even upon the principles of the +commercial system.</p> + +<p><i>First</i>, Though it were certain that in the +case of a free trade between France and England, +for example, the balance would be in +favour of France, it would by no means follow +that such a trade would be disadvantageous +to England, or that the general balance +of its whole trade would thereby be turned +more against it. If the wines of France are +better and cheaper than these of Portugal, or +its linens than those of Germany, it would be +more advantageous for Great Britain to purchase +both the wine and the foreign linen +which it had occasion for of France, than of +Portugal and Germany. Though the value +of the annual importations from France would +thereby be greatly augmented, the value of +the whole annual importations would be diminished, +in proportion as the French goods +of the same quality were cheaper than those of +the other two countries. This would be the +case, even upon the supposition that the whole +French goods imported were to be consumed +in Great Britain.</p> + +<p>But, <i>Secondly</i>, A great part of them might +be re-exported to other countries, where, being +sold with profit, they might bring back a +return, equal in value, perhaps, to the prime +cost of the whole French goods imported. +What has frequently been said of the East +India trade, might possibly be true of the +French; that though the greater part of East +India goods were bought with gold and silver, +the re-exportation of a part of them to +other countries brought back more gold and +silver to that which carried on the trade, than +the prime cost of the whole amounted to. +One of the most important branches of the +Dutch trade at present, consists in the carriage +of French goods to other European +countries. Some part even of the French wine +drank in Great Britain, is clandestinely imported +from Holland and Zealand. If there +was either a free trade between France and +England, or if French goods could be imported +upon paying only the same duties as those +of other European nations, to be drawn back +upon exportation, England might have some +share of a trade which is found so advantageous +to Holland.</p> + +<p><i>Thirdly</i>, and <i>lastly</i>, There is no certain criterion +by which we can determine on which +side what is called the balance between any<span class='pagenum'><a name="Page_193" id="Page_193">[Pg 193]</a></span> +two countries lies, or which of them exports +to the greatest value. National prejudice and +animosity, prompted always by the private interest +of particular traders, are the principles +which generally direct our judgment upon all +questions concerning it. There are two criterions, +however, which have frequently been +appealed to upon such occasions, the custom-house +books and the course of exchange. The custom-house +books, I think, it is now generally +acknowledged, are a very uncertain criterion, +on account of the inaccuracy of the +valuation at which the greater part of goods +are rated in them. The course of exchange +is, perhaps, almost equally so.</p> + +<p>When the exchange between two places, +such as London and Paris, is at par, it is said +to be a sign that the debts due from London +to Paris are compensated by those due from +Paris to London. On the contrary, when a +premium is paid at London for a bill upon +Paris, it is said to be a sign that the debts +due from London to Paris are not compensated +by those due from Paris to London, but +that a balance in money must be sent out +from the latter place; for the risk, trouble, +and expense, of exporting which, the premium +is both demanded and given. But the ordinary +state of debt and credit between those +two cities must necessarily be regulated, it is +said, by the ordinary course of their dealings +with one another. When neither of them imports +from the other to a greater amount than +it exports to that other, the debts and credits +of each may compensate one another. But +when one of them imports from the other to +a greater value than it exports to that other, +the former necessarily becomes indebted to +the latter in a greater sum than the latter becomes +indebted to it: the debts and credits +of each do not compensate one another, and +money must be sent out from that place of +which the debts overbalance the credits. The +ordinary course of exchange, therefore, being +an indication of the ordinary state of debt and +credit between two places, must likewise be +an indication of the ordinary course of their +exports and imports, as these necessarily regulate +that state.</p> + +<p>But though the ordinary course of exchange +shall be allowed to be a sufficient indication +of the ordinary state of debt and credit between +any two places, it would not from thence +follow, that the balance of trade was +in favour of that place which had the ordinary +state of debt and credit in its favour. +The ordinary state of debt and credit between +any two places is not always entirely regulated +by the ordinary course of their dealings +with one another, but is often influenced by +that of the dealings of either with many other +places. If it is usual, for example, for the +merchants of England to pay for the goods +which they buy of Hamburg, Dantzic, Riga, +&c. by bills upon Holland, the ordinary state +of debt and credit between England and Holland +will not be regulated entirely by the ordinary +course of the dealings of those two +countries with one another, but will be influenced +by that of the dealings in England with +those other places. England may he obliged +to send out every year money to Holland, +though its annual exports to that country may +exceed very much the annual value of its imports +from thence, and though what is called +the balance of trade may be very much in +favour of England.</p> + +<p>In the way, besides, in which the par of exchange +has hitherto been computed, the ordinary +course of exchange can afford no sufficient +indication that the ordinary state of debt +and credit is in favour of that country which +seems to have, or which is supposed to have, +the ordinary course of exchange in its favour; +or, in other words, the real exchange may be, +and in fact often is, so very different from the +computed one, that, from the course of the +latter, no certain conclusion can, upon many +occasions, be drawn concerning that of the +former.</p> + +<p>When for a sum of money paid in England, +containing, 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, containing, +according to the standard of the French mint, +an equal number of ounces of pure silver, +exchange is said to be at par between England +and France. When you pay more, you are +supposed to given premium, and exchange is +said to be against England, and in favour of +France. When you pay less, you are supposed +to get a premium, and exchange is said +to be against France, and in favour of England.</p> + +<p>But, <i>first</i>, We cannot always judge of the +value of the current money of different countries +by the standard of their respective mints. +In some it is more, in others it in less worn, +clipt, and otherwise degenerated from that +standard. But the value of the current coin +of every country, compared with that of any +other country, is in proportion, not to the +quantity of pure silver which it ought to contain, +but to that which it actually does contain. +Before the reformation of the silver +coin in King William's time, exchange between +England and Holland, computed in the +usual manner, according to the standard of +their respective mints, was five-and-twenty per +cent. against England. But the value of the +current coin of England, as we learn from +Mr Lowndes, was at that time rather more +than five-and-twenty per cent. below its standard +value. The real exchange, therefore, may +even at that time have been in favour of England, +notwithstanding the computed exchange +so much against it; a smaller number of +ounces of pure silver, actually paid in England, +may have purchased a bill for a greater<span class='pagenum'><a name="Page_194" id="Page_194">[Pg 194]</a></span> +number of ounces of pure silver to be paid in +Holland, and the man who was supposed to +give, may in reality have got the premium. +The French coin was, before the late reformation +of the English gold coin, much less +wore than the English, and was perhaps two +or three per cent. nearer its standard. If the +computed exchange with France, therefore, +was not more than two or three per cent. +against England, the real exchange might +have been in its favour. Since the reformation +of the gold coin, the exchange has been +constantly in favour of England, and against +France.</p> + +<p><i>Secondly</i>, In some countries the expense of +coinage is defrayed by the government; in +others, it is defrayed by the private people, +who carry their bullion to the mint, and the +government even derives some revenue from +the coinage. In England it is defrayed by +the government; and if you carry a pound +weight of standard silver to the mint, you get +back sixty-two shillings, containing a pound +weight of the like standard silver. In France +a duty of eight per cent. is deducted for the +coinage, which not only defrays the expense +of it, but affords a small revenue to the government. +In England, as the coinage costs +nothing, the current coin can never be much +more valuable than the quantity of bullion +which it actually contains. In France, the +workmanship, as you pay for it, adds to the +value, in the same manner as to that of wrought +plate. A sum of French money, therefore, +containing an equal weight of pure silver, is +more valuable than a sum of English money +containing an equal weight of pure silver, and +must require more bullion, or other commodities, +to purchase it. Though the current +coin of the two countries, therefore, were equally +near the standards of their respective mints, +a sum of English money could not well purchase +a sum of French money containing an +equal number of ounces of pure silver, nor +consequently, a bill upon France for such a +sum. If, for such a bill, no more additional +money was paid than what was sufficient to +compensate the expense of the French coinage, +the real exchange might be at par between +the two countries; their debts and credits +might mutually compensate one another, +while the computed exchange was considerably +in favour of France. If less than this was +paid, the real exchange might be in favour of +England, while the computed was in favour +of France.</p> + +<p><i>Thirdly</i>, and <i>lastly</i>, In some places, as at +Amsterdam, Hamburg, Venice, &c. foreign +bills of exchange are paid in what they call +bank money; while in others, as at London, +Lisbon, Antwerp, Leghorn, &c. they are paid +in the common currency of the country. What +is called bank money, is always of more value +than the same nominal sum of common +currency. A thousand guilders in the bank +of Amsterdam, for example, are of more value +than a thousand guilders of Amsterdam +currency. The difference between them is +called the agio of the bank, which at Amsterdam +is generally about five per cent. Supposing +the current money of the two countries +equally near to the standard of their respective +mints, and that the one pays foreign bills +in this common currency, while the other pays +them in bank money, it is evident that the +computed exchange may be in favour of that +which pays in bank money, though the real +exchange should be in favour of that which +pays in current money; for the same reason +that the computed exchange may be in favour +of that which pays in better money, or in money +nearer to its own standard, though the +real exchange should be in favour of that +which pays in worse. The computed exchange, +before the late reformation of the gold +coin, was generally against London with Amsterdam, +Hamburg, Venice, and, I believe, +with all other places which pay in what is +called bank money. It will by no means follow, +however, that the real exchange was against +it. Since the reformation of the gold +coin, it has been in favour of London, even +with those places. The computed exchange +has generally been in favour of London with +Lisbon, Antwerp, Leghorn, and, if you except +France, I believe with most other parts +of Europe that pay in common currency; and +it is not improbable that the real exchange +was so too.</p> + + +<h4><i>Digression concerning Banks of Deposit, particularly +concerning that of Amsterdam.</i></h4> + +<p>The currency of a great state, such as France +or England, generally consists almost entirely +of its own coin. Should this currency, therefore, +be at any time worn, clipt, or otherwise +degraded below its standard value, the state, +by a reformation of its coin, can effectually +re-establish its currency. But the currency +of a small state, such as Genoa or Hamburg, +can seldom consist altogether in its own coin, +but must be made up, in a great measure, of +the coins of all the neighbouring states with +which its inhabitants have a continual intercourse. +Such a state, therefore, by reforming +its coin, will not always be able to reform its +currency. If foreign bills of exchange are +paid in this currency, the uncertain value of +any sum, of what is in its own nature so uncertain, +must render the exchange always very +much against such a state, its currency being +in all foreign states necessarily valued even below +what it is worth.</p> + +<p>In order to remedy the inconvenience to +which this disadvantageous exchange must +have subjected their merchants, such small +states, when they began to attend to the interest +of trade, have frequently enacted, that<span class='pagenum'><a name="Page_195" id="Page_195">[Pg 195]</a></span> +foreign bills of exchange of a certain value +should be paid, not in common currency, but +by an order upon, or by a transfer in the books +of a certain bank, established upon the credit, +and under the protection of the state, this bank +being always obliged to pay, in good and true +money, exactly according to the standard of +the state. The banks of Venice, Genoa, Amsterdam, +Hamburg, and Nuremberg, seem to +have been all originally established with this +view, though some of them may have afterwards +been made subservient to other purposes. +The money of such banks, being better +than the common currency of the country, +necessarily bore an agio, which was greater or +smaller, according as the currency was supposed +to be more or less degraded below the +standard of the state. The agio of the bank +of Hamburg, for example, which is said to +be commonly about fourteen per cent. is the +supposed difference between the good standard +money of the state, and the clipt, worn, and +diminished currency, poured into it from all +the neighbouring states.</p> + +<p>Before 1609, the great quantity of clipt and +worn foreign coin which the extensive trade +of Amsterdam brought from all parts of Europe, +reduced the value of its currency about +nine per cent. below that of good money fresh +from the mint. Such money no sooner appeared, +than it was melted down or carried +away, as it always is in such circumstances. +The merchants, with plenty of currency, could +not always find a sufficient quantity of good +money to pay their bills of exchange; and the +value of those bills, in spite of several regulations +which were made to prevent it, became +in a great measure uncertain.</p> + +<p>In order to remedy these inconveniences, a +bank was established in 1609, under the guarantee +of the city. This bank received both +foreign coin, and the light and worn coin of +the country, at its real intrinsic value in the +good standard money of the country, deducting +only so much as was necessary for defraying +the expense of coinage and the other necessary +expense of management. For the +value which remained after this small deduction +was made, it gave a credit in its books. +This credit was called bank money, which, as +it represented money exactly according to the +standard of the mint, was always of the same +real value, and intrinsically worth more than +current money. It was at the same time enacted, +that all bills drawn upon or negociated +at Amsterdam, of the value of 600 guilders +and upwards, should be paid in bank money, +which at once took away all uncertainty in +the value of those bills. Every merchant, in +consequence of this regulation, was obliged to +keep an account with the bank, in order to +pay his foreign bills of exchange, which necessarily +occasioned a certain demand for bank +money.</p> + +<p>Bank money, over and above both its intrinsic +superiority to currency, and the additional +value which this demand necessarily +gives it, has likewise some other advantages. +It is secure from fire, robbery, and other accidents; +the city of Amsterdam is bound for +it; it can be paid away by a simple transfer, +without the trouble of counting, or the risk +of transporting it from one place to another. +In consequence of those different advantages, +it seems from the beginning to have borne an +agio; and it is generally believed that all the +money originally deposited in the bank, was +allowed to remain there, nobody caring to demand +payment of a debt which he could sell +for a premium in the market. By demanding +payment of the bank, the owner of a bank +credit would lose this premium. As a shilling +fresh from the mint will buy no more +goods in the market than one of our common +worn shillings, so the good and true money +which might be brought from the coffers of +the bank into those of a private person, being +mixed and confounded with the common currency +of the country, would be of no more +value than that currency, from which it could +no longer be readily distinguished. While it +remained in the coffers of the bank, its superiority +was known and ascertained. When it +had come into those of a private person, its +superiority could not well be ascertained +without more trouble than perhaps the difference +was worth. By being brought from the +coffers of the bank, besides, it lost all the other +advantages of bank money; its security, +its easy and safe transferability, its use in paying +foreign bills of exchange. Over and above +all this, it could not be brought from +those coffers, as will appear by and by, without +previously paying for the keeping.</p> + +<p>Those deposits of coin, or those deposits +which the bank was bound to restore in coin, +constituted the original capital of the bank, or +the whole value of what was represented by +what is called bank money. At present they +are supposed to constitute but a very small +part of it. In order to facilitate the trade in +bullion, the bank has been for these many +years in the practice of giving credit in its +books, upon deposits of gold and silver bullion. +This credit is generally about five per cent. +below the mint price of such bullion. The +bank grants at the same time what is called a +recipice or receipt, entitling the person who +makes the deposit, or the bearer, to take out +the bullion again at any time within six months, +upon transferring to the bank a quantity of +bank money equal to that for which credit had +been given in its books when the deposit was +made, and upon paying one-fourth per cent. +for the keeping, if the deposit was in silver; +and one-half per cent. if it was in gold; but +at the same time declaring, that in default of +such payment, and upon the expiration of this +term, the deposit should belong to the bank, +at the price at which it had been received, or<span class='pagenum'><a name="Page_196" id="Page_196">[Pg 196]</a></span> +for which credit had been given in the transfer +books. What is thus paid for the keeping +of the deposit may be considered as a sort of +warehouse rent; and why this warehouse rent +should be so much dearer for gold than for silver, +several different reasons have been assigned. +The fineness of gold, it has been said, is more +difficult to be ascertained than that of silver. +Frauds are more easily practised, and occasion +a greater loss in the most precious metal. Silver, +besides, being the standard metal, the +state, it has been said, wishes to encourage +more the making of deposits of silver than +those of gold.</p> + +<p>Deposits of bullion are most commonly +made when the price is somewhat lower than +ordinary, and they are taken out again when +it happens to rise. In Holland the market +price of bullion is generally above the mint +price, for the same reason that it was so in +England before the late reformation of the +gold coin. The difference is said to be commonly +from about six to sixteen stivers upon +the mark, or eight ounces of silver, of eleven +parts of fine and one part alloy. The bank +price, or the credit which the bank gives for +the deposits of such silver (when made in foreign +coin, of which the fineness is well known +and ascertained, such as Mexico dollars), is +twenty-two guilders the mark; the mint price +is about twenty-three guilders, and the market +price is from twenty-three guilders six, to +twenty-three guilders sixteen stivers, or from +two to three per cent. above the mint price.<a name="FNanchor_37_37" id="FNanchor_37_37"></a><a href="#Footnote_37_37" class="fnanchor">[37]</a> +The proportions between the bank price, the +mint price, and the market price of gold bullion, +are nearly the same. 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 almost always +worth something, and it very seldom happens, +therefore, that anybody suffers his receipts to +expire, or allows his bullion to fall to the bank +at the price at which it had been received, either +by not taking it out before the end of +the six months, or by neglecting to pay one +fourth or one half per cent. in order to obtain +a new receipt for another six months. This, +however, though it happens seldom, is said to +happen sometimes, and more frequently with +regard to gold than with regard to silver, on +account of the higher warehouse rent which +is paid for the keeping of the more precious +metal.</p> + +<p>The person who, by making a deposit of +bullion, obtains both a bank credit and a receipt, +pays his bills of exchange as they become +due, with his bank credit; and either +sells or keeps his receipt, according as he +judges that the price of bullion is likely to +rise or to fall. The receipt and the bank credit +seldom keep long together, and there is no +occasion that they should. The person who +has a receipt, and who wants to take out bullion, +finds always plenty of bank credits, or +bank money, to buy at the ordinary price, +and the person who has bank money, and +wants to take out bullion, finds receipts always +in equal abundance.</p> + +<p>The owners of bank credits, and the holders +of receipts, constitute two different sorts +of creditors against the bank. The holder of +a receipt cannot draw out the bullion for +which it is granted, without re-assigning to +the bank a sum of bank money equal to the +price at which the bullion had been received. +If he has no bank money of his own, he must +purchase it of those who have it. The owner +of bank money cannot draw out bullion, without +producing to the bank receipts for the +quantity which he wants. If he has none of +his own, he must buy them of those who have +them. The holder of a receipt, when he purchases +bank money, purchases the power of +taking out a quantity of bullion, of which the +mint price is five per cent. above the bank +price. The agio of five per cent. therefore, +which he commonly pays for it, is paid, not +for an imaginary, but for a real value. The +owner of bank money, when he purchases a +receipt, purchases the power of taking out a +quantity of bullion, of which the market price +is commonly from two to three per cent. +above the mint price. The price which he +pays for it, therefore, is paid likewise for a +real value. The price of the receipt, and the +price of the bank money, compound or make +up between them the full value or price of +the bullion.</p> + +<p>Upon deposits of the coin current in the +country, the bank grant receipts likewise, as +well as bank credits; but those receipts are +frequently of no value and will bring no +price in the market. Upon ducatoons, for +example, which in the currency pass for three +guilders three stivers each, the bank gives a +credit of three guilders only, or five per +cent. below their current value. It grants +a receipt likewise, entitling the bearer to +take out a number of ducatoons depos<span class='pagenum'><a name="Page_197" id="Page_197">[Pg 197]</a></span>ited +at any time within six months, upon +paying one fourth per cent. for the keeping. +This receipt will frequently bring no price in +the market. Three guilders, bank money, +generally sell in the market for three guilders +three stivers, the full value of the ducatoons, +if they were taken out of the bank; and before +they can be taken out, one-fourth per +cent. must be paid for the keeping, which +would be mere loss to the holder of the receipt. +If the agio of the bank, however, +should at any time fall to three per cent. such +receipts might bring some price in the market, +and might sell for one and three-fourths +per cent. But the agio of the bank being now +generally about five per cent. such receipts +are frequently allowed to expire, or, as they +express it, to fall to the bank. The receipts +which are given for deposits of gold ducats +fall to it yet more frequently, because a higher +warehouse rent, or one half per cent. must be +paid for the keeping of them, before they can +be taken out again. The five per cent. which +the bank gains, when deposits either of coin +or bullion are allowed to fall to it, may be +considered as the warehouse rent for the perpetual +keeping of such deposits.</p> + +<p>The sum of bank money, for which the receipts +are expired, must be very considerable. +It must comprehend the whole original capital +of the bank, which, it is generally supposed, +has been allowed to remain there from the +time it was first deposited, nobody caring either +to renew his receipt, or to take out his +deposit, as, for the reasons already assigned, +neither the one nor the other could be done +without loss. But whatever may be the amount +of this sum, the proportion which it bears to +the whole mass of bank money is supposed to +be very small. The bank of Amsterdam has, +for these many years past, been the great +warehouse of Europe for bullion, for which +the receipts are very seldom allowed to expire, +or, as they express it, to fall to the bank. +The far greater part of the bank money, or of +the credits upon the books of the bank, is supposed +to have been created, for these many +years past, by such deposits, which the dealers +in bullion are continually both making and +withdrawing.</p> + +<p>No demand can be made upon the bank, +but by means of a recipice or receipt. The +smaller mass of bank money, for which the +receipts are expired, is mixed and confounded +with the much greater mass 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 specific +sum or portion of it which may not at any +time be demanded by one. The bank cannot +be debtor to two persons for the same thing; +and the owner of bank money who has no receipt, +cannot demand payment of the bank +till he buys one. In ordinary and quiet times, +he can find no difficulty in getting one to +buy at the market price, which generally corresponds +with the price at which he can sell +the coin or bullion it entitles him to take out +of the bank.</p> + +<p>It might be otherwise during a public calamity; +an invasion, for example, such as that +of the French in 1672. The owners of bank +money being then all eager to draw it out of +the bank, in order to have it in their own +keeping, the demand for receipts might raise +their price to an exorbitant height. The +holders of them might form extravagant expectations, +and, instead of two or three per cent. +demand half the bank money for which credit +had been given upon the deposits that the receipts +had respectively been granted for. The +enemy, informed of the constitution of the +bank, might even buy them up, in order to +prevent the carrying away of the treasure. In +such emergencies, the bank, it is supposed, +would break through its ordinary rule of making +payment only to the holders of receipts. +The holders of receipts, who had no bank +money, must have received within two or +three per cent. of the value of the deposit for +which their respective receipts had been granted. +The bank, therefore, it is said, would in +this case make no scruple of paying, either +with money or bullion, the full value of what +the owners of bank money, who could get no +receipts, were credited for in its books; paying, +at the same time, two or three per cent. +to such holders of receipts as had no bank +money, that being the whole value which, in +this state of things, could justly be supposed +due to them.</p> + +<p>Even in ordinary and quiet times, it is the +interest of the holders of receipts to depress +the agio, in order either to buy bank money +(and consequently the bullion which their receipts +would then enable them to take out +of the bank) so much cheaper, or to sell their +receipts to these who have bank money, and +who want to take out bullion, so much dearer; +the price of a receipt being generally equal to +the difference between the market price of +bank money and that of the coin or bullion +for which the receipt had been granted. It +is the interest of the owners of bank money, +on the contrary, to raise the agio, in order +either to sell their bank money so much dearer, +or to buy a receipt so much cheaper. To +prevent the stock-jobbing tricks which those +opposite interests might sometimes occasion, +the bank has of late years come to the resolution, +to sell at all times bank money for currency +at five per cent. agio, and to buy it in +again at four per cent. agio. In consequence +of this resolution, the agio can never either +rise above five, or sink below four per cent.; +and the proportion between the market price +of bank and that of current money is kept at +all times very near the proportion between +their intrinsic values. Before this resolution +was taken, the market price of bank money<span class='pagenum'><a name="Page_198" id="Page_198">[Pg 198]</a></span> +used sometimes to rise so high as nine per +cent. agio, and sometimes to sink so low as +par, according as opposite interests happened +to influence the market.</p> + +<p>The bank of Amsterdam professes to lend +out no part of what is deposited with it, but, +for every guilder for which it gives credit in +its books, to keep in its repositories the value +of a guilder either in money or bullion. That +it keeps in its repositories all the money or +bullion for which there are receipts in force, +for which it is at all times liable to be called +upon, and which in reality is continually going +from it, and returning to it again, cannot +well be doubted. But whether it does so likewise +with regard to that part of its capital for +which the receipts are long ago expired, for +which, in ordinary and quiet times, it cannot +be called upon, and which, in reality, is very +likely to remain with it for ever, or as long as +the states of the United Provinces subsist, +may perhaps appear more uncertain. At Amsterdam, +however, no point of faith is better +established than that, for every guilder circulated +as bank money, there is a correspondent +guilder in gold or silver to be found in the +treasures of the bank. The city is guarantee +that it should be so. The bank is under the +direction of the four reigning burgomasters, +who are changed every year. Each new set +of burgomasters visits the treasure, compares +it with the books, receives it upon oath, and +delivers it over, with the same awful solemnity, +to the set which succeeds; and in that sober +and religious country, oaths are not yet disregarded. +A rotation of this kind seems alone +a sufficient security against any practices which +cannot be avowed. Amidst all the revolutions +which faction has ever occasioned in the government +of Amsterdam, the prevailing party +has at no time accused their predecessors of +infidelity in the administration of the bank. +No accusation could have affected more deeply +the reputation and fortune of the disgraced +party; and if such an accusation could have +been supported, we may be assured that it +would have been brought. In 1672, when +the French king was at Utrecht, the bank of +Amsterdam paid so readily, as left no doubt +of the fidelity with which it had observed its +engagements. Some of the pieces which were +then brought from its repositories, appeared +to have been scorched with the fire which happened +in the town-house soon after the bank +was established. Those pieces, therefore, must +have lain there from that time.</p> + +<p>What may be the amount of the treasure in +the bank, is a question which has long employed +the speculations of the curious. Nothing +but conjecture can be offered concerning +it. It is generally reckoned, that there are +about 2000 people who keep accounts with +the bank; and allowing them to have, one +with another, the value of L.1500 sterling lying +upon their respective accounts (a very +large allowance), the whole quantity of bank +money, and consequently of treasure in the +bank, will amount to about L.3,000,000 sterling, +or, at eleven guilders the pound sterling, +33,000,000 of guilders; a great sum, and sufficient +to carry on a very extensive circulation, +but vastly below the extravagant ideas +which some people have formed of this treasure.</p> + +<p>The city of Amsterdam derives a considerable +revenue from the bank. Besides what +may be called the warehouse rent above mentioned, +each person, upon first opening an account +with the bank, pays a fee of ten guilders; +and for every new account, three guilders +three stivers; for every transfer, two stivers; +and if the transfer is for less than 300 guilders, +six stivers, in order to discourage the multiplicity +of small transactions. The person +who neglects to balance his account twice in +the year, forfeits twenty-five guilders. The +person who orders a transfer for more than is +upon his account, is obliged to pay three per +cent. for the sum overdrawn, and his order is +set aside into the bargain. The bank is supposed, +too, to make a considerable profit by the +sale of the foreign coin or bullion which sometimes +falls to it by the expiring of receipts, +and which is always kept till it can be sold +with advantage. It makes a profit, likewise, +by selling bank money at five per cent. agio, +and buying it in at four. These different emoluments +amount to a good deal more than +what is necessary for paying the salaries of +officers, and defraying the expense of management. +What is paid for the keeping of +bullion upon receipts, is alone supposed to +amount to a neat annual revenue of between +150,000 and 200,000 guilders. Public utility, +however, and not revenue, was the original +object of this institution. Its object was +to relieve the merchants from the inconvenience +of a disadvantageous exchange. The +revenue which has arisen from it was unforeseen, +and may be considered as accidental. +But it is now time to return from this long +digression, into which I have been insensibly +led, in endeavouring to explain the reasons +why the exchange between the countries which +pay in what is called bank money, and those +which pay in common currency, should generally +appear to be in favour of the former, and +against the latter. The former pay in a species +of money, of which the intrinsic value is +always the same, and exactly agreeable to the +standard of their respective mints; the latter +is a species of money, of which the intrinsic +value is continually varying, and is almost +always more or less below that standard.</p> +<p><span class='pagenum'><a name="Page_199" id="Page_199">[Pg 199]</a></span></p> + +<h4><span class="smcap">Part II.</span>—<i>Of the Unreasonableness of those +extraordinary Restraints, upon other Principles.</i></h4> + +<p>In the foregoing part of this chapter, I have +endeavoured to show, even upon the principles +of the commercial system, how unnecessary +it is to lay extraordinary restraints upon +the importation of goods from those countries +with which the balance of trade is supposed +to be disadvantageous.</p> + +<p>Nothing, however, can be more absurd than +this whole doctrine of the balance of trade, +upon which, not only these restraints, but almost +all the other regulations of commerce, +are founded. When two places trade with one +another, this doctrine supposes that, if the balance +be even, neither of them either loses or +gains; but if it leans in any degree to one +side, that one of them loses, and the other +gains, in proportion to its declension from the +exact equilibrium. Both suppositions are +false. A trade, which is forced by means of +bounties and monopolies, may be, and commonly +is, disadvantageous to the country in +whose favour it is meant to be established, as +I shall endeavour to show hereafter. But that +trade which, without force or constraint, is naturally +and regularly carried on between any +two places, is always advantageous, though +not always equally so, to both.</p> + +<p>By advantage or gain, I understand, not +the increase of the quantity of gold or silver, +but that of the exchangeable value of the annual +produce of the land and labour of the +country, or the increase of the annual revenue +of its inhabitants.</p> + +<p>If the balance be even, and if the trade between +the two places consist altogether in the +exchange of their native commodities, they +will, upon most occasions, not only both gain, +but they will gain equally, or very nearly +equally; each will, in this case, afford a market +for a part of the surplus produce of the +other; each will replace a capital which had +been employed in raising and preparing for +the market this part of the surplus produce of +the other, and which had been distributed +among, and given revenue and maintenance +to, a certain number of its inhabitants. Some +part of the inhabitants of each, therefore, will +directly derive their revenue and maintenance +from the other. As the commodities exchanged, +too, are supposed to be of equal value, so the +two capitals employed in the trade will, upon +most occasions, be equal or very nearly equal; +and both being employed in raising the native +commodities of the two countries, the revenue +and maintenance which their distribution will +afford to the inhabitants of each will be equal, +or very nearly equal. This revenue and maintenance, +this mutually afforded, will be greater +or smaller, in proportion to the extent of their +dealings. If these should annually amount +to L.100,000, for example, or to L.1,000,000, +on each side, each of them will afford an annual +revenue, in the one case, of L.100,000, +and, in the other, of L.1,000,000, to the inhabitants +of the other.</p> + +<p>If their trade should be of such a nature, +that one of them exported to the other nothing +but native commodities, while the returns +of that other consisted altogether in foreign +goods; the balance, in this case, would +still be supposed even, commodities being paid +for with commodities. They would, in this +case too, both gain, but they would not gain +equally; and the inhabitants of the country +which exported nothing but native commodities, +would derive the greatest revenue from +the trade. If England, for example, should +import from France nothing but the native +commodities of that country, and not having +such commodities of its own as were in demand +there, should annually repay them by +sending thither a large quantity of foreign +goods, tobacco, we shall suppose, and East +India goods; this trade, though it would give +some revenue to the inhabitants of both countries, +would give more to those of France than +to those of England. The whole French capital +annually employed in it would annually +be distributed among the people of France; +but that part of the English capital only, +which was employed in producing the English +commodities with which those foreign goods +were purchased, would be annually distributed +among the people of England. The greater +part of it would replace the capitals which +had been employed in Virginia, Indostan, and +China, and which had given revenue and +maintenance to the inhabitants of those distant +countries. If the capitals were equal, or +nearly equal, therefore, this employment of +the French capital would augment much more +the revenue of the people of France, than that +of the English capital would the revenue of +the people of England. France would, in this +case, carry on a direct foreign trade of consumption +with England; whereas England +would carry on a round-about trade of the +same kind with France. The different effects +of a capital employed in the direct, and of +one employed in the round-about foreign trade +of consumption, have already been fully explained.</p> + +<p>There is not, probably, between any two +countries, a trade which consists altogether in +the exchange, either of native commodities +on both sides, or of native commodities on +one side, and of foreign goods on the other. +Almost all countries exchange with one another, +partly native and partly foreign goods. +That country, however, in whose cargoes there +is the greatest proportion of native, and the +least of foreign goods, will always be the principal +gainer.</p> + +<p>If it was not with tobacco and East India<span class='pagenum'><a name="Page_200" id="Page_200">[Pg 200]</a></span> +goods, but with gold and silver, that England +paid for the commodities annually imported +from France, the balance, in this case, would +be supposed uneven, commodities not being +paid for with commodities, but with gold and +silver. The trade, however, would in this +case, as in the foregoing, give some revenue +to the inhabitants of both countries, but more +to those of France than to those of England. +It would give some revenue to those of England. +The capital which had been employed +in producing the English goods that purchased +this gold and silver, the capital which +had been distributed among, and given revenue +to, certain inhabitants of England, would +thereby be replaced, and enabled to continue +that employment. The whole capital of England +would no more be diminished by this +exportation of gold and silver, than by the +exportation of an equal value of any other +goods. On the contrary, it would, in most +cases, be augmented. No goods are sent +abroad but those for which the demand is supposed +to be greater abroad than at home, and +of which the returns, consequently, it is expected, +will be of more value at home than +the commodities exported. If the tobacco +which in England is worth only L.100,000, +when sent to France, will purchase wine which +is in England worth L.110,000, the exchange +will equally augment the capital of England by +L.10,000. If L.100,000 of English gold, in +the same manner, purchase French wine, +which in England is worth L.110,000, this +exchange will equally augment the capital of +England by L.10,000. As a merchant, who +has L.110,000 worth of wine in his cellar, is +a richer man than he who has only L.100,000 +worth of tobacco in his warehouse, so is he +likewise a richer man than he who has only +L.100,000 worth of gold in his coffers. He +can put into motion a greater quantity of industry, +and give revenue, maintenance, and +employment, to a greater number of people, +than either of the other two. But the capital +of the country is equal to the capital of all its +different inhabitants; and the quantity of industry +which can be annually maintained in +it is equal to what all those different capitals +can maintain. Both the capital of the country, +therefore, and the quantity of industry +which can be annually maintained in it, must +generally be augmented by this exchange. It +would, indeed, be more advantageous for +England that it could purchase the wines of +France with its own hardware and broad cloth, +than with either the tobacco of Virginia, or +the gold and silver of Brazil and Peru. A +direct foreign trade of consumption is always +more advantageous than a round-about one. +But a round-about foreign trade of consumption, +which is carried on with gold and silver, +does not seem to be less advantageous than +any other equally round-about one. Neither +is a country which has no mines, more likely +to be exhausted of gold and silver by this annual +exportation of those metals, than one +which does not grow tobacco by the like annual +exportation of that plant. As a country +which has wherewithal to buy tobacco will +never be long in want of it, so neither will +one be long in want of gold and silver which +has wherewithal to purchase those metals.</p> + +<p>It is a losing trade, it is said, which a workman +carries on with the alehouse; and the +trade which a manufacturing nation would +naturally carry on with a wine country, may +be considered as a trade of the same nature. +I answer, that the trade with the alehouse is +not necessarily a losing trade. In its own +nature it is just as advantageous as any other, +though, perhaps, somewhat more liable to be +abused. The employment of a brewer, and +even that of a retailer of fermented liquors, +are as necessary divisions of labour as any +other. It will generally be more advantageous +for a workman to buy of the brewer the +quantity he has occasion for, than to brew it +himself; and if he is a poor workman, it will +generally be more advantageous for him to +buy it by little and little of the retailer, than +a large quantity of the brewer. He may no +doubt buy too much of either, as he may of +any other dealers in his neighbourhood; of +the butcher, if he is a glutton; or of the draper, +if he affects to be a beau among his companions. +It is advantageous to the great body +of workmen, notwithstanding, that all these +trades should be free, though this freedom +may be abused in all of them, and is more +likely to be so, perhaps, in some than in others. +Though individuals, besides, may sometimes +ruin their fortunes by an excessive consumption +of fermented liquors, there seems to be +no risk that a nation should do so. Though +in every country there are many people who +spend upon such liquors more than they can +afford, there are always many more who spend +less. It deserves to be remarked, too, that if +we consult experience, the cheapness of wine +seems to be a cause, not of drunkenness, but +of sobriety. The inhabitants of the wine +countries are in general the soberest people of +Europe; witness the Spaniards, the Italians, +and the inhabitants of the southern provinces +of France. People are seldom guilty of excess +in what is their daily fare. Nobody affects +the character of liberality and good fellowship, +by being profuse of a liquor which is +as cheap as small beer. On the contrary, in +the countries which, either from excessive heat +or cold, produce no grapes, and where wine +consequently is dear and a rarity, drunkenness +is a common vice, as among the northern nations, +and all those who live between the tropics, +the negroes, for example, on the coast of +Guinea. When a French regiment comes +from some of the northern provinces of France, +where wine is somewhat dear, to be quartered +in the southern, where it is very cheap, the<span class='pagenum'><a name="Page_201" id="Page_201">[Pg 201]</a></span> +soldiers, I have frequently heard it observed, +are at first debauched by the cheapness and +novelty of good wine; but after a few months +residence, the greater part of them become as +sober as the rest of the inhabitants. Were +the duties upon foreign wines, and the excises +upon malt, beer, and ale, to be taken +away all at once, it might, in the same manner, +occasion in Great Britain a pretty general +and temporary drunkenness among the +middling and inferior ranks of people, which +would probably be soon followed by a permanent +and almost universal sobriety. At present, +drunkenness is by no means the vice of +people of fashion, or of those who can easily +afford the most expensive liquors. A gentleman +drunk with ale has scarce ever been seen +among us. The restraints upon the wine trade +in Great Britain, besides, do not so much +seem calculated to hinder the people from going, +if I may say so, to the alehouse, as from +going where they can buy the best and cheapest +liquor. They favour the wine trade of +Portugal, and discourage that of France. The +Portuguese, it is said, indeed, are better customers +for our manufactures than the French, +and should therefore be encouraged in preference +to them. As they give us their custom, +it is pretended we should give them ours. The +sneaking arts of underling tradesman are thus +erected into political maxims for the conduct +of a great empire; for it is the most underling +tradesmen only who make it a rule to +employ chiefly their own customers. A great +trader purchases his goods always where they +are cheapest and best, without regard to any +little interest of this kind.</p> + +<p>By such maxims as these, however, nations +have been taught that their interest consisted +in beggaring all their neighbours. Each nation +has been made to look with an invidious +eye upon the prosperity of all the nations with +which it trades, and to consider their gain as +its own loss. Commerce, which ought naturally +to be, among nations as among individuals, +a bond of union and friendship, has become +the most fertile source of discord and +animosity. The capricious ambition of kings +and ministers has not, during the present and +the preceding century, been more fatal to the +repose of Europe, than the impertinent jealousy +of merchants and manufacturers. The +violence and injustice of the rulers of mankind +is an ancient evil, for which, I am afraid, +the nature of human affairs can scarce admit +of a remedy: but the mean rapacity, the monopolizing +spirit, of merchants and manufacturers, +who neither are, nor ought to be, the +rulers of mankind, though it cannot, perhaps, +be corrected, may very easily be prevented +from disturbing the tranquillity of anybody +but themselves.</p> + +<p>That it was the spirit of monopoly which +originally both invented and propagated this +doctrine, cannot be doubted: and they who +first taught it, were by no means such fools +as they who believed it. In every country it +always is, and must be, the interest of the +great body of the people, to buy whatever they +want of those who sell it cheapest. The proposition +is so very manifest, that it seems ridiculous +to take any pains to prove it; nor could +it ever have been called in question, had not +the interested sophistry of merchants and manufacturers +confounded the common sense of +mankind. Their interest is, in this respect, +directly opposite to that of the great body of +the people. As it is the interest of the freemen +of a corporation to hinder the rest of the +inhabitants from employing any workmen but +themselves; so it is the interest of the merchants +and manufacturers of every country to +secure to themselves the monopoly of the +home market. Hence, in Great Britain, and +in most other European countries, the extraordinary +duties upon almost all goods imported +by alien merchants. Hence the high duties +and prohibitions upon all those foreign +manufactures which can come into competition +with our own. Hence, too, the extraordinary +restraints upon the importation of almost +all sorts of goods from those countries +with which the balance of trade is supposed +to be disadvantageous; that is, from those +against whom national animosity happens to +be most violently inflamed.</p> + +<p>The wealth of neighbouring nations, however, +though dangerous in war and politics, is +certainly advantageous in trade. In a state +of hostility, it may enable our enemies to +maintain fleets and armies superior to our +own; but in a state of peace and commerce, +it must likewise enable them to exchange with +us to a greater value, and to afford a better +market, either for the immediate produce of +our own industry, or for whatever is purchased +with that produce. As a rich man is likely +to be a better customer to the industrious people +in his neighbourhood, than a poor, so is +likewise a rich nation. A rich man, indeed, +who is himself a manufacturer, is a very dangerous +neighbour to all those who deal in the +same way. All the rest of the neighbourhood, +however, by far the greatest number, profit by +the good market which his expense affords +them. They even profit by his underselling +the poorer workmen who deal in the same way +with him. The manufacturers of a rich nation, +in the same manner, may no doubt be +very dangerous rivals to those of their neighbours. +This very competition, however, is +advantageous to the great body of the people, +who profit greatly, besides, by the good market +which the great expense of such a nation +affords them in every other way. Private +people, who want to make a fortune, never +think of retiring to the remote and poor provinces +of the country, but resort either to the +capital, or to some of the great commercial +towns. They know, that where little wealth<span class='pagenum'><a name="Page_202" id="Page_202">[Pg 202]</a></span> +circulates, there is little to be got; but that +where a great deal is in motion, some share +of it may fall to them. The same maxim +which would in this manner direct the common +sense of one, or ten, or twenty individuals, +should regulate the judgment of one, +or ten, or twenty millions, and should make +a whole nation regard the riches of its neighbours, +as a probable cause and occasion for itself +to acquire riches. A nation that would +enrich itself by foreign trade, is certainly most +likely to do so, when its neighbours are all +rich, industrious and commercial nations. A +great nation, surrounded on all sides by wandering +savages and poor barbarians, might, no +doubt, acquire riches by the cultivation of its +own lands, and by its own interior commerce, +but not by foreign trade. It seems to have +been in this manner that the ancient Egyptians +and the modern Chinese acquired their +great wealth. The ancient Egyptians, it is +said, neglected foreign commerce, and the modern +Chinese, it is known, hold it in the utmost +contempt, and scarce deign to afford it +the decent protection of the laws. The modern +maxims of foreign commerce, by aiming +at the impoverishment of all our neighbours, +so far as they are capable of producing their +intended effect, tend to render that very commerce +insignificant and contemptible.</p> + +<p>It is in consequence of these maxims, that +the commerce between France and England +has, in both countries, been subjected to so +many discouragements and restraints. If those +two countries, however, were to consider their +real interest, without either mercantile jealousy +or national animosity, the commerce of France +might be more advantageous to Great Britain +than that of any other country, and, for the +same reason, that of Great Britain to France. +France is the nearest neighbour to Great Britain. +In the trade between the southern coast +of England and the northern and north-western +coast of France, the returns might be expected, +in the same manner as in the inland +trade, four, five, or six times in the year. The +capital, therefore, employed in this trade could, +in each of the two countries, keep in motion +four, five, or six times the quantity of industry, +and afford employment and subsistence +to four, five, or six times the number of people, +which an equal capital could do in the +greater part of the other branches of foreign +trade. Between the parts of France and Great +Britain most remote from one another, the +returns might be expected, at least, once in +the year; and even this trade would so far be +at least equally advantageous, as the greater +part of the other branches of our foreign European +trade. It would be, at least, three +times more advantageous than the boasted +trade with our North American colonies, in +which the returns were seldom made in less +than three years, frequently not in less than +four or five years. France, besides, is supposed +to contain 24,000,000 of inhabitants. +Our North American colonies were never supposed +to contain more than 3,000,000; and +France is a much richer country than North +America; though, on account of the more +unequal distribution of riches, there is much +more poverty and beggary in the one country +than in the other. France, therefore, could +afford a market at least eight times more extensive, +and, on account of the superior frequency +of the returns, four-and-twenty times +more advantageous than that which our North +American colonies ever afforded. The trade +of Great Britain would be just as advantageous +to France, and, in proportion to the +wealth, population, and proximity of the respective +countries, would have the same superiority +over that which France carries on with +her own colonies. Such is the very great +difference between that trade which the wisdom +of both nations has thought proper to +discourage, and that which it has favoured the +most.</p> + +<p>But the very same circumstances which +would have rendered an open and free commerce +between the two countries so advantageous +to both, have occasioned the principal +obstructions to that commerce. Being neighbours, +they are necessarily enemies, and the +wealth and power of each becomes, upon that +account, more formidable to the other; and +what would increase the advantage of national +friendship, serves only to inflame the violence +of national animosity. They are both rich and +industrious nations; and the merchants and +manufacturers of each dread the competition +of the skill and activity of those of the other. +Mercantile jealousy is excited, and both inflames, +and is itself inflamed, by the violence +of national animosity, and the traders of both +countries have announced, with all the passionate +confidence of interested falsehood, the certain +ruin of each, in consequence of that unfavourable +balance of trade, which, they pretend, +would be the infallible effect of an unrestrained +commerce with the other.</p> + +<p>There is no commercial country in Europe, +of which the approaching ruin has not frequently +been foretold by the pretended doctors +of this system, from an unfavourable balance +of trade. After all the anxiety, however, +which they have excited about this, after +all the vain attempts of almost all trading nations +to turn that balance in their own favour, +and against their neighbours, it does not appear +that any one nation in Europe has been, +in any respect, impoverished by this cause. +Every town and country, on the contrary, in +proportion as they have opened their ports to +all nations, instead of being ruined by this +free trade, as the principles of the commercial +system would lead us to expect, have been enriched +by it. Though there are in Europe, +indeed, a few towns which, in some respects, +deserve the name of free ports, there is no<span class='pagenum'><a name="Page_203" id="Page_203">[Pg 203]</a></span> +country which does so. Holland, perhaps, +approaches the nearest to this character of any, +though still very remote from it; and Holland, +it is acknowledged, not only derives its +whole wealth, but a great part of its necessary +subsistence, from foreign trade.</p> + +<p>There is another balance, indeed, which has +already been explained, very different from +the balance of trade, and which, according as +it happens to be either favourable or unfavourable, +necessarily occasions the prosperity +or decay of every nation. This is the balance +of the annual produce and consumption. If +the exchangeable value of the annual produce, +it has already been observed, exceeds that of +the annual consumption, the capital of the society +must annually increase in proportion to +this excess. The society in this case lives within +its revenue; and what is annually saved +out of its revenue, is naturally added to its capital, +and employed so as to increase still further +the annual produce. If the exchangeable +value of the annual produce, on the contrary, +fall short of the annual consumption, +the capital of the society must annually decay +in proportion to this deficiency. The expense +of the society, in this case, exceeds its revenue, +and necessarily encroaches upon its capital. +Its capital, therefore, must necessarily +decay, and, together with it, the exchangeable +value of the annual produce of its industry.</p> + +<p>This balance of produce and consumption +is entirely different from what is called the +balance of trade. It might take place in a +nation which had no foreign trade, but which +was entirely separated from all the world. +It may take place in the whole globe of the +earth, of which the wealth, population, and +improvement, may be either gradually increasing +or gradually decaying.</p> + +<p>The balance of produce and consumption +may be constantly in favour of a nation, though +what is called the balance of trade be generally +against it. A nation may import to a greater +value than it exports for half a century, perhaps, +together; the gold and silver which +comes into it during all this time, may be all +immediately sent out of it; its circulating +coin may gradually decay, different sorts of +paper money being substituted in its place, +and even the debts, too, which it contracts in +the principal nations with whom it deals, may +be gradually increasing; and yet its real +wealth, the exchangeable value of the annual +produce of its lands and labour, may, during +the same period, have been increasing in a +much greater proportion. The state of our +North American colonies, and of the trade +which they carried on with Great Britain, before +the commencement of the present disturbances,<a name="FNanchor_38_38" id="FNanchor_38_38"></a><a href="#Footnote_38_38" class="fnanchor">[38]</a> +may serve as a proof that this is +by no means an impossible supposition.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IV.</h3> + +<h4>OF DRAWBACKS.</h4> + + +<p>Merchants and manufacturers are not contented +with the monopoly of the home market, +but desire likewise the most extensive foreign +sale for their goods. Their country has no +jurisdiction in foreign nations, and therefore +can seldom procure them any monopoly there. +They are generally obliged, therefore, to content +themselves with petitioning for certain +encouragements to exportation.</p> + +<p>Of these encouragements, what are called +drawbacks seem to be the most reasonable. +To allow the merchant to draw back upon exportation, +either the whole, or a part of whatever +excise or inland duty is imposed upon +domestic industry, can never occasion the exportation +of a greater quantity of 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 of that +share to other employments. They tend not +to overturn that balance which naturally establishes +itself among all the various employments +of the society, but to hinder it from being +overturned by the duty. They tend not +to destroy, but to preserve, what it is in most +cases advantageous to preserve, the natural +division and distribution of labour in the society.</p> + +<p>The same thing may be said of the drawbacks +upon the re-exportation of foreign goods +imported, which, in Great Britain, generally +amount to by much the largest part of the +duty upon importation. By the second of the +rules, annexed to the act of parliament, which +imposed what is now called the old subsidy, +every merchant, whether English or alien, +was allowed to draw back half that duty upon +exportation; the English merchant, provided +the exportation took place within twelve +months; the alien, provided it took place +within nine months. Wines, currants, and +wrought silks, were the only goods which did +not fall within this rule, having other and +more advantageous allowances. The duties +imposed by this act of parliament were, at +that time, the only duties upon the importation +of foreign goods. The term within which +this, and all other drawbacks could be claimed, +was afterwards (by 7 Geo. I. chap. 21. +sect. 10.) extended to three years.</p> + +<p>The duties which have been imposed since +the old subsidy, are, the greater part of them, +wholly drawn back upon exportation. This +general rule, however, is liable to a great +<span class='pagenum'><a name="Page_204" id="Page_204">[Pg 204]</a></span>number of exceptions; and the doctrine of +drawbacks has become a much less simple +matter than it was at their first institution.</p> + +<p>Upon the exportation of some foreign +goods, of which it was expected that the importation +would greatly exceed what was necessary +for the home consumption, the whole +duties are drawn back, without retaining even +half the old subsidy. Before the revolt of our +North American colonies, we had the monopoly +of the tobacco of Maryland and Virginia. We +imported about ninety-six thousand hogsheads, +and the home consumption was not supposed +to extend fourteen thousand. To facilitate +the great exportation which was necessary, in +order to rid us of the rest, the whole duties +were drawn back, provided the exportation +took place within three years.</p> + +<p>We still have, though not altogether, yet +very nearly, the monopoly of the sugars of +our West Indian islands. If sugars are exported +within a year, therefore, all the duties, +upon importation are drawn back; and if +exported within three years, all the duties, +except half the old subsidy, which still continues +to be retained upon the exportation of +the greater part of goods. Though the importation +of sugar exceeds a good deal what is +necessary for the home consumption, the excess +is inconsiderable, in comparison of what +it used to be in tobacco.</p> + +<p>Some goods, the particular objects of the +jealousy of our own manufacturers, are prohibited +to be imported for home consumption. +They may, however, upon paying certain duties, +be imported and warehoused for exportation. +But upon such exportation no part of +these duties is drawn back. Our manufacturers +are unwilling, it seems, that even this +restricted importation should be encouraged, +and are afraid lest some part of these goods +should be stolen out of the warehouse, and +thus came into competition with their own. +It is under these regulations only that we can +import wrought silks, French cambrics and +lawns, calicoes, painted, printed, stained, or +dyed, &c.</p> + +<p>We are unwilling even to be the carriers of +French goods, and choose rather to forego a +profit to ourselves than to suffer those whom +we consider as our enemies to make any profit +by our means. Not only half the old subsidy, +but the second twenty-five per cent. is +retained upon the exportation of all French +goods.</p> + +<p>By the fourth of the rules annexed to the +old subsidy, the drawback allowed upon the +exportation of all wines amounted to a great +deal more than half the duties which were at +that time paid upon their importation; and it +seems at that time to have been the object of +the legislature to give somewhat more than +ordinary encouragement to the carrying trade +in wine. Several of the other duties, too, +which were imposed either at the same time +or subsequent to the old subsidy, what is called +the additional duty, the new subsidy, the one-third +and two-thirds subsidies, the impost +1692, the tonnage on wine, were allowed to +be wholly drawn back upon exportation. All +those duties, however, except the additional +duty and impost 1692, being paid down in +ready money upon importation, the interest of +so large a sum occasioned an expense, which +made it unreasonable to expect any profitable +carrying trade in this article. Only a part, +therefore of the duty called the impost on +wine, and no part of the twenty-five pounds +the ton upon French wines, or of the duties +imposed in 1745, in 1763, and in 1778, were +allowed to be drawn back upon exportation. +The two imposts of five per cent. imposed in +1779 and 1781, upon all the former duties of +customs, being allowed to be wholly drawn +back upon the exportation of all other goods, +were likewise allowed to be drawn back upon +that of wine. The last duty that has been +particularly imposed upon wine, that of 1780, +is allowed to be wholly drawn back; an indulgence +which, when so many heavy duties +are retained, most probably could never occasion +the exportation of a single ton of wine. +These rules took place with regard to all +places of lawful exportation, except the British +colonies in America.</p> + +<p>The 15th Charles II, chap. 7, called an act +for the encouragement of trade, had given +Great Britain the monopoly of supplying the +colonies with all the commodities of the growth +or manufacture of Europe, and consequently +with wines. In a country of so extensive a +coast as our North American and West Indian +colonies, where our authority was always +so very slender, and where the inhabitants +were allowed to carry out in their own ships +their non-enumerated commodities, at first to +all parts of Europe, and afterwards to all +parts of Europe south of Cape Finisterre, it +is not very probable that this monopoly could +ever be much respected; and they probably at +all times found means of bringing back some +cargo from the countries to which they were +allowed to carry out one. They seem, however, +to have found some difficulty in importing +European wines from the places of +their growth; and they could not well import +them from Great Britain, where they +were loaded with many heavy duties, of which +a considerable part was not drawn back upon +exportation. Madeira wine, not being an +European commodity, could be imported directly +into America and the West Indies, +countries which, in all their non-enumerated +commodities, enjoyed a free trade to the island +of Madeira. These circumstances had probably +introduced that general taste for Madeira +wine, which our officers found established +in all our colonies at the commence<span class='pagenum'><a name="Page_205" id="Page_205">[Pg 205]</a></span>ment +of the war which began in 1755, and +which they brought back with them to the +mother country, where that wine had not been +much in fashion before. Upon the conclusion +of that war, in 1763 (by the 4th Geo. III, +chap. 15, sect. 12), all the duties except L.3, +10s. were allowed to be drawn back upon the +exportation to the colonies of all wines, except +French wines, to the commerce and consumption +of which national prejudice would +allow no sort of encouragement. The period +between the granting of this indulgence and +the revolt of our North American colonies, +was probably too short to admit of any considerable +change in the customs of those countries.</p> + +<p>The same act which, in the drawbacks upon +all wines, except French wines, thus favoured +the colonies so much more than other countries, +in those upon the greater part of other +commodities, favoured them much less. Upon +the exportation of the greater part of commodities +to other countries, half the old subsidy +was drawn back. But this law enacted, +that no part of that duty should be drawn +back upon the exportation to the colonies of +any commodities of the growth or manufacture +either of Europe or the East Indies, except +wines, white calicoes, and muslins.</p> + +<p>Drawbacks were, perhaps, originally granted +for the encouragement of the carrying trade, +which, as the freight of the ship is frequently +paid by foreigners in money, was supposed to +be peculiarly fitted for bringing gold and silver +into the country. But though the carrying +trade certainly deserves no peculiar encouragement, +though the motive of the institution +was, perhaps, abundantly foolish, the +institution itself seems reasonable enough. +Such drawbacks cannot force into this trade a +greater share of the capital of the country than +what would have gone to it of its own accord, +had there been no duties upon importation; +they only prevent its being excluded +altogether by those duties. The carrying trade, +though it deserves no preference, ought not +to be precluded, but to be left free, like all +other trades. It is a necessary resource to +those capitals which cannot find employment, +either in the agriculture or in the manufactures +of the country, either in its home trade, +or in its foreign trade of consumption.</p> + +<p>The revenue of the customs, instead of suffering, +profits from such drawbacks, by that +part of the duty which is retained. If the +whole duties had been retained, the foreign +goods upon which they are paid could seldom +have been exported, nor consequently imported, +for want of a market. The duties, +therefore, of which a part is retained, would +never have been paid.</p> + +<p>These reasons seem sufficiently to justify +drawbacks, and would justify them, though +the whole duties, whether upon the produce +of domestic industry or upon foreign goods, +were always drawn back upon exportation. +The revenue of excise would, in this case indeed, +suffer a little, and that of the customs a +good deal more; but the natural balance of +industry, the natural division and distribution +of labour, which is always more or less disturbed +by such duties, would be more nearly +re-established by such a regulation.</p> + +<p>These reasons, however, will justify drawbacks +only upon exporting goods to those +countries which are altogether foreign and independent, +not to those in which our merchants +and manufacturers enjoy a monopoly. +A drawback, for example, upon the exportation +of European goods to our American colonies, +will not always occasion a greater exportation +than what would have taken place +without it. By means of the monopoly which +our merchants and manufacturers enjoy there, +the same quantity might frequently, perhaps, +be sent thither, though the whole duties were +retained. The drawback, therefore, may frequently +be pure loss to the revenue of excise +and customs, without altering the state of the +trade, or rendering it in any respect more extensive. +How far such drawbacks can be justified +as a proper encouragement to the industry +of our colonies, or how far it is advantageous +to the mother country that they should +be exempted from taxes which are paid by +all the rest of their fellow-subjects, will appear +hereafter, when I come to treat of colonies.</p> + +<p>Drawbacks, however, it must always be understood, +are useful only in those cases in +which the goods, for the exportation of which +they are given, are really exported to some +foreign country, and not clandestinely re-imported +into our own. That some drawbacks, +particularly those upon tobacco, have frequently +been abused in this manner, and have +given occasion to many frauds, equally hurtful +both to the revenue and to the fair trader, +is well known.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. V.</h3> + +<h4>OF BOUNTIES.</h4> + + +<p>Bounties upon exportation are, in Great Britain, +frequently petitioned for, and sometimes +granted, to the produce of particular branches +of domestic industry. By means of them, our +merchants and manufacturers, it is pretended, +will be enabled to sell their goods as cheap or +cheaper than their rivals in the foreign market. +A greater quantity, it is said, will thus +be exported, and the balance of trade consequently +turned more in favour of our own +country. We cannot give our workmen a monopoly +in the foreign, as we have done in the<span class='pagenum'><a name="Page_206" id="Page_206">[Pg 206]</a></span> +home market. We cannot force foreigners +to buy their goods as we have done our +own countrymen. The next best expedient, +it has been thought, therefore, is to pay them +for buying. It is in this manner that the +mercantile system proposes to enrich the whole +country, and to put money into all our pockets +by means of the balance of trade.</p> + +<p>Bounties, it is allowed, ought to be given +to those branches of trade only which cannot +be carried on without them. But every branch +of trade in which the merchant can sell his +goods for a price which replaces to him, with +the ordinary profits of stock, the whole capital +employed in preparing and sending them +to market, can be carried on without a bounty. +Every such branch is evidently upon a level +with all the other branches of trade which are +carried on without bounties, and cannot, therefore, +require one more than they. Those +trades only require bounties in which the +merchant is obliged to sell his goods for a +price which does not replace to him his capital, +together with the ordinary profit, or in +which he is obliged to sell them for less than +it really costs him to send them to market. +The bounty is given in order to make up this +loss, and to encourage him to continue, or, +perhaps, to begin a trade, of which the expense +is supposed to be greater than the returns, +of which every operation eats up a part +of the capital employed in it, and which is of +such a nature, that if all other trades resembled +it, there would soon be no capital left in +the country.</p> + +<p>The trades, it is to be observed, which are +carried on by means of bounties, are the only +ones which can be carried on between two nations +for any considerable time together, in +such a manner as that one of them shall always +and regularly lose, or sell its goods for +less than it really costs to send them to market. +But if the bounty did not repay to the merchant +what he would otherwise lose upon the +price of his goods, his own interest would soon +oblige him to employ his stock in another +way, or to find out a trade in which the price +of the goods would replace to him, with the +ordinary profit, the capital employment in sending +them to market. The effect of bounties, +like that of all the other expedients of the mercantile +system, can only be to force the trade +of a country into a channel much less advantageous +than that in which it would naturally +run of its own accord.</p> + +<p>The ingenious and well-informed author of +the Tracts upon the Corn Trade has shown +very clearly, that since the bounty upon the +exportation of corn was first established, the +price of the corn exported, valued moderately enough, +has exceeded that of the corn imported, +valued very high, by a much greater +sum than the amount of the whole bounties +which have been paid during that period. +This, he imagines, upon the true principles +of the mercantile system, is a clear proof that +this forced corn trade is beneficial to the nation, +the value of the exportation exceeding +that of the importation by a much greater sum +than the whole extraordinary expense which +the public has been at in order to get it exported. +He does not consider that this extraordinary +expense, or the bounty, is the +smallest part of the expense which the exportation +of corn really costs the society. The +capital which the farmer employed in raising +it must likewise be taken into the account. +Unless the price of the corn, when sold in the +foreign markets replaces, not only the bounty, +but this capital, together with the ordinary +profits of stock, the society is a loser by the +difference, or the national stock is so much +diminished. But the very reason for which +it has been thought necessary to grant a bounty, +is the supposed insufficiency of the price to do +this.</p> + +<p>The average price of corn, it has been said, +has fallen considerably since the establishment +of the bounty. That the average price +of corn began to fall somewhat towards the +end of the last century, and has continued to +do so during the course of the sixty-four first +years of the present, I have already endeavoured +to show. But this event, supposing it +to be real, as I believe it to be, must have +happened in spite of the bounty, and cannot +possibly have happened in consequence of it. +It has happened in France, as well as in England, +though in France there was not only no +bounty, but, till 1764, the exportation of corn +was subjected to a general prohibition. This +gradual fall in the average price of grain, it +is probable, therefore, is ultimately owing neither +to the one regulation nor to the other, +but to that gradual and insensible rise in the +real value of silver, which, in the first book of +this discourse, I have endeavoured to show, +has taken place in the general market of Europe +during the course of the present century. +It seems to be altogether impossible that the +bounty could ever contribute to lower the +price of grain.</p> + +<p>In years of plenty, it has already been observed, +the bounty, by occasioning an extraordinary +exportation, necessarily keeps up the +price of corn in the home market above what +it would naturally fall to. To do so was the +avowed purpose of the institution. In years +of scarcity, though the bounty is frequently +suspended, yet the great exportation which it +occasions in years of plenty, must frequently +hinder, more or less, the plenty of one year +from relieving the scarcity of another. Both +in years of plenty and in years of scarcity, +therefore, the bounty necessarily tends to raise +the money price of corn somewhat higher +than it otherwise would be in the home market.</p> + +<p>That, in the actual state of tillage, the bounty +must necessarily have this tendency, will not<span class='pagenum'><a name="Page_207" id="Page_207">[Pg 207]</a></span> +I apprehend, be disputed by any reasonable +person. But it has been thought by many +people, that it tends to encourage tillage, and +that in two different ways; first, by opening a +more extensive foreign market to the corn of +the farmer, it tends, they imagine, to increase +the demand for, and consequently the production +of, that commodity; and, secondly, +by securing to him a better price than he +could otherwise expect in the actual state of +tillage, it tends, they suppose, to encourage +tillage. This double encouragement must, +they imagine, in a long period of years, occasion +such an increase in the production of +corn, as may lower its price in the home market, +much more than the bounty can raise it, +in the actual state which tillage may, at the +end of that period, happen to be in.</p> + +<p>I answer, that whatever extension of the +foreign market can be occasioned by the bounty +must, in every particular year, be altogether +at the expense of the home market; as every +bushel of corn, which is exported by means of +the bounty, and which would not have been +exported without the bounty, would have remained +in the home market to increase the +consumption, and to lower the price of that +commodity. The corn bounty, it is to be observed, +as well as every other bounty upon exportation, +imposes two different taxes upon +the people; first, the tax which they are obliged +to contribute, in order to pay the bounty; +and, secondly, the tax which arises from +the advanced price of the commodity in the +home market, and which, as the whole body +of the people are purchasers of corn, must, in +this particular commodity, be paid by the +whole body of the people. In this particular +commodity, therefore, this second tax is by +much the heaviest of the two. Let us suppose +that, taking one year with another, the +bounty of 5s. upon the exportation of the +quarter of wheat raises the price of that commodity +in the home market only 6d. the bushel, +or 4s. the quarter higher than it otherwise +would have been in the actual state of +the crop. Even upon this very moderate supposition, +the great body of the people, over +and above contributing the tax which pays +the bounty of 5s. upon every quarter of wheat +exported, must pay another of 4s. upon every +quarter which they themselves consume. But +according to the very well informed author of +the Tracts upon the Corn Trade, the average +proportion of the corn exported to that consumed +at home, is not more than that of one +to thirty-one. For every 5s. therefore, which +they contribute to the payment of the first +tax, they must contribute L.6, 4s. to the payment +of the second. So very heavy a tax +upon the first necessary of life must either reduce +the subsistence of the labouring poor, +or it must occasion some augmentation in +their pecuniary wages, proportionable to that +in the pecuniary price of their subsistence. So +far as it operates in the one way, it must reduce +the ability of the labouring poor to educate +and bring up their children, and must, +so far, tend to restrain the population of the +country. So far as it operates in the other, +it must reduce the ability of the employers of +the poor, to employ so great a number as they +otherwise might do, and must so far tend to +restrain the industry of the country. The extraordinary +exportation of corn, therefore, occasioned +by the bounty, not only in every +particular year diminishes the home, just as +much as it extends the foreign market and +consumption, but, by restraining the population +and industry of the country, its final tendency +is to stint and restrain the gradual extension +of the home market; and thereby, in +the long-run, rather to diminish than to augment +the whole market and consumption of +corn.</p> + +<p>This enhancement of the money price of +corn, however, it has been thought, by rendering +that commodity more profitable to the +farmer, must necessarily encourage its production.</p> + +<p>I answer, that this might be the case, if the +effect of the bounty was to raise the real price +of corn, or to enable the farmer, with an equal +quantity of it, to maintain a greater number +of labourers in the same manner, whether liberal, +moderate, or scanty, than other labourers +are commonly maintained in his neighbourhood. +But neither the bounty, it is evident, +nor any other human institution, can +have any such effect. It is not the real, but +the nominal price of corn, which can in any +considerable degree be affected by the bounty. +And though the tax, which that institution +imposes upon the whole body of the people, +may be very burdensome to those who pay it, +it is of very little advantage to those who receive +it.</p> + +<p>The real effect of the bounty is not so much +to raise the real value of corn, as to degrade +the real value of silver; or to make an equal +quantity of it exchange for a smaller quantity, +not only of corn, but of all other home made +commodities; for the money price of corn regulates +that of all other home made commodities.</p> + +<p>It regulates the money price of labour, +which must always be such as to enable the +labourer to purchase a quantity of corn sufficient +to maintain him and his family, either +in the liberal, moderate, or scanty manner, in +which the advancing, stationary, or declining +circumstances of the society, oblige his employers +to maintain him.</p> + +<p>It regulates the money price of all the +other parts of the rude produce of land, +which, in every period of improvement, must +bear a certain proportion to that of corn, +though this proportion is different in different +periods. It regulates, for example, the money +price of grass and hay, of butcher's meat, of<span class='pagenum'><a name="Page_208" id="Page_208">[Pg 208]</a></span> +horses, and the maintenance of horses, of land +carriage consequently, or of the greater part +of the inland commerce of the country.</p> + +<p>By regulating the money price of all the +other parts of the rude produce of land, it regulates +that of the materials of almost all manufactures; +by regulating the money price of +labour, it regulates that of manufacturing art +and industry; and by regulating both, it regulates +that of the complete manufacture. +The money price of labour, and of every thing +that is the produce, either of land or labour, +must necessarily either rise or fall in proportion +to the money price of corn.</p> + +<p>Though in consequence of the bounty, +therefore, the farmer should be enabled to sell +his corn for 4s. the bushel, instead of 3s 6d. +and to pay his landlord a money rent proportionable +to this rise in the money price of his +produce; yet if, in consequence of this rise +in the price of corn, 4s. will purchase no more +home made goods of any other kind than 3s. +6d. would have done before, neither the circumstances +of the farmer, nor those of the +landlord, will be much mended by this +change. The farmer will not be able to cultivate +much better; the landlord will not be able +to live much better. In the purchase of foreign +commodities, this enhancement in the +price of corn may give them some little advantage. +In that of home made commodities, +it can give them none at all. And almost the +whole expense of the farmer, and the far +greater part even of that of the landlord, is in +home made commodities.</p> + +<p>That degradation in the value of silver, +which is the effect of the fertility of the mines, +and which operates equally, or very nearly +equally, through the greater part of the commercial +world, is a matter of very little consequence +to any particular country. The consequent +rise of all money prices, though it +does not make those who receive them really +richer, does not make them really poorer. A +service of plate becomes really cheaper, and +every thing else remains precisely of the same +real value as before.</p> + +<p>But that degradation in the value of silver, +which, being the effect either of the peculiar +situation or of the political institutions of a +particular country, takes place only in that +country, is a matter of very great consequence, +which, far from tending to make any body +really richer, tends to make every body really +poorer. The rise in the money price of all +commodities, which is in this case peculiar to +that country, tends to discourage more or less +every sort of industry which is carried on within +it, and to enable foreign nations, by furnishing +almost all sorts of goods for a smaller +quantity of silver than its own workmen can +afford to do, to undersell them, not only in +the foreign, but even in the home market.</p> + +<p>It is the peculiar situation of Spain and +Portugal, as proprietors of the mines, to be +the distributers of gold and silver to all the +other countries of Europe. Those metals +ought naturally, therefore, to be somewhat +cheaper in Spain and Portugal than in any +other part of Europe. The difference, however, +should be no more than the amount of +the freight and insurance; and, on account of +the great value and small bulk of those metals, +their freight is no great matter, and their insurance +is the same as that of any other goods +of equal value. Spain and Portugal, therefore, +could suffer very little from their peculiar +situation, if they did not aggravate its disadvantages +by their political institutions.</p> + +<p>Spain by taxing, and Portugal by prohibiting, +the exportation of gold and silver, load +that exportation with the expense of smuggling, +and raise the value of those metals in +other countries so much more above what it is +in their own, by the whole amount of this expense. +When you dam up a stream of water, +as soon as the dam is full, as much water +must run over the dam-head as if there was +no dam at all. The prohibition of exportation +cannot detain a greater quantity of gold +and silver in Spain and Portugal, than what +they can afford to employ, than what the annual +produce of their land and labour will allow +them to employ, in coin, plate, gilding, +and other ornaments of gold and silver. When +they have got this quantity, the dam is full, +and the whole stream which flows in afterwards +must run over. The annual exportation +of gold and silver from Spain and Portugal, +accordingly, is, by all accounts, notwithstanding +these restraints, very near equal to +the whole annual importation. As the water, +however, must always be deeper behind the +dam-head than before it, so the quantity of gold +and silver which these restraints detain in Spain +and Portugal, must, in proportion to the annual +produce of their land and labour, be greater +than what is to be found in other countries. +The higher and stronger the dam-head, the +greater must be the difference in the depth of +water behind and before it. The higher the tax, +the higher the penalties with which the prohibition +is guarded, the more vigilant and severe +the police which looks after the execution of +the law, 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. +It is said, accordingly, to be very considerable, +and that you frequently find there a profusion +of plate in houses, where there is nothing else +which would in other countries be thought +suitable or correspondent to this sort of magnificence. +The cheapness of gold and silver, +or, what is the same thing, the dearness of all +commodities, which is the necessary effect of +this redundancy of the precious metals, discourages +both the agriculture and manufactures +of Spain and Portugal, and enables foreign +nations to supply them with many sorts<span class='pagenum'><a name="Page_209" id="Page_209">[Pg 209]</a></span> +of rude, and with almost all sorts of manufactured +produce, for a smaller quantity of +gold and silver than what they themselves can +either raise or make them for at home. The +tax and prohibition operate in two different +ways. They not only lower very much the +value of the precious metals in Spain and Portugal, +but by detaining there a certain quantity +of those metals which would otherwise +flow over other countries, they keep up their +value in those other countries somewhat above +what it otherwise would be, and thereby give +those countries a double advantage in their +commerce with Spain and Portugal. Open +the flood-gates, and there will presently be +less water above, and more below the dam-head, +and it will soon come to a level in both +places. Remove the tax and the prohibition, +and as the quantity of gold and silver will diminish +considerably in Spain and Portugal, +so it will increase somewhat in other countries; +and the value of those metals, their proportion +to the annual produce of land and labour, +will soon come to a level, or very near +to a level, in all. The loss which Spain and +Portugal could sustain by this exportation of +their gold and silver, would be altogether nominal +and imaginary. The nominal value of +their goods, and of the annual produce of +their land and labour, would fall, and would +be expressed or represented by a smaller quantity +of silver than before; but their real value +would be the same as before, and would be +sufficient to maintain, command, and employ +the same quantity of labour. As the nominal +value of their goods would fall, the real value of +what remained of their gold and silver would +rise, and a smaller quantity of those metals +would answer all the same purposes of commerce +and circulation which had employed a +greater quantity before. The gold and silver +which would go abroad would not go abroad +for nothing, but would bring back an equal +value of goods of some kind or other. Those +goods, too, would not be all matters of mere +luxury and expense, to be consumed by idle +people, who produce nothing in return for +their consumption. As the real wealth and +revenue of idle people would not be augmented +by this extraordinary exportation of gold +and silver, so neither would their consumption +be much augmented by it. Those goods +would probably, the greater part of them, and +certainly some part of them, consist in materials, +tools, and provisions, for the employment +and maintenance of industrious people, +who would reproduce, with a profit, the full +value of their consumption. A part of the +dead stock of the society would thus be turned +into active stock, and would put into motion +a greater quantity of industry than had been +employed before. The annual produce of +their land and labour would immediately be +augmented a little, and in a few years would +probably be augmented a great deal; their +industry being thus relieved from one of the +most oppressive burdens which it at present +labours under.</p> + +<p>The bounty upon the exportation of corn +necessarily operates exactly in the same way +as this absurd policy of Spain and Portugal. +Whatever be the actual state of tillage, it renders +our corn somewhat dearer in the home +market than it otherwise would be in that +state, and somewhat cheaper in the foreign; +and as the average money price of corn regulates, +more or less, that of all other commodities, +it lowers the value of silver considerably +in the one, and tends to raise it a little in the +other. It enables foreigners, the Dutch in +particular, not only to eat our corn cheaper +than they otherwise could do, but sometimes +to eat it cheaper than even our own people +can do upon the same occasions; as we are +assured by an excellent authority, that of Sir +Matthew Decker. It hinders our own workmen +from furnishing their goods for so small +a quantity of silver as they otherwise might +do, and enables the Dutch to furnish theirs +for a smaller. It tends to render our manufactures +somewhat dearer in every market, and +theirs somewhat cheaper, than they otherwise +would be, and consequently to give their industry +a double advantage over our own.</p> + +<p>The bounty, as it raises in the home market, +not so much the real, as the nominal +price of our corn; as it augments, not the +quantity of labour which a certain quantity of +corn can maintain and employ, but only the +quantity of silver which it will exchange for; +it discourages our manufactures, without rendering +any considerable service, either to our +farmers or country gentlemen. It puts, indeed, +a little more money into the pockets of +both, and it will perhaps be somewhat difficult +to persuade the greater part of them that +this is not rendering them a very considerable +service. But if this money sinks in its value, +in the quantity of labour, provisions, and +home-made commodities of all different kinds +which it is capable of purchasing, as much as +it rises in its quantity, the service will be little +more than nominal and imaginary.</p> + +<p>There is, perhaps, but one set of men in +the whole commonwealth to whom the bounty +either was or could be essentially serviceable. +These were the corn merchants, the exporters +and importers of corn. In years of plenty, +the bounty necessarily occasioned a greater +exportation than would otherwise have taken +place; and by hindering the plenty of the one +year from relieving the scarcity of another, it +occasioned in years of scarcity a greater importation +than would otherwise have been necessary. +It increased the business of the corn +merchant in both; and in the years of scarcity, +it not only enabled him to import a greater +quantity, but to sell it for a better price, +and consequently with a greater profit, than +he could otherwise have made, if the plenty<span class='pagenum'><a name="Page_210" id="Page_210">[Pg 210]</a></span> +of one year had not been more or less hindered +from relieving the scarcity of another. It +is in this set of men, accordingly, that I have +observed the greatest zeal for the continuance +or renewal of the bounty.</p> + +<p>Our country gentlemen, when they imposed +the high duties upon the exportation of +corn, which in times of moderate plenty amount +to a prohibition, and when they established +the bounty, seem to have imitated the +conduct of our manufacturers. By the one +institution, they secured to themselves the monopoly +of the home market, and by the other +they endeavoured to prevent that market from +ever being overstocked with their commodity. +By both they endeavoured to raise its real value, +in the same manner as our manufacturers had, +by the like institutions, raised the real value +of many different sorts of manufactured goods. +They did not, perhaps, attend to the great and +essential difference which nature has established +between corn and almost every other sort +of goods. When, either by the monopoly of +the home market, or by a bounty upon exportation, +you enable our woollen or linen manufacturers +to sell their goods for somewhat a +better price than they otherwise could get for +them, you raise, not only the nominal, but the +real price of those goods; you render them +equivalent to a greater quantity of labour and +subsistence; you increase not only the nominal, +but the real profit, the real wealth and +revenue of these manufacturers; and you enable +them, either to live better themselves, or +to employ a greater quantity of labour in those +particular manufactures. You really encourage +those manufactures, and direct towards +them a greater quantity of the industry of the +country than what would properly go to them +of its own accord. But when, by the like institutions, +you raise the nominal or money +price of corn, you do not raise its real value; +you do not increase the real wealth, the real +revenue, either of our farmers or country gentlemen; +you do not encourage the growth of +corn, because you do not enable them to maintain +and employ more labourers in raising it. +The nature of things has stamped upon corn +a real value, which cannot be altered by +merely altering its money price. No bounty +upon exportation, no monopoly of the home +market, can raise that value. The freest competition +cannot lower it. Through the world +in general, that value is equal to the quantity +of labour which it can maintain, and in every +particular place it is equal to the quantity of +labour which it can maintain in the way, +whether liberal, moderate, or scanty, in which +labour is commonly maintained in that place. +Woollen or linen cloth are not the regulating +commodities by which the real value of all +other commodities must be finally measured +and determined; corn is. The real value of +every other commodity is finally measured and +determined by the proportion which its average +money price bears to the average money +price of corn. The real value of corn does +not vary with those variations in its average +money price, which sometimes occur from one +century to another; it is the real value of silver +which varies with them.</p> + +<p>Bounties upon the exportation of any home-made +commodity are liable, first, to that general +objection which may be made to all the +different expedients of the mercantile system; +the objection of forcing some part of the industry +of the country into a channel less advantageous +than that in which it would run +of its own accord; and, secondly, to the particular +objection of forcing it not only into a +channel that is less advantageous, but into +one that is actually disadvantageous; the trade +which cannot be carried on but by means of a +bounty being necessarily a losing trade. The +bounty upon the exportation of corn is liable +to this further objection, that it can in no respect +promote the raising of that particular +commodity of which it was meant to encourage +the production. When our country gentlemen, +therefore, demanded the establishment +of the bounty, though they acted in imitation +of our merchants and manufacturers, they did +not act with that complete comprehension of +their own interest, which commonly directs +the conduct of those two other orders of people. +They loaded the public revenue with a +very considerable expense: they imposed a +very heavy tax upon the whole body of the +people; but they did not, in any sensible degree, +increase the real value of their own commodity; +and by lowering somewhat the real +value of silver, they discouraged, in some degree, +the general industry of the country, and, +instead of advancing, retarded more or less +the improvement of their own lands, which +necessarily depend upon the general industry +of the country.</p> + +<p>To encourage the production of any commodity, +a bounty upon production, one should +imagine, would have a more direct operation +than one upon exportation. It would, besides, +impose only one tax upon the people, +that which they must contribute in order to +pay the bounty. Instead of raising, it would +tend to lower the price of the commodity in +the home market; and thereby, instead of imposing +a second tax upon the people, it might, +at least in part, repay them for what they had +contributed to the first. Bounties upon production, +however, have been very rarely granted. +The prejudices established by the commercial +system have taught us to believe, that +national wealth arises more immediately from +exportation than from production. It has +been more favoured, accordingly, as the more +immediate means of bringing money into the +country. Bounties upon production, it has +been said too, have been found by experience +more liable to frauds than those upon exportation. +How far this is true, I know not.<span class='pagenum'><a name="Page_211" id="Page_211">[Pg 211]</a></span> +That bounties upon exportation have been +abused, to many fraudulent purposes, is very +well known. But it is not the interest of +merchants and manufacturers, the great inventors +of all these expedients, that the home +market should be overstocked with their goods; +an event which a bounty upon production +might sometimes occasion. A bounty upon +exportation, by enabling them to send abroad +their surplus part, and to keep up the price of +what remains in the home market, effectually +prevents this. Of all the expedients of the +mercantile system, accordingly, it is the one +of which they are the fondest. I have known +the different undertakers of some particular +works agree privately among themselves to +give a bounty out of their own pockets upon +the exportation of a certain proportion of +goods which they dealt in. This expedient +succeeded so well, that it more than doubled +the price of their goods in the home market, +notwithstanding a very considerable increase +in the produce. The operation of the bounty +upon corn must have been wonderfully different, +if it has lowered the money price of +that commodity.</p> + +<p>Something like a bounty upon production, +however, has been granted upon some particular +occasions. The tonnage bounties given +to the white herring and whale fisheries may, +perhaps, be considered as somewhat of this +nature. They tend directly, it may be supposed, +to render the goods cheaper in the +home market than they otherwise would be. +In other respects, their effects, it must be +acknowledged, are the same as those of bounties +upon exportation. By means of them, +a part of the capital of the country is employed +in bringing goods to market, of which +the price does not repay the cost, together +with the ordinary profits of stock.</p> + +<p>But though the tonnage bounties to those +fisheries do not contribute to the opulence of +the nation, it may, perhaps, be thought that +they contribute to its defence, by augmenting +the number of its sailors and shipping. This, +it may be alleged, may sometimes be done +by means of such bounties, at a much smaller +expense than by keeping up a great standing +navy, if I may use such an expression, in the +same way as a standing army.</p> + +<p>Notwithstanding these favourable allegations, +however, the following considerations +dispose me to believe, that in granting at least +one of these bounties, the legislature has been +very grossly imposed upon:</p> + +<p><i>First.</i> The herring-buss bounty seems too +large.</p> + +<p>From the commencement of the winter fishing +1771, to the end of the winter fishing +1781, the tonnage bounty upon the herring-buss +fishery has been at thirty shillings the +ton. During these eleven years, the whole +number of barrels caught by the herring-buss +fishery of Scotland amounted to 378,347. +The herrings caught and cured at sea are +called sea-sticks. In order to render them +what are called merchantable herrings, it is +necessary to repack them with an additional +quantity of salt; and in this case, it is reckoned, +that three barrels of sea-sticks are usually +repacked into two barrels of merchantable +herrings. The number of barrels of merchantable +herrings, therefore, caught during +these eleven years, will amount only, according +to this account, to 252,231¼. During these eleven +years, the tonnage bounties paid amounted +to L.155,463 : 11s. or 8s. 2¼d. upon every +barrel of sea-sticks, and to 12s. 3¾d. upon +every barrel of merchantable herrings.</p> + +<p>The salt with which these herrings are cured +is sometimes Scotch, and sometimes foreign +salt; both which are delivered, free of all excise +duty, to the fish-curers. The excise duty +upon Scotch salt is at present 1s. 6d., that +upon foreign salt 10s. the bushel. A barrel +of herrings is supposed to require about one +bushel and one-fourth of a bushel foreign +salt. Two bushels are the supposed average +of Scotch salt. If the herrings are entered +for exportation, no part of this duty is paid +up; if entered for home consumption, whether +the herrings were cured with foreign or +with Scotch salt, only one shilling the barrel +is paid up. It was the old Scotch duty upon +a bushel of salt, the quantity which, at a low +estimation, had been supposed necessary for +curing a barrel of herrings. In Scotland, foreign +salt is very little used for any other purpose +but the curing of fish. But from the +5th April 1771 to the 5th April 1782, the +quantity of foreign salt imported amounted to +936,974 bushels, at eighty-four pounds the +bushel; the quantity of Scotch salt delivered +from the works to the fish-curers, to no more +than 168,226, at fifty-six pounds the bushel +only. It would appear, therefore, that it is +principally foreign salt that is used in the fisheries. +Upon every barrel of herrings exported, +there is, besides, a bounty of 2s. 8d. and more +than two-thirds of the buss-caught herrings +are exported. Put all these things together, +and you will find that, during these eleven +years, every barrel of buss-caught herrings, +cured with Scotch salt, when exported, has +cost government 17s. 11¾d.; and, when entered +for home consumption, 14s. 3¾d.; and +that every barrel cured with foreign salt, when +exported, has cost government L.1 : 7 : 5¾d.; +and, when entered for home consumption, +L.1 : 3 : 9¾d. The price of a barrel of good +merchantable herrings runs from seventeen +and eighteen to four and five-and-twenty shillings; +about a guinea at an average.<a name="FNanchor_39_39" id="FNanchor_39_39"></a><a href="#Footnote_39_39" class="fnanchor">[39]</a></p> + +<p><i>Secondly</i>, The bounty to the white-herring +fishery is a tonnage bounty, and is proportioned +to the burden of the ship, not to her diligence +or success in the fishery; and it has, I<span class='pagenum'><a name="Page_212" id="Page_212">[Pg 212]</a></span> +am afraid, been too common for the vessels to +fit out for the sole purpose of catching, not +the fish, but the bounty. In the year 1759, +when the bounty was at fifty shillings the ton, +the whole buss fishery of Scotland brought +in only four barrels of sea-sticks. In that +year, each barrel of sea-sticks cost government, +in bounties alone, L.113 : 15s.; each +barrel of merchantable herrings L.159 : 7 : 6.</p> + +<p><i>Thirdly</i>, The mode of fishing, for which +this tonnage bounty in the white herring fishery +has been given (by busses or decked vessels +from twenty to eighty tons burden), seems +not so well adapted to the situation of Scotland, +as to that of Holland, from the practice +of which country it appears to have been borrowed. +Holland lies at a great distance from +the seas to which herrings are known principally +to resort, and can, therefore, carry on +that fishery only in decked vessels, which can +carry water and provisions sufficient for a +voyage to a distant sea; but the Hebrides, or +Western Islands, the islands of Shetland, and +the northern and north-western coasts of Scotland, +the countries in whose neighborhood +the herring fishery is principally carried on, +are everywhere intersected by arms of the sea, +which run up a considerable way into the +land, and which, in the language of the country, +are called sea-lochs. It is to these sea-lochs +that the herrings principally resort during +the seasons in which they visit those seas; +for the visits of this, and, I am assured, of +many other sorts of fish, are not quite regular +and constant. A boat-fishery, therefore, seems +to be the mode of fishing best adapted to the +peculiar situation of Scotland, the fishers carrying +the herrings on shore as fast as they are +taken, to be either cured or consumed fresh. +But the great encouragement which a bounty +of 30s. the ton gives to the buss-fishery, is +necessarily a discouragement to the boat-fishery, +which, having no such bounty, cannot +bring its cured fish to market upon the same +terms as the buss-fishery. The boat-fishery, +accordingly, which, before the establishment +of the buss-bounty, was very considerable, and +is said to have employed a number of seamen, +not inferior to what the buss-fishery employs +at present, is now gone almost entirely to +decay. Of the former extent, however, of this +now ruined and abandoned fishery, I must +acknowledge that I cannot pretend to speak +with much precision. As no bounty was paid +upon the outfit of the boat-fishery, no account +was taken of it by the officers of the customs +or salt duties.</p> + +<p><i>Fourthly</i>, In many parts of Scotland, during +certain seasons of the year, herrings make +no inconsiderable part of the food of the common +people. A bounty which tended to lower +their price in the home market, might contribute +a good deal to the relief of a great number +of our fellow-subjects, whose circumstances +are by no means affluent. But the herring-buss +bounty contributes to no such good purpose. +It has ruined the boat-fishery, which is +by far the best adapted for the supply of the +home market; and the additional bounty of +2s. 8d. the barrel upon exportation, carries +the greater part, more than two-thirds, of the +produce of the buss-fishery abroad. Between +thirty and forty years ago, before the establishment +of the buss-bounty, 16s. the barrel, I +have been assured, was the common price of +white herrings. Between ten and fifteen years +ago, before the boat-fishery was entirely ruined, +the price was said to have run from seventeen +to twenty shillings the barrel. For these +last five years, it has, at an average, been at +twenty-five shillings the barrel. This high +price, however, may have been owing to the +real scarcity of the herrings upon the coast of +Scotland. I must observe, too, that the cask +or barrel, which is usually sold with the herrings, +and of which the price is included in +all the foregoing prices, has, since the commencement +of the American war, risen to +about double its former price, or from about +3s. to about 6s. I must likewise observe, +that the accounts I have received of the prices +of former times, have been by no means quite +uniform and consistent, and an old man of +great accuracy and experience has assured me, +that, more than fifty years ago, a guinea was +the usual price of a barrel of good merchantable +herrings; and this, I imagine, may still +be looked upon as the average price. All accounts, +however, I think, agree that the price +has not been lowered in the home market in +consequence of the buss-bounty.</p> + +<p>When the undertakers of fisheries, after +such liberal bounties have been bestowed upon +them, continue to sell their commodity at the +same, or even at a higher price than they were +accustomed to do before, it might be expected +that their profits should be very great; and it +is not improbable that those of some individuals +may have been so. In general, however, +I have every reason to believe they have +been quite otherwise. The usual effect of +such bounties is, to encourage rash undertakers +to adventure in a business which they +do not understand; and what they lose by +their own negligence and ignorance, more +than compensates all that they can gain by +the utmost liberality of government. In 1750, +by the same act which first gave the bounty +of 30s. the ton for the encouragement of the +white herring fishery (the 23d Geo. II. chap. +24), a joint stock company was erected, with +a capital of L.500,000, to which the subscribers +(over and above all other encouragements, +the tonnage bounty just now mentioned, the +the exportation bounty of 2s. 8d. the barrel, the +delivery of both British and foreign salt duty +free) were, during the space of fourteen years, +for every hundred pounds which they subscribed +and paid into the stock of the society, +entitled to three pounds a-year, to be paid by<span class='pagenum'><a name="Page_213" id="Page_213">[Pg 213]</a></span> +the receiver-general of the customs in equal +half-yearly payments. Besides this great company, +the residence of whose governor and +directors was to be in London, it was declared +lawful to erect different fishing chambers in +all the different out-ports of the kingdom, +provided a sum not less than L.10,000 was +subscribed into the capital of each, to be managed +at its own risk, and for its own profit +and loss. The same annuity, and the same +encouragements of all kinds, were given to +the trade of those inferior chambers as to that +of the great company. The subscription of +the great company was soon filled up, and several +different fishing chambers were erected +in the different out-ports of the kingdom. In +spite of all these encouragements, almost all +those different companies, both great and +small, lost either the whole or the greater +part of their capitals; scarce a vestige now +remains of any of them, and the white-herring +fishery is now entirely, or almost entirely, carried +on by private adventurers.</p> + +<p>If any particular manufacture was necessary, +indeed, for the defence of the society, it +might not always be prudent to depend upon +our neighbours for the supply; and if such +manufacture could not otherwise be supported +at home, it might not be unreasonable that all +the other branches of industry should be taxed +in order to support it. The bounties upon +the exportation of British made sail-cloth, and +British made gunpowder, may, perhaps, both +be vindicated upon this principle.</p> + +<p>But though it can very seldom be reasonable +to tax the industry of the great body of +the people, in order to support that of some +particular class of manufacturers; yet, in the +wantonness of great prosperity, when the public +enjoys a greater revenue than it knows +well what to do with, to give such bounties +to favourite manufactures, may, perhaps, be +as natural as to incur any other idle expense. +In public, as well as in private expenses, great +wealth, may, perhaps, frequently be admitted +as an apology for great folly. But there must +surely be something more than ordinary absurdity +in continuing such profusion in times +of general difficulty and distress.</p> + +<p>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 a bounty. The bounty, for example, +upon refined sugar exported, may be considered +as a drawback of the duties upon the +brown and Muscovado sugars, from which it +is made; the bounty upon wrought silk exported, +a drawback of the duties upon raw and +thrown silk imported; the bounty upon gunpowder +exported, a drawback of the duties +upon brimstone and saltpetre imported. In +the language of the customs, those allowances +only are called drawbacks which are given +upon goods exported in the same form in which +they are imported. When that form has been +so altered by manufacture of any kind as to +come under a new denomination, they are +called bounties.</p> + +<p>Premiums given by the public to artists +and manufacturers, who excel in their particular +occupations, are not liable to the same +objections as bounties. By encouraging extraordinary +dexterity and ingenuity, they serve +to keep up the emulation of the workmen actually +employed in those respective occupations, +and are not considerable enough to +turn towards any one of them a greater share +of the capital of the country than what would +go to it of its own accord. Their tendency +is not to overturn the natural balance of employments, +but to render the work which is +done in each as perfect and complete as possible. +The expense of premiums, besides, is +very trifling, that of bounties very great. The +bounty upon corn alone has sometimes cost +the public, in one year, more than L.300,000.</p> + +<p>Bounties are sometimes called premiums, +as drawbacks are sometimes called bounties. +But we must, in all cases, attend to the nature +of the thing, without paying any regard +to the word.</p> + + +<h4><i>Digression concerning the Corn Trade and +Corn Laws.</i></h4> + +<p>I cannot conclude this chapter concerning +bounties, without observing, that the praises +which have been bestowed upon the law which +establishes the bounty upon the exportation of +corn, and upon that system of regulations +which is connected with it, are altogether unmerited. +A particular examination of the nature +of the corn trade, and of the principal +British laws which relate to it, will sufficiently +demonstrate the truth of this assertion. The +great importance of this subject must justify +the length of the digression.</p> + +<p>The trade of the corn merchant is composed +of four different branches, which, though they +may sometimes be all carried on by the same +person, are, in their own nature, four separate +and distinct trades. These are, first, the +trade of the inland dealer; secondly, that of +the merchant-importer for home consumption; +thirdly, that of the merchant-exporter of home +produce for foreign consumption; and, fourthly, +that of the merchant-carrier, or of the importer +of corn, in order to export it again.</p> + +<p>I. The interest of the inland dealer, and +that of the great body of the people, how opposite +soever they may at first appear, are, +even in years of the greatest scarcity, exactly +the same. It is his interest to raise the price +of his corn as high as the real scarcity of the +season requires, and it can never be his interest +to raise it higher. By raising the price, +he discourages the consumption, and puts +every body more or less, but particularly the +inferior ranks of people, upon thrift and good<span class='pagenum'><a name="Page_214" id="Page_214">[Pg 214]</a></span> +management. If, by raising it too high, he +discourages the consumption so much that the +supply of the season is likely to go beyond the +consumption of the season, and to last for some +time after the next crop begins to come in, he +runs the hazard, not only of losing a considerable +part of his corn by natural causes, but +of being obliged to sell what remains of it +for much less than what he might have had +for it several months before. If, by not raising +the price high enough, he discourages +the consumption so little, that the supply of +the season is likely to fall short of the consumption +of the season, he not only loses a +part of the profit which he might otherwise +have made, but he exposes the people to suffer +before the end of the season, instead of +the hardships of a dearth, the dreadful horrors +of a famine. It is the interest of the people +that their daily, weekly, and monthly consumption +should be proportioned as exactly +as possible to the supply of the season. The +interest of the inland corn dealer is the same. +By supplying them, as nearly as he can judge, +in this proportion, he is likely to sell all his +corn for the highest price, and with the greatest +profit; and his knowledge of the state of +the crop, and of his daily, weekly, and monthly +sales, enables him to judge, with more or less +accuracy, how far they really are supplied in +this manner. Without intending the interest +of the people, he is necessarily led, by a regard +to his own interest, to treat them, even +in years of scarcity, pretty much in the same +manner as the prudent master of a vessel is +sometimes obliged to treat his crew. When +he foresees that provisions are likely to run +short, he puts them upon short allowance. +Though from excess of caution he should +sometimes do this without any real necessity, +yet all the inconveniencies which his crew can +thereby suffer are inconsiderable, in comparison +of the danger, misery, and ruin, to which +they might sometimes be exposed by a less +provident conduct. Though, from excess of +avarice, in the same manner, the inland corn +merchant should sometimes raise the price of +his corn somewhat higher than the scarcity of +the season requires, yet all the inconveniencies +which the people can suffer from this conduct, +which effectually secures them from a famine +in the end of the season, are inconsiderable, +in comparison of what they might have been +exposed to by a more liberal way of dealing +in the beginning of it. The corn merchant +himself is likely to suffer the most by this excess +of avarice; not only from the indignation +which it generally excites against him, +but, though he should escape the effects of +this indignation, from the quantity of corn +which it necessarily leaves upon his hands in +the end of the season, and which, if the next +season happens to prove favourable, he must +always sell for a much lower price than he +might otherwise have had.</p> + +<p>Were it possible, indeed, for one great company +of merchants to possess themselves of +the whole crop of an extensive country, it +might perhaps be their interest to deal with +it, as the Dutch are said to do with the spiceries +of the Moluccas, to destroy or throw +away a considerable part of it, in order to +keep up the price of the rest. But it is scarce +possible, even by the violence of law, to establish +such an extensive monopoly with regard +to corn; and wherever the law leaves the trade +free, it is of all commodities the least liable to +be engrossed or monopolized by the force of +a few large capitals, which buy up the greater +part of it. Not only its value far exceeds what +the capitals of a few private men are capable +of purchasing; but, supposing they were capable +of purchasing it, the manner in which +it is produced renders this purchase altogether +impracticable. As, in every civilized +country, it is the commodity of which the annual +consumption is the greatest; so a greater +quantity of industry is annually employed in +producing corn than in producing any other +commodity. When it first comes from the +ground, too, it is necessarily divided among a +greater number of owners than any other commodity; +and these owners can never be collected +into one place, like a number of independent +manufacturers, but are necessarily +scattered through all the different corners of +the country. These first owners either immediately +supply the consumers in their own +neighbourhood, or they supply other inland +dealers, who supply those consumers. The +inland dealers in corn, therefore, including +both the farmer and the baker, are necessarily +more numerous than the dealers in any other +commodity; and their dispersed situation renders +it altogether impossible for them to enter +into any general combination. If, in a year +of scarcity, therefore, any of them should find +that he had a good deal more corn upon hand +than, at the current price, he could hope to +dispose of before the end of the season, he +would never think of keeping up this price to +his own loss, and to the sole benefit of his +rivals and competitors, but would immediately +lower it, in order to get rid of his corn +before the new crop began to come in. The +same motives, the same interests, which would +thus regulate the conduct of any one dealer, +would regulate that of every other, and oblige +them all in general to sell their corn at +the price which, according to the best of their +judgment, was most suitable to the scarcity or +plenty of the season.</p> + +<p>Whoever examines, with attention, the history +of the dearths and famines which have +afflicted any part of Europe during either the +course of the present or that of the two preceding +centuries, of several of which we have +pretty exact accounts, will find, I believe, that +a dearth never has arisen from any combination +among the inland dealers in corn, nor<span class='pagenum'><a name="Page_215" id="Page_215">[Pg 215]</a></span> +from any other cause but a real scarcity, occasioned +sometimes, perhaps, and in some particular +places, by the waste of war, but in by +far the greatest number of cases by the fault +of the seasons; and that a famine has never +arisen from any other cause but the violence +of government attempting, by improper means, +to remedy the inconveniencies of a dearth.</p> + +<p>In an extensive corn country, between all +the different parts of which there is a free +commerce and communication, the scarcity +occasioned by the most unfavourable seasons +can never be so great as to produce a famine; +and the scantiest crop, if managed with frugality +and economy, will maintain, through +the year, the same number of people that are +commonly fed in a more affluent manner by +one of moderate plenty. The seasons most +unfavourable to the crop are those of excessive +drought or excessive rain. But as corn +grows equally upon high and low lands, upon +grounds that are disposed to be too wet, and +upon those that are disposed to be too dry, +either the drought or the rain, which is hurtful +to one part of the country, is favourable +to another; and though, both in the wet and +in the dry season, the crop is a good deal less +than in one more properly tempered; yet, in +both, what is lost in one part of the country +is in some measure compensated by what is +gained in the other. In rice countries, where +the crop not only requires a very moist soil, +but where, in a certain period of its growing, +it must be laid under water, the effects of a +drought are much more dismal. Even in such +countries, however, the drought is, perhaps, +scarce ever so universal as necessarily to occasion +a famine, if the government would allow +a free trade. The drought in Bengal, a few +years ago, might probably have occasioned a +very great dearth. Some improper regulations, +some injudicious restraints, imposed by the +servants of the East India Company upon the +rice trade, contributed, perhaps, to turn that +dearth into a famine.</p> + +<p>When the government, in order to remedy +the inconveniencies of a dearth, orders all the +dealers to sell their corn at what it supposes a +reasonable price, it either hinders them from +bringing it to market, which may sometimes +produce a famine even in the beginning of the +season; or, if they bring it thither, it enables +the people, and thereby encourages them to +consume it so fast as must necessarily produce +a famine before the end of the season. The +unlimited, unrestrained freedom of the corn +trade, as it is the only effectual preventive of +the miseries of a famine, so it is the best palliative +of the inconveniencies of a dearth; for +the inconveniencies of a real scarcity cannot +be remedied; they can only be palliated. No +trade deserves more the full protection of the +law, and no trade requires it so much; because +no trade is so much exposed to popular +odium.</p> + +<p>In years of scarcity, the inferior ranks of +people impute their distress to the avarice of +the corn merchant, who becomes the object of +their hatred and indignation. Instead of making +profit upon such occasions, therefore, he +is often in danger of being utterly ruined, +and of having his magazines plundered and +destroyed by their violence. It is in years of +scarcity, however, when prices are high, that +the corn merchant expects to make his principal +profit. He is generally in contract with some +farmers to furnish him, for a certain number +of years, with a certain quantity of corn, at a +certain price. This contract price is settled +according to what is supposed to be the moderate +and reasonable, that is, the ordinary or +average price, which, before the late years of +scarcity, was commonly about 28s. for the +quarter of wheat, and for that of other grain +in proportion. In years of scarcity, therefore, +the corn merchant buys a great part of his corn +for the ordinary price, and sells it for a much +higher. That this extraordinary profit, however, +is no more them sufficient to put his +trade upon a fair level with other trades, and +to compensate the many losses which be sustains +upon other occasions, both from the perishable +nature of the commodity itself, and +from the frequent and unforeseen fluctuations +of its price, seems evident enough, from this +single circumstance, that great fortunes are as +seldom made in this as in any other trade. +The popular odium, however, which attends +it in years of scarcity, the only years in which +it can be very profitable, renders people of character +and fortune averse to enter into it. It +is abandoned to an inferior set of dealers; +and millers, bakers, meal-men, and meal-factors, +together with a number of wretched hucksters, +arr almost the only middle people that, +in the home market, come between the grower +and the consumer.</p> + +<p>The ancient policy of Europe, instead of +discountenancing this popular odium against +a trade so beneficial to the public, seems, on +the contrary, to have authorised and encouraged +it.</p> + +<p>By the 5th and 6th of Edward VI. cap. 14, +it was enacted, that whoever should buy any +corn or grain, with intent to sell it again, +should be reputed an unlawful engrosser, and +should, for the first fault, suffer two months +imprisonment, and forfeit the value of the +corn; for the second, suffer six months imprisonment, +and forfeit double the value; and, +for the third, be set in the pillory, suffer imprisonment +during the king's pleasure, and +forfeit all his goods and chattels. The ancient +policy of most other parts of Europe was no +better than that of England.</p> + +<p>Our ancestors seem to have imagined, that +the people would buy their corn cheaper of +the farmer than of the corn merchant, who, +they were afraid, would require, over and +above, the price which he paid to the farmer<span class='pagenum'><a name="Page_216" id="Page_216">[Pg 216]</a></span>, +an exorbitant profit to himself. They endeavoured, +therefore, to annihilate his trade altogether. +They even endeavoured to hinder, as +much as possible, any middle man of any +kind from coming in between the grower and +the consumer; and this was the meaning of +the many restraints which they imposed upon +the trade of those whom they called kidders, +or carriers of corn; a trade which nobody was +allowed to exercise without a licence, ascertaining +his qualifications as a man of probity and +fair dealing. The authority of three justices of +the peace was, by the statute of Edward VI. +necessary in order to grant this licence. But +even this restraint was afterwards thought insufficient, +and, by a statute of Elizabeth, the +privilege of granting it was confined to the +quarter-sessions.</p> + +<p>The ancient policy of Europe endeavoured, +in this manner, to regulate agriculture, the +great trade of the country, by maxims quite +different from those which it established with +regard to manufactures, the great trade of the +towns. By leaving a farmer no other customers +but either the consumers or their immediate +factors, the kidders and carriers of corn, +it endeavoured to force him to exercise the +trade, not only of a farmer, but of a corn merchant, +or corn retailer. On the contrary, it, +in many cases, prohibited the manufacturer +from exercising the trade of a shopkeeper, or +from selling his own goods by retail. It +meant, by the one law, to promote the general +interest of the country, or to render corn +cheap, without, perhaps, its being well understood +how this was to be done. By the other, +it meant to promote that of a particular order +of men, the shopkeepers, who would be so +much undersold by the manufacturer, it was +supposed, that their trade would be ruined, +if he was allowed to retail at all.</p> + +<p>The manufacturer, however, though he had +been allowed to keep a shop, and to sell his +own goods by retail, could not have undersold +the common shopkeeper. Whatever part of +his capital he might have placed in his shop, +he must have withdrawn it from his manufacture. +In order to carry on his business on a +level with that of other people, as he must +have had the profit of a manufacturer on the +one part, so he must have had that of a shopkeeper +upon the other. Let us suppose, for +example, that in the particular town where he +lived, ten per cent. was the ordinary profit +both of manufacturing and shopkeeping stock; +he must in this case have charged upon every +piece of his own goods, which he sold in his +shop, a profit of twenty per cent. When he +carried them from his workhouse to his shop, +he must have valued them at the price for +which he could have sold them to a dealer or +shopkeeper, who would have bought them by +wholesale. If he valued them lower, he lost +a part of the profit of his manufacturing capital. +When, again, he sold them from his +shop, unless he got the same price at which a +shopkeeper would have sold them, he lost a +part of the profit of his shopkeeping capital. +Though he might appear, therefore, to make +a double profit upon the same piece of goods, +yet, as these goods made successively a part +of two distinct capitals, he made but a single +profit upon the whole capital employed about +them; and if he made less than his profit, he +was a loser, and did not employ his whole capital +with the same advantage as the greater +of part of his neighbours.</p> + +<p>What the manufacturer was prohibited to +do, the farmer was in some measure enjoined +to do; to divide his capital between two different +employments; to keep one part of it +in his granaries and stack-yard, for supplying +the occasional demands of the market, and to +employ the other in the cultivation of his +land. But as he could not afford to employ +the latter for less than the ordinary profits of +farming stock, so he could as little afford to +employ the former for less than the ordinary +profits of mercantile stock. Whether the stock +which really carried on the business of a corn +merchant belonged to the person who was +called a farmer, or to the person who was called +a corn merchant, an equal profit was in +both cases requisite, in order to indemnify its +owner for employing it in this manner, in +order to put his business on a level with other +trades, and in order to hinder him from having +an interest to change it as soon as possible +for some other. The farmer, therefore, +who was thus forced to exercise the trade of +a corn merchant, could not afford to sell his +corn cheaper than any other corn merchant +would have been obliged to do in the case +a free competition.</p> + +<p>The dealer who can employ his whole stock +in one single branch of business, has an advantage +of the same kind with the workman +who can employ his whole labour in one single +operation. As the latter acquires a dexterity +which enables him, with the same two hands, +to perform a much greater quantity of work, +so the former acquires so easy and ready a +method of transacting his business, of buying +and disposing of his goods, that, with the same +capital he can transact a much greater quantity +of business. As the one can commonly +afford his work a good deal cheaper, so the +other can commonly afford his goods somewhat +cheaper, than if his stock and attention +were both employed about a greater variety of +objects. The greater part of manufacturers +could not afford to retail their own goods so +cheap as a vigilant and active shopkeeper, +whose sole business it was to buy them by +wholesale and to retail them again. The +greater part of farmers could still less afford +to retail their own corn, to supply the inhabitants +of a town, at perhaps four or five miles +distance from the greater part of them, so +cheap as a vigilant and active corn merchant,<span class='pagenum'><a name="Page_217" id="Page_217">[Pg 217]</a></span> +whose sole business it was to purchase corn by +wholesale, to collect it into a great magazine, +and to retail it again.</p> + +<p>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 corn +merchant, endeavoured to hinder it from going +on so fast. Both laws were evident violations +of natural liberty, and therefore unjust; +and they were both, too, as impolitic as +they were unjust. It is the interest of every +society, that things of this kind should never +either be forced or obstructed. The man who +employs either his labour or his stock in a +greater variety of ways than his situation renders +necessary, can never hurt his neighbour +by underselling him. He may hurt himself, +and he generally does so. Jack-of-all-trades +will never be rich, says the proverb. But the +law ought always to trust people with the care +of their own interest, as in their local situations +they must generally be able to judge better +of it than the legislature can do. The law, +however, which obliged the farmer to exercise +the trade of a corn merchant was by far the +most pernicious of the two.</p> + +<p>It obstructed not only that division in the +employment of stock which is so advantageous +to every society, but it obstructed likewise the +improvement and cultivation of the land. By +obliging the farmer to carry on two trades instead +of one, it forced him to divide his capital +into two parts, of which one only could be +employed in cultivation. But if he had been +at liberty to sell his whole crop to a corn merchant +as fast as he could thresh it out, his +whole capital might have returned immediately +to the land, and have been employed in +buying more cattle, and hiring more servants, +in order to improve and cultivate it better. +But by being obliged to sell his corn by retail, +he was obliged to keep a great part of +his capital in his granaries and stack-yard +through the year, and could not therefore cultivate +so well as with the same capital he might +otherwise have done. This law, therefore, +necessarily obstructed the improvement of the +land, and, instead of tending to render corn +cheaper, must have tended to render it scarcer, +and therefore dearer, than it would otherwise +have been.</p> + +<p>After the business of the farmer, that of the +corn merchant is in reality the trade which, if +properly protected and encouraged, would +contribute the most to the raising of corn. It +would support the trade of the farmer, in the +same manner as the trade of the wholesale +dealer supports that of the manufacturer.</p> + +<p>The wholesale dealer, by affording a ready +market to the manufacturer, by taking his goods +off his hand as fast as he can make them, and +by sometimes even advancing their price to him +before he has made them, enables him to keep +his whole capital, and sometimes even more +than his whole capital, constantly employed in +manufacturing, and consequently to manufacture +a much greater quantity of goods than +if he was obliged to dispose of them himself +to the immediate consumers, or even to the +retailers. As the capital of the wholesale +merchant, too, is generally sufficient to replace +that of many manufacturers, this intercourse +between him and them interests the owner of +a large capital to support the owners of a great +number of small ones, and to assist them in +those losses and misfortunes which might otherwise +prove ruinous to them.</p> + +<p>An intercourse of the same kind universally +established between the farmers and the +corn merchants, would be attended with effects +equally beneficial to the farmers. They would +be enabled to keep their whole capitals, and +even more than their whole capitals constantly +employed in cultivation. In case of any of +those accidents to which no trade is more liable +than theirs, they would find in their ordinary +customer, the wealthy corn merchant, +a person who had both an interest to support +them, and the ability to do it; and they would +not, as at present, be entirely dependent upon +the forbearance of their landlord, or the mercy +of his steward. Were it possible, as perhaps +it is not, to establish this intercourse universally, +and all at once; were it possible to turn +all at once the whole farming stock of the +kingdom to its proper business, the cultivation +of land, withdrawing it from every other employment +into which any part of it may be at +present diverted; and were it possible, in order +to support and assist, upon occasion, the +operations of this great stock, to provide all +at once another stock almost equally great; it +is not, perhaps, very easy to imagine how great, +how extensive, and how sudden, would be the +improvement which this change of circumstances +would alone produce upon the whole +face of the country.</p> + +<p>The statute of Edward VI. therefore, by +prohibiting as much as possible any middle +man from coming in between the grower and +the consumer, endeavoured to annihilate a +trade, of which the free exercise is not only +the best palliative of the inconveniencies of a +dearth, but the best preventive of that calamity; +after the trade of the farmer, no trade +contributing so much to the growing of corn +as that of the corn merchant.</p> + +<p>The rigour of this law was afterwards softened +by several subsequent statutes, which +successively permitted the engrossing of corn +when the prices of wheat should not exceed +20s. and 24s. 32s. and 40s. the quarter. At +last, by the 15th of Charles II. c. 7, the engrossing +or buying of corn, in order to sell it +again, as long as the price of wheat did not +exceed 48s. the quarter, and that of other +grain in proportion, was declared lawful to all<span class='pagenum'><a name="Page_218" id="Page_218">[Pg 218]</a></span> +persons not being forestallers, that is, not selling +again in the same market within three +months. All the freedom which the trade of +the inland corn dealer has ever yet enjoyed +was bestowed upon it by this statute. The +statute of the twelfth of the present king, +which repeals almost all the other ancient +laws against engrossers and forestallers, does +not repeal the restrictions of this particular +statute, which therefore still continue in force.</p> + +<p>This statute, however, authorises in some +measure two very absurd popular prejudices.</p> + +<p><i>First</i>, It supposes, that when the price of +wheat has risen so high as 48s. the quarter, +and that of other grain in proportion, corn is +likely to be so engrossed as to hurt the people. +But, from what has been already said, it seems +evident enough, that corn can at no price be +so engrossed by the inland dealers as to hurt +the people; and 48s. the quarter, besides, +though it may be considered as a very high +price, yet, in years of scarcity, it is a price +which frequently takes place immediately after +harvest, when scarce any part of the new +crop can be sold off, and when it is impossible +even for ignorance to suppose that any part of +it can be so engrossed as to hurt the people.</p> + +<p><i>Secondly</i>, It supposes that there is a certain +price at which corn is likely to be forestalled, +that is, bought up in order to be sold again +soon after in the same market, so as to hurt +the people. But if a merchant ever buys up +corn, either going to a particular market, or +in a particular market, in order to sell it +again soon after in the same market, it +must be because he judges that the market +cannot be so liberally supplied through the +whole season as upon that particular occasion, +and that the price, therefore, must +rise. If he judges wrong in this, and if the +price does not rise, he not only loses the whole +profit of the stock which he employs in this +manner, but a part of the stock itself, by the +expense and loss which necessarily attend the +storing and keeping of corn. He hurts himself, +therefore, much more essentially than he +can hurt even the particular people whom he +may hinder from supplying themselves upon +that particular market day, because they may +afterwards supply themselves just as cheap upon +any other market day. If he judges right, +instead of hurting the great body of the people, +he renders them a most important service. +By making them feel the inconveniencies +of a dearth somewhat earlier than they +otherwise might do, he prevents their feeling +them afterwards so severely as they certainly +would do, if the cheapness of price encouraged +them to consume faster than suited the +real scarcity of the season. When the scarcity +is real, the best thing that can be done for +people is, to divide the inconvenience of it as +equally as possible, through all the different +months and weeks and days of the year. The +interest of the corn merchant makes him study +to do this as exactly as he can; and as no +other person can have either the same interest, +or the same knowledge, or the same abilities, +to do it so exactly as he, this most important +operation of commerce ought to be +trusted entirely to him; or, in other words, +the corn trade, so far at least as concerns the +supply of the home market, ought to be left +perfectly free.</p> + +<p>The popular fear of engrossing and forestalling +may be compared to the popular terrors +and suspicions of witchcraft. The unfortunate +wretches accused of this latter crime +were not more innocent of the misfortunes +imputed to them, than those who have been accused +of the former. The law which put an end +to all prosecutions against witchcraft, which put +it out of any man's power to gratify his own +malice by accusing his neighbour of that imaginary +crime, seems effectually to have put +an end to those fears and suspicions, by taking +away the great cause which encouraged +and supported them. The law which would +restore entire freedom to the inland trade of +corn, would probably prove as effectual to put +an end to the popular fears of engrossing and +forestalling.</p> + +<p>The 15th of Charles II. c. 7, however, with +all its imperfections, has, perhaps, contributed +more, both to the plentiful supply of the home +market, and to the increase of tillage, than +any other law in the statute book. It is from +this law that the inland corn trade has derived +all the liberty and protection which it +has ever yet enjoyed; and both the supply of +the home market and the interest of tillage +are much more effectually promoted by the +inland, than either by the importation or exportation +trade.</p> + +<p>The proportion of the average quantity of +all sorts of grain imported into Great Britain +to that of all sorts of grain consumed, it has +been computed by the author of the Tracts +upon the Corn Trade, does not exceed that of +one to five hundred and seventy. For supplying +the home market, therefore, the importance +of the inland trade must be to that +of the importation trade as five hundred and +seventy to one.</p> + +<p>The average quantity of all sorts of grain +exported from Great Britain does not, according +to the same author, exceed the one-and-thirtieth +part of the annual produce. For the +encouragement of tillage, therefore, by providing +a market for the home produce, the +importance of the inland trade must be to that +of the exportation trade as thirty to one.</p> + +<p>I have no great faith in political arithmetic, +and I mean not to warrant the exactness of +either of these computations. I mention them +only in order to show of how much less consequence, +in the opinion of the most judicious +and experienced persons, the foreign trade of +corn is than the home trade. The great cheapness +of corn in the years immediately preced<span class='pagenum'><a name="Page_219" id="Page_219">[Pg 219]</a></span>ing +the establishment of the bounty may, perhaps +with reason, be ascribed in some measure +to the operation of this statute of Charles II. +which had been enacted about five-and-twenty +years before, and which had, therefore, full +time to produce its effect.</p> + +<p>A very few words will sufficiently explain +all that I have to say concerning the other +three branches of the corn trade.</p> + +<p>II. The trade of the merchant-importer of +foreign corn for home consumption, evidently +contributes to the immediate supply of the +home market, and must so far be immediately +beneficial to the great body of the people. It +tends, indeed, to lower somewhat the average +money price of corn, but not to diminish its +real value, or the quantity of labour which it +is capable of maintaining. If importation was +at all times free, our farmers and country gentlemen +would probably, one year with another, +get less money for their corn than they do at +present, when importation is at most times in +effect prohibited; but the money which they +got would be of more value, would buy more +goods of all other kinds, and would employ +more labour. Their real wealth, their real revenue, +therefore, would be the same as at present, +though it might be expressed by a smaller +quantity of silver, and they would neither be +disabled nor discouraged from cultivating corn +as much as they do at present. On the contrary, +as the rise in the real value of silver, in consequence +of lowering the money price of corn, +lowers somewhat the money price of all other +commodities, it gives the industry of the country +where it takes place some advantage in all +foreign markets, and thereby tends to encourage +and increase that industry. But the extent +of the home market for corn must be in +proportion to the general industry of the country +where it grows, or to the number of those +who produce something else, and, therefore, +have something else, or, what comes to the +same thing, the price of something else, to +give in exchange for corn. But in every country, +the home market, as it is the nearest and +most convenient, so is it likewise the greatest +and most important market for corn. That +rise in the real value of silver, therefore, which +is the effect of lowering the average money +price of corn, tends to enlarge the greatest and +most important market for corn, and thereby +to encourage, instead of discouraging its +growth.</p> + +<p>By the 22nd of Charles II. c. 13, the importation +of wheat, whenever the price in the +home market did not exceed 53s. 4d. the +quarter, was subjected to a duty of 16s. the +quarter; and to a duty of 8s. whenever the +price did not exceed L.4. The former of these +two prices has, for more than a century past, +taken place only in times of very great scarcity; +and the latter has, so far as I know, not +taken place at all. Yet, till wheat had risen +above this latter price, it was, by this statute, +subjected to a very high duty; and, till it +had risen above the former, to a duty which +amounted to a prohibition. The importation +of other sorts of grain was restrained at rates +and by duties, in proportion to the value of +the grain, almost equally high.<a name="FNanchor_40_40" id="FNanchor_40_40"></a><a href="#Footnote_40_40" class="fnanchor">[40]</a> Subsequent +laws still further increased those duties.</p> + +<p>The distress which, in years of scarcity, the +strict execution of those laws might have +brought upon the people, would probably +have been very great; but, upon such occasions, +its execution was generally suspended +by temporary statutes, which permitted, for a +limited time, the importation of foreign corn. +The necessity of these temporary statutes sufficiently +demonstrates the impropriety of this +general one.</p> + +<p>These restraints upon importation, though +prior to the establishment of the bounty, were +dictated by the same spirit, by the same principles, +which afterwards enacted that regulation. +How hurtful soever in themselves, these, +or some other restraints upon importation, became +necessary in consequence of that regulation. +If, when wheat was either below 48s. +the quarter, or not much above it, foreign +corn could have been imported, either duty +free, or upon paying only a small duty, it +might have been exported again, with the benefit +of the bounty, to the great loss of the +public revenue, and to the entire perversion +of the institution, of which the object was to +extend the market for the home growth, not +that for the growth of foreign countries.</p> + +<p>III. The trade of the merchant-exporter of +corn for foreign consumption, certainly does +not contribute directly to the plentiful supply +of the home market. It does so, however, indirectly. +From whatever source this supply +may be usually drawn, whether from home +growth, or from foreign importation, unless +more corn is either usually grown, or usually +imported into the country, than what is usually<span class='pagenum'><a name="Page_220" id="Page_220">[Pg 220]</a></span> +consumed in it, the supply of the home market +can never be very plentiful. But unless +the surplus can, in all ordinary cases, be exported, +the growers will be careful never to +grow more, and the importers never to import +more, than what the bare consumption +of the home market requires. That market +will very seldom be overstocked; but it will +generally be understocked; the people, whose +business it is to supply it, being generally +afraid lest their goods should be left upon +their hands. The prohibition of exportation +limits the improvement and cultivation of the +country to what the supply of its own inhabitants +require. The freedom of exportation +enables it to extend cultivation for the supply +of foreign nations.</p> + +<p>By the 12th of Charles II. c. 4, the exportation +of corn was permitted whenever the price +of wheat did not exceed 40s. the quarter, and +that of other grain in proportion. By the +15th of the same prince, this liberty was extended +till the price of wheat exceeded 48s. +the quarter, and by the 22d, to all higher +prices. A poundage, indeed, was to be paid +to the king upon such exportation; but all +grain was rated so low in the book of rates, +that this poundage amounted only, upon +wheat to 1s. upon oats to 4d. and upon all other +grain to 6d. the quarter. By the 1st of William +and Mary, the act which established this +bounty, this small duty was virtually taken off +whenever the price of wheat did not exceed +48s. the quarter; and by the 11th and 12th +of William III. c. 20, it was expressly taken +off at all higher prices.</p> + +<p>The trade of the merchant-exporter was, in +this manner, not only encouraged by a bounty, +but rendered much more free than that of +the inland dealer. By the last of these statutes, +corn could be engrossed at any price for +exportation; but it could not be engrossed for +inland sale, except when the price did not +exceed 48s. the quarter. The interest of the +inland dealer, however, it has already been +shown, can never be opposite to that of the +great body of the people. That of the merchant-exporter +may, and in fact sometimes is. +If, while his own country labours under a +dearth, a neighbouring country should be afflicted +with a famine, it might be his interest +to carry corn to the latter country, in such +quantities as might very much aggravate the +calamities of the dearth. The plentiful supply +of the home market was not the direct object +of those statutes; but, under the pretence of +encouraging agriculture, to raise the money +price of corn as high as possible, and thereby +to occasion, as much as possible, a constant +dearth in the home market. By the discouragement +of importation, the supply of that +market, even in times of great scarcity, was +confined to the home growth; and by the encouragement +of exportation, when the price +was so high as 48s. the quarter, that market +was not, even in times of considerable scarcity, +allowed to enjoy the whole of that growth. +The temporary laws, prohibiting, for a limited +time, the exportation of corn, and taking off, +for a limited time, the duties upon its importation, +expedients to which Great Britain has +been obliged so frequently to have recourse, +sufficiently demonstrate the impropriety of +her general system. Had that system been +good, she would not so frequently have been +reduced to the necessity of departing from it.</p> + +<p>Were all nations to follow the liberal system +of free exportation and free importation, +the different states into which a great continent +was divided, would so far resemble the +different provinces of a great empire. As +among the different provinces of a great empire, +the freedom of the inland trade appears, +both from reason and experience, not only the +best palliative of a dearth, but the most effectual +preventive of a famine; so would the +freedom of the exportation and importation +trade be among the different states into which +a great continent was divided. The larger +the continent, the easier the communication +through all the different parts of it, both by +land and by water, the less would any one particular +part of it ever he exposed to either of +these calamities, the scarcity of any one country +being more likely to be relieved by the +plenty of some other. But very few countries +have entirely adopted this liberal system. The +freedom of the corn trade is almost everywhere +more or less restrained, and in many +countries is confined by such absurd regulations, +as frequently aggravate the unavoidable +misfortune of a dearth into the dreadful calamity +of a famine. The demand of such +countries for corn may frequently become so +great and so urgent, that a small state in their +neighbourhood, which happened at the same +time to be labouring under some degree of +dearth, could not venture to supply them without +exposing itself to the like dreadful calamity. +The very bad policy of one country +may thus render it, in some measure, dangerous +and imprudent to establish what would +otherwise be the best policy in another. The +unlimited freedom of exportation, however, +would be much less dangerous in great states, +in which the growth being much greater, the +supply could seldom be much affected by any +quantity of corn that was likely to be exported. +In a Swiss canton, or in some of the little states +in Italy, it may, perhaps, sometimes be necessary +to restrain the exportation of corn. In +such great countries as France or England, it +scarce ever can. To hinder, besides, the farmer +from sending his goods at all times to +the best market, is evidently to sacrifice the +ordinary laws of justice to an idea of public +utility, to a sort of reasons of state; an act of +legislative authority which ought to be exercised +only, which can be pardoned only, in +cases of the most urgent necessity. The price<span class='pagenum'><a name="Page_221" id="Page_221">[Pg 221]</a></span> +at which exportation of corn is prohibited, if +it is ever to be prohibited, ought always to be +a very high price.</p> + +<p>The laws concerning corn may everywhere +be compared to the laws concerning religion. +The people feel themselves so much interested +in what relates either to their subsistence in +this life, or to their happiness in a life to come, +that government must yield to their prejudices, +and, in order to preserve the public +tranquillity, establish that system which they +approve of. It is upon this account, perhaps, +that we so seldom find a reasonable system established +with regard to either of those two capital +objects.</p> + +<p>IV. The trade of the merchant-carrier, or +of the importer of foreign corn, in order to +export it again, contributes to the plentiful +supply of the home market. It is not, indeed, +the direct purpose of his trade to sell his corn +there; but he will generally be willing to do +so, and even for a good deal less money than +he might expect in a foreign market; because +he saves in this manner the expense of loading +and unloading, of freight and insurance. +The inhabitants of the country which, by +means of the carrying trade, becomes the magazine +and storehouse for the supply of other +countries, can very seldom be in want themselves. +Though the carrying trade must thus +contribute to reduce the average money price +of corn in the home market, it would not +thereby lower its real value; it would only +raise somewhat the real value of silver.</p> + +<p>The carrying trade was in effect prohibited +in Great Britain, upon all ordinary occasions, +by the high duties upon the importation of foreign +corn, of the greater part of which there +was no drawback; and upon extraordinary +occasions, when a scarcity made it necessary +to suspend those duties by temporary statutes, +exportation was always prohibited. By this +system of laws, therefore, the carrying trade +was in effect prohibited.</p> + +<p>That system of laws, therefore, which is +connected with the establishment of the bounty, +seems to deserve no part of the praise +which has been bestowed upon it. The improvement +and prosperity of Great Britain, +which has been so often ascribed to those +laws, may very easily be accounted for by +other causes. That security which the laws +in Great Britain give to every man, that he +shall enjoy the fruits of his own labour, is +alone sufficient to make any country flourish, +notwithstanding these and twenty other absurd +regulations of commerce; and this security +was perfected by the Revolution, much +about the same time that the bounty was established. +The natural effort of every individual +to better his own condition, when suffered +to exert itself with freedom and security, +is so powerful a principle, that it is alone, +and without any assistance, not only capable +of carrying on the society to wealth and prosperity, +but of surmounting a hundred impertinent +obstructions, with which the folly of +human laws too often encumbers its operations: +though the effect of those obstructions +is always, more or less, either to encroach +upon its freedom, or to diminish its security. +In Great Britain industry is perfectly secure; +and though it is far from being perfectly free, +it is as free or freer than in any other part of +Europe.</p> + +<p>Though the period of the greatest prosperity +and improvement of Great Britain has +been posterior to that system of laws which is +connected with the bounty, we must not upon +that account, impute it to those laws. It +has been posterior likewise to the national +debt; but the national debt has most assuredly +not been the cause of it.</p> + +<p>Though the system of laws which is connected +with the bounty, has exactly the same +tendency with the practice of Spain and Portugal, +to lower somewhat the value of the +precious metals in the country where it takes +place; yet Great Britain is certainly one of +the richest countries in Europe, while Spain +and Portugal are perhaps amongst the most +beggarly. This difference of situation, however, +may easily be accounted for from two +different causes. First, the tax in Spain, the +prohibition in Portugal of exporting gold and +silver, and the vigilant police which watches +over the execution of those laws, must, in two +very poor countries, which between them import +annually upwards of six millions sterling, +operate not only more directly, but +much more forcibly, in reducing the value of +those metals there, than the corn laws can do +in Great Britain. And, secondly, this bad +policy is not in these countries counterbalanced +by the general liberty and security of +the people. Industry is there neither free nor +secure; and the civil and ecclesiastical governments +of both Spain and Portugal are +such as would alone be sufficient to perpetuate +their present state of poverty, even +though their regulations of commerce were +as wise as the greatest part of them are absurd +and foolish.</p> + +<p>The 13th of the present king, c. 43, seems +to have established a new system with regard +to the corn laws, in many respects better than +the ancient one, but in one or two respects +perhaps not quite so good.</p> + +<p>By this statute, the high duties upon importation +for home consumption are taken off, +so soon as the price of middling wheat rises +to 48s. the quarter; that of middling rye, +pease, or beans, to 32s.; that of barley to +24s.; and that of oats to 16s.; and instead of +them, a small duty is imposed of only 6d. +upon the quarter of wheat, and upon that of +other grain in proportion. With regard to +all those different sorts of grain, but particu<span class='pagenum'><a name="Page_222" id="Page_222">[Pg 222]</a></span>larly +with regard to wheat, the home market +is thus opened to foreign supplies, at prices +considerably lower than before.</p> + +<p>By the same statute, the old bounty of 5s. +upon the exportation of wheat, ceases so soon +as the price rises to 44s. the quarter, instead +of 48s. the price at which it ceased before; +that of 2s. 6d. upon the exportation of barley, +ceases so soon as the price rises to 22s. +instead of 24s. the price at which it ceased before; +that of 2s. 6d. upon the exportation of +oatmeal, ceases so soon as the price rises to +14s. instead of 15s. the price at which it ceased +before. The bounty upon rye is reduced +from 3s. 6d. to 3s. and it ceases so soon as +the price rises to 28s. instead of 32s. the price +at which it ceased before. If bounties are as +improper as I have endeavoured to prove +them to be, the sooner they cease, and the +lower they are, so much the better.</p> + +<p>The same statute permits, at the lowest +prices, the importation of corn in order to be +exported again, duty free, provided it is in the +mean time lodged in a warehouse under the +joint locks of the king and the importer. This +liberty, indeed, extends to no more than +twenty-five of the different parts of Great +Britain. They are, however, the principal +ones; and there may not, perhaps, be warehouses +proper for this purpose in the greater +part of the others.</p> + +<p>So far this law seems evidently an improvement +upon the ancient system.</p> + +<p>But by the same law, a bounty of 2s. the +quarter is given for the exportation of oats, +whenever the price does not exceed fourteen +shillings. No bounty had ever been given +before for the exportation of this grain, no +more than for that of pease or beans.</p> + +<p>By the same law, too, the exportation of +wheat is prohibited so soon as the price rises +to forty-four shillings the quarter; that of +rye so soon as it rises to twenty-eight shillings; +that of barley so soon as it rises to +twenty-two shillings; and that of oats so soon +as they rise to fourteen shillings. Those several +prices seem all of them a good deal too +low; and there seems to be an impropriety, +besides, in prohibiting exportation altogether +at those precise prices at which that bounty, +which was given in order to force it, is withdrawn. +The bounty ought certainly either to +have been withdrawn at a much lower price, +or exportation ought to have been allowed at +a much higher.</p> + +<p>So far, therefore, this law seems to be inferior +to the ancient system. With all its +imperfections, however, we may perhaps say +of it what was said of the laws of Solon, that +though not the best in itself, it is the best +which the interest, prejudices, and temper of +the times, would admit of. It may perhaps +in due time prepare the way for a better.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VI.</h3> + +<h4>OF TREATIES OF COMMERCE.</h4> + + +<p>When a nation binds itself by treaty, either +to permit the entry of certain goods from one +foreign country which it prohibits from all +others, or to exempt the goods of one country +from duties to which it subjects those of +all others, the country, or at least the merchants +and manufacturers of the country, +whose commerce is so favoured, must necessarily +derive great advantage from the treaty. +Those merchants and manufacturers enjoy a +sort of monopoly in the country which is so +indulgent to them. That country becomes a +market, both more extensive and more advantageous +for their goods: more extensive, because +the goods of other nations being either +excluded or subjected to heavier duties, it +takes off a greater quantity of theirs; more +advantageous, because the merchants of the +favoured country, enjoying a sort of monopoly +there, will often sell their goods for a better +price than if exposed to the free competition +of all other nations.</p> + +<p>Such treaties, however, though they may be +advantageous to the merchants and manufacturers +of the favoured, are necessarily disadvantageous +to those of the favouring country. +A monopoly is thus granted against them to +a foreign nation; and they must frequently +buy the foreign goods they have occasion for, +dearer than if the free competition of other +nations was admitted. That part of its own +produce with which such a nation purchases +foreign goods, must consequently be sold +cheaper; because, when two things are exchanged +for one another, the cheapness of the +one is a necessary consequence, or rather is +the same thing, with the dearness of the other. +The exchangeable value of its annual produce, +therefore, is likely to be diminished by +every such treaty. This diminution, however, +can scarce amount to any positive loss, +but only to a lessening of the gain which it +might otherwise make. Though it sells its +goods cheaper than it otherwise might do, it +will not probably sell them for less than they +cost; nor, as in the case of bounties, for a +price which will not replace the capital employed +in bringing them to market, together +with the ordinary profits of stock. The trade +could not go on long if it did. Even the favouring +country, therefore, may still gain by +the trade, though less than if there was a free +competition.</p> + +<p>Some treaties of commerce, however, have +been supposed advantageous, upon principles +very different from these; and a commercial +country has sometimes granted a monopoly of<span class='pagenum'><a name="Page_223" id="Page_223">[Pg 223]</a></span> +this kind, against itself, to certain goods of a +foreign nation, because it expected, that in +the whole commerce between them, it would +annually sell more than it would buy, and +that a balance in gold and silver would be annually +returned to it. It is upon this principle +that the treaty of commerce between +England and Portugal, concluded in 1703 by +Mr Methuen, has been so much commended. +The following is a literal translation of that +treaty, which consists of three articles only.</p> + +<div class="listquot"> +<h4>ART. I.</h4> + +<p>His sacred royal majesty of Portugal promises, +both in his own name and that of his +successors, to admit for ever hereafter, into +Portugal, the woollen cloths, and the rest of +the woollen manufactures of the British, as +was accustomed, till they were prohibited by +the law; nevertheless upon this condition:</p> + + +<h4>ART. II.</h4> + +<p>That is to say, that her sacred royal majesty +of Great Britain shall, in her own name, and +that of her successors, be obliged, for ever +hereafter, to admit the wines of the growth of +Portugal into Britain; so that at no time, +whether there shall be peace or war between +the kingdoms of Britain and France, +any thing more shall be demanded for these +wines by the name of custom or duty, or by +whatsoever other title, directly or indirectly, +whether they shall be imported into Great +Britain in pipes or hogsheads, or other casks, +than what shall be demanded for the like +quantity or measure of French wine, deducting +or abating a third part of the custom or +duty. But if, at any time, this deduction or +abatement of customs, which is to be made as +aforesaid, shall in any manner be attempted +and prejudiced, it shall be just and lawful for +his sacred royal majesty of Portugal, again to +prohibit the woollen cloths, and the rest of +the British woollen manufactures.</p> + + +<h4>ART. III.</h4> + +<p>The most excellent lords the plenipotentiaries +promise and take upon themselves, that +their above named masters shall ratify this +treaty; and within the space of two months +the ratification shall be exchanged.</p> +</div> + +<p>By this treaty, the crown of Portugal becomes +bound to admit the English woollens +upon the same footing as before the prohibition; +that is, not to raise the duties which +had been paid before that time. But it does +not become bound to admit them upon any +better terms than those of any other nation, +of France or Holland, for example. The +crown of Great Britain, on the contrary, becomes +bound to admit the wines of Portugal, +upon paying only two-thirds of the duty which +is paid for those of France, the wines most +likely to come into competition with them. +So far this treaty, therefore, is evidently advantageous +to Portugal, and disadvantageous +to Great Britain.</p> + +<p>It has been celebrated, however, as a masterpiece +of the commercial policy of England. +Portugal receives annually from the Brazils +a greater quantity of gold than can be employed +in its domestic commerce, whether in +the shape of coin or of plate. The surplus is +too valuable to be allowed to lie idle and +locked up in coffers; and as it can find no +advantageous market at home, it must, notwithstanding +any prohibition, be sent abroad, +and exchanged for something for which there +is a more advantageous market at home. A +large share of it comes annually to England, +in return either for English goods, or for +those of other European nations that receive +their returns through England. Mr Barretti +was informed, that the weekly packet-boat +from Lisbon brings, one week with another, +more than L.50,000 in gold to England. The +sum had probably been exaggerated. It +would amount to more than L.2,600,000 a-year, +which is more than the Brazils are supposed +to afford.</p> + +<p>Our merchants were, some years ago, out +of humour with the crown of Portugal. Some +privileges which had been granted them, not +by treaty, but by the free grace of that +crown, at the solicitation, indeed, it is probable, +and in return for much greater favours, +defence and protection from the crown of +Great Britain, had been either infringed or +revoked. The people, therefore, usually most +interested in celebrating the Portugal trade, +were then rather disposed to represent it as +less advantageous than it had commonly been +imagined. The far greater part, almost the +whole, they pretended, of this annual importation +of gold, was not on account of Great +Britain, but of other European nations; the +fruits and wines of Portugal annually imported +into Great Britain nearly compensating +the value of the British goods sent thither.</p> + +<p>Let us suppose, however, that the whole +was on account of Great Britain, and that it +amounted to a still greater sum than Mr Barretti +seems to imagine; this trade would not, +upon that account, be more advantageous than +any other, in which, for the same value sent +out, we received an equal value of consumable +goods in return.</p> + +<p>It is but a very small part of this importation +which, it can be supposed, is employed +as an annual addition, either to the plate or +to the coin of the kingdom. The rest must +all be sent abroad, and exchanged for con<span class='pagenum'><a name="Page_224" id="Page_224">[Pg 224]</a></span>sumable +goods of some kind or other. But +if those consumable goods were purchased directly +with the produce of English industry, +it would be more for the advantage of England, +than first to purchase with that produce +the gold of Portugal, and afterwards to purchase +with that gold those consumable goods. +A direct foreign trade of consumption is always +more advantageous than a round-about +one; and to bring the same value of foreign +goods to the home market, requires a much +smaller capital in the one way than in the +other. If a smaller share of its industry, +therefore, had been employed in producing +goods fit for the Portugal market, and a +greater in producing those fit for the other +markets, where those consumable goods for +which there is a demand in Great Britain are +to be had, it would have been more for the +advantage of England. To procure both the +gold which it wants for its own use, and the +consumable goods, would, in this way, employ +a much smaller capital than at present. +There would be a spare capital, therefore, to +be employed for other purposes, in exciting +an additional quantity of industry, and in +raising a greater annual produce.</p> + +<p>Though Britain were entirely excluded from +the Portugal trade, it could find very little +difficulty in procuring all the annual supplies +of gold which it wants, either for the purposes +of plate, or of coin, or of foreign trade. Gold, +like every other commodity, is always somewhere +or another to be got for its value by +those who have that value to give for it. The +annual surplus of gold in Portugal, besides, +would still be sent abroad, and though not +carried away by Great Britain, would be carried +away by some other nation, which would +be glad to sell it again for its price, in the +same manner as Great Britain does at present. +In buying gold of Portugal, indeed, we buy +it at the first hand; whereas, in buying it of +any other nation, except Spain, we should buy +it at the second, and might pay somewhat +dearer. This difference, however, would surely +be too insignificant to deserve the public attention.</p> + +<p>Almost all our gold, it is said, comes from +Portugal. With other nations, the balance of +trade is either against us, or not much in our +favour. But we should remember, that the +more gold we import from one country, the +less we must necessarily import from all others. +The effectual demand for gold, like that for +every other commodity, is in every country limited +to a certain quantity. If nine-tenths +of this quantity are imported from one country, +there remains a tenth only to be imported +from all others. The more gold, besides, that +is annually imported from some particular +countries, over and above what is requisite +for plate and for coin, the more must necessarily +be exported to some others: and the +more that most insignificant object of modern +policy, the balance of trade, appears to be in +our favour with some particular countries, the +more it must necessarily appear to be against +us with many others.</p> + +<p>It was upon this silly notion, however, that +England could not subsist without the Portugal +trade, that, towards the end of the late +war, France and Spain, without pretending +either offence or provocation, required the +king of Portugal to exclude all British ships +from his ports, and, for the security of this +exclusion, to receive into them French or Spanish +garrisons. Had the king of Portugal +submitted to those ignominious terms which +his brother-in-law the king of Spain proposed +to him, Britain would have been freed from +a much greater inconveniency than the loss of +the Portugal trade, the burden of supporting +a very weak ally, so unprovided of every thing +for his own defence, that the whole power of +England, had it been directed to that single +purpose, could scarce, perhaps, have defended +him for another campaign. The loss of the +Portugal trade would, no doubt, have occasioned +a considerable embarrassment to the +merchants at that time engaged in it, who +might not, perhaps, have found out, for a year +or two, any other equally advantageous method +of employing their capitals; and in this +would probably have consisted all the inconveniency +which England could have suffered +from this notable piece of commercial policy.</p> + +<p>The great annual importation of gold and +silver is neither for the purpose of plate nor of +coin, but of foreign trade. A round-about +foreign trade of consumption can be carried +on more advantageously by means of these +metals than of almost any other goods. As +they are the universal instruments of commerce, +they are more readily received in return +for all commodities than any other goods; and, +on account of their small bulk and great value, +it costs less to transport them backward +and forward from one place to another than +almost any other sort of merchandize, and they +lose less of their value by being so transported. +Of all the commodities, therefore, which are +bought in one foreign country, for no other +purpose but to be sold or exchanged again for +some other goods in another, there are none +so convenient as gold and silver. In facilitating +all the different round-about foreign +trades of consumption which are carried on in +Great Britain, consists the principal advantage +of the Portugal trade; and though it is +not a capital advantage, it is, no doubt, a considerable +one.</p> + +<p>That any annual addition which, it can reasonably +be supposed, is made either to the +plate or to the coin of the kingdom, could require +but a very small annual importation of +gold and silver, seems evident enough; and<span class='pagenum'><a name="Page_225" id="Page_225">[Pg 225]</a></span> +though we had no direct trade with Portugal, +this small quantity could always, somewhere +or another, be very easily got.</p> + +<p>Though the goldsmiths trade be very considerable +in Great Britain, the far greater part +of the new plate which they annually sell, is +made from other old plate melted down; so +that the addition annually made to the whole +plate of the kingdom cannot be very great, and +could require but a very small annual importation.</p> + +<p>It is the same case with the coin. Nobody +imagines, I believe, that even the greater part +of the annual coinage, amounting, for ten +years together, before the late reformation of +the gold coin, to upwards of L.800,000 a-year +in gold, was an annual addition to the money +before current in the kingdom. In a country +where the expense of the coinage is defrayed +by the government, the value of the coin, even +when it contains its full standard weight of +gold and silver, can never be much greater +than that of an equal quantity of those metals +uncoined, because it requires only the trouble +of going to the mint, and the delay, perhaps, +of a few weeks, to procure for any quantity of +uncoined gold and silver an equal quantity of +those metals in coin; but in every country +the greater part of the current coin is almost +always more or less worn, or otherwise degenerated +from its standard. In Great Britain +it was, before the late reformation, a good +deal so, the gold being more than two per +cent., and the silver more than eight per cent. +below its standard weight. But if forty-four +guineas and a-half, containing their full standard +weight, a pound weight of gold, could +purchase very little more than a pound weight +of uncoined gold; forty-four guineas and a-half, +wanting a part of their weight, could +not purchase a pound weight, and something +was to be added, in order to make up the deficiency. +The current price of gold bullion +at market, therefore, instead of being the same +with the mint price, or L.46 : 14 : 6, was +then about L.47 : 14s., and sometimes about +L.48. When the greater part of the coin, however, +was in this degenerate condition, forty-four +guineas and a-half, fresh from the mint, +would purchase no more goods in the market +than any other ordinary guineas; because, +when they came into the coffers of the merchant, +being confounded with other money, +they could not afterwards be distinguished +without more trouble than the difference was +worth. Like other guineas, they were worth +no more than L.46 : 14 : 6. If thrown into +the melting pot, however, they produced, without +any sensible loss, a pound weight of +standard gold, which could be sold at any +time for between L.47 : 14s. and L.48, either +in gold or silver, as fit for all the purposes of +coin as that which had been melted down. +There was an evident profit, therefore, in +melting down new-coined money; and it was +done so instantaneously, that no precaution +of government could prevent it. The operations +of the mint were, upon this account, +somewhat like the web of Penelopé; the work +that was done in the day was undone in the +night. The mint was employed, not so much +in making daily additions to the coin, as in +replacing the very best part of it, which was +daily melted down.</p> + +<p>Were the private people who carry their +gold and silver to the mint to pay themselves +for the coinage, it would add to the value of +those metals, in the same manner as the fashion +does to that of plate. Coined gold and +silver would be more valuable than uncoined. +The seignorage, if it was not exorbitant, +would add to the bullion the whole value of +the duty; because, the government having +everywhere the exclusive privilege of coining, +no coin can come to market cheaper than they +think proper to afford it. If the duty was +exorbitant, indeed, that is, if it was very much +above the real value of the labour and expense +requisite for coinage, false coiners, both +at home and abroad, might be encouraged, by +the great difference between the value of bullion +and that of coin, to pour in so great a +quantity of counterfeit money as might reduce +the value of the government money. In +France, however, though the seignorage is +eight per cent., no sensible inconveniency of +this kind is found to arise from it. The dangers +to which a false coiner is everywhere exposed, +if he lives in the country of which he +counterfeits the coin, and to which his agents +or correspondents are exposed, if he lives in +a foreign country, are by far too great to be +incurred for the sake of a profit of six or seven +per cent.</p> + +<p>The seignorage in France raises the value +of the coin higher than in proportion to the +quantity of pure gold which it contains. Thus, +by the edict of January 1726, the<a name="FNanchor_41_41" id="FNanchor_41_41"></a><a href="#Footnote_41_41" class="fnanchor">[41]</a> mint price +of fine gold of twenty-four carats was fixed at +seven hundred and forty livres nine sous and +one denier one-eleventh the mark of eight Paris +ounces. The gold coin of France, making +an allowance for the remedy of the mint, contains +twenty-one carats and three-fourths of +fine gold, and two carats one-fourth of alloy. +The mark of standard gold, therefore, is worth +no more than about six hundred and seventy-one +livres ten deniers. But in France this +mark of standard gold is coined into thirty +louis d'ors of twenty-four livres each, or into +seven hundred and twenty livres. The coinage, +therefore, increases the value of a mark +of standard gold bullion, by the difference between +six hundred and seventy-one livres ten +deniers and seven hundred and twenty livres, +or by forty-eight livres nineteen sous and two +deniers.</p> +<p><span class='pagenum'><a name="Page_226" id="Page_226">[Pg 226]</a></span></p> +<p>A seignorage will, in many cases, take +away altogether, and will in all cases diminish, +the profit of melting down the new coin. +This profit always arises from the difference +between the quantity of bullion which the +common currency ought to contain and that +which it actually does contain. If this difference +is less than the seignorage, there will +be loss instead of profit. If it is equal to the +seignorage, there will be neither profit nor +loss. If it is greater than the seignorage, there +will, indeed, be some profit, but less than if +there was no seignorage. If, before the late +reformation of the gold coin, for example, +there had been a seignorage of five per cent. +upon the coinage, there would have been a +loss of three per cent. upon the melting down +of the gold coin. If the seignorage had been +two per cent, there would have been neither +profit nor loss. If the seignorage had been +one per cent., there would have been a profit +but of one per cent. only, instead of two per +cent. Wherever money is received by tale, +therefore, and not by weight, a seignorage is +the most effectual preventive of the melting +down of the coin, and, for the same reason, of its +exportation. It is the best and heaviest pieces +that are commonly either melted down or exported, +because it is upon such that the largest +profits are made.</p> + +<p>The law for the encouragement of the coinage, +by rendering it duty-free, was first enacted +during the reign of Charles II. for a +limited time, and afterwards continued, by +different prolongations, till 1769, when it was +rendered perpetual. The bank of England, +in order to replenish their coffers with money, +are frequently obliged to carry bullion to the +mint; and it was more for their interest, they +probably imagined, that the coinage should +be at the expense of the government than at +their own. It was probably out of complaisance +to this great company, that the government +agreed to render this law perpetual. +Should the custom of weighing gold, however, +come to be disused, as it is very likely +to be on account of its inconveniency; should +the gold coin of England come to be received +by tale, as it was before the late recoinage, +this great company may, perhaps, find that +they have, upon this, as upon some other occasions, +mistaken their own interest not a +little.</p> + +<p>Before the late recoinage, when the gold +currency of England was two per cent. below +its standard weight, as there was no seignorage, +it was two per cent. below the value of +that quantity of standard gold bullion which +it ought to have contained. When this great +company, therefore, bought gold bullion in +order to have it coined, they were obliged to +pay for it two per cent. more than it was +worth after the coinage. But if there had +been a seignorage of two per cent upon the +coinage, the common gold currency, though +two per cent. below its standard weight, +would, notwithstanding, have been equal in +value to the quantity of standard gold which +it ought to have contained; the value of the +fashion compensating in this case the diminuation +of the weight. They would, indeed, +have had the seignorage to pay, which being +two per cent., their loss upon the whole transaction +would have been two per cent., exactly +the same, but no greater than it actually +was.</p> + +<p>If the seignorage had been five per cent., +and the gold currency only two per cent. below +its standard weight, the bank would, in +this case, have gained three per cent. upon the +price of the bullion; but as they would have +had a seignorage of five per cent. to pay upon +the coinage, their loss upon the whole transaction +would, in the same manner, have been +exactly two per cent.</p> + +<p>If the seignorage had been only one per +cent., and the gold currency two per cent. +below its standard weight, the bank would, in +this case, have lost only one per cent. upon +the price of the bullion; but as they would +likewise have had a seignorage of one per +cent. to pay, their loss upon the whole transaction +would have been exactly two per cent., +in the same manner as in all other cases.</p> + +<p>If there was a reasonable seignorage, while +at the same time the coin contained its full +standard weight, as it has done very nearly +since the late recoinage, whatever the bank +might lose by the seignorage, they would gain +upon the price of the bullion; and whatever +they might gain upon the price of the bullion, +they would lose by the seignorage. +They would neither lose nor gain, therefore, +upon the whole transaction, and they would, +in this, as in all the foregoing cases, be exactly +in the same situation as if there was no +seignorage.</p> + +<p>When the tax upon a commodity is so moderate +as not to encourage smuggling, the +merchant who deals in it, though he advances, +does not properly pay the tax, as he gets it +back in the price of the commodity. The tax +is finally paid by the last purchaser or consumer. +But money is a commodity, with regard +to which every man is a merchant. Nobody +buys it but in order to sell it again; +and with regard to it there is, in ordinary +cases, no last purchaser or consumer. When +the tax upon coinage, therefore, is so moderate +as not to encourage false coining, though +every body advances the tax, nobody finally +pays it; because every body gets it back in +the advanced value of the coin.</p> + +<p>A moderate seignorage, therefore, would +not, in any case, augment the expense of the +bank, or of any other private persons who +carry their bullion to the mint in order to be +coined; and the want of a moderate seignorage +does not in any case diminish it. Whether +there is or is not a seignorage, if the cur<span class='pagenum'><a name="Page_227" id="Page_227">[Pg 227]</a></span>rency +contains its full standard weight, the +coinage costs nothing to any body; and if it +is short of that weight, the coinage must always +cost the difference between the quantity +of bullion which ought to be contained in it, +and that which actually is contained in it.</p> + +<p>The government, therefore, when it defrays +the expense of coinage, not only incurs some +small expense, but loses some small revenue +which it might get by a proper duty; and +neither the bank, nor any other private persons, +are in the smallest degree benefited by +this useless piece of public generosity.</p> + +<p>The directors of the bank, however, would +probably be unwilling to agree to the imposition +of a seignorage upon the authority of a +speculation which promises them no gain, but +only pretends to insure them from any loss. +In the present state of the gold coin, and as +long as it continues to be received by weight, +they certainly would gain nothing by such a +change. But if the custom of weighing the +gold coin should ever go into disuse, as it is +very likely to do, and if the gold coin should +ever fall into the same state of degradation in +which it was before the late recoinage, the +gain, or more properly the savings, of the +bank, in consequence of the imposition of a +seignorage, would probably be very considerable. +The bank of England is the only company +which sends any considerable quantity +of bullion to the mint, and the burden of the +annual coinage falls entirely, or almost entirely, +upon it. If this annual coinage had +nothing to do but to repair the unavoidable +losses and necessary wear and tear of the +coin, it could seldom exceed fifty thousand, +or at most a hundred thousand pounds. But +when the coin is degraded below its standard +weight, the annual coinage must, besides this, +fill up the large vacuities which exportation +and the melting pot are continually making +in the current coin. It was upon this account, +that during the ten or twelve years +immediately preceding the late reformation of +the gold coin, the annual coinage amounted, +at an average, to more than L.850,000. But +if there had been a seignorage of four or five +per cent. upon the gold coin, it would probably, +even in the state in which things then +were, have put an effectual stop to the business +both of exportation and of the melting +pot. The bank, instead of losing every year +about two and a half per cent. upon the bullion +which was to be coined into more than +eight hundred and fifty thousand pounds, or +incurring an annual loss of more than twenty-one +thousand two hundred and fifty pounds, +would not probably have incurred the tenth +part of that loss.</p> + +<p>The revenue allotted by parliament for defraying +the expense of the coinage is but fourteen +thousand pounds a-year; and the real +expense which it costs the government, or the +fees of the officers of the mint, do not, upon +ordinary occasions, I am assured, exceed the +half of that sum. The saving of so very small +a sum, or even the gaining of another, which +could not well be much larger, are objects +too inconsiderable, it may be thought, to deserve +the serious attention of government. +But the saving of eighteen or twenty thousand +pounds a-year, in case of an event which +is not improbable, which has frequently happened +before, and which in very likely to happen +again, is surely an object which well deserves +the serious attention, even of so great a +company as the bank of England.</p> + +<p>Some of the foregoing reasonings and observations +might, perhaps, have been more +properly placed in those chapters of the first +book which treat of the origin and use of +money, and of the difference between the real +and the nominal price of commodities. But +as the law for the encouragement of coinage +derives its origin from these vulgar prejudices +which have been introduced by the mercantile +system, I judged it more proper to reserve +them for this chapter. Nothing could be more +agreeable to the spirit of that system than a +sort of bounty upon the production of money, +the very thing which, it supposes, constitutes +the wealth of every nation. It is one of its +many admirable expedients for enriching the +country.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VII.</h3> + +<h4>OF COLONIES.</h4> + +<h4>PART I.</h4> + +<h4><i>Of the Motives for Establishing New Colonies.</i></h4> + +<p>The interest which occasioned the first settlement +of the different European colonies in +America and the West Indies, was not altogether +so plain and distinct as that which directed +the establishment of those of ancient +Greece and Rome.</p> + +<p>All the different states of ancient Greece +possessed, each of them, but a very small territory; +and when the people in any one of +them multiplied beyond what that territory +could easily maintain, a part of them were +sent in quest of a new habitation, in some remote +and distant part of the world; the war-like +neighbours who surrounded them on all +sides, rendering it difficult for any of them to +enlarge very much its territory at home. The +colonies of the Dorians resorted chiefly to +Italy and Sicily, which, in the times preceding +the foundation of Rome, were inhabited +by barbarous and uncivilized nations; those +of the Ionians and Æolians, the two other +great tribes of the Greeks, to Asia Minor and<span class='pagenum'><a name="Page_228" id="Page_228">[Pg 228]</a></span> +the islands of the Ægean sea, of which the +inhabitants seem at that time to have been +pretty much in the same state as those of Sicily +and Italy. The mother city, though she +considered the colony as a child, at all times +entitled to great favour and assistance, and +owing in return much gratitude and respect, +yet considered it as an emancipated child, +over whom she pretended to claim no direct +authority or jurisdiction. The colony settled +its own form of government, enacted its own +laws, elected its own magistrates, and made +peace or war with its neighbours, as an independent +state, which had no occasion to wait +for the approbation or consent of the mother +city. Nothing can be more plain and distinct +than the interest which directed every such +establishment.</p> + +<p>Rome, like most of the other ancient republics, +was originally founded upon an agrarian +law, which divided the public territory, +in a certain proportion, among the different +citizens who composed the state. The course +of human affairs, by marriage, by succession, +and by alienation, necessarily deranged this +original division, and frequently threw the +lands which had been allotted for the maintenance +of many different families, into the +possession of a single person. To remedy +this disorder, for such it was supposed to be, +a law was made, restricting the quantity of +land which any citizen could possess to five +hundred <i>jugera</i>, about 350 English acres. +This law, however, though we read of its +having been executed upon one or two occasions, +was either neglected or evaded, and the +inequality of fortunes went on continually increasing. +The greater part of the citizens +had no land; and without it the manners and +customs of those times rendered it difficult for +a freeman to maintain his independency. In +the present times, though a poor man has no +land of his own, if he has a little stock, he +may either farm the lands of another, or he +may carry on some little retail trade; and if +he has no stock, he may find employment +either as a country labourer, or as an artificer. +But among the ancient Romans, the lands of +the rich were all cultivated by slaves, who +wrought under an overseer, who was likewise +a slave; so that a poor freeman had little +chance of being employed either as a farmer +or as a labourer. All trades and manufactures, +too, even the retail trade, were carried +on by the slaves of the rich for the benefit of +their masters, whose wealth, authority, and +protection, made it difficult for a poor freeman +to maintain the competition against them. +The citizens, therefore, who had no land, had +scarce any other means of subsistence but the +bounties of the candidates at the annual elections. +The tribunes, when they had a mind +to animate the people against the rich and the +great, put them in mind of the ancient divisions +of lands, and represented that law which +restricted this sort of private property as the +fundamental law of the republic. The people +became clamorous to get land, and the rich +and the great, we may believe, were perfectly +determined not to give them any part of theirs. +To satisfy them in some measure, therefore, +they frequently proposed to send out a new +colony. But conquering Rome was, even +upon such occasions, under no necessity of +turning out her citizens to seek their fortune, +if one may so, through the wide world, without +knowing where they were to settle. She +assigned them lands generally in the conquered +provinces of Italy, where, being within the +dominions of the republic, they could never +form any independent state, but were at best +but a sort of corporation, which, though it had +the power of enacting bye-laws for its own +government, was at all times subject to the +correction, jurisdiction, and legislative authority +of the mother city. The sending out a +colony of this kind not only gave some satisfaction +to the people, but often established a +sort of garrison, too, in a newly conquered +province, of which the obedience might otherwise +have been doubtful. A Roman colony, +therefore, whether we consider the nature of +the establishment itself, or the motives for +making it, was altogether different from a +Greek one. The words, accordingly, which +in the original languages denote those different +establishments, have very different meanings. +The Latin word (<i>colonia</i>) signifies simply +a plantation. The Greek word (αποικια), +on the contrary, signifies a separation of dwelling, +a departure from home, a going out of +the house. But though the Roman colonies +were, in many respects, different from the +Greek ones, the interest which prompted to +establish them was equally plain and distinct. +Both institutions derived their origin, either +from irresistible necessity, or from clear and +evident utility.</p> + +<p>The establishment of the European colonies +in America and the West Indies arose +from no necessity; and though the utility +which has resulted from them has been very +great, it is not altogether so clear and evident. +It was not understood at their first establishment, +and was not the motive, either of that +establishment, or of the discoveries which gave +occasion to it; and the nature, extent, and limits +of that utility, are not, perhaps, well understood +at this day.</p> + +<p>The Venetians, during the fourteenth and +fifteenth centuries, carried on a very advantageous +commerce in spiceries and other East +India goods, which they distributed among +the other nations of Europe. They purchased +them chiefly in Egypt, at that time under the +dominion of the Mamelukes, the enemies of +the Turks, of whom the Venetians were the +enemies: and this union of interest, assisted by<span class='pagenum'><a name="Page_229" id="Page_229">[Pg 229]</a></span> +the money of Venice, formed such a connexion +as gave the Venetians almost a monopoly of +the trade.</p> + +<p>The great profits of the Venetians tempted +the avidity of the Portuguese. They had been +endeavouring, during the course of the fifteenth +century, to find out by sea a way to +the countries from which the Moors brought +them ivory and gold dust across the desert. +They discovered the Madeiras, the Canaries, +the Azores, the Cape de Verd islands, the +coast of Guinea, that of Loango, Congo, Angola, +and Benguela, and, finally, the Cape of +Good Hope. They had long wished to share +in the profitable traffic of the Venetians, and +this last discovery opened to them a probable +prospect of doing so. In 1497, Vasco de +Gamo sailed from the port of Lisbon with a +fleet of four ships, and, after a navigation of +eleven months, arrived upon the coast of Indostan; +and thus completed a course of discoveries +which had been pursued with great +steadiness, and with very little interruption, +for near a century together.</p> + +<p>Some years before this, while the expectations +of Europe were in suspense about the +projects of the Portuguese, of which the success +appeared yet to be doubtful, a Genoese +pilot formed the yet more daring project of +sailing to the East Indies by the west. The +situation of those countries was at that time +very imperfectly known in Europe. The few +European travellers who had been there, had +magnified the distance, perhaps through simplicity +and ignorance; what was really very +great, appearing almost infinite to those who +could not measure it; or, perhaps, in order +to increase somewhat more the marvellous of +their own adventures in visiting regions so +immensely remote from Europe. The longer +the way was by the east, Columbus very justly +concluded, the shorter it would be by the west. +He proposed, therefore, to take that way, as +both the shortest and the surest, and he had +the good fortune to convince Isabella of Castile +of the probability of his project. He sailed +from the port of Palos in August 1492, near +five years before the expedition of Vasco de +Gamo set out from Portugal; and, after a +voyage of between two and three months, discovered +first some of the small Bahama or +Lucyan islands, and afterwards the great island +of St. Domingo.</p> + +<p>But the countries which Columbus discovered, +either in this or in any of his subsequent +voyages, had no resemblance to those +which he had gone in quest of. Instead of +the wealth, cultivation, and populousness of +China and Indostan, he found, in St. Domingo, +and in all the other parts of the new world +which he ever visited, nothing but a country +quite covered with wood, uncultivated, and +inhabited only by some tribes of naked and +miserable savages. He was not very willing, +however, to believe that they were not the +same with some of the countries described by +Marco Polo, the first European who had visited, +or at least had left behind him any description +of China or the East Indies; and a +very slight resemblance, such as that which he +found between the name of Cibao, a mountain +in St. Domingo, and that of Cipange, +mentioned by Marco Polo, was frequently +sufficient to make him return to this favourite +prepossession, though contrary to the clearest +evidence. In his letters to Ferdinand and Isabella, +he called the countries which he had +discovered the Indies. He entertained no +doubt but that they were the extremity of those +which had been described by Marco Polo, and +that they were not very distant from the +Ganges, or from the countries which had been +conquered by Alexander. Even when at last +convinced that they were different, he still +flattered himself that those rich countries were +at no great distance; and in a subsequent +voyage, accordingly, went in quest of them +along the coast of Terra Firma, and towards +the Isthmus of Darien.</p> + +<p>In consequence of this mistake of Columbus, +the name of the Indies has stuck to those +unfortunate countries ever since; and when +it was at last clearly discovered that the new +were altogether different from the old Indies, +the former were called the West, in contradistinction +to the latter, which were called the +East Indies.</p> + +<p>It was of importance to Columbus, however, +that the countries which he had discovered, +whatever they were, should be represented +to the court of Spain as of very great +consequence; and, in what constitutes the real +riches of every country, the animal and vegetable +productions of the soil, there was at that +time nothing which could well justify such a +representation of them.</p> + +<p>The cori, something between a rat and a +rabbit, and supposed by Mr Buffon to be the +same with the aperea of Brazil, was the largest +viviparous quadruped in St. Domingo. This +species seems never to have been very numerous; +and the dogs and cats of the Spaniards +are said to have long ago almost entirely extirpated +it, as well as some other tribes of a +still smaller size. These, however, together +with a pretty large lizard, called the ivana or +iguana, constituted the principal part of the +animal food which the land afforded.</p> + +<p>The vegetable food of the inhabitants, +though, from their want of industry, not very +abundant, was not altogether so scanty. It +consisted in Indian corn, yams, potatoes, bananas, +&c., plants which were then altogether +unknown in Europe, and which have never +since been very much esteemed in it, or supposed +to yield a sustenance equal to what is +drawn from the common sorts of grain and +pulse, which have been cultivated in this part +of the world time out of mind.</p> + +<p>The cotton plant, indeed, afforded the ma<span class='pagenum'><a name="Page_230" id="Page_230">[Pg 230]</a></span>terial +of a very important manufacture, and +was at that time, to Europeans, undoubtedly +the most valuable of all the vegetable +productions of those islands. But though, +in the end of the fifteenth century, the muslins +and other cotton goods of the East Indies +were much esteemed in every part of Europe, +the cotton manufacture itself was not +cultivated in any part of it. Even this production, +therefore, could not at that time appear +in the eyes of Europeans to be of very +great consequence.</p> + +<p>Finding nothing, either in the animals +or vegetables of the newly discovered countries +which could justify a very advantageous +representation of them, Columbus turned +his view towards their minerals; and in +the richness of their productions of this third +kingdom, he flattered himself he had found a +full compensation for the insignificancy of those +of the other two. The little bits of gold with +which the inhabitants ornamented their dress, +and which, he was informed, they frequently +found in the rivulets and torrents which fell +from the mountains, were sufficient to satisfy +him that those mountains abounded with the +richest gold mines. St. Domingo, therefore, +was represented as a country abounding with +gold, and upon that account (according to +the prejudices not only of the present times, +but of those times), an inexhaustible source of +real wealth to the crown and kingdom of +Spain. When Columbus, upon his return +from his first voyage, was introduced with a +sort of triumphal honours to the sovereigns of +Castile and Arragon, the principal productions +of the countries which he had discovered were +carried in solemn procession before him. The +only valuable part of them consisted in some +little fillets, bracelets, and other ornaments of +gold, and in some bales of cotton. The rest were +mere objects of vulgar wonder and curiosity; +some reeds of an extraordinary size, some +birds of a very beautiful plumage, and some +stuffed skins of the huge alligator and manati; +all of which were preceded by six or seven +of the wretched natives, whose singular colour +and appearance added greatly to the novelty +of the show.</p> + +<p>In consequence of the representations of +Columbus, the council of Castile determined +to take possession of the countries of which +the inhabitants were plainly incapable of defending +themselves. The pious purpose of +converting them to Christianity sanctified the +injustice of the project. But the hope of +finding treasures of gold there was the sole +motive which prompted to undertake it; and +to give this motive the greater weight, it was +proposed by Columbus, that the half of all +the gold and silver that should be found there, +should belong to the crown. This proposal +was approved of by the council.</p> + +<p>As long as the whole, or the greater part +of the gold which the first adventurers imported +into Europe was got by so very easy +a method as the plundering of the defenceless +natives, it was not perhaps very difficult to +pay even this heavy tax; but when the natives +were once fairly stript of all that they +had, which, in St. Domingo, and in all the +other countries discovered by Columbus, was +done completely in six or eight years, and +when, in order to find more, it had become +necessary to dig for it in the mines, there was +no longer any possibility of paying this tax. +The rigorous exaction of it, accordingly, first +occasioned, it is said, the total abandoning +of the mines of St. Domingo, which have +never been wrought since. It was soon reduced, +therefore, to a third; then to a fifth; +afterwards to a tenth; and at last to a twentieth +part of the gross produce of the gold +mines. The tax upon silver continued for a +long time to be a fifth of the gross produce. +It was reduced to a tenth only in the course +of the present century. But the first adventurers +do not appear to have been much interested +about silver. Nothing less precious +than gold seemed worthy of their attention.</p> + +<p>All the other enterprizes of the Spaniards +in the New World, subsequent to those of +Columbus, seem to have been prompted by +the same motive. It was the sacred thirst of +gold that carried Ovieda, Nicuessa, and Vasco +Nugnes de Balboa, to the Isthmus of Darien; +that carried Cortes to Mexico, Almagro and +Pizarro to Chili and Peru. When those adventurers +arrived upon any unknown coast, +their first inquiry was always if there was any +gold to be found there; and according to the +information which they received concerning +this particular, they determined either to quit +the country or to settle in it.</p> + +<p>Of all those expensive and uncertain projects, +however, which bring bankruptcy up +on the greater part of the people who engage +in them, there is none, perhaps, more +perfectly ruinous than the search after new +silver and gold mines. It is, perhaps, the most +disadvantageous lottery in the world, or the +one in which the gain of those who draw the +prizes bears the least proportion to the loss of +those who draw the blanks; for though the +prizes are few, and the blanks many, the common +price of a ticket is the whole fortune of +a very rich man. Projects of mining, instead +of replacing the capital employed in them, together +with the ordinary profits of stock, commonly +absorb both capital and profit. They +are the projects, therefore, to which, of all +others, a prudent lawgiver, who desired to +increase the capital of his nation, would least +choose to give any extraordinary encouragement, +or to turn towards them a greater share +of that capital than what would go to them +of its own accord. Such, in reality, is the +absurd confidence which almost all men have +in their own good fortune, that wherever there +is the least probability of success, too great<span class='pagenum'><a name="Page_231" id="Page_231">[Pg 231]</a></span> +a share of it is apt to go to them of its own +accord.</p> + +<p>But though the judgment of sober reason +and experience concerning such projects has +always been extremely unfavourable, that of +human avidity has commonly been quite otherwise. +The same passion which has suggested +to so many people the absurd idea of the philosopher's +stone, has suggested to others the +equally absurd one of immense rich mines of +gold and silver. They did not consider that the +value of those metals has, in all ages and nations, +arisen chiefly from their scarcity, and that +their scarcity has arisen from the very small +quantities of them which nature has anywhere +deposited in one place, from the hard and intractable +substances with which she has almost +everywhere surrounded those small quantities, +and consequently from the labour and expense +which are everywhere necessary in order to penetrate, +and get at them. They flattered themselves +that veins of those metals might in +many places be found, as large and as abundant +as those which are commonly found of +lead, or copper, or tin, or iron. The dream +of Sir Walter Raleigh, concerning the golden +city and country of El Dorado, may satisfy +us, that even wise men are not always exempt +from such strange delusions. More than a +hundred years after the death of that great +man, the Jesuit Gumila was still convinced of +the reality of that wonderful country, and expressed, +with great warmth, and, I dare say, +with great sincerity, how happy he should be +to carry the light of the gospel to a people +who could so well reward the pious labours of +their missionary.</p> + +<p>In the countries first discovered by the +Spaniards, no gold or silver mines are at +present known which are supposed to be +worth the working. The quantities of those +metals which the first adventurers are said to +have found there, had probably been very +much magnified, as well as the fertility of the +mines which were wrought immediately after +the first discovery. What those adventurers +were reported to have found, however, was +sufficient to inflame the avidity of all their +countrymen. Every Spaniard who sailed to +America expected to find an El Dorado. +Fortune, too, did upon this what she has done +upon very few other occasions. She realized +in some measure the extravagant hopes of her +votaries; and in the discovery and conquest +of Mexico and Peru (of which the one happened +about thirty, and the other about forty, +years after the first expedition of Columbus), +she presented them with something not very +unlike that profusion of the precious metals +which they sought for.</p> + +<p>A project of commerce to the East Indies, +therefore, gave occasion to the first discovery +of the West. A project of conquest gave occasion +to all the establishments of the Spaniards +in those newly discovered countries. +The motive which excited them to this conquest +was a project of gold and silver mines; +and a course of accidents which no human +wisdom could foresee, rendered this project +much more successful than the undertakers +had any reasonable grounds for expecting.</p> + +<p>The first adventurers of all the other nations +of Europe who attempted to make settlements +in America, were animated by the +like chimerical views; but they were not +equally successful. It was more than a hundred +years after the first settlement of the Brazils, +before any silver, gold, or diamond mines, +were discovered there. In the English, French, +Dutch, and Danish colonies, none have ever +yet been discovered, at least none that are at +present supposed to be worth the working. +The first English settlers in North America, +however, offered a fifth of all the gold and silver +which should be found there to the king, +as a motive for granting them their patents. +In the patents of Sir Walter Raleigh, to the +London and Plymouth companies, to the council +of Plymouth, &c. this fifth was accordingly +reserved to the crown. To the expectation +of finding gold and silver mines, those +first settlers, too, joined that of discovering a +north-west passage to the East Indies. They +have hitherto been disappointed in both.</p> + + +<h4>PART II.</h4> + +<h4><i>Causes of the Prosperity of New Colonies.</i></h4> + +<p>The colony of a civilized nation which takes +possession either of a waste country, or of one +so thinly inhabited that the natives easily give +place to the new settlers, advances more rapidly +to wealth and greatness than any other +human society.</p> + +<p>The colonies carry out with them a knowledge +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 and barbarous nations. They carry +out with them, too, the habit of subordination, +some notion of the regular government which +takes place in their own country, of the system +of laws which support it, and of a regular +administration of justice; and they naturally +establish something of the same kind in +the new settlement. But among savage and +barbarous nations, the natural progress of law +and government is still slower than the natural +progress of arts, after law and government +have been so far established as is necessary +for their protection. Every colonist gets more +land than he can possibly cultivate. He has +no rent, and scarce any taxes, to pay. No landlord +shares with him in its produce, and, the +share of the sovereign is commonly but a trifle. +He has every motive to render as great as possible +a produce which is thus to be almost entirely +his own. But his land is commonly so<span class='pagenum'><a name="Page_232" id="Page_232">[Pg 232]</a></span> +extensive, that, with all his own industry, and +with all the industry of other people whom he +can get to employ, he can seldom make it +produce the tenth part of what it is capable of +producing. He is eager, therefore, to collect +labourers from all quarters, and to reward +them with the most liberal wages. But those +liberal wages, joined to the plenty and cheapness +of land, soon make those labourers leave +him, in order to become landlords themselves, +and to reward with equal liberality other labourers, +who soon leave them for the same +reason that they left their first master. The +liberal reward of labour encourages marriage. +The children, during the tender years of infancy, +are well fed and properly taken care +of; and when they are grown up, the value of +their labour greatly overpays their maintenance. +When arrived at maturity, the high +price of labour, and the low price of land, enable +them to establish themselves in the same +manner as their fathers did before them.</p> + +<p>In other countries, rent and profit eat up +wages, and the two superior orders of people +oppress the inferior one; but in new colonies, +the interest of the two superior orders obliges +them to treat the inferior one with more generosity +and humanity, at least where that inferior +one is not in a state of slavery. Waste +lands, of the greatest natural fertility, are to +be had for a trifle. The increase of revenue +which the proprietor, who is always the undertaker, +expects from their improvement, +constitutes his profit, which, in these circumstances, +is commonly very great; but this +great profit cannot be made, without employing +the labour of other people in clearing and +cultivating the land; and the disproportion +between the great extent of the land and the +small number of the people, which commonly +takes place in new colonies, makes it difficult +for him to get this labour. He does not, therefore, +dispute about wages, but is willing to +employ labour at any price. The high wages +of labour encourage population. The cheapness +and plenty of good land encourage improvement, +and enable the proprietor to pay +those high wages. In those wages consists +almost the whole price of the land; and though +they are high, considered as the wages of labour, +they are low, considered as the price of +what is so very valuable. What encourages +the progress of population and improvement, +encourages that of real wealth and greatness.</p> + +<p>The progress of many of the ancient Greek +colonies towards wealth and greatness seems +accordingly to have been very rapid. In the +course of a century or two, several of them +appear to have rivalled, and even to have surpassed, +their mother cities. Syracuse and Agrigentum +in Sicily, Tarentum and Locri in Italy, +Ephesus and Miletus in Lesser Asia, appear, +by all accounts, to have been at least +equal to any of the cities of ancient Greece. +Though posterior in their establishment, yet +all the arts of refinement, philosophy, poetry, +and eloquence, seem to have been cultivated +as early, and to have been improved as highly +in them as in any part of the mother country. +The schools of the two oldest Greek philosophers, +those of Thales and Pythagoras, were +established, it is remarkable, not in ancient +Greece, but the one in an Asiatic, the other in +an Italian colony. All those colonies had +established themselves in countries inhabited +by savage and barbarous nations, who easily +gave place to the new settlers. They had +plenty of good land; and as they were altogether +independent of the mother city, they were +at liberty to manage their own affairs in the +way that they judged was most suitable to their +own interest.</p> + +<p>The history of the Roman colonies is by no +means so brilliant. Some of them, indeed, +such as Florence, have, in the course of many +ages, and after the fall of the mother city, +grown up to be considerable states. But the +progress of no one of them seems ever to have +been very rapid. They were all established in +conquered provinces, which in most cases had +been fully inhabited before. The quantity of +land assigned to each colonist was seldom very +considerable, and, as the colony was not independent, +they were not always at liberty to +manage their own affairs in the way that they +judged was most suitable to their own interest.</p> + +<p>In the plenty of good land, the European +colonies established in America and the West +Indies resemble, and even greatly surpass, +those of ancient Greece. In their dependency +upon the mother state, they resemble those of +ancient Rome; but their great distance from +Europe has in all of them alleviated more or +less the effects of this dependency. Their +situation has placed them less in the view, and +less in the power of their mother country. In +pursuing their interest their own way, their +conduct has upon many occasions been overlooked, +either because not known or not understood +in Europe; and upon some occasions +it has been fairly suffered and submitted to, +because their distance rendered it difficult to +restrain it. Even the violent and arbitrary government +of Spain has, upon many occasion, +been obliged to recall or soften the orders which +had been given for the government of her colonies, +for fear of a general insurrection. The +progress of all the European colonies in wealth, +population, and improvement, has accordingly +been very great.</p> + +<p>The crown of Spain, by its share of the gold +and silver, derived some revenue from its colonies +from the moment of their first establishment. +It was a revenue, too, of a nature +to excite in human avidity the most extravagant +expectation of still greater riches. The +Spanish colonies, therefore, from the moment +of their first establishment, attracted very much +the attention of their mother country; while<span class='pagenum'><a name="Page_233" id="Page_233">[Pg 233]</a></span> +those of the other European nations were for +a long time in a great measure neglected. The +former did not, perhaps, thrive the better in +consequence of this attention, nor the latter +the worse in consequence of this neglect. In +proportion to the extent of the country which +they in some measure possess, the Spanish colonies +are considered as less populous and +thriving than those of almost any other European +nation. The progress even of the Spanish +colonies, however, in population and improvement, +has certainly been very rapid and +very great. The city of Lima, founded since +the conquest, is represented by Ulloa as containing +fifty thousand inhabitants near thirty +years ago. Quito, which had been but a miserable +hamlet of Indians, is represented by +the same author as in his time equally populous. +Gemel i Carreri, a pretended traveller, +it is said, indeed, but who seems everywhere +to have written upon extreme good information, +represents the city of Mexico as containing +a hundred thousand inhabitants; a number +which, in spite of all the exaggerations of +the Spanish writers, is probably more than five +times greater than what it contained in the +time of Montezuma. These numbers exceed +greatly these of Boston, New York, and Philadelphia, +the three greatest cities of the English +colonies. Before the conquest of the Spaniards, +there were no cattle fit for draught, +either in Mexico or Peru. The lama was +their only beast of burden, and its strength +seems to have been a good deal inferior to that +of a common ass. The plough was unknown +among them. They were ignorant of the use +of iron. They had no coined money, nor any +established instrument of commerce of any +kind. Their commerce was carried on by barter. +A sort of wooden spade was their principal +instrument of agriculture. Sharp stones +served them for knives and hatchets to cut +with; fish bones, and the hard sinews of certain +animals, served them with needles to sew +with; and these seem to have been their principal +instruments of trade. In this state of +things, it seems impossible that either of those +empires could have been so much improved or +so well cultivated as at present, when they are +plentifully furnished with all sorts of European +cattle, and when the use of iron, of the +plough, and of many of the arts of Europe, +have been introduced among them. But the +populousness of every country must be in proportion +to the degree of its improvement and +cultivation. In spite of the cruel destruction +of the natives which followed the conquest, +these two great empires are probably more populous +now than they ever were before; and +the people are surely very different; for we +must acknowledge, I apprehend, that the Spanish +creoles are in many respects superior to +the ancient Indians.</p> + +<p>After the settlements of the Spaniards, that +of the Portuguese in Brazil is the oldest of +any European nation in America. But as for +a long time after the first discovery neither +gold nor silver mines were found in it, and as +it afforded upon that account little or no revenue +to the crown, it was for a long time in a +great measure neglected; and during this state +of neglect, it grew up to be a great and powerful +colony. While Portugal was under the +dominion of Spain, Brazil was attacked by +the Dutch, who got possession of seven of the +fourteen provinces into which it is divided. +They expected soon to conquer the other seven, +when Portugal recovered its independency by +the elevation of the family of Braganza to the +throne. The Dutch, then, as enemies to the +Spaniards, became friends to the Portuguese, +who were likewise the enemies of the Spaniards. +They agreed, therefore, to leave that +part of Brazil which they had not conquered +to the king of Portugal, who agreed to leave +that part which they had conquered to them, +as a matter not worth disputing about, with +such good allies. But the Dutch government +soon began to oppress the Portuguese colonists, +who, instead of amusing themselves with +complaints, took arms against their new masters, +and by their own valour and resolution, +with the connivance, indeed, but without +any avowed assistance from the mother country, +drove them out of Brazil. The Dutch, +therefore, finding it impossible to keep any +part of the country to themselves, were contented +that it should be entirely restored to the +crown of Portugal. In this colony there are +said to be more than six hundred thousand +people, either Portuguese or descended from +Portuguese, creoles, mulattoes, and a mixed +race between Portuguese and Brazilians. No +one colony in America is supposed to contain +so great a number of people of European extraction.</p> + +<p>Towards the end of the fifteenth, and during +the greater part of the sixteenth century, +Spain and Portugal were the two great naval +powers upon the ocean; for though the commerce +of Venice extended to every part of Europe, +its fleet had scarce ever sailed beyond +the Mediterranean. The Spaniards, in virtue +of the first discovery, claimed all America as +their own; and though they could not hinder +so great a naval power as that of Portugal +from settling in Brazil, such was at that time +the terror of their name, that the greater part +of the other nations of Europe were afraid to +establish themselves in any other part of that +great continent. The French, who attempted +to settle in Florida, were all murdered by the +Spaniards. But the declension of the naval +power of this latter nation, in consequence of +the defeat or miscarriage of what they called +their invincible armada, which happened towards +the end of the sixteenth century, put it +out of their power to obstruct any longer the +settlements of the other European nations. In +the course of the seventeenth century, there<span class='pagenum'><a name="Page_234" id="Page_234">[Pg 234]</a></span>fore, +the English, French, Dutch, Danes, and +Swedes, all the great nations who had any +ports upon the ocean, attempted to make some +settlements in the new world.</p> + +<p>The Swedes established themselves in New +Jersey; and the number of Swedish families +still to be found there sufficiently demonstrates, +that this colony was very likely to prosper, +had it been protected by the mother country. +But being neglected by Sweden, it was soon +swallowed up by the Dutch colony of New +York, which again, in 1674, fell under the +dominion of the English.</p> + +<p>The small islands of St. Thomas and Santa +Cruz, are the only countries in the new world +that have been possessed by the Danes. +These little settlements, too, were under the +government of an exclusive company, which +had the sole right, both of purchasing the surplus +produce of the colonies, and of supplying +them with such goods of other countries as +they wanted, and which, therefore, both in its +purchases and sales, had not only the power +of oppressing them, but the greatest temptation +to do so. The government of an exclusive +company of merchants is, perhaps, the +worst of all governments for any country whatever. +It was not, however, able to stop altogether +the progress of these colonies, though it +rendered it more slow and languid. The late +king of Denmark dissolved this company, and +since that time the prosperity of these colonies +has been very great.</p> + +<p>The Dutch settlements in the West, as well +as those in the East Indies, were originally +put under the government of an exclusive +company. The progress of some of them, +therefore, though it has been considerable in +comparison with that of almost any country +that has been long peopled and established, +has been languid and slow in comparison with +that of the greater part of new colonies. The +colony of Surinam, though very considerable, +is still inferior to the greater part of the sugar +colonies of the other European nations. The +colony of Nova Belgia, now divided into the +two provinces of New York and New Jersey, +would probably have soon become considerable +too, even though it had remained under +the government of the Dutch. The plenty +and cheapness of good land are such powerful +causes of prosperity, that the very worst government +is scarce capable of checking altogether +the efficacy of their operation. The great +distance, too, from the mother country, would +enable the colonists to evade more or less, by +smuggling, the monopoly which the company +enjoyed against them. At present, the company +allows all Dutch ships to trade to Surinam, +upon paying two and a-half per cent. +upon the value of their cargo for a license; +and only reserves to itself exclusively, the direct +trade from Africa to America, which consists +almost entirely in the slave trade. This +relaxation in the exclusive privileges of the +company, is probably the principal cause of +that degree of prosperity which that colony at +present enjoys. Curaçoa and Eustatia, the +two principal islands belonging to the Dutch, +are free ports, open to the ships of all nations; +and this freedom, in the midst of better colonies, +whose ports are open to those of one nation +only, has been the great cause of the prosperity +of those two barren islands.</p> + +<p>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 company. Under so unfavourable +administration, its progress was necessarily +very slow, in comparison with that of +other new colonies; but it became much more +rapid when this company was dissolved, after +the fall of what is called the Mississippi scheme. +When the English got possession of this country, +they found in it near double the number +of inhabitants which father Charlevoix had assigned +to it between twenty and thirty years +before. That jesuit had travelled over the +whole country, and had no inclination to represent +it as less inconsiderable than it really +was.</p> + +<p>The French colony of St. Domingo was +established by pirates and freebooters, who, +for a long time, neither required the protection, +nor acknowledged 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 +exercise it with very great gentleness. During +this period, the population and improvement +of this colony increased very fast. Even +the oppression of the exclusive company, to +which it was for some time subjected with all +the other colonies of France, though it no +doubt retarded, had not been able to stop its +progress altogether. The course of its prosperity +returned as soon as it was relieved from +that oppression. It is now the most important +of the sugar colonies of the West Indies, and +its produce is said to be greater than that of +all the English sugar colonies put together. +The other sugar colonies of France are in general +all very thriving.</p> + +<p>But there are no colonies of which the progress +has been more rapid than that of the +English in North America.</p> + +<p>Plenty of good land, and liberty to manage +their own affairs their own way, seem to be +the two great causes of the prosperity of all +new colonies.</p> + +<p>In the plenty of good land, the English colonies +of North America, though no doubt +very abundantly provided, are, however, inferior +to those of the Spaniards and Portuguese, +and not superior to some of those possessed +by the French before the last war. But the +political institutions of the English colonies +have been more favourable to the improvement +and cultivation of this land, than those +of the other three nations.<span class='pagenum'><a name="Page_235" id="Page_235">[Pg 235]</a></span></p> + +<p><i>First</i>, The engrossing of uncultivated land, +though it has by no means been prevented altogether, +has been more restrained in the English +colonies than in any other. The colony +law, which imposes upon every proprietor the +obligation of improving and cultivating, within +a limited time, a certain proportion of his +lands, and which, in case of failure, declares +those neglected lands grantable to any other +person; though it has not perhaps been very +strictly executed, has, however, had some effect.</p> + +<p><i>Secondly</i>, In Pennsylvania there is no right +of primogeniture, and lands, like moveables, +are divided equally among all the children of +the family. In three of the provinces of New +England, the oldest has only a double share, +as in the Mosaical law. Though in those +provinces, therefore, too great a quantity of +land should sometimes be engrossed by a particular +individual, it is likely, in the course of +a generation or two, to be sufficiently divided +again. In the other English colonies, indeed, +the right of primogeniture takes place, as in +the law of England: But in all the English +colonies, the tenure of the lands, which are all +held by free soccage, facilitates alienation; and +the grantee of an extensive tract of land generally +finds it for his interest to alienate, as fast +as he can, the greater part of it, reserving only +a small quit-rent. In the Spanish and Portuguese +colonies, what is called the right of +majorazzo takes place in the succession of all +those great estates to which any title of honour +is annexed. Such estates go all to one +person, and are in effect entailed and unalienable. +The French colonies, indeed, are subject +to the custom of Paris, which, in the inheritance +of land, is much more favourable to +the younger children than the law of England. +But, in the French colonies, if any part of an +estate, held by the noble tenure of chivalry +and homage, is alienated, it is, for a limited +time, subject to the right of redemption, either +by the heir of the superior, or by the heir of +the family; and all the largest estates of the +country are held by such noble tenures, which +necessarily embarrass alienation. But, in a +new colony, a great uncultivated estate is likely +to be much more speedily divided by alienation +than by succession. The plenty and +cheapness of good land, it has already been +observed, are the principal causes of the rapid +prosperity of new colonies. The engrossing +of land, in effect, destroys this plenty and +cheapness. The engrossing of uncultivated +land, besides, is the greatest obstruction to its +improvement; but the labour that is employed +in the improvement and cultivation of land +affords the greatest and most valuable produce +to the society. The produce of labour, in this +case, pays not only its own wages and the +profit of the stock which employs it, but the +rent of the land too upon which it is employed. +The labour of the English colonies, +therefore, being more employed in the improvement +and cultivation of land, is likely to +afford a greater and more valuable produce +than that of any of the other three nations, +which, by the engrossing of land, is more or +less diverted towards other employments.</p> + +<p><i>Thirdly</i>, The labour of the English colonists +is not only likely to afford a greater and +more valuable produce, but, in consequence +of the moderation of their taxes, a greater proportion +of this produce belongs to themselves, +which they may store up and employ in putting +into motion a still greater quantity of labour. +The English colonists have never yet +contributed any thing towards the defence of +the mother country, or towards the support of +its civil government. They themselves, on +the contrary, have hitherto been defended almost +entirely at the expense of the mother +country; but the expense of fleets and armies +is out of all proportion greater than the necessary +expense of civil government. The expense +of their own civil government has always +been very moderate. It has generally +been confined to what was necessary for paying +competent salaries to the governor, to the +judges, and to some other officers of police, +and for maintaining a few of the must useful +public works. The expense of the civil establishment +of Massachusetts Bay, before the +commencement of the present disturbances, +used to be but about L.18,000 a-year; that of +New Hampshire and Rhode Island, L.3500 +each; that of Connecticut, L.4000; that of +New York and Pennsylvania, L.4500 each; +that of New Jersey, L.1200; that of Virginia +and South Carolina, L.8000 each. The civil +establishments of Nova Scotia and Georgia +are partly supported by an annual grant of +parliament; but Nova Scotia pays, besides, +about L.7000 a-year towards the public expenses +of the colony, and Georgia about +L.2500 a-year. All the different civil establishments +in North America, in short, exclusive +of those of Maryland and North Carolina, +of which no exact account has been got, +did not, before the commencement of the present +disturbances, cost the inhabitants above +L.64,700 a-year; an ever memorable example, +at how small an expense three millions of +people may not only be governed but well governed. +The must important part of the expense +of government, indeed, that of defence +and protection, has constantly fallen upon the +mother country. The ceremonial, too, of the +civil government in the colonies, upon the reception +of a new governor, upon the opening +of a new assembly, &c. though sufficiently decent, +is not accompanied with any expensive +pomp or parade. Their ecclesiastical government +is conducted upon a plan equally frugal. +Tithes are unknown among them; and +their clergy, who are far from being numerous, +are maintained either by moderate stipends, +or by the voluntary contributions of<span class='pagenum'><a name="Page_236" id="Page_236">[Pg 236]</a></span> +the people. The power of Spain and Portugal, +on the contrary, derives some support +from the taxes levied upon their colonies. +France, indeed, has never drawn any considerable +revenue from its colonies, the taxes +which it levies upon them being generally +spent among them. But the colony government +of all these three nations is conducted +upon a much more extensive plan, and is accompanied +with a much more expensive ceremonial. +The sums spent upon the reception +of a new viceroy of Peru, for example, have +frequently been enormous. Such ceremonials +are not only real taxes paid by the rich colonists +upon those particular occasions, but they +serve to introduce among them the habit of +vanity and expense upon all other occasions. +They are not only very grievous occasional +taxes, but they contribute to establish perpetual +taxes, of the same kind, still more grievous; +the ruinous taxes of private luxury and +extravagance. In the colonies of all those +three nations, too, the ecclesiastical government +is extremely oppressive. Tithes take +place in all of them, and are levied with the +utmost rigour in those of Spain and Portugal. +All of them, besides, are oppressed with numerous +race of mendicant friars, whose beggary +being not only licensed but consecrated +by religion, is a most grievous tax upon the +poor people, who are most carefully taught +that it is a duty to give, and a very great sin +to refuse them their charity. Over and above +all this, the clergy are, in all of them, the +greatest engrossers of land.</p> + +<p><i>Fourthly</i>, In the disposal of their surplus +produce, or of what is over and above their +own consumption, the English colonies have +been more favoured, and have been allowed a +more extensive market, than those of any +other European nation. Every European nation +has endeavoured, more or less, to monopolize +to itself the commerce of its colonies, +and, upon that account, has prohibited the +ships of foreign nations from trading to them, +and has prohibited them from importing European +goods from any foreign nation. But +the manner in which this monopoly has been +exercised in different nations, has been very +different.</p> + +<p>Some nations have given up the whole commerce +of their colonies to an exclusive company, +of whom the colonists were obliged to +buy all such European goods as they wanted, +and to whom they were obliged to sell the +whole of their surplus produce. It was the +interest of the company, therefore, not only +to sell the former as dear, and to buy the latter +as cheap as possible, but to buy no more +of the latter, even at this low price, than what +they could dispose of for a very high price in +Europe. It was their interest not only to degrade +in all cases the value of the surplus produce +of the colony, but in many cases to discourage +and keep down the natural increase +of its quantity. Of all the expedients that +can well be contrived to stunt the natural +growth of a new colony, that of an exclusive +company is undoubtedly the most effectual. +This, however, has been the policy of Holland, +though their company, in the course of +the present century, has given up in many respects +the exertion of their exclusive privilege. +This, too, was the policy of Denmark, till the +reign of the late king. It has occasionally +been the policy of France; and of late, since +1755, after it had been abandoned by all other +nations on account of its absurdity, it has become +the policy of Portugal, with regard at +least to two of the principal provinces of Brazil, +Pernambucco, and Marannon.</p> + +<p>Other nations, without establishing an exclusive +company, have confined the whole +commerce of their colonies to a particular port +of the mother country, from whence no ship +was allowed to sail, but either in a fleet and +at a particular season, or, if single, in consequence +of a particular license, which in most +cases was very well paid for. This policy opened, +indeed, the trade of the colonies to all the +natives of the mother country, provided they +traded from the proper port, at the proper season, +and in the proper vessels. But as all the +different merchants, who joined their stocks in +order to fit out those licensed vessels, would +find it for their interest to act in concert, 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. The profit of those merchants +would be almost equally exorbitant and oppressive. +The colonies would be ill supplied, +and would be obliged both to buy very dear, +and to sell very cheap. This, however, till +within these few years, had always been the +policy of Spain; and the price of all European +goods, accordingly, is said to have been enormous +in the Spanish West Indies. At Quito, +we are told by Ulloa, a pound of iron sold +for about 4s. 6d., and a pound of steel for +about 6s. 9d. sterling. But it is chiefly in order +to purchase European goods that the colonies +part with their own produce. The more, +therefore, they pay for the one, the less they +really get for the other, and the dearness of +the one is the same thing with the cheapness +of the other. The policy of Portugal is, in +this respect, the same as the ancient policy of +Spain, with regard to all its colonies, except +Pernambucco and Marannon; and with regard +to these it has lately adopted a still worse.</p> + +<p>Other nations leave the trade of their colonies +free to all their subjects, who may carry +it on from all the different ports of the mother +country, and who have occasion for no other +license than the common despatches of the +custom-house. In this case the number and +dispersed situation of the different traders renders +it impossible for them to enter into any +general combination, and their competition is<span class='pagenum'><a name="Page_237" id="Page_237">[Pg 237]</a></span> +sufficient to hinder them from making very +exorbitant profits. Under so liberal a policy, +the colonies are enabled both to sell their own +produce, and to buy the goods of Europe at +a reasonable price; but since the dissolution +of the Plymouth company, when our colonies +were but in their infancy, this has always been +the policy of England. It has generally, too, +been that of France, and has been uniformly +so since the dissolution of what in England is +commonly called their Mississippi company. +The profits of the trade, therefore, which +France and England carry on with their colonies, +though no doubt somewhat higher than +if the competition were free to all other nations, +are, however, by no means exorbitant; +and the price of European goods, accordingly, +is not extravagantly high in the greater +part of the colonies of either of those nations.</p> + +<p>In the exportation of their own surplus 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, and in +some other subsequent acts, have upon that +account been called <i>enumerated commodities</i>. +The rest are called <i>non-enumerated</i>, and may +be exported directly to other countries, provided +it is in British or plantation ships, of +which the owners and three fourths of the mariners +are British subjects.</p> + +<p>Among the non-enumerated commodities +are some of the most important productions of +America and the West Indies, grain of all +sorts, lumber, salt provisions, fish, sugar, and +rum.</p> + +<p>Grain is naturally the first and principal +object of the culture of all new colonies. By +allowing them a very extensive market for it, +the law encourages them to extend this culture +much beyond the consumption of a thinly +inhabited country, and thus to provide beforehand +an ample subsistence for a continually +increasing population.</p> + +<p>In a country quite covered with wood, +where timber consequently is of little or no +value, the expense of clearing the ground is +the principal obstacle to improvement. By +allowing the colonies a very extensive market +for their lumber, the law endeavours to facilitate +improvement by raising the price of a +commodity which would otherwise be of little +value, and thereby enabling them to make +some profit of what would otherwise be mere +expense.</p> + +<p>In a country neither half peopled nor half +cultivated, cattle naturally multiply beyond +the consumption of the inhabitants, and are +often, upon that account, of little or no value. +But it is necessary, it has already been +shown, that the price of cattle should bear a +certain proportion to that of corn, before the +greater part of the lands of any country can +be improved. By allowing to American cattle, +in all shapes, dead and alive, a very extensive +market, the law endeavours to raise +the value of a commodity, of which the high +price is so very essential to improvement. +The good effects of this liberty, however, must +be somewhat diminished by the 4th of Geo. +III. c. 15, which puts hides and skins among +the enumerated commodities and thereby tends +to reduce the value of American cattle.</p> + +<p>To increase the shipping and naval power +of Great Britain by the extension of the fisheries +of our colonies, is an object which the +legislature seems to have had almost constantly +in view. Those fisheries, upon this account, +have had all the encouragement which freedom +can give them, and they have flourished +accordingly. The New England fishery, in +particular, was, before the late disturbances, +one of the most important, perhaps, in the +world. The whale fishery which, notwithstanding +an extravagant bounty, is in Great Britain +carried on to so little purpose, that in the +opinion of many people (which I do not, however, +pretend to warrant), the whole produce +does not much exceed the value of the bounties +which are annually paid for it, is in New +England carried on, without any bounty, to a +very great extent. Fish is one of the principal +articles with which the North Americans +trade to Spain, Portugal, and the Mediterranean.</p> + +<p>Sugar was originally an enumerated commodity, +which could only be exported to Great +Britain; but in 1731, upon a representation +of the sugar-planters, its exportation was permitted +to all parts of the world. The restrictions, +however, with which this liberty was +granted, joined to the high price of sugar in +Great Britain, have rendered it in a great +measure ineffectual. Great Britain and her +colonies still continue to be almost the sole +market for all sugar produced in the British +plantations. Their consumption increases so +fast, that, though in consequence of the increasing +improvement of Jamaica, as well as +of the ceded islands, the importation of sugar +has increased very greatly within these twenty +years, the exportation to foreign countries is +said to be not much greater than before.</p> + +<p>Rum is a very important article in the trade +which the Americans carry on to the coast of +Africa, from which they bring back negro +slaves in return.</p> + +<p>If the whole surplus produce of America, +in grain of all sorts, in salt provisions, and in +fish, had been put into the 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. +It was probably not so much from any +regard to the interest of America, as from a +jealousy of this interference, that those important +commodities have not only been kept +out of the enumeration, but that the importation +into Great Britain of all grain, except<span class='pagenum'><a name="Page_238" id="Page_238">[Pg 238]</a></span> +rice, and of all salt provisions, has, in the ordinary +state of the law, been prohibited.</p> + +<p>The non-enumerated commodities could +originally be exported to all parts of the world. +Lumber and rice having been once put into +the enumeration, when they were afterwards +taken out of it, were confined, as to the European +market, to the countries that lie south +of Cape Finisterre. By the 6th of George +III. c. 52, all non-enumerated commodities +were subjected to the like restriction. The +parts of Europe which lie south of Cape Finisterre +are not manufacturing countries, and +we are less jealous of the colony ships carrying +home from them any manufactures which +could interfere with our own.</p> + +<p>The enumerated commodities are of two +sorts; first, such as are either the peculiar +produce of America, or as cannot be produced, +or at least are not produced in the mother +country. Of this kind are molasses, coffee, +cocoa-nuts, tobacco, pimento, ginger, whale-fins, +raw silk, cotton, wool, beaver, and other +peltry of America, indigo, fustick, and other +dyeing woods; secondly, such as are not the +peculiar produce of America, but which are, +and may be produced in the mother country, +though not in such quantities as to supply the +greater part of her demand, which is principally +supplied from foreign countries. Of +this kind are all naval stores, masts, yards, +and bowsprits, tar, pitch, and turpentine, pig +and bar iron, copper ore, hides and skins, pot +and pearl ashes. The largest importation of +commodities of the first kind could not discourage +the growth, or interfere with the sale, +of any part of the produce of the mother +country. By confining them to the home market, +our merchants, it was expected, would +not only be enabled to buy them cheaper in +the plantations, and consequently to sell them +with a better profit at home, but to establish +between the plantations and foreign countries +an advantageous carrying trade, of which +Great Britain was necessarily to be the centre +or emporium, as the European country into +which those commodities were first to be imported. +The importation of commodities of +the second kind might be so managed too, 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; because, +by means of proper duties, they might be rendered +always somewhat dearer than the former, +and yet a good deal cheaper than the latter. +By confining such commodities to the +home market, therefore, it was proposed to +discourage the produce, not of Great Britain, +but of some foreign countries with which the +balance of trade was believed to be unfavourable +to Great Britain.</p> + +<p>The prohibition of exporting from the colonies +to any other country but Great Britain, +masts, yards, and bowsprits, tar, pitch, and +turpentine, naturally tended to lower the price +of timber in the colonies, and consequently to +increase the expense of clearing their lands, +the principal obstacle to their improvement. +But about the beginning of the present century, +in 1703, the pitch and tar company of +Sweden endeavoured to raise the price of their +commodities to Great Britain, by prohibiting +their exportation, except in their own ships, +at their own price, and in such quantities as +they thought proper. In order to counteract +this notable piece of mercantile policy, and to +render herself as much as possible independent, +not only of Sweden, but of all the other +northern powers, Great Britain gave a bounty +upon the importation of naval stores from +America; and the effect of this bounty was +to raise the price of timber in America much +more than the confinement to the home market +could lower it; and as both regulations +were enacted at the same time, their joint effect +was rather to encourage than to discourage +the clearing of land in America.</p> + +<p>Though pig and bar iron, too, have been +put among the enumerated commodities, yet +as, when imported from America, they are +exempted from considerable duties to which +they are subject when imported from any other +country, the one part of the regulation contributes +more to encourage the erection of furnaces +in America than the other to discourage +it. There is no manufacture which occasions +so great a consumption of wood as a furnace, +or which can contribute so much to the clearing +of a country overgrown with it.</p> + +<p>The tendency of some of these regulations +to raise the value of timber in America, and +thereby to facilitate the clearing of the land, +was neither, perhaps, intended nor understood +by the legislature. Though their beneficial +effects, however, have been in this respect accidental, +they have not upon that account been +less real.</p> + +<p>The most perfect freedom of trade is permitted +between the British colonies of America +and the West Indies, both in the enumerated +and in the non-enumerated commodities. +Those colonies are now become so populous +and thriving, that each of them finds in some +of the others a great and extensive market +for every part of its produce. All of them +taken together, they make a great internal +market for the produce of one another.</p> + +<p>The liberality of England, however, towards +the trade of her colonies, has been confined +chiefly to what concerns the market for their +produce, either in its rude state, or in what +may be called the very first stage of manufacture. +The more advanced or more refined +manufactures, even of the colony produce, the +merchants and manufacturers of Great Britain +chuse to reserve to themselves, and have +prevailed upon the legislature to prevent their<span class='pagenum'><a name="Page_239" id="Page_239">[Pg 239]</a></span> +establishment in the colonies, sometimes by +high duties, and sometimes by absolute prohibitions.</p> + +<p>While, for example, Muscovado sugars from +the British plantations pay, upon importation, +only 6s. 4d. the hundred weight, white sugars +pay L.1 : 1 : 1; and refined, either double or +single, in loaves, L.4 : 2 : 5<sup>8</sup>⁄<sub>20</sub>ths. When +those high duties were imposed, Great Britain +was the sole, and she still continues to be, +the principal market, to which the sugars of +the British colonies could be exported. They +amounted, therefore, to a prohibition, at first +of claying or refining sugar for any foreign +market, and at present of claying or refining +it for the market which takes off, perhaps, +more than nine-tenths of the whole produce. +The manufacture of claying or refining sugar, +accordingly, though it has flourished in +all the sugar colonies of France, has been little +cultivated in any of those of England, except +for the market of the colonies themselves. +While Grenada was in the hands of the French, +there was a refinery of sugar, by claying, at +least upon almost every plantation. Since it +fell into those of the English, almost all works +of this kind have been given up; and there +are at present (October 1773), I am assured, +not above two or three remaining in the island. +At present, however, by an indulgence of the +custom-house, clayed or refined sugar, if reduced +from loaves into powder, is commonly +imported as Muscovado.</p> + +<p>While Great Britain encourages in America +the manufacturing of pig and bar iron, by +exempting them from duties to which the like +commodities are subject when imported from +any other country, she imposes an absolute +prohibition upon the erection of steel furnaces +and slit-mills in any of her American plantations. +She will not suffer her colonies to work +in those more refined manufactures, even for +their own consumption; but insists upon their +purchasing of her merchants and manufacturers +all goods of this kind which they have occasion +for.</p> + +<p>She prohibits the exportation from one province +to another by water, and even the carriage +by land upon horseback, or in a cart, of +hats, of wools, and woollen goods, of the produce +of America; a regulation which effectually +prevents the establishment of any manufacture +of such commodities for distant sale, +and confines the industry of her colonists in +this way to such coarse and household manufactures +as a private family commonly makes +for its own use, or for that of some of its +neighbours in the same province.</p> + +<p>To prohibit a great people, however, from +making all that they can of every part of their +own produce, or from employing their stock +and industry in the way that they judge most +advantageous to themselves, is a manifest violation +of the most sacred rights of mankind. +Unjust, however, as such prohibitions may be, +they have not hitherto been very hurtful to +the colonies. Land is still so cheap, and, consequently, +labour so dear among them, that +they can import from the mother country almost +all the more refined or more advanced +manufactures cheaper than they could make +them for themselves. Though they had not, +therefore, been prohibited from establishing +such manufactures, yet, in their present state +of improvement, a regard to their own interest +would probably have prevented them from +doing so. In their present state of improvement, +those prohibitions, perhaps, without +cramping their industry, or restraining it from +any employment to which it would have gone +of its own accord, are only impertinent badges +of slavery imposed upon them, without any +sufficient reason, by the groundless jealousy +of the merchants and manufacturers of the +mother country. In a more advanced state, +they might be really oppressive and insupportable.</p> + +<p>Great Britain, too, as she confines to her +own market some of the most important productions +of the colonies, 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. In the first way, she gives +an advantage in the home market to the sugar, +tobacco, and iron of her own colonies; +and, in the second, to their raw silk, to their +hemp and flax, to their indigo, to their naval +stores, and to their building timber. This +second way of encouraging the colony produce, +by bounties upon importation, is, so far +as I have been able to learn, peculiar to Great +Britain: the first is not. Portugal does not +content herself with imposing higher duties +upon the importation of tobacco from any +other country, but prohibits it under the severest +penalties.</p> + +<p>With regard to the importation of goods +from Europe, England has likewise dealt +more liberally with her colonies than any other +nation.</p> + +<p>Great Britain allows a part, almost always +the half, generally a larger portion, and sometimes +the whole, of the duty which is paid upon +the importation of foreign goods, to be +drawn back upon their exportation to any foreign +country. No independent foreign country, +it was easy to foresee, would receive them, +if they came to it loaded with the heavy duties +to which almost all foreign goods are +subjected on their importation into Great Britain. +Unless, therefore, some part of those +duties was drawn back upon exportation, +there was an end of the carrying trade; a +trade so much favoured by the mercantile +system.</p> + +<p>Our colonies, however, are by no means +independent foreign countries; and Great<span class='pagenum'><a name="Page_240" id="Page_240">[Pg 240]</a></span> +Britain having assumed to herself the exclusive +right of supplying them with all goods +from Europe, might have forced them (in +the same manner as other countries have done +their colonies) to receive such goods loaded +with all the same duties which they paid in +the mother country. But, on the contrary, till +1763, the same drawbacks were paid upon +the exportation of the greater part of foreign +goods to our colonies, as to any independent +foreign country. In 1763, indeed, by the +4th of Geo. III. c. 15, this indulgence was a +good deal abated, and it was enacted, "That +no part of the duty called the old subsidy +should be drawn back for any goods of the +growth, production, or manufacture of Europe +or the East Indies, which should be +exported from this kingdom to any British +colony or plantation in America; wines, +white calicoes, and muslins, excepted." Before +this law, many different sorts of foreign +goods might have been bought cheaper in the +plantations than in the mother country, and +some may still.</p> + +<p>Of the greater part of the regulations concerning +the colony trade, the merchants who +carry it on, it must be observed, have been +the principal advisers. We must not wonder, +therefore, if, in a great part of them, their interest +has been more considered than either +that of the colonies or that of the mother +country. In their exclusive privilege of supplying +the colonies with all the goods which +they wanted from Europe, and of purchasing +all such parts of their surplus produce as +could not interfere with any of the trades +which they themselves carried on at home, the +interest of the colonies was sacrificed to the +interest of those merchants. In allowing the +same drawbacks upon the re-exportation of +the greater part of European and East India +goods to the colonies, as upon their re-exportation +to any independent country, the interest +of the mother country was sacrificed to it, +even according to the mercantile ideas of that +interest. It was for the interest of the merchants +to pay as little as possible for the foreign +goods which they sent to the colonies, +and, consequently, to get back as much as possible +of the duties which they advanced upon +their importation into Great Britain. They +might thereby be enabled to sell in the colonies, +either the some quantity of goods with a +greater profit, or a greater quantity with the +same profit, and, consequently, to gain something +either in the one way or the other. +It was likewise for the interest of the colonies +to get all such goods as cheap, and in as +great abundance as possible. But this might +not always be for the interest of the mother +country. She might frequently suffer, both +in her revenue, by giving back a great part +of the duties which had been paid upon the +importation of such goods; and in her manufactures, +by being undersold in the colony +market in consequence of the easy terms upon +which foreign manufactures could be carried +thither by means of those drawbacks. +The progress of the linen manufacture of +Great Britain, it is commonly said, has been +a good deal retarded by the drawbacks upon +the re-exportation of German linen to the +American colonies.</p> + +<p>But though the policy of Great Britain, +with regard to the trade of her colonies, has +been dictated by the same mercantile spirit as +that of other nations, it has, however, upon +the whole, been less illiberal and oppressive +than that of any of them.</p> + +<p>In every thing except their foreign trade, +the liberty of the English colonists to manage +their own affairs their own way, is complete. +It is in every respect equal to that of their +fellow-citizens at home, and is secured in the +same manner, by an assembly of the representatives +of the people, who claim the sole +right of imposing taxes for the support of the +colony government. The authority of this +assembly overawes the executive power; and +neither the meanest nor the most obnoxious +colonist, as long as he obeys the law, has any +thing to fear from the resentment, either of +the governor, or of any other civil or military +officer in the province. The colony assemblies, +though, like the house of commons +in England, they are not always a very equal +representation of the people, yet they approach +more nearly to that character; and as the executive +power either has not the means to corrupt +them, or, on account of the support which +it receives from the mother country, is not +under the necessity of doing so, they are, perhaps, +in general more influenced by the inclinations +of their constituents. The councils, +which, in the colony legislatures, correspond +to the house of lords in Great Britain, are +not composed of a hereditary nobility. In +some of the colonies, as in three of the governments +of New England, those councils +are not appointed by the king, but chosen by +the representatives of the people. In none of +the English colonies is there any hereditary +nobility. In all of them, indeed, as in all +other free countries, the descendant of an old +colony family is more respected than an upstart +of equal merit and fortune; but he is +only more respected, and he has no privileges +by which he can be troublesome to his neighbours. +Before the commencement of the present +disturbances, the colony assemblies had +not only the legislative, but a part of the executive +power. In Connecticut and Rhode +Island, they elected the governor. In the +other colonies, they appointed the revenue officers, +who collected the taxes imposed by those +respective assemblies, to whom those officers +were immediately responsible. There is more +equality, therefore, among the English colonists +than among the inhabitants of the mother +country. Their manners are more re<span class='pagenum'><a name="Page_241" id="Page_241">[Pg 241]</a></span>publican; +and their governments, those of +three of the provinces of New England in +particular, have hitherto been more republican +too.</p> + +<p>The absolute governments of Spain, Portugal, +and France, on the contrary, take place +in their colonies; and the discretionary powers +which such governments commonly delegate +to all their inferior officers are, on account +of the great distance, naturally exercised +there with more than ordinary violence. +Under all absolute governments, there is more +liberty in the capital than in any other part of +the country. The sovereign himself can never +have either interest or inclination to pervert +the order of justice, or to oppress the great +body of the people. In the capital, his presence +overawes, more or less, all his inferior +officers, who, in the remoter provinces, from +whence the complaints of the people are less +likely to reach him, can exercise their tyranny +with much more safety. But the European +colonies in America are more remote than +the most distant provinces of the greatest empires +which had ever been known before. The +government of the English colonies is, perhaps, +the only one which, since the world began, +could give perfect security to the inhabitants +of so very distant a province. The +administration of the French colonies, however, +has always been conducted with much +more gentleness and moderation than that of +the Spanish and Portuguese. This superiority +of conduct is suitable both to the character +of the French nation, and to what forms +the character of every nation, the nature of +their government, which, though arbitrary and +violent in comparison with that of Great Britain, +is legal and free in comparison with +those of Spain and Portugal.</p> + +<p>It is in the progress 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 +at least equal, perhaps superior, to that of the +greater part of those of England; and yet +the sugar colonies of England enjoy a free +government, nearly of the same kind with that +which takes place in her colonies of North +America. But the sugar colonies of France +are not discouraged, like those of England, +from refining their own sugar; and what is +still of greater importance, the genius of their +government naturally introduces a better management +of their negro slaves.</p> + +<p>In all European colonies, the culture of +the sugar-cane is carried on by negro slaves. +The constitution of those who have been born +in the temperate climate of Europe could +not, it is supposed, support the labour of digging +the ground under the burning sun of +the West Indies; and the culture of the sugar-cane, +as it is managed at present, is all +hand labour; though, in the opinion of many, +the drill plough might be introduced into it +with great advantage. But, as the profit and +success of the cultivation which is carried on +by means of cattle, depend very much upon +the good management of those cattle; so the +profit and success of that which is carried on +by slaves must depend equally upon the good +management of those slaves; and in the good +management of their slaves the French planters, +I think it is generally allowed, are superior +to the English. The law, so far as it +gives some weak protection to the slave against +the violence of his master, is likely to be better +executed in a colony where the government +is in a great measure arbitrary, than in +one where it is altogether free. In every country +where the unfortunate law of slavery is established, +the magistrate, when he protects +the slave, intermeddles in some measure in +the management of the private property of +the master; and, in a free country, where the +master is, perhaps, either a member of the colony +assembly, or an elector of such a member, +he dares not do this but with the greatest +caution and circumspection. The respect +which he is obliged to pay to the master, renders +it more difficult for him to protect the +slave. But in a country where the government +is in a great measure arbitrary, where it +is usual for the magistrate to intermeddle even +in the management of the private property of +individuals, and to send them, perhaps, a lettre +de cachet, if they do not manage it according +to his liking, it is much easier for him to +give some protection to the slave; and common +humanity naturally disposes him to do +so. The protection of the magistrate renders +the slave less contemptible in the eyes of his +master, who is thereby induced to consider +him with more regard, and to treat him with +more gentleness. Gentle usage renders the +slave not only more faithful, but more intelligent, +and, therefore, upon a double account, +more useful. He approaches more to the condition +of a free servant, and may possess some +degree of integrity and attachment to his master's +interest; virtues which frequently belong +to free servants, but which never can belong +to a slave, who is treated as slaves commonly +are in countries where the master is perfectly +free and secure.</p> + +<p>That the condition of a slave is better under +an arbitrary than under a free government, is, +I believe, supported by the history of all ages +and nations. In the Roman history, the first +time we read of the magistrate interposing to +protect the slave from the violence of his +master, is under the emperors. When Vidius +Pollio, in the presence of Augustus, ordered +one of his slaves, who had committed a slight +fault, to be cut into pieces and thrown into +his fish-pond, in order to feed his fishes, the +emperor commanded him, with indignation, +to emancipate immediately, not only that +slave, but all the others that belonged to him. +Under the republic no magistrate could have<span class='pagenum'><a name="Page_242" id="Page_242">[Pg 242]</a></span> +had authority enough to protect the slave, much +less to punish the master.</p> + +<p>The stock, it is to be observed, which has +improved the sugar colonies of France, particularly +the great colony of St Domingo, has +been raised almost entirely from the gradual +improvement and cultivation of those colonies. +It has been almost altogether the produce +of the soil and of the industry of the colonists, +or, what comes to the same thing, the +price of that produce, gradually accumulated +by good management, and employed in raising +a still greater produce. But the stock +which has improved and cultivated the sugar +colonies of England, has, a great part of it, +been sent out from England, and has by no +means been altogether the produce of the soil +and industry of the colonists. 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 overflowed, if +one may say so, upon these colonies. But +the prosperity of the sugar colonies of France +has been entirely owing to the good conduct +of the colonists, which must therefore have +had some superiority over that of the English; +and this superiority has been remarked +in nothing so much as in the good management +of their slaves.</p> + +<p>Such have been the general outlines of the +policy of the different European nations with +regard to their colonies.</p> + +<p>The policy of Europe, therefore, has very +little to boast of, either in the original establishment, +or, so far as concerns their internal +government, in the subsequent prosperity of +the colonies of America.</p> + +<p>Folly and injustice seem to have been the +principles which presided over and directed +the first project of establishing those colonies; +the folly of hunting after gold and silver +mines, and the injustice of coveting the possession +of a country whose harmless natives, +far from having ever injured the people of +Europe, had received the first adventurers +with every mark of kindness and hospitality.</p> + +<p>The adventurers, indeed, who formed some +of the latter establishments, 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.</p> + +<p>The English puritans, restrained at home, +fled for freedom to America, and established +there the four governments of New England. +The English catholics, treated with much +greater injustice, established that of Maryland; +the quakers, that of Pennsylvania. The +Portuguese Jews, persecuted by the inquisition, +stript of their fortunes, and banished to +Brazil, introduced, by their example, some +sort of order and industry among the transported +felons and strumpets by whom that colony +was originally peopled, and taught them +the culture of the sugar-cane. Upon all these +different occasions, it was not the wisdom and +policy, but the disorder and injustice of the +European governments, which peopled and +cultivated America.</p> + +<p>In effectuating some of the most important +of these establishments, the different governments +of Europe had as little merit as in projecting +them. The conquest of Mexico was +the project, not of the council of Spain, but +of a governor of Cuba; and it was effectuated +by the spirit of the bold adventurer to whom +it was entrusted, in spite of every thing which +that governor, who soon repented of having +trusted such a person, could do to thwart it. +The conquerors of Chili and Peru, and of almost +all the other Spanish settlements upon +the continent of America, carried out with +them no other public encouragement, but a +general permission to make settlements and +conquests in the name of the king of Spain. +Those adventures were all at the private risk +and expense of the adventurers. The government +of Spain contributed scarce any thing +to any of them. That of England contributed +as little towards effectuating the establishment +of some of its most important colonies +in North America.</p> + +<p>When those establishments were effectuated, +and had become so considerable as to attract +the attention of the mother country, the first +regulations which she made with regard to +them, had always in view to secure to herself +the monopoly of their commerce; to confine +their market, and to enlarge her own at their +expense, and, consequently, rather to damp and +discourage, than to quicken and forward the +course of their prosperity. In the different +ways in which this monopoly has been exercised, +consists one of the most essential differences +in the policy of the different European +nations with regard to their colonies. The best +of them all, that of England, is only somewhat +less illiberal and oppressive than that of any of +the rest.</p> + +<p>In what way, therefore, has the policy of +Europe contributed either to the first establishment, +or to the present grandeur of the +colonies of America? In one way, and in one +way only, it has contributed a good deal. +<i>Magna virûm mater!</i> It bred and formed the +men who were capable of achieving such great +actions, and of laying the foundation of so +great an empire; and there is no other quarter +of the world, of which the policy is capable +of forming, or has ever actually, and in +fact, formed such men. The colonies owe to +the policy of Europe the education and great +views of their active and enterprising founders; +and some of the greatest and most important +of them, so far as concerns their internal +government, owe to it scarce any thing +else.</p> +<p><span class='pagenum'><a name="Page_243" id="Page_243">[Pg 243]</a></span></p> + + +<h4>PART III.</h4> + +<h4><i>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.</i></h4> + +<p>Such are the advantages which the colonies +of America have derived from the policy of +Europe.</p> + +<p>What are these which Europe has derived +from the discovery and colonization of America?</p> + +<p>Those advantages may be divided, first, into +the general advantages which Europe, considered +as one great country, has derived from +those great events; and, secondly, into the +particular advantages which each colonizing +country has derived from the colonies which +particularly belong to it, in consequence of +the authority or dominion which it exercises +over them.</p> + +<p>The general advantages which Europe, considered +as one great country, has derived from +the discovery and colonization of America, +consist, first, in the increase of its enjoyments; +and, secondly, in the augmentation of its industry.</p> + +<p>The surplus produce of America imported +into Europe, furnishes the inhabitants of this +great continent with a variety of commodities +which they could not otherwise have possessed; +some for conveniency and use, some for +pleasure, and some for ornament; and thereby +contributes to increase their enjoyments.</p> + +<p>The discovery and colonization of America, +it will readily be allowed, have contributed +to augment the industry, first, of all +the countries which trade to it directly, such +as Spain, Portugal, France, and England; +and, secondly, of all those which, without +trading to it directly, send, through the +medium of other countries, goods to it of their +own produce, such as Austrian Flanders, and +some provinces of Germany, which, through +the medium of the countries before mentioned, +send to it a considerable quantity of linen and +other goods. All such countries have evidently +gained a more extensive market for +their surplus produce, and must consequently +have been encouraged to increase its quantity.</p> + +<p>But that those great events should likewise +have contributed to encourage the industry +of countries such as Hungary and Poland, +which may never, perhaps, have sent a single +commodity of their own produce to America, +is not, perhaps, altogether so evident. That +those events have done so, however, cannot +be doubted. Some part of the produce of +America is consumed in Hungary and Poland, +and there in some demand there for the +sugar, chocolate, and tobacco, of that new +quarter of the world. But those commodities +must be purchased with something which is +either the produce of the industry of Hungary +and Poland, or with something which had +been purchased with some part of that produce. +Those commodities of America are +new values, new equivalents, introduced into +Hungary and Poland, to be exchanged there +for the surplus produce of these countries. +By being carried thither, they create a new +and more extensive market for that surplus +produce. They raise its value, and thereby +contribute to encourage its increase. Though +no part of it may ever be carried to America, +it may be carried to other countries, which +purchase it with a part of their share of the +surplus produce of America, and it may find +a market by means of the circulation of that +trade which was originally put into motion +by the surplus produce of America.</p> + +<p>Those great events may even have contributed +to increase the enjoyments, and to augment +the industry, of countries which not only +never sent any commodities to America, but +never received any from it. Even such countries +may have received a greater abundance +of other commodities from countries, of which +the surplus produce had been augmented by +means of the American trade. This greater +abundance, as it must necessarily have increased +their enjoyments, so it must likewise +have augmented their industry. A greater +number of new equivalents, of some kind or +other, must have been presented to them to +be exchanged for the surplus produce of that +industry. A more extensive market must +have been created for that surplus produce, so +as to raise its value, and thereby encourage +its increase. The mass of commodities annually +thrown into the great circle of European +commerce, and by its various revolutions +annually distributed among all the different +nations comprehended within it, must have +been augmented by the whole surplus produce +of America. A greater share of this +greater mass, therefore, is likely to have fallen +to each of those nations, to have increased +their enjoyments, and augmented their industry.</p> + +<p>The exclusive trade of the mother countries +tends to diminish, or at least to keep down below +what they would otherwise rise to, both +the enjoyments and industry of all those nations +in general, and of the American colonies +in particular. It is a dead weight upon the +action of one of the great springs which puts +into motion a great part of the business of +mankind. By rendering the colony produce +dearer in all other countries, it lessens its consumption, +and thereby cramps the industry of +the colonies, and both the enjoyments and the +industry or all 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 pro<span class='pagenum'><a name="Page_244" id="Page_244">[Pg 244]</a></span>duce +of all other countries dearer in the colonies, +it cramps in the same manner the industry +of all other colonies, and both the enjoyments +and the industry of the colonies. It is +a clog which, for the supposed benefit of some +particular countries, embarrasses the pleasures +and encumbers the industry of all other countries, +but of the colonies more than of any +other. It not only excludes as much as possible +all other countries from one particular +market, but it confines as much as possible +the colonies to one particular market; and +the difference is very great between being +excluded from one particular market when all +others are open, and being confined to one +particular market when all others are shut up. +The surplus produce of the colonies, however, +is the original source of all that increase of +enjoyments and industry which Europe derives +from the discovery and colonization of +America, and the exclusive trade of the mother +countries tends to render this source +much less abundant than it otherwise would +be.</p> + +<p>The particular advantages which each colonizing +country derives from the colonies which +particularly belong to it, are of two different +kinds; first, those common advantages which +every empire derives from the provinces subject +to its dominion; and, secondly, those peculiar +advantages which are supposed to result +from provinces of so very peculiar a nature +as the European colonies of America.</p> + +<p>The common advantages which every empire +derives from the provinces subject to its +dominion consist, first, in the military force +which they furnish for its defence; and, secondly, +in the revenue which they furnish for +the support of its civil government. The Roman +colonies furnished occasionally both the +one and the other. The Greek colonies sometimes +furnished a military force, but seldom +any revenue. They seldom acknowledged +themselves subject to the dominion of the mother +city. They were generally her allies in +war, but very seldom her subjects in peace.</p> + +<p>The European colonies of America have +never yet furnished any military force for the +defence of the mother country. The military +force has never yet been sufficient for their +own defence; and in the different wars in +which the mother countries have been engaged, +the defence of their colonies has generally occasioned +a very considerable distraction of the +military force of those countries. In this respect, +therefore, all the European colonies +have, without exception, been a cause rather +of weakness than of strength to their respective +mother countries.</p> + +<p>The colonies of Spain and Portugal only +have contributed any revenue towards the defence +of the mother country, or the support +of her civil government. The taxes which +have been levied upon those of other European +nations, upon those of England in particular, +have seldom been equal to the expense +laid out upon them in time of peace, +and never sufficient to defray that which they +occasioned in time of war. Such colonies, +therefore, have been a source of expense, and +not of revenue, to their respective mother +countries.</p> + +<p>The advantages of such colonies to their +respective mother countries, consist altogether +in those peculiar advantages which are supposed +to result from provinces of so very peculiar +a nature as the European colonies of +America; and the exclusive trade, it is acknowledged, +is the sole source of all those peculiar +advantages.</p> + +<p>In consequence of this exclusive trade, all +that part of the surplus produce of the English +colonies, for example, which consists in +what are called enumerated commodities, can +be sent to no other country but England. +Other countries must afterwards buy it of +her. It must be cheaper, therefore, in England +than it can be in any other country, and +must contribute more to increase the enjoyments +of England than those of any other +country. It must likewise contribute more +to encourage her industry. For all those parts +of her own surplus produce which England +exchanges for those enumerated commodities, +she must get a better price than any other +countries can get for the like parts of theirs, +when they exchange them for the same commodities. +The manufactures of England, for +example, will purchase a greater quantity of +the sugar and tobacco of her own colonies +than the like manufactures of other countries +can purchase of that sugar and tobacco. So +far, therefore, as the manufactures of England +and those of other countries are both to +be exchanged for the sugar and tobacco of the +English colonies, this superiority of price +gives an encouragement to the former beyond +what the latter can, in these circumstances, +enjoy. The exclusive trade of the colonies, +therefore, as it diminishes, or at least keeps +down below what they would otherwise rise +to, both the enjoyments and the industry of +the countries which do not possess it, so it +gives an evident advantage to the countries +which do possess it over those other countries.</p> + +<p>This advantage, however, will, perhaps, be +found to be rather what may be called a relative +than an absolute advantage, and to give +a superiority to the country which enjoys it, +rather by depressing the industry and produce +of other countries, than by raising those +of that particular country above what they +would naturally rise to in the case of a free +trade.</p> + +<p>The tobacco of Maryland and Virginia, for +example, by means of the monopoly which +England enjoys of it, certainly comes cheaper +to England than it can do to France, to whom +England commonly sells a considerable part<span class='pagenum'><a name="Page_245" id="Page_245">[Pg 245]</a></span> +of it. But had France and all other European +countries been at all times allowed a free +trade to Maryland and Virginia, the tobacco +of those colonies might by this time have +come cheaper than it actually does, not only +to all those other countries, but likewise to +England. The produce of tobacco, in consequence +of a market so much more extensive +than any which it has hitherto enjoyed, +might, and probably would, by this time have +been so much increased as to reduce the profits +of a tobacco plantation to their natural +level with those of a corn plantation, which it +is supposed they are still somewhat above. +The price of tobacco might, and probably +would, by this time have fallen somewhat +lower than it is at present. An equal quantity +of the commodities, either of England or +of those other countries, might have purchased +in Maryland and Virginia a greater quantity of +tobacco than it can do at present, and consequently +have been sold there for so much a +better price. So far as that weed, therefore, +can, by its cheapness and abundance, increase +the enjoyments, or augment the industry, +either of England or of any other country, it +would probably, in the case of a free trade, +have produced both these effects in somewhat +a greater degree than it can do at present. +England, indeed, would not, in this case, have +had any advantage over other countries. She +might have bought the tobacco of her colonies +somewhat cheaper, and consequently have +sold some of her own commodities somewhat +dearer, than she actually does; but she could +neither have bought the one cheaper, nor sold +the other dearer, than any other country might +have done. She might, perhaps, have gained +an absolute, but she would certainly have lost +a relative advantage.</p> + +<p>In order, however, to obtain this relative +advantage in the colony trade, in order to execute +the invidious and malignant project of +excluding, as much as possible, other nations +from any share in it, England, there are very +probable reasons for believing, has not only +sacrificed a part of the absolute advantage +which she, as well as every other nation, might +have derived from that trade, but has subjected +herself both to an absolute and to a relative +disadvantage in almost every other branch of +trade.</p> + +<p>When, by the act of navigation, England +assumed to herself the monopoly of the colony +trade, the foreign capitals which had before +been employed in it, were necessarily +withdrawn from it. The English capital, +which had before carried on but a part of it, +was now to carry on the whole. The capital +which had before supplied the colonies with +but a part of the goods which they wanted +from Europe, was now all that was employed +to supply them with the whole. But it could +not supply them with the whole; and the +goods with which it did supply them were +necessarily sold very dear. The capital which +had before bought but a part of the surplus +produce of the colonies, was now all that was +employed to buy the whole. But it could +not buy the whole at anything near the old +price; and therefore, whatever it did buy, it +necessarily bought very cheap. But in an +employment of capital, in which the merchant +sold very dear, and bought very cheap, the +profit must have been very great, and much +above the ordinary level of profit in other +branches of trade. This superiority of profit +in the colony trade could not fail to draw from +other branches of trade a part of the capital +which had before been employed in them. +But this revulsion of capital, as it must have +gradually increased the competition of capitals +in the colony trade, so it must have gradually +diminished that competition in all those +other branches of trade; as it must have gradually +lowered the profits of the one, so it +must have gradually raised those of the other, +till the profits of all came to a new level, different +from, and somewhat higher, than that +at which they had been before.</p> + +<p>This double effect of drawing capital from +all other trades, and of raising the rate of +profit somewhat higher than it otherwise +would have been in all trades, was not only +produced by this monopoly upon its first establishment, +but has continued to be produced +by it ever since.</p> + +<p><i>First</i>, This monopoly has been continually +drawing capital from all other trades, to be +employed in that of the colonies.</p> + +<p>Though the wealth of Great Britain has +increased very much since the establishment +of the act of navigation, it certainly has not +increased in the same proportion as that of +the colonies. But the foreign trade of every +country naturally increases in proportion to +its wealth, its surplus produce in proportion +to its whole produce; and Great Britain +having engrossed to herself almost the whole +of what may be called the foreign trade of +the colonies, and her capital not having increased +in the same proportion as the extent +of that trade, she could not carry it on without +continually withdrawing from other +branches of trade some part of the capital +which had before been employed in them, as +well as withholding from them a great deal +more which would otherwise have gone to +them. Since the establishment of the act of +navigation, accordingly, the colony trade has +been continually increasing, while many other +branches of foreign trade, particularly of that +to other parts of Europe, have been continually +decaying. Our manufactures for foreign +sale, instead of being suited, as before the +act of navigation, to the neighbouring market +of Europe, or to the more distant one of the +countries which lie round the Mediterranean +sea, have, the greater part of them, been accommodated +to the still more distant one of<span class='pagenum'><a name="Page_246" id="Page_246">[Pg 246]</a></span> +the colonies; to the market in which they +have the monopoly, rather than to that in +which they have many competitors. The +causes of decay in other branches of foreign +trade, which, by Sir Matthew Decker and +other writers, have been sought for in the +excess and improper made of taxation, in the +high price of labour, in the increase of +luxury, &c. may all be found in the overgrowth +of the colony trade. The mercantile +capital of Great Britain, though very +great, yet not being infinite, and though +greatly increased since the act of navigation, +yet not being increased in the same proportion +as the colony trade, that trade could not +possibly be carried on without withdrawing +some part of that capital from other branches +of trade, nor consequently without some decay +of those other branches.</p> + +<p>England, it must be observed, was a great +trading country, her mercantile capital was +very great, and likely to become still greater +and greater every day, not only before the act +of navigation had established the monopoly of +the corn trade, but before that trade was very +considerable. In the Dutch war, during the +government of Cromwell, her navy was superior +to that of Holland; and in that which +broke out in the beginning of the reign of +Charles II., it was at least equal, perhaps +superior to the united navies of France and +Holland. Its superiority, perhaps, would +scarce appear greater in the present times, at +least if the Dutch navy were to bear the +same proportion to the Dutch commerce now +which it did then. But this great naval +power could not, in either of those wars, be +owing to the act of navigation. During the +first of them, the plan of that act had been +but just formed; and though, before the +breaking out of the second, it had been fully +enacted by legal authority, yet no part of it +could have had time to produce any considerable +effect, and least of all that part which +established the exclusive trade to the colonies. +Both the colonies and their trade were inconsiderable +then, in comparison of what they +are now. The island of Jamaica was an +unwholesome desert, little inhabited, and less +cultivated. New York and New Jersey were +in the possession of the Dutch, the half of +St. Christopher's in that of the French. +The island of Antigua, the two Carolinas, +Pennsylvania, Georgia, and Nova Scotia, +were not planted. Virginia, Maryland, and +New England were planted; and though +they were very thriving colonies, yet there +was not perhaps at that time, either in Europe +or America, a single person who foresaw, +or even suspected, the rapid progress which +they have since made in wealth, population, +and improvement. The island of Barbadoes, +in short, was the only British colony of any +consequence, of which the condition at that +time bore any resemblance to what it is at +present. The trade of the colonies, of which +England, even for some time after the act of +navigation, enjoyed but a part (for the act +of navigation was not very strictly executed +till several years after it was enacted), could +not at that time be the cause of the great +trade of England, nor of the great naval +power which was supported by that trade. +The trade which at that time supported that +great naval power was the trade of Europe, +and of the countries which lie round the Mediterranean +sea. But the share which Great +Britain at present enjoys of that trade could +not support any such great naval power. +Had the growing trade of the colonies been +left free to all nations, whatever share of it +might have fallen to Great Britain, and a +very considerable share would probably have +fallen to her, must have been all an addition +to this great trade of which she was before in +possession. In consequence of the monopoly, +the increase of the colony trade has not so +much occasioned an addition to the trade +which Great Britain had before, as a total +change in its direction.</p> + +<p><i>Secondly</i>, This monopoly has necessarily +contributed to keep up the rate of profit, in +all the different branches of British trade, +higher than it naturally would have been, had +all nations been allowed a free trade to the +British colonies.</p> + +<p>The monopoly of the colony trade, as it necessarily +drew towards that trade a greater +proportion of the capital of Great Britain than +what would have gone to it of its own accord, +so, by the expulsion of all foreign capitals, it +necessarily reduced the whole quantity of +capital employed in that trade below what it +naturally would have been in the case of a +free trade. But, by lessening the competition +of capitals in that branch of trade, it necessarily +raised the rate of profit in that +branch. By lessening, too, the competition +of British capitals in all other branches of +trade, it necessarily raised the rate of British +profit in all those other branches. Whatever +may have been, at any particular period since +the establishment of the act of navigation, the +state or extent of the mercantile capital of +Great Britain, the monopoly of the colony +trade must, during the continuance of that +state, have raised the ordinary rate of British +profit higher than it otherwise would have +been, both in that and in all the other branches +of British trade. If, since the establishment +of the act of navigation, the ordinary rate of +British profit has fallen considerably, as it +certainly has, it must have fallen still lower, +had not the monopoly established by that act +contributed to keep it up.</p> + +<p>But whatever raises, in any country, the +ordinary rate of profit higher than it otherwise +would be, necessarily subjects that country<span class='pagenum'><a name="Page_247" id="Page_247">[Pg 247]</a></span> +both to an absolute, and to a relative disadvantage +in every branch of trade of which she +has not the monopoly.</p> + +<p>It subjects her to an absolute disadvantage; +because, in such branches of trade, her merchants +cannot get this greater profit without +selling dearer than they otherwise would do, +both the goods of foreign countries which +they import into their own, and the goods of +their own country which they export to foreign +countries. Their own country must +both buy dearer and sell dearer; must both +buy less, and sell less; must both enjoy less +and produce less, than she otherwise would do.</p> + +<p>It subjects her to a relative disadvantage; +because, in such branches of trade, it sets +other countries, which are not subject to the +same absolute disadvantage, either more above +her or less below her, than they otherwise +would be. It enables them both to enjoy +more and to produce more, in proportion to +what she enjoys and produces. It renders +their superiority greater, or their inferiority +less, than it otherwise would be. By raising +the price of her produce above what it otherwise +would be, it enables the merchants of +other countries to undersell her in foreign +markets, and thereby to justle her out of almost +all those branches of trade, of which she +has not the monopoly.</p> + +<p>Our merchants frequently complain of the +high wages of British labour, as the cause of +their manufactures being undersold in foreign +markets; but they are silent about the high +profits of stock. They complain of the extravagant +gain of other people; but they say +nothing of their own. The high profits of +British stock, however, may contribute towards +raising the price of British manufactures, +in many cases, as much, and in some +perhaps more, than the high wages of British +labour.</p> + +<p>It is in this manner that the capital of +Great Britain, one may justly say, has partly +been drawn and partly been driven from the +greater part of the different branches of trade +of which she has not the monopoly; from the +trade of Europe, in particular, and from that +of the countries which lie round the Mediterranean +sea.</p> + +<p>It has partly been drawn from those +branches of trade, by the attraction of superior +profit in the colony trade, in consequence +of the continual increase of that trade, and of +the continual insufficiency of the capital which +had carried it on one year to carry it on the +next.</p> + +<p>It has partly been driven from them, by +the advantage which the high rate of profit +established in Great Britain gives to other +countries, in all the different branches of +trade of which Great Britain has not the monopoly.</p> + +<p>As the monopoly of the colony trade has +drawn from those other branches a part of the +British capital, which would otherwise have +been employed in them, so it has forced into +them many foreign capitals which would never +have gone to them, had they not been expelled +from the colony trade. In those other +branches of trade, it has diminished the competition +of British capitals, and thereby raised +the rate of British profit higher than it +otherwise would have been. On the contrary, +it has increased the competition of foreign +capitals, and thereby sunk the rate of +foreign profit lower than it otherwise would +have been. Both in the one way and in the +other, it must evidently have subjected Great +Britain to a relative disadvantage in all those +other branches of trade.</p> + +<p>The colony trade, however, it may perhaps +be said, is more advantageous to Great Britain +than any other; and the monopoly, by +forcing into that trade a greater proportion +of the capital of Great Britain than what +would otherwise have gone to it, has turned +that capital into an employment, more advantageous +to the country than any other which +it could have found.</p> + +<p>The most advantageous employment of any +capital to the country to which it belongs, is +that which maintains there the greatest quantity +of productive labour, and increases the +most the annual produce of the land and labour +of that country. But the quantity of +productive labour which any capital employed +in the foreign trade of consumption can maintain, +is exactly in proportion, it has been +shown in the second book, to the frequency +of its returns. A capital of a thousand +pounds, for example, employed in a foreign +trade of consumption, of which the returns +are made regularly once in the year, can keep +in constant employment, in the country to +which it belongs, a quantity of productive labour, +equal to what a thousand pounds can +maintain there for a year. If the returns are +made twice or thrice in the year, it can keep +in constant employment a quantity of productive +labour, equal to what two or three thousand +pounds can maintain there for a year. +A foreign trade of consumption carried on +with a neighbouring, is, upon that account, +in general, more advantageous than one carried +on with a distant country; and, for the +same reason, a direct foreign trade of consumption, +as it has likewise been shown in +the second book, is in general more advantageous +than a round-about one.</p> + +<p>But the monopoly of the colony trade, so +far as it has operated upon the employment of +the capital of Great Britain, has, in all cases, +forced some part of it from a foreign trade of +consumption carried on with a neighbouring, +to one carried on with a more distant country, +and in many cases from a direct foreign trade +of consumption to a round-about one.</p> + +<p><i>First</i>, The monopoly of the colony trade +has, in all cases, forced some part of the cap<span class='pagenum'><a name="Page_248" id="Page_248">[Pg 248]</a></span>ital +of Great Britain from a foreign trade of +consumption carried on with a neighbouring, +to one carried on with a more distant country.</p> + +<p>It has, in all cases, forced some part of that +capital from the trade with Europe, and with +the countries which lie round the Mediterranean +sea, to that with the more distant regions +of America and the West Indies; from +which the returns are necessarily less frequent, +not only on account of the greater distance, +but on account of the peculiar circumstances +of those countries. New colonies, it has already +been observed, are always understocked. +Their capital in always much less than what +they could employ with great profit and advantage +in the improvement and cultivation +of their land. They have a constant demand, +therefore, for more capital than they have of +their own; and, in order to supply the deficiency +of their own, they endeavour to borrow +as much as they can of the mother country, to +whom they are, therefore, always in debt. The +most common way in which the colonies contract +this debt, is not by borrowing upon +bond of the rich people of the mother country, +though they sometimes do this too, but +by running as much in arrear to their correspondents, +who supply them with goods +from Europe, as those correspondents will allow +them. Their annual returns frequently +do not amount to more than a third, and +sometimes not to so great a proportion of +what they owe. The whole capital, therefore, +which their correspondents advance to +them, is seldom returned to Britain in less +than three, and sometimes not in less than +four or five years. But a British capital of a +thousand pounds, for example, which is returned +to Great Britain only once in five +years, can keep in constant employment only +one-fifth part of the British industry which it +could maintain, if the whole was returned +once in the year; and, instead of the quantity +of industry which a thousand pounds +could maintain for a year, can keep in constant +employment the quantity only which +two hundred pounds can maintain for a year. +The planter, no doubt, by the high price +which he pays for the goods from Europe, +by the interest upon the bills which he grants +at distant dates, and by the commission upon +the renewal of those which he grants at near +dates, makes up, and probably more than +makes up, all the loss which his correspondent +can sustain by this delay. But, though +he make up the loss of his correspondent, he +cannot make up that of Great Britain. In a +trade of which the returns are very distant, +the profit of the merchant may be as great or +greater than in one in which they are very +frequent and near; but the advantage of the +country in which he resides, the quantity of +productive labour constantly maintained +there, the annual produce of the land and labour, +must always be much less. That the +returns of the trade to America, and still +more those of that to the West Indies, are, +in general, not only more distant, but more +irregular and more uncertain, too, than those +of the trade to any part of Europe, or even +of the countries which lie round the Mediterranean +sea, will readily be allowed, I imagine, +by every body who has any experience +of these different branches of trade.</p> + +<p><i>Secondly</i>, The monopoly of the colony +trade, has, in many cases, forced some part +of the capital of Great Britain from a direct +foreign trade of consumption, into a round-about +one.</p> + +<p>Among the enumerated commodities which +can be sent to no other market but Great +Britain, there are several of which the quantity +exceeds very much the consumption of +Great Britain, and of which, a part, therefore, +must be exported to other countries. But +this cannot be done without forcing some +part of the capital of Great Britain into a +round-about foreign trade of consumption. +Maryland, and Virginia, for example, send +annually to Great Britain upwards of ninety-six +thousand hogsheads of tobacco, and the +consumption of Great Britain is said not to +exceed fourteen thousand. Upwards of +eighty-two thousand hogsheads, therefore, +must be exported to other countries, to +France, to Holland, and, to the countries +which lie round the Baltic and Mediterranean +seas. But that part of the capital of +Great Britain which brings those eighty-two +thousand hogsheads to Great Britain, which +re-exports them from thence to those other +countries, and which brings back from those +countries to Great Britain either goods +or money in return, is employed in a round-about +foreign trade of consumption; and is +necessarily forced into this employment, in +order to dispose of this great surplus. If we +would compute in how many years the whole +of this capital is likely to come back to Great +Britain, we must add to the distance of the +American returns that of the returns from +those other countries. If, in the direct +foreign trade of consumption which we carry +on with America, the whole capital employed +frequently does not come back in less than +three or four years, the whole capital employed +in this round-about one 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 in the year, the other can keep +in constant employment but a fourth or a fifth +part of that industry. At some of the out-ports +a credit is commonly given to those +foreign correspondents to whom they export +their tobacco. At the port of London, indeed, +it is commonly sold for ready money: +the rule is Weigh and pay. At the port of +London, therefore, the final returns of the<span class='pagenum'><a name="Page_249" id="Page_249">[Pg 249]</a></span> +whole round-about trade are more distant than +the returns from America, by the time only +which the goods may lie unsold in the warehouse; +where, however, they may sometimes +lie long enough. But, had not the colonies +been confined to the market of Great Britain +for the sale of their tobacco, very little more +of it would probably have come to us than +what was necessary for the home consumption. +The goods which Great Britain purchases +at present for her own consumption +with the great surplus of tobacco which she +exports to other countries, she would, in this +case, probably have purchased with the immediate +produce of her own industry, or +with some part of her own manufactures. +That produce, those manufactures, instead of +being almost entirely suited to one great market, +as at present, would probably have been +fitted to a great number of smaller markets. +Instead of one great round-about foreign +trade of consumption, Great Britain would +probably have carried on a great number of +small direct foreign trades of the same kind. +On account of the frequency of the returns, a +part, and probably but a small part, perhaps +not above a third or a fourth of the capital +which at present carries on this great round-about +trade, might have been sufficient to +carry on all those small direct ones; might +have kept in constant employment an equal +quantity of British industry; and have equally +supported the annual produce of the land +and labour of Great Britain. All the purposes +of this trade being, in this manner, +answered by a much smaller capital, there +would have been a large spare capital to apply +to other purposes; to improve the lands, to +increase the manufactures, and to extend the +commerce of Great Britain; to come into +competition at least with the other British +capitals employed in all those different ways, +to reduce the rate of profit in them all, and +thereby to give to Great Britain, in all of +them, a superiority over other countries, still +greater than what she at present enjoys.</p> + +<p>The monopoly of the colony trade, too, has +forced some part of the capital of Great Britain +from all foreign trade of consumption to +a carrying trade; and, consequently from +supporting more or less the industry of Great +Britain, to be employed altogether in supporting +partly that of the colonies, and partly that +of some other countries.</p> + +<p>The goods, for example, which are annually +purchased with the great surplus of eighty-two +thousand hogsheads of tobacco annually re-exported +from Great Britain, are not all consumed +in Great Britain. Part of them, +linen from Germany and Holland, for example, +is returned to the colonies for their particular +consumption. But that part of the +capital of Great Britain which buys the tobacco +with which this linen is afterwards +bought, is necessarily withdrawn from supporting +the industry of Great Britain, to be +employed altogether in supporting, partly that +of the colonies, and partly that of the particular +countries who pay for this tobacco with +the produce of their own industry.</p> + +<p>The monopoly of the colony trade, besides, +by forcing towards it a much greater proportion +of the capital of Great Britain than what +would naturally have gone to it, seems to +have broken altogether that natural balance +which would otherwise have taken place among +all the different branches of British industry. +The industry of Great Britain, instead of +being accommodated to a great number of +small markets, has been principally suited to +one great market. Her commerce, instead +of running in a great number of small channels, +has been taught to run principally in +one great channel. But the whole system of +her industry and commerce has thereby been +rendered less secure; the whole state of her +body politic less healthful than it otherwise +would have been. In her present condition, +Great Britain resembles one of those unwholesome +bodies in which some of the vital +parts are overgrown, and which, upon that +account, are liable to many dangerous disorders, +scarce incident to those in which all +the parts are more properly proportioned. A +small stop in that great blood-vessel, which +has been artificially swelled beyond its natural +dimensions, and through which an unnatural +proportion of the industry and commerce +of the country has been forced to circulate, +is very likely to bring on the most dangerous +disorders upon the whole body politic. The +expectation of a rupture with the colonies, +accordingly, has struck the people of Great +Britain with more terror than they ever felt +for a Spanish armada, or a French invasion. +It was this terror, whether well or ill grounded, +which rendered the repeal of the stamp +act, among the merchants at least, a popular +measure. In the total exclusion from the +colony market, was it to last only for a few +years, the greater part of our merchants used +to fancy that they foresaw an entire stop to +their trade; the greater part of our master +manufacturers, the entire ruin of their business; +and the greater part of our workmen, +an end of their employment. A rupture +with any of our neighbours upon the continent, +though likely, too, to occasion some stop +or interruption in the employments of some +of all these different orders of people, is +foreseen, however, without any such general +emotion. The blood, of which the circulation +is stopt in some of the smaller vessels, +easily disgorges itself into the greater, without +occasioning any dangerous disorder; but, +when it is stopt in any of the greater vessels, +convulsions, apoplexy, or death, are the immediate +and unavoidable consequences. If +but one of those overgrown manufactures, +which, by means either of bounties or of the<span class='pagenum'><a name="Page_250" id="Page_250">[Pg 250]</a></span> +monopoly of the home and colony markets, +have been artificially raised up to any unnatural +height, finds some small stop or interruption +in its employment, it frequently occasions +a mutiny and disorder alarming to government, +and embarrassing even to the deliberations +of the legislature. How great, therefore, +would be the disorder and confusion, it +was thought, which must necessarily be occasioned +by a sudden and entire stop in the employment +of so great a proportion of our principal +manufacturers?</p> + +<p>Some moderate and gradual relaxation of +the laws which give to Great Britain the exclusive +trade to the colonies, till it is rendered +in a great measure free, seems to be the only +expedient which can, in all future times, deliver +her from this danger; which can enable +her, or even force her, to withdraw some part +of her capital from this overgrown employment, +and to turn it, though with less profit, +towards other employments; and which, by +gradually diminishing one branch of her industry, +and gradually increasing all the rest, can, +by degrees, restore all the different branches +of it to that natural, healthful, and proper +proportion, which perfect liberty necessarily +establishes, and which perfect liberty can alone +preserve. To open the colony trade all at +once to all nations, might not only occasion +some transitory inconveniency, but a great +permanent loss, to the greater part of those +whose industry or capital is at present engaged +in it. The sudden loss of the employment, +even of the ships which import the eighty-two +thousand hogsheads of tobacco, which are over +and above the consumption of Great Britain, +might alone be felt very sensibly. Such are +the unfortunate effects of all the regulations +of the mercantile system. They not only introduce +very dangerous disorders into the state +of the body politic, but disorders which it is +often difficult to remedy, without occasioning, +for a time at least, still greater disorders. In +what manner, therefore, the colony trade ought +gradually to be opened; what are the restraints +which ought first, and what are those which +ought last, to be taken away; or in what manner +the natural system of perfect liberty and +justice ought gradually to be restored, we must +leave to the wisdom of future statesmen and +legislators to determine.</p> + +<p>Five different events, unforeseen and unthought +of, have very fortunately concurred +to hinder Great Britain from feeling, so sensibly +as it was generally expected she would, +the total exclusion which has now taken place +for more than a year (from the first of December +1774) from a very important branch +of the colony trade, that of the twelve associated +provinces of North America. First, +those colonies, in preparing themselves for their +non-importation agreement, drained Great Britain +completely of all the commodities which +were fit for their market; secondly, the extraordinary +demand of the Spanish flota has, this +year, drained Germany and the north of many +commodities, linen in particular, which used +to come into competition, even in the British +market, with the manufactures of Great Britain; +thirdly, the peace between Russia and +Turkey has occasioned an extraordinary demand +from the Turkey market, which, during +the distress of the country, and while a +Russian fleet was cruising in the Archipelago, +had been very poorly supplied; fourthly, the +demand of the north of Europe for the manufactures +of Great Britain has been increasing +from year to year, for some time past; +and, fifthly, the late partition, and consequential +pacification of Poland, by opening the +market of that great country, have, this year, +added an extraordinary demand from thence +to the increasing demand of the north. These +events are all, except the fourth, in their nature +transitory and accidental; and the exclusion +from so important a branch of the colony +trade, if unfortunately it should continue +much longer, may still occasion some degree +of distress. This distress, however, as it will +come on gradually, will be felt much less severely +than if it had come on all at once; and, +in the mean time, the industry and capital of +the country may find a new employment and +direction, so as to prevent this distress from +ever rising to any considerable height.</p> + +<p>The monopoly of the colony trade, therefore, +so far as it has turned towards that trade a +greater proportion of the capital of Great Britain +than what would otherwise have gone to +it, has in all cases turned it, from a foreign +trade of consumption with a neighbouring, into +one with a more distant country; in many +cases from a direct foreign trade of consumption +into a round-about one; and, in some +cases, from all foreign trade of consumption +into a carrying trade. It has, in all cases, +therefore, turned it from a direction in which +it would have maintained a greater quantity +of productive labour, into one in which it can +maintain a much smaller quantity. By suiting, +besides, to one particular market only, so +great a part of the industry and commerce of +Great Britain, it has rendered the whole state +of that industry and commerce more precarious +and less secure, than if their produce +had been accommodated to a greater variety +of markets.</p> + +<p>We must carefully distinguish between the +effects of the colony trade and those of the +monopoly of that trade. The former are always +and necessarily beneficial; the latter always +and necessarily hurtful. But the former +are so beneficial, that the colony trade, +though subject to a monopoly, and, notwithstanding +the hurtful effects of that monopoly, +is still, upon the whole, beneficial, and greatly +beneficial, though a good deal less so than it +otherwise would be.</p> + +<p>The effect of the colony trade, in its natu<span class='pagenum'><a name="Page_251" id="Page_251">[Pg 251]</a></span>ral +and free state, is to open a great though +distant market, for such parts of the produce +of British industry as may exceed the demand +of the markets nearer home, of those +of Europe, and of the countries which lie +round the Mediterranean sea. In its natural +and free state, the colony trade, without drawing +from those markets any part of the produce +which had ever been sent to them, encourages +Great Britain to increase the surplus +continually, by continually presenting new +equivalents to be exchanged for it. In its natural +and free state, the colony trade tends to +increase the quantity of productive labour in +Great Britain, but without altering in any respect +the direction of that which had been +employed there before. In the natural and +free state of the colony trade, the competition +of all other nations would hinder the rate of +profit from rising above the common level, +either in the new market, or in the new employment. +The new market, without drawing +any thing from the old one, would create, if +one may say so, a new produce for its own +supply; and that new produce would constitute +a new capital for carrying on the new +employment, which, in the same manner, would +draw nothing from the old one.</p> + +<p>The monopoly of the colony trade, on the +contrary, by excluding the competition of other +nations, and thereby raising the rate of profit, +both in the new market and in the new employment, +draws produce from the old market, +and capital from the old employment. +To augment our share of the colony trade +beyond what it otherwise would be, is the +avowed purpose of the monopoly. If our +share of that trade were to be no greater with, +than it would have been without the monopoly, +there could have been no reason for establishing +the monopoly. But whatever forces +into a branch of trade, of which the returns +are slower and more distant than those of the +greater part of other trades, a greater proportion +of the capital of any country, than what +of its own accord would go to that branch, +necessarily renders the whole quantity of productive +labour annually maintained there, the +whole annual produce of the land and labour +of that country, less than they otherwise would +be. It keeps down the revenue of the inhabitants +of that country below what it would +naturally rise to, and thereby diminishes their +power of accumulation. It not only hinders, +at all times, their capital from maintaining so +great a quantity of productive labour as it +would otherwise maintain, but it hinders it +from increasing so fast as it would otherwise +increase, and, consequently, from maintaining +a still greater quantity of productive labour.</p> + +<p>The natural good effects of the colony trade, +however, more than counterbalance to Great +Britain the bad effects of the monopoly; so +that, monopoly and altogether, that trade, +even as it is carried on at present, is not only +advantageous, but greatly advantageous. The +new market and the new employment which +are opened by the colony trade, are of much +greater extent than that portion of the old +market and of the old employment which is +lost by the monopoly. The new produce and +the new capital which has been created, if one +may say so, by the colony trade, maintain in +Great Britain a greater quantity of productive +labour than what can have been thrown +out of employment by the revulsion of capital +from other trades of which the returns are more +frequent. If the colony trade, however, even +as it is carried on at present, is advantageous +to Great Britain, it is not by means of the +monopoly, but in spite of the monopoly.</p> + +<p>It is rather for the manufactured than for +the rude produce of Europe, that the colony +trade opens a new market. Agriculture is +the proper business of all new colonies; a +business which the cheapness of land renders +more advantageous than any other. They +abound, therefore, in the rude produce of +land; and instead of importing it from other +countries, they have generally a large surplus +to export. In new colonies, agriculture +either draws hands from all other employments, +or keeps them from going to any other +employment. There are few hands to spare +for the necessary, and none for the ornamental +manufactures. The greater part of the +manufactures of both kinds they find it cheaper +to purchase of other countries than to +make for themselves. It is chiefly by encouraging +the manufactures of Europe, that +the colony trade indirectly encourages its +agriculture. The manufacturers of Europe, +to whom that trade gives employment, constitute +a new market for the produce of the +land, and the most advantageous of all markets; +the home market for the corn and cattle, +for the bread and butcher's meat of Europe, +is thus greatly extended by means of +the trade to America.</p> + +<p>But that the monopoly of the trade of populous +and thriving colonies is not alone sufficient +to establish, or even to maintain, manufactures +in any country, the examples of +Spain and Portugal sufficiently demonstrate. +Spain and Portugal were manufacturing +countries before they had any considerable +colonies. Since they had the richest and +most fertile in the world, they have both +ceased to be so.</p> + +<p>In Spain and Portugal, the bad effects of +the monopoly, aggravated by other causes, +have, perhaps, nearly overbalanced the natural +good effects of the colony trade. These +causes seem to be other monopolies of different +kinds: the degradation of the value of +gold and silver below what it is in most other +countries; the exclusion from foreign markets +by improper taxes upon exportation, and the +narrowing of the home market, by still more<span class='pagenum'><a name="Page_252" id="Page_252">[Pg 252]</a></span> +improper taxes upon the transportation of goods +from one part of the country to another; but +above all, that irregular and partial administration +of justice which often protects the +rich and powerful debtor from the pursuit of +his injured creditor, and which makes the industrious +part of the nation afraid to prepare +goods for the consumption of those haughty +and great men, to whom they dare not refuse +to sell upon credit, and from whom they are +altogether uncertain of repayment.</p> + +<p>In England, on the contrary, the natural +good effects of the colony trade, assisted by +other causes, have in a great measure conquered +the bad effects of the monopoly. +These causes seem to be, the general liberty +of trade, which, notwithstanding some restraints, +is at least equal, perhaps superior, to +what it is in any other country; the liberty of +exporting, duty free, almost all sorts of goods +which are the produce of domestic industry, +to almost any foreign country; and what, +perhaps, is of still greater importance, the +unbounded liberty of transporting them from +one part of our own country to any other, +without being obliged to give any account to +any public office, without being liable to +question or examination of any kind; but, +above all, that equal and impartial administration +of justice, which renders the rights of +the meanest British subject respectable to the +greatest, and which, by securing to every man +the fruits of his own industry, gives the +greatest and most effectual encouragement to +every sort of industry.</p> + +<p>If the manufactures of Great Britain, however, +have been advanced, as they certainly +have, by the colony trade, it has not been by +means of the monopoly of that trade, but in +spite of the monopoly. The effect of the +monopoly has been, not to augment the quantity, +but to alter the quality and shape of a +part of the manufactures of Great Britain, +and to accommodate to a market, from which +the returns are slow and distant, what would +otherwise have been accommodated to one +from which the returns are frequent and near. +Its effect has consequently been, to turn a +part of the capital of Great Britain from an +employment in which it would have maintained +a greater quantity of manufacturing industry, +to one in which it maintains a much +smaller, and thereby to diminish, instead of +increasing, the whole quantity of manufacturing +industry maintained in Great Britain.</p> + +<p>The monopoly of the colony trade, therefore, +like all the other mean and malignant +expedients of the mercantile system, depresses +the industry of all other countries, but chiefly +that of the colonies, without in the least increasing, +but on the contrary diminishing, +that of the country in whose favour it is established.</p> + +<p>The monopoly hinders the capital of that +country, whatever may, at any particular +time, be the extent of that capital, from +maintaining so great a quantity of productive +labour as it would otherwise maintain, and +from affording so great a revenue to the industrious +inhabitants as it would otherwise +afford. But as capital can be increased only +by savings from revenue, the monopoly, by +hindering it from affording so great a revenue +as it would otherwise afford, necessarily hinders +it from increasing so fast as it would +otherwise increase, and consequently from +maintaining a still greater quantity of productive +labour, and affording a still greater revenue +to the industrious inhabitants of that +country. One great original source of revenue, +therefore, the wages of labour, the +monopoly must necessarily have rendered, at +all times, less abundant than it otherwise +would have been.</p> + +<p>By raising the rate of mercantile profit, the +monopoly discourages the improvement of land. +The profit of improvement depends upon the +difference between what the land actually produces, +and what, by the application of a certain +capital, it can be made to produce. If +this difference affords a greater profit than +what can be drawn from an equal capital in +any mercantile employment, the improvement +of land will draw capital from all mercantile +employments. If the profit in less, mercantile +employments will draw capital from the +improvement of land. Whatever, therefore, +raises the rate of mercantile profit, either lessens +the superiority, or increases the inferiority +of the profit of improvement: and, in the +one case, hinders capital from going to improvement, +and in the other draws capital +from it; but by discouraging improvement, +the monopoly necessarily retards the natural +increase of another great original source of +revenue, the rent of land. By raising the +rate of profit, too, the monopoly necessarily +keeps up the market rate of interest higher +than it otherwise would be. But the price +of land, in proportion to the rent which it +affords, the number of years purchase which +is commonly paid for it, necessarily falls as +the rate of interest rises, and rises as the rate +of interest falls. The monopoly, therefore, +hurts the interest of the landlord two different +ways, by retarding the natural increase, first, +of his rent, and, secondly, of the price which +he would get for his land, in proportion to the +rent which it affords.</p> + +<p>The monopoly, indeed, raises the rate of +mercantile profit, and thereby augments +somewhat the gain of our merchants. But +as it obstructs the natural increase of capital, +it tends rather to diminish than to increase the +sum total of the revenue which the inhabitants +of the country derive from the profits of +stock; a small profit upon a great capital generally +affording a greater revenue than a +great profit upon a small one. The monopoly +raises the rate of profit, but it hinders the<span class='pagenum'><a name="Page_253" id="Page_253">[Pg 253]</a></span> +sum of profit from rising so high as it otherwise +would do.</p> + +<p>All the original sources of revenue, the +wages of labour, the rent of land, and the +profits of stock, the monopoly renders much +less abundant than they otherwise would be. +To promote the little interest of one little +order of men in one country, it hurts the interest +of all other orders of men in that country, +and of all the men in all other countries.</p> + +<p>It is solely by raising the ordinary rate of +profit, that the monopoly either has proved, +or could prove, advantageous to any one particular +order of men. But besides all the +bad effects to the country in general, which +have already been mentioned as necessarily +resulting from a higher rate of profit, there is +one more fatal, perhaps, than all these put +together, but which, if we may judge from +experience, is inseparably connected with it. +The high rate of profit seems everywhere to +destroy that parsimony which, in other circumstances, +is natural to the character of the +merchant. When profits are high, that sober +virtue seems to be superfluous, and expensive +luxury to suit better the affluence of his situation. +But the owners of the great mercantile +capitals are necessarily the leaders and conductors +of the whole industry of every nation; +and their example has a much greater +influence upon the manners of the whole industrious +part of it than that of any other +order of men. If his employer is attentive +and parsimonious, the workman is very likely +to be so too; but if the master in dissolute +and disorderly, the servant, who shapes his +work according to the pattern which his master +prescribes to him, will shape his life, too, +according to the example which he sets him. +Accumulation is thus prevented in the hands +of all those who are naturally the most disposed +to accumulate; and the funds destined +for the maintenance of productive labour, +receive no augmentation from the revenue of +those who ought naturally to augment them +the most. The capital of the country, instead +of increasing, gradually dwindles away, +and the quantity of productive labour maintained +in it grows every day less and less. +Have the exorbitant profits of the merchants +of Cadiz and Lisbon augmented the capital +of Spain and Portugal? Have they alleviated +the poverty, have they promoted the industry, +of those two beggarly countries? Such has +been the tone of mercantile expense in those +two trading cities, that those exorbitant profits, +far from augmenting the general capital +of the country, seem scarce to have been +sufficient to keep up the capitals upon which +they were made. Foreign capitals are every +day intruding themselves, if I may say so, +more and more into the trade of Cadiz and +Lisbon. It is to expel those foreign capitals +from a trade which their own grows every +day more and more insufficient for carrying +on, that the Spaniards and Portuguese endeavour +every day to straiten more and more the +galling bands of their absurd monopoly. +Compare the mercantile manners of Cadiz +and Lisbon with those of Amsterdam, and +you will be sensible how differently the conduct +and character of merchants are affected +by the high and by the low profits of stock. +The merchants of London, indeed, have not +yet generally become such magnificent lords +as those of Cadiz and Lisbon; but neither +are they in general such attentive and parsimonious +burghers as those of Amsterdam. +They are supposed, however, many of them, +to be a good deal richer than the greater part +of the former, and not quite so rich as many +of the latter: but the rate of their profit is +commonly much lower than that of the former, +and a good deal higher than that of the +latter. Light come, light go, says the proverb; +and the ordinary tone of expense seems +everywhere to be regulated, not so much according +to the real ability of spending, as +to the supposed facility of getting money to +spend.</p> + +<p>It is thus that 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> + +<p>To found a great empire for the sole purpose +of raising up a people of customers, +may at first sight, appear a project fit only +for a nation of shopkeepers. It is, however, +a project altogether unfit for a nation of +shopkeepers, but extremely fit for a nation +whose government is influenced by shopkeepers. +Such statesmen, and such statesmen +only, are capable of fancying that they +will find some advantage in employing the +blood and treasure of their fellow-citizens, to +found and maintain such an empire. Say to +a shopkeeper, Buy me a good estate, and I +shall always buy my clothes at your shop, +even though I should pay somewhat dearer +than what I can have them for at other shops; +and you will not find him very forward to +embrace your proposal. But should any +other person buy you such an estate, the +shopkeeper will be much obliged to your benefactor +if he would enjoin you to buy all +your clothes at his shop. England purchased +for some of her subjects, who found themselves +uneasy at home, a great estate in a +distant country. The price, indeed, was very +small, and instead of thirty years purchase, +the ordinary price of land in the present +times, it amounted to little more than the +expense of the different equipments which +made the first discovery, reconoitered the +coast, and took a fictitious possession of the +country. The land was good, and of great +extent; and the cultivators having plenty of +good ground to work upon, and being for +some time at liberty to sell their produce +where they pleased, became, in the course of<span class='pagenum'><a name="Page_254" id="Page_254">[Pg 254]</a></span> +little more than thirty or forty years (between +1620 and 1660), so numerous and thriving a +people, that the shopkeepers and other traders +of England wished to secure to themselves +the monopoly of their custom. Without +pretending, therefore, that they had paid any +part, either of the original purchase money, +or of the subsequent expense of improvement, +they petitioned the parliament, that the cultivators +of America might for the future be +confined to their shop; first, for buying all +the goods which they wanted from Europe; +and, secondly, for selling all such parts of +their own produce as these traders might find +it convenient to buy. For they did not find +it convenient to buy every part of it. Some +parts of it imported into England, might +have interfered with some of the trades which +they themselves carried on at home. Those +particular parts of it, therefore, they were +willing that the colonists should sell where +they could; the farther off the better; and +upon that account proposed that their market +should be confined to the countries south of +Cape Finisterre. A clause in the famous act +of navigation established this truly shopkeeper +proposal into a law.</p> + +<p>The maintenance of this monopoly has +hitherto been the principal, or more properly, +perhaps, the sole end and purpose of the dominion +which Great Britain assumes over her +colonies. In the exclusive trade, it is supposed, +consists the great advantage of provinces, +which have never yet afforded either +revenue or military force for the support of +the civil government, or the defence of the +mother country. The monopoly is the principal +badge of their dependency, and it is the +sole fruit which has hitherto been gathered +from that dependency. Whatever expense +Great Britain has hitherto laid out in maintaining +this dependency, has really been laid +out in order to support this monopoly. The +expense of the ordinary peace establishment +of the colonies amounted, before the commencement +of the present disturbances to the +pay of twenty regiments of foot; to the expense +of the artillery, stores, and extraordinary +provisions, with which it was necessary +to supply them; and to the expense of a very +considerable naval force, which was constantly +kept up, in order to guard from the smuggling +vessels of other nations, the immense +coast of North America, and that of our West +Indian islands. The whole expense of this +peace establishment was a charge upon the +revenue of Great Britain, and was, at the +same time, the smallest part of what the dominion +of the colonies has cost the mother +country. If we would know the amount of +the whole, we must add to the annual expense +of this peace establishment, the interest +of the sums which, in consequence of their +considering her colonies as provinces subject +to her dominion, Great Britain has, upon +different occasions, laid out upon their defence. +We must add to it, in particular, the +whole expense of the late war, and a great +part of that of the war which preceded it. +The late war was altogether a colony quarrel; +and the whole expense of it, in whatever part +of the world it might have been laid out, +whether in Germany or the East Indies, +ought justly to be stated to the account of +the colonies. It amounted to more than +ninety millions sterling, including not only +the new debt which was contracted, but the +two shillings in the pound additional land tax, +and the sums which were every year borrowed +from the sinking fund. The Spanish war +which began in 1739 was principally a colony +quarrel. Its principal object was to prevent +the search of the colony ships, which carried +on a contraband trade with the Spanish Main. +This whole expense is, in reality, a bounty +which has been given in order to support a +monopoly. The pretended purpose of it was +to encourage the manufactures, and to increase +the commerce of Great Britain. But +its real effect has been to raise the rate of +mercantile profit, and to enable our merchants +to turn into a branch of trade, of which the +returns are more slow and distant than those +of the greater part of other trades, a greater +proportion of their capital than they otherwise +would have done; two events which, if a +bounty could have prevented, it might perhaps +have been very well worth while to give +such a bounty.</p> + +<p>Under the present system of management, +therefore, Great Britain derives nothing but +loss from the dominion which she assumes over +her colonies.</p> + +<p>To propose that Great Britain should voluntarily +give up all authority over her colonies, +and leave them to elect their own magistrates, +to enact their own laws, and to +make peace and war, as they might think +proper, would be to propose such a measure +as never was, and never will be, adopted by +any nation in the world. No nation ever +voluntarily gave up the dominion of any province, +how troublesome soever it might be to +govern it, and how small soever the revenue +which it afforded might be in proportion to +the expense which it occasioned. Such sacrifices, +though they might frequently be +agreeable to the interest, are always mortifying +to the pride of every nation; and, what +is perhaps of still greater consequence, they +are always contrary to the private interest of +the governing part of it, who would thereby +be deprived of the disposal of many places of +trust and profit, of many opportunities of +acquiring wealth and distinction, which the +possession of the most turbulent, and, to the +great body of the people, the most unprofitable +province, seldom fails to afford. The +most visionary enthusiasts would scarce be +capable of proposing such a measure, with<span class='pagenum'><a name="Page_255" id="Page_255">[Pg 255]</a></span> +any serious hopes at least of its ever being +adopted. If it was adopted, however, Great +Britain would not only be immediately freed +from the whole annual expense of the peace +establishment of the colonies, but might settle +with them such a treaty of commerce as +would effectually secure to her a free trade, +more advantageous to the great body of the +people, though less so to the merchants, than +the monopoly which she at present enjoys. +By thus parting good friends, the natural affection +of the colonies to the mother country, +which, perhaps our late dissensions have well +nigh extinguished, would quickly revive. It +might dispose them not only to respect, for +whole centuries together, that treaty of commerce +which they had concluded with us at +parting, but to favour us in war as in +trade, and instead of turbulent and factious +subjects, to become our most faithful, affectionate, +and generous allies; and the same +sort of parental affection on the one side, and +filial respect on the other, might revive between +Great Britain and her colonies, which +used to subsist between those of ancient Greece +and the mother city from which they descended.</p> + +<p>In order to render any province advantageous +to the empire to which it belongs, it ought +to afford, in time of peace, a revenue to the +public, sufficient not only for defraying the +whole expense of its own peace establishment, +but for contributing its proportion to the support +of the general government of the empire. +Every province necessarily contributes, more +or less, to increase the expense of that general +government. If any particular province, +therefore, does not contribute its share towards +defraying this expense, an unequal +burden must be thrown upon some other part +of the empire. The extraordinary revenue, +too, which every province affords to the public +in time of war, ought, from parity of reason, +to bear the same proportion to the extraordinary +revenue of the whole empire, +which its ordinary revenue does in time of +peace. That neither the ordinary nor extraordinary +revenue which Great Britain derives +from her colonies, bears this proportion +to the whole revenue of the British empire, +will readily be allowed. The monopoly, it +has been supposed, indeed, by increasing the +private revenue of the people of Great Britain, +and thereby enabling them to pay greater +taxes, compensates the deficiency of the +public revenue of the colonies. But this monopoly, +I have endeavoured to show, though +a very grievous tax upon the colonies, and +though it may increase the revenue of a particular +order of men in Great Britain, diminishes, +instead of increasing, that of the great +body of the people, and consequently diminishes, +instead of increasing, the ability of +the great body of the people to pay taxes. +The men, too, whose revenue the monopoly +increases, constitute a particular order, which +it is both absolutely impossible to tax beyond +the proportion of other orders, and extremely +impolitic even to attempt to tax beyond that +proportion, as I shall endeavour to show in +the following book. No particular resource, +therefore, can be drawn from this particular +order.</p> + +<p>The colonies may be taxed either by their +own assemblies, or by the parliament of Great +Britain.</p> + +<p>That the colony assemblies can never be so +managed as to levy upon their constituents a +public revenue, sufficient, not only to maintain +at all times their own civil and military +establishment, but to pay their proper proportion +of the expense of the general government +of the British empire, seems not very +probable. It was a long time before even +the parliament of England, though placed +immediately under the eye of the sovereign, +could be brought under such a system of +management, or could be rendered sufficiently +liberal in their grants for supporting the +civil and military establishments even of their +own country. It was only by distributing +among the particular members of parliament +a great part either of the offices, or of the +disposal of the offices arising from this civil +and military establishment, that such a system +of management could be established, even +with regard to the parliament of England. +But the distance of the colony assemblies +from the eye of the sovereign, their number, +their dispersed situation, and their various +constitutions, would render it very difficult +to manage them in the same manner, even +though the sovereign had the same means of +doing it; and those means are wanting. It +would be absolutely impossible to distribute +among all the leading members of all the colony +assemblies such a share, either of the +offices, or of the disposal of the offices, arising +from the general government of the British +empire, as to dispose them to give up +their popularity at home, and to tax their +constituents for the support of that general +government, of which almost the whole emoluments +were to be divided among people who +were strangers to them. The unavoidable +ignorance of administration, besides, concerning +the relative importance of the different +members of those different assemblies, +the offences which must frequently be given, +the blunders which must constantly be committed, +in attempting to manage them in +this manner, seems to render such a system +of management altogether impracticable with +regard to them.</p> + +<p>The colony assemblies, besides, cannot be +supposed the proper judges of what is necessary +for the defence and support of the whole +empire. The care of that defence and support +is not entrusted to them. It is not their +business, and they have no regular means of +information concerning it. The assembly of<span class='pagenum'><a name="Page_256" id="Page_256">[Pg 256]</a></span> +a province, like the vestry of a parish, may +judge very properly concerning the affairs of +its own particular district, but can have no +proper means of judging concerning those of +the whole empire. It cannot even judge properly +concerning the proportion which its own +province bears to the whole empire, or concerning +the relative degree of its wealth and +importance, compared with the other provinces; +because those other provinces are not +under the inspection and superintendency of +the assembly of a particular province. What +is necessary for the defence and support of the +whole empire, and in what proportion each +part ought to contribute, can be judged of +only by that assembly which inspects and superintends +the affairs of the whole empire.</p> + +<p>It has been proposed, accordingly, that the +colonies should be taxed by requisition, the +parliament of Great Britain determining the +sum which each colony ought to pay, and the +provincial assembly assessing and levying it +in the way that suited best the circumstances +of the province. What concerned the whole +empire would in this way be determined by +the assembly which inspects and superintends +the affairs of the whole empire; and the provincial +affairs of each colony might still be regulated +by its own assembly. Though the +colonies should, in this case, have no representatives +in the British parliament, yet, if we +may judge by experience, there is no probability +that the parliamentary requisition would +be unreasonable. The parliament of England +has not, upon any occasion, shewn the smallest +disposition to overburden those parts of +the empire which are not represented in parliament. +The islands of Guernsey and Jersey, +without any means of resisting the authority +of parliament, are more lightly taxed than +any part of Great Britain. Parliament, in attempting +to exercise its supposed right, whether +well or ill grounded, of taxing the colonies, +has never hitherto demanded of them +any thing which even approached to a just +proportion to what was paid by their fellow-subjects +at home. If the contribution of the +colonies, besides, was to rise or fall in proportion +to the rise or fall of the land-tax, parliament +could not tax them without taxing, +at the same time, its own constituents, and +the colonies might, in this case, be considered +as virtually represented in parliament.</p> + +<p>Examples are not wanting of empires in +which all the different provinces are not taxed, +if I may be allowed the expression, in one +mass; but in which the sovereign regulates +the sum which each province ought to pay, +and in some provinces assesses and levies it +as he thinks proper; while in others he leaves +it to be assessed and levied as the respective +states of each province shall determine. In +some provinces of France, the king not only +imposes what taxes he thinks proper, but assesses +and levies them in the way he thinks +proper. From others he demands a certain +sum, but leaves it to the states of each province +to assess and levy that sum as they think +proper. According to the scheme of taxing +by requisition, the parliament of Great Britain +would stand nearly in the same situation +towards the colony assemblies, as the king of +France does towards the states of those provinces +which still enjoy the privilege of having +states of their own, the provinces of +France which are supposed to be the best governed.</p> + +<p>But though, according to this scheme, the +colonies could have no just reason to fear that +their share of the public burdens should ever +exceed the proper proportion to that of their +fellow-citizens at home, Great Britain might +have just reason to fear that it never would +amount to that proper proportion. The parliament +of Great Britain has not, for some +time past, had the same established authority +in the colonies, which the French king has in +those provinces of France which still enjoy +the privilege of having states of their own. +The colony assemblies, if they were not very +favourably disposed (and unless more skilfully +managed than they ever have been hitherto, +they are not very likely to be so), might still +find many pretences for evading or rejecting +the most reasonable requisitions of parliament. +A French war breaks out, we shall +suppose; ten millions must immediately be +raised, in order to defend the seat of the empire. +This sum must be borrowed upon the +credit of some parliamentary fund mortgaged +for paying the interest. Part of this fund +parliament proposes to raise by a tax to be +levied in Great Britain, and part of it by a +requisition to all the different colony assemblies +of America and the West Indies. Would +people readily advance their money upon the +credit of a fund which partly depended upon +the good humour of all these assemblies, far +distant from the seat of the war, and sometimes, +perhaps, thinking themselves not much concerned +in the event of it? Upon such a fund, +no more money would probably be advanced +than what the tax to be levied in Great Britain +might be supposed to answer for. The +whole burden of the debt contracted on account +of the war would in this manner fall, +as it always has done hitherto, upon Great +Britain; upon a part of the empire, and not +upon the whole empire. Great Britain is, +perhaps, since the world began, the only state +which, as it has extended its empire, has only +increased its expense, without once augmenting +its resources. Other states have generally +disburdened themselves, upon their subject +and subordinate provinces, of the most +considerable part of the expense of defending +the empire. Great Britain has hitherto suffered +her subject and subordinate provinces to +disburden themselves upon her of almost this +whole expense. In order to put Great Britain<span class='pagenum'><a name="Page_257" id="Page_257">[Pg 257]</a></span> +upon a footing of equality with her own colonies, +which the law has hitherto supposed to +be subject and subordinate, it seems necessary, +upon the scheme of taxing them by parliamentary +requisition, that parliament should +have some means of rendering its requisitions +immediately effectual, in case the colony assemblies +should attempt to evade or reject +them; and what those means are, it is not +very easy to conceive, and it has not yet been +explained.</p> + +<p>Should the parliament of Great Britain, at +the same time, be ever fully established in the +right of taxing the colonies, even independent +of the consent of their own assemblies, the +importance of those assemblies would, from +that moment, be at an end, and with it, that +of all the leading men of British America. +Men desire to have some share in the management +of public affairs, chiefly on account of +the importance which it gives them. Upon +the power which the greater part of the leading +men, the natural aristocracy of every country, +have of preserving or defending their respective +importance, depends the stability and +duration of every system of free government. +In the attacks which those leading men are continually +making upon the importance of one another, +and in the defence of their own, consists +the whole play of domestic faction and ambition. +The leading men of America, like those +of all other countries, desire to preserve their +own importance. They feel, or imagine, that if +their assemblies, which they are fond of calling +parliaments, and of considering as equal +in authority to the parliament of Great Britain, +should be so far degraded as to become +the humble ministers and executive officers +of that parliament, the greater part of their +own importance would be at an end. They +have rejected, therefore, the proposal of being +taxed by parliamentary requisition, and, +like other ambitious and high-spirited men, +have rather chosen to draw the sword in defence +of their own importance.</p> + +<p>Towards the declension of the Roman republic, +the allies of Rome, who had borne +the principal burden of defending the state +and extending the empire, demanded to be +admitted to all the privileges of Roman citizens. +Upon being refused, the social war +broke out. During the course of that war, +Rome granted those privileges to the greater +part of them, one by one, and in proportion as +they detached themselves from the general +confederacy. The parliament of Great Britain +insists upon taxing the colonies; and they +refuse to be taxed by a parliament in which +they are not represented. If to each colony +which should detach itself from the general +confederacy, Great Britain should allow such +a number of representatives as suited the proportion +of what it contributed to the public +revenue of the empire, in consequence of its +being subjected to the same taxes, and in compensation +admitted to the same freedom of +trade with its fellow-subjects at home; the +number of its representatives to be augmented +as the proportion of its contribution might afterwards +augment; a new method of acquiring +importance, a new and more dazzling object +of ambition, would be presented to the +leading men of each colony. Instead of piddling +for the little prizes which are to be found +in what may be called the paltry raffle of colony +faction, they might then hope, from the +presumption which men naturally have in their +own ability and good fortune, to draw some +of the great prizes which sometimes come from +the wheel of the great state lottery of British +politics. Unless this or some other method is +fallen upon, and there seems to be none more +obvious than this, of preserving the importance +and of gratifying the ambition of the leading +men of America, it is not very probable that they +will ever voluntarily submit to us; and we +ought to consider, that the blood which must +be shed in forcing them to do so, is, every +drop of it, the blood either of those who are, +or of those whom we wish to have for our fellow-citizens. +They are very weak who flatter +themselves that, in the state to which things +have come, our colonies will be easily conquered +by force alone. The persons who now +govern the resolutions of what they call their +continental congress, feel in themselves at this +moment a degree of importance which, perhaps, +the greatest subjects in Europe scarce +feel. From shopkeepers, tradesmen, and attorneys, +they are become statesmen and legislators, +and are employed in contriving a new +form of government for an extensive empire, +which, they flatter themselves, will become, +and which, indeed, seems very likely to become, +one of the greatest and most formidable +that ever was in the world. Five hundred +different people, perhaps, who, in different +ways, act immediately under the continental +congress, and five hundred thousand, perhaps, +who act under those five hundred, all feel, in +the same manner, a proportionable rise in +their own importance. Almost every individual +of the governing party in America fills, +at present, in his own fancy, a station superior, +not only to what he had ever filled before, +but to what he had ever expected to fill; +and unless some new object of ambition is +presented either to him or to his leaders, if he +has the ordinary spirit of a man, he will die +in defence of that station.</p> + +<p>It is a remark of the President Heynaut, +that we now read with pleasure the account +of many little transactions of the Ligue, which, +when they happened, were not, perhaps, considered +as very important pieces of news. But +every man then, says he, fancied himself of +some importance; and the innumerable memoirs +which have come down to us from those +times, were the greater part of them written +by people who took pleasure in recording and<span class='pagenum'><a name="Page_258" id="Page_258">[Pg 258]</a></span> +magnifying events, in which they flattered +themselves they had been considerable actors. +How obstinately the city of Paris, upon that +occasion, defended itself, what a dreadful famine +it supported, rather than submit to the +best, and afterwards the most beloved of all +the French kings, is well known. The greater +part of the citizens, or those who governed the +greater part of them, fought in defence of +their own importance, which, they foresaw, +was to be at an end whenever the ancient government +should be re-established. Our colonies, +unless they can be induced to consent +to a union, are very likely to defend themselves, +against the best of all mother countries, +as obstinately as the city of Paris did against +one of the best of kings.</p> + +<p>The idea of representation was unknown in +ancient times. When the people of one state +were admitted to the right of citizenship in +another, they had no other means of exercising +that right, but by coming in a body to +vote and deliberate with the people of that +other state. The admission of the greater part +of the inhabitants of Italy to the privileges of +Roman citizens, completely ruined the Roman +republic. It was no longer possible to +distinguish between who was, and who was +not, a Roman citizen. No tribe could know +its own members. A rabble of any kind could +be introduced into the assemblies of the people, +could drive out the real citizens, and decide +upon the affairs of the republic, as if they +themselves had been such. But though America +were to send fifty or sixty new representatives +to parliament, the door-keeper of the +house of commons could not find any great +difficulty in distinguishing between who was +and who was not a member. Though the Roman +constitution, therefore, was necessarily +ruined by the union of Rome with the allied +states of Italy, there is not the least probability +that the British constitution would be hurt +by the union of Great Britain with her colonies. +That constitution, on the contrary, +would be completed by it, and seems to be +imperfect without it. The assembly which deliberates +and decides concerning the affairs of +every part of the empire, in order to be properly +informed, ought certainly to have representatives +from every part of it. That this +union, however, could be easily effectuated, +or that difficulties, and great difficulties, might +not occur in the execution, I do not pretend. +I have yet heard of none, however, which appear +insurmountable. The principal, perhaps, +arise, not from the nature of things, but +from the prejudices and opinions of the people, +both on this and on the other side of the +Atlantic.</p> + +<p>We on this side of the water are afraid lest +the multitude of American representatives +should overturn the balance of the constitution, +and increase too much either the influence +of the crown on the one hand, or the +force of the democracy on the other. But if +the number of American representatives were +to be in proportion to the produce of American +taxation, the number of people to be managed +would increase exactly in proportion to +the means of managing them, and the means +of managing to the number of people to be +managed. The monarchical and democratical +parts of the constitution would, after the union, +stand exactly in the same degree of relative +force with regard to one another as they had +done before.</p> + +<p>The people on the other side of the water +are afraid lest their distance from the seat of +government might expose them to many oppressions; +but their representatives in parliament, +of which the number ought from the +first to be considerable, would easily be able +to protect them from all oppression. The distance +could not much weaken the dependency +of the representative upon the constituent, and +the former would still feel that he owed his +seat in parliament, and all the consequence +which he derived from it, to the good-will of +the latter. It would be the interest of the former, +therefore, to cultivate that good-will, by +complaining, with all the authority of a member +of the legislature, of every outrage which +any civil or military officer might be guilty of +in those remote parts of the empire. The distance +of America from the seat of government, +besides, the natives of that country might flatter +themselves, with some appearance of reason +too, would not be of very long continuance. +Such has hitherto been the rapid progress +of that country in wealth, population, +and improvement, that in the course of little +more than a century, perhaps, the produce of +the American might exceed that of the British +taxation. The seat of the empire would +then naturally remove itself to that part of the +empire which contributed most to the general +defence and support of the whole.</p> + +<p>The discovery of America, and that of a +passage to the East Indies by the Cape of +Good Hope, are the two greatest and most +important events recorded in the history of +mankind. Their consequences have already +been great; but, in the short period of between +two and three centuries which has +elapsed since these discoveries were made, it +is impossible that the whole extent of their +consequences can have been seen. What benefits +or what misfortunes to mankind may +hereafter result from those great events, no human +wisdom can foresee. By uniting in some +measure the most distant parts of the world, +by enabling them to relieve one another's +wants, to increase one another's enjoyments, +and to encourage one another's industry, their +general tendency would seem to be beneficial. +To the natives, however, both of the East and +West Indies, all the commercial benefits which +can have resulted from those events have been +sunk and lost in the dreadful misfortunes<span class='pagenum'><a name="Page_259" id="Page_259">[Pg 259]</a></span> +which they have occasioned. These misfortunes, +however, seem to have arisen rather +from accident than from any thing in the nature +of those events themselves. At the particular +time when these discoveries were made, +the superiority of force happened to be so +great on the side of the Europeans, that they +were enabled to commit with impunity every +sort of injustice in those remote countries. +Hereafter, perhaps, the natives of those countries +may grow stronger, or those of Europe +may grow weaker; and the inhabitants of all +the different quarters of the world may arrive +at that equality of courage and force which, +by inspiring mutual fear, can alone overawe +the injustice of independent nations into some +sort of respect for the rights of one another. +But nothing seems more likely to establish +this equality of force, than that mutual communication +of knowledge, and of all sorts of +improvements, which an extensive commerce +from all countries to all countries naturally, +or rather necessarily, carries along with it.</p> + +<p>In the mean time, one of the principal effects +of those discoveries has been, to raise the +mercantile system to a degree of splendour +and glory which it could never otherwise have +attained to. It is the object of that system +to enrich a great nation, rather by trade and +manufactures than by the improvement and +cultivation of land, rather by the industry of +the towns than by that of the country. But +in consequence of those discoveries, the commercial +towns of Europe, instead of being +the manufacturers and carriers for but a very +small part of the world (that part of Europe +which is washed by the Atlantic ocean, and +the countries which lie round the Baltic and +Mediterranean seas), have now become the +manufacturers for the numerous and thriving +cultivators of America, and the carriers, and +in some respects the manufacturers too, for +almost all the different nations of Asia, +Africa, and America. Two new worlds have +been opened to their industry, each of them +much greater and more extensive than the +old one, and the market of one of them growing +still greater and greater every day.</p> + +<p>The countries which possess the colonies of +America, and which trade directly to the East +Indies, enjoy indeed the whole show and +splendour of this great commerce. Other +countries, however, notwithstanding all the +invidious restraints by which it is meant to +exclude them, frequently enjoy a greater +share of the real benefit of it. The colonies +of Spain and Portugal, for example, give +more real encouragement to the industry of +other countries than to that of Spain and Portugal. +In the single article of linen alone, +the consumption of those colonies amounts, it +is said (but I do not pretend to warrant the +quantity), to more than three millions sterling +a-year. But this great consumption is almost +entirely supplied by France, Flanders, Holland, +and Germany. Spain and Portugal +furnish but a small part of it. The capital +which supplies the colonies with this great +quantity of linen, is annually distributed among, +and furnishes a revenue to, the inhabitants +of those other countries. The profits +of it only are spent in Spain and Portugal, +where they help to support the sumptuous +profusion of the merchants of Cadiz and +Lisbon.</p> + +<p>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. The unjust oppression +of the industry of other countries +falls back, if I may say so, upon the heads +of the oppressors, and crushes their industry +more than it does that of those other countries. +By those regulations, for example, the +merchant of Hamburg must send the linen +which he destines for the American market +to London, and he must bring back from +thence the tobacco which he destines for the +German market; because he can neither send +the one directly to America, nor bring the +other directly from thence. By this restraint +he is probably obliged to sell the one somewhat +cheaper, and to buy the other somewhat +dearer, than he otherwise might have done; +and his profits are probably somewhat abridged +by means of it. In this trade, however, +between Hamburg and London, he certainly +receives the returns of his capital much more +quickly than he could possibly have done in +the direct trade to America, even though we +should suppose, what is by no means the case, +that the payments of America were as punctual +as those of London. In the trade, +therefore, to which those regulations confine +the merchant of Hamburg, his capital can +keep in constant employment a much greater +quantity of German industry than he possibly +could have done in the trade from which he +is excluded. Though the one employment, +therefore, may to him perhaps be less profitable +than the other, it cannot be less advantageous +to his country. It is quite otherwise +with the employment into which the monopoly +naturally attracts, if I may say so, the +capital of the London merchant. That employment +may, perhaps, be more profitable to +him than the greater part of other employments; +but on account of the slowness of the +returns, it cannot be more advantageous to +his country.</p> + +<p>After all the unjust attempts, therefore, of +every country in Europe to engross to itself +the whole advantage of the trade of its own +colonies, no country has yet been able to +engross to itself any thing but the expense of +supporting in time of peace, and of defending +in time of war, the oppressive authority which +it assumes over them. The inconveniencies<span class='pagenum'><a name="Page_260" id="Page_260">[Pg 260]</a></span> +resulting from the possession of its colonies, +every country has engrossed to itself completely. +The advantages resulting from +their trade, it has been obliged to share with +many other countries.</p> + +<p>At first sight, no doubt, the monopoly of +the great commerce of America naturally +seems to be an acquisition of the highest +value. To the undiscerning eye of giddy +ambition it naturally presents itself, amidst +the confused scramble of politics and war, as +a very dazzling object to fight for. The dazzling +splendour of the object, however, the +immense greatness of the commerce, is the +very quality which renders the monopoly of +it hurtful, or which makes one employment, +in its own nature necessarily less advantageous +to the country than the greater part of +other employments, absorb a much greater +proportion of the capital of the country than +what would otherwise have gone to it.</p> + +<p>The mercantile stock of every country, it +has been shown in the second book, naturally +seeks, if one may say so, the employment +most advantageous to that country. If it is +employed in the carrying trade, the country +to which it belongs becomes the emporium of +the goods of all the countries whose trade +that stock carries on. But the owner of that +stock necessarily wishes to dispose of as great +a part of those goods as he can at home. +He thereby saves himself the trouble, risk, +and expense of exportation; and he will upon +that account be glad to sell them at home, +not only for a much smaller price, but with +somewhat a smaller profit, than he might expect +to make by sending them abroad. He +naturally, therefore, endeavours as much as +he can to turn his carrying trade into a +foreign trade of consumption. If his stock, +again, is employed in a foreign trade of consumption, +he will, for the same reason, be +glad to dispose of, at home, as great a part +as he can of the home goods which he collects +in order to export to some foreign market, +and he will thus endeavour, as much as he +can, to turn his foreign trade of consumption +into a home trade. The mercantile stock of +every country naturally courts in this manner +the near, and shuns the distant employment; +naturally courts the employment in which +the returns are frequent, and shuns that in +which they are distant and slow; naturally +courts the employment in which it can maintain +the greatest quantity of productive labour +in the country to which it belongs, or in +which its owner resides, and shuns that in +which it can maintain there the smallest +quantity. It naturally courts the employment +which in ordinary cases is most advantageous, +and shuns that which in ordinary +cases is least advantageous to that country.</p> + +<p>But if, in any one of these distant employments, +which in ordinary cases are less advantageous +to the country, the profit should +happen to rise somewhat higher than what is +sufficient to balance the natural preference +which is given to nearer employments, this +superiority of profit will draw stock from those +nearer employments, till the profits of all return +to their proper level. This superiority +of profit, however, is a proof that, in the actual +circumstances of the society, those distant +employments are somewhat understocked +in proportion to other employments, and 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, and that some +particular class of citizens is more or less +oppressed, either by paying more, or by getting +less than what is suitable to that equality +which ought to take place, and which naturally +does take place, among all the different +classes of them. Though the same capital +never will maintain the same quantity of productive +labour in a distant as in a near employment, +yet a distant employment may be +as necessary for the welfare of the society as +a near one; the goods which the distant +employment deals in being necessary, perhaps, +for carrying on many of the nearer employments. +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, or somewhat above their natural +price, and all those engaged in the nearer employments +will be more or less oppressed by +this high price. Their interest, therefore, in +this case, requires, that some stock should +be withdrawn from those nearer employments, +and turned towards that distant one, in order +to reduce its profits to their proper level, and +the price of the goods which it deals in to +their natural price. In this extraordinary +case, the public interest requires that some +stock should be withdrawn from those employments +which, in ordinary cases, are more +advantageous, and turned towards one which, +in ordinary cases, is less advantageous to the +public; and, in this extraordinary case, the +natural interests and inclinations of men coincide +as exactly with the public interests as in +all other ordinary cases, and lead them to +withdraw stock from the near, and to turn it +towards the distant employments.</p> + +<p>It is thus that the private interests and passions +of individuals naturally dispose them to +turn their stock towards the employments +which in ordinary cases, are most advantageous +to the society. But if from this natural +preference they should turn too much of it +towards those employments, the fall of profit +in them, and the rise of it in all others, immediately +dispose them to alter this faulty distribution. +Without any intervention of law, +therefore, the private interests and passions of +men naturally lead them to divide and distribute +the stock of every society among all the<span class='pagenum'><a name="Page_261" id="Page_261">[Pg 261]</a></span> +different employments carried on in it, as +nearly as possible in the proportion which is +most agreeable to the interest of the whole +society.</p> + +<p>All the different regulations of the mercantile +system necessarily derange more or less +this natural and most advantageous distribution +of stock. But those which concern the +trade to America and the East Indies derange +it, perhaps, more than any other; because the +trade to those two great continents absorbs a +greater quantity of stock than any two other +branches of trade. The regulations, however, +by which this derangement is effected in those +two different branches of trade, are not altogether +the same. Monopoly is the great engine +of both; but it is a different sort of monopoly. +Monopoly of one kind or another, +indeed, seems to be the sole engine of the mercantile +system.</p> + +<p>In the trade to America, every nation endeavours +to engross as much as possible the +whole market of its own colonies, by fairly +excluding all other nations from any direct +trade to them. During the greater part of the +sixteenth century, the Portuguese endeavoured +to manage the trade to the East Indies in the +same manner, by claiming the sole right of +sailing in the Indian seas, on account of the +merit of having first found out the road to +them. The Dutch still continue to exclude +all other European nations from any direct +trade to their spice islands. Monopolies of +this kind are evidently established against all +other European nations, who are thereby not +only excluded from a trade to which it might +be convenient for them to turn some part of +their stock, but are obliged to buy the goods +which that trade deals in, somewhat dearer +than if they could import them themselves +directly from the countries which produced +them.</p> + +<p>But since the fall of the power of Portugal, +no European nation has claimed the exclusive +right of sailing in the Indian seas, of +which the principal ports are now open to the +ships of all European nations. Except in +Portugal, however, and within these few years +in France, the trade to the East Indies has, +in every European country, been subjected to +an exclusive company. Monopolies of this +kind are properly established against the very +nation which erects them. The greater part +of that nation are thereby not only excluded +from a trade to which it might be convenient +for them to turn some part of their stock, but +are obliged to buy the goods which that trade +deals in somewhat dearer than if it was open +and free to all their countrymen. Since the +establishment of the English East India company, +for example, the other inhabitants of +England, over and above being excluded from +the trade, must have paid, in the price of the +East India goods which they have consumed, +not only for all the extraordinary profits which +the company may have made upon those goods +in consequence of their monopoly, but for all +the extraordinary waste which the fraud and +abuse inseparable from the management of +the affairs of so great a company must necessarily +have occasioned. The absurdity of this +second kind of monopoly, therefore, is much +more manifest than that of the first.</p> + +<p>Both these kinds of monopolies derange +more or less the natural distribution of the +stock of the society; but they do not always +derange it in the same way.</p> + +<p>Monopolies of the first kind always attract +to the particular trade in which they are established +a greater proportion of the stock of +the society than what would go to that trade +of its own accord.</p> + +<p>Monopolies of the second kind may sometimes +attract stock towards the particular trade +in which they are established, and sometimes +repel it from that trade, according to different +circumstances. In poor countries, they +naturally attract towards the trade more stock +than would otherwise go to it. In rich countries, +they naturally repel from it a good deal +of stock which would otherwise go to it.</p> + +<p>Such poor countries as Sweden and Denmark, +for example, would probably have never +sent a single ship to the East Indies, had +not the trade been subjected to an exclusive +company. The establishment of such a company +necessarily encourages adventurers. Their +monopoly secures them against all competitors +in the home market, and they have the +same chance for foreign markets with the +traders of other nations. Their monopoly +shows them the certainty of a great profit upon +a considerable quantity of goods, and the +chance of a considerable profit upon a great +quantity. Without such extraordinary encouragement, +the poor traders of such poor countries +would probably never have thought of +hazarding their small capitals in so very distant +and uncertain an adventure as the trade +to the East Indies must naturally have appeared +to them.</p> + +<p>Such a rich country as Holland, on the +contrary, would probably, in the case of a free +trade, send many more ships to the East Indies +than it actually does. The limited stock +of the Dutch East India company probably +repels from that trade many great mercantile +capitals which would otherwise go to it. The +mercantile capital of Holland is so great, that +it is, as it were, continually overflowing, sometimes +into the public funds of foreign countries, +sometimes into loans to private traders +and adventurers of foreign countries, sometimes +into the most round-about foreign trades +consumption, and sometimes into the carrying +trade. All near employments being +completely filled up, all the capital which can +be placed in them with any tolerable profit +being already placed in them, the capital of +Holland necessarily flows towards the most<span class='pagenum'><a name="Page_262" id="Page_262">[Pg 262]</a></span> +distant employments. The trade to the East +Indies, if it were altogether free, would probably +absorb the greater part of this redundant +capital. The East Indies offer a market +both for the manufactures of Europe, and for +the gold and silver, as well as for the several +other productions of America, greater and +more extensive than both Europe and America +put together.</p> + +<p>Every derangement of the natural distribution +of stock is necessarily hurtful to the +society in which it takes place; whether it be +by repelling from a particular trade the stock +which would otherwise go to it, or by attracting +towards a particular trade that which +would not otherwise come to it. If, without +any exclusive company, the trade of Holland +to the East Indies would be greater than it +actually is, that country must suffer a considerable +loss, by part of its capital being excluded +from the employment most convenient +for that port. And, in the same manner, if, +without an exclusive company, the trade of +Sweden and Denmark to the East Indies +would be less than it actually is, or, what perhaps +is more probable, would not exist at all, +those two countries must likewise suffer a +considerable loss, by part of their capital being +drawn into an employment which must +be more or less unsuitable to their present circumstances. +Better for them, perhaps, in the +present circumstances, to buy East India +goods of other nations, even though they +should pay somewhat dearer, than to turn so +great a part of their small capital to so very +distant a trade, in which the returns are so +very slow, in which that capital can maintain +so small a quantity of productive labour at +home, where productive labour is so much +wanted, where so little is done, and where so +much is to do.</p> + +<p>Though without an exclusive company, +therefore, a particular country should not be +able to carry on any direct trade to the East +Indies, it will not from thence follow, that +such a company ought to be established there, +but only that such a country ought not, in +these circumstances, to trade directly to the +East Indies. That such companies are not +in general necessary for carrying on the East +India trade, is sufficiently demonstrated by +the experience of the Portuguese, who enjoyed +almost the whole of it for more than a +century together, without any exclusive company.</p> + +<p>No private merchant, it has been said, +could well have capital sufficient to maintain +factors and agents in the different ports of the +East Indies, in order to provide goods for +the ships which he might occasionally send +thither; and yet, unless he was able to do +this, the difficulty of finding a cargo might +frequently make his ships lose the season for +returning; and the expense of so long a delay +would not only eat up the whole profit of +the adventure, but frequently occasion a very +considerable loss. This argument, however, +if it proved any thing at all, would prove +that no one great branch of trade could be +carried on without an exclusive company, +which is contrary to the experience of all nations. +There is no great branch of trade, in +which the capital of any one private merchant +is sufficient for carrying on all the subordinate +branches which must be carried on, in +order to carry on the principal one. But +when a nation is ripe for any great branch of +trade, some merchants naturally turn their +capitals towards some principal, and some towards +the subordinate branches of it; and +though all the different branches of it are in +this manner carried on, yet it very seldom +happens that they are all carried on by the capital +of one private merchant. If a nation, +therefore, is ripe for the East India trade, a +certain portion of its capital will naturally +divide itself among all the different branches +of that trade. Some of its merchants will +find it for their interest to reside in the East +Indies, and to employ their capitals there in +providing goods for the ships which are to be +sent out by other merchants who reside in +Europe. The settlements which different +European nations have obtained in the East +Indies, if they were taken from the exclusive +companies to which they at present belong, +and put under the immediate protection of +the sovereign, would render this residence +both safe and easy, at least to the merchants +of the particular nations to whom those settlements +belong. If, at any particular time, +that part of the capital of any country which +of its own accord tended and inclined, if I +may say so, towards the East India trade, +was not sufficient for carrying on all those +different branches of it, it would be a proof +that, at that particular time, that country was +not ripe for that trade, and that it would do +better to buy for some time, even at a higher +price, from other European nations, the East +India goods it had occasion for, than to import +them itself directly from the East Indies. +What it might lose by the high price of those +goods, could seldom be equal to the loss which +it would sustain by the distraction of a large +portion of its capital from other employments +more necessary, or more useful, or more suitable +to its circumstances and situation, than +a direct trade to the East Indies.</p> + +<p>Though the Europeans possess many considerable +settlements both upon the coast of +Africa and in the East Indies, they have not +yet established, in either of those countries, +such numerous and thriving colonies as those +in the islands and continent of America. Africa, +however, as well as several of the countries +comprehended under the general name +of the East Indies, is inhabited by barbarous +nations. But those nations were by no means +so weak and defenceless as the miserable and<span class='pagenum'><a name="Page_263" id="Page_263">[Pg 263]</a></span> +helpless Americans; and in proportion to the +natural fertility of the countries which they +inhabited, they were, besides, much more +populous. The most barbarous nations, +either of Africa or of the East Indies, were +shepherds; even the Hottentots were so. +But the natives of every part of America, except +Mexico and Peru, were only hunters; +and the difference is very great between the +number of shepherds and that of hunters, +whom the same extent of equally fertile territory +can maintain. In Africa and the East +Indies, therefore, it was more difficult to +displace the natives, and to extend the European +plantations over the greater part of the +lands of the original inhabitants. The genius +of exclusive companies, besides, is unfavourable, +it has already been observed, to +the growth of new colonies, and has probably +been the principal cause of the little progress +which they have made in the East Indies. +The Portuguese carried on the trade both to +Africa and the East Indies, without any exclusive +companies; and their settlements at +Congo, Angola, and Benguela, on the coast +of Africa, and at Goa in the East Indies, +though much depressed by superstition and +every sort of bad government, yet bear some +resemblance to the colonies of America, and +are partly inhabited by Portuguese who have +been established there for several generations. +The Dutch settlements at the Cape of Good +Hope and at Batavia, are at present the most +considerable colonies which the Europeans +have established, either in Africa or in the +East Indies; and both those settlements are +peculiarly fortunate in their situation. The +Cape of Good Hope was inhabited by a race +of people almost as barbarous, and quite as +incapable of defending themselves, as the natives +of America. It is, besides, the half-way +house, if one may say so, between Europe +and the East Indies, at which almost every +European ship makes some stay, both in going +and returning. The supplying of those +ships with every sort of fresh provisions, with +fruit, and sometimes with wine, affords alone +a very extensive market for the surplus produce +of the colonies. What the Cape of +Good Hope is between Europe and every +part of the East Indies, Batavia is between +the principal countries of the East Indies. +It lies upon the most frequented road from +Indostan to China and Japan, and is nearly +about mid-way upon that road. Almost all +the ships too, that sail between Europe and +China, touch at Batavia; and it is, over and +above all this, the centre and principal mart +of what is called the country trade of the East +Indies; not only of that part of it which is +carried on by Europeans, but of that which is +carried on by the native Indians; and vessels +navigated by the inhabitants of China and Japan, +of Tonquin, Malacca, Cochin-China, +and the island of Celebes, are frequently to +be seen in its port. Such advantageous situations +have enabled those two colonies to surmount +all the obstacles which the oppressive +genius of an exclusive company may have occasionally +opposed to their growth. They +have enabled Batavia to surmount the additional +disadvantage of perhaps the most unwholesome +climate in the world.</p> + +<p>The English and Dutch companies, though +they have established no considerable colonies, +except the two above mentioned, have +both made considerable conquests in the East +Indies. But in the manner in which they +both govern their new subjects, the natural +genius of an exclusive company has shewn itself +most distinctly. In the spice islands, the +Dutch are said to burn all the spiceries which +a fertile season produces, beyond what they +expect to dispose of in Europe with such a +profit as they think sufficient. In the islands +where they have no settlements, they give a +premium to those who collect the young blossoms +and green leaves of the clove and nutmeg +trees, which naturally grow there, but +which this savage policy has now, it is said, +almost completely extirpated. Even in the +islands where they have settlements, they have +very much reduced, it is said, the number of +those trees. If the produce even of their own +islands was much greater than what suited +their market, the natives, they suspect, might +find means to convey some part of it to other +nations; and the best way, they imagine, to +secure their own monopoly, is to take care +that no more shall grow than what they themselves +carry to market. By different arts of +oppression, they have reduced the population +of several of the Moluccas nearly to the number +which is sufficient to supply with fresh +provisions, and other necessaries of life, their +own insignificant garrisons, and such of their +ships as occasionally come there for a cargo +of spices. Under the government even of the +Portuguese, however, those islands are said +to have been tolerably well inhabited. The +English company have not yet had time to +establish in Bengal so perfectly destructive a +system. The plan of their government, however, +has had exactly the same tendency. It +has not been uncommon, I am well assured, +for the chief, that is, the first clerk of a factory, +to order a peasant to plough up a rich +field of poppies, and sow it with rice, or some +other grain. The pretence was, to prevent a +scarcity of provisions; but the real reason, to +give the chief an opportunity of selling at a +better price a large quantity of opium which +he happened then to have upon hand. Upon +other occasions, the order has been reversed; +and a rich field of rice or other grain has +been ploughed up, in order to make room +for a plantation of poppies, when the chief +foresaw that extraordinary profit was likely +to be made by opium. The servants of the +company have, upon several occasions, at<span class='pagenum'><a name="Page_264" id="Page_264">[Pg 264]</a></span>tempted +to establish in their own favour the +monopoly of some of the most important +branches, not only of the foreign, but of the +inland trade of the country. Had they been +allowed to go on, it is impossible that they +should not, at some time or another, have attempted +to restrain the production of the particular +articles of which they had thus usurped +the monopoly, not only to the quantity which +they themselves could purchase, but to that +which they could expect to sell with such a +profit as they might think sufficient. In the +course of a century or two, the policy of the +English company would, in this manner, have +probably proved as completely destructive as +that of the Dutch.</p> + +<p>Nothing, however, can be more directly +contrary to the real interest of those companies, +considered as the sovereigns of the +countries which they have conquered, than +this destructive plan. In almost all countries, +the revenue of the sovereign is drawn +from that of the people. The greater the +revenue of the people, therefore, the greater +the annual produce of their land and labour, +the more they can afford to the sovereign. It +is his interest, therefore, to increase as much +as possible that annual produce. But if this +is the interest of every sovereign, it is peculiarly +so of one whose revenue, like that of +the sovereign of Bengal, arises chiefly from a +land-rent. That rent must necessarily be in +proportion to the quantity and value of the +produce; and both the one and the other +must depend upon the extent of the market. +The quantity will always be suited, with +more or less exactness, to the consumption of +those who can afford to pay for it; and the +price which they will pay will always be in proportion +to the eagerness of their competition. +It is the interest of such a sovereign, therefore, +to open the most extensive market for +the produce of his country, to allow the most +perfect freedom of commerce, in order to increase +as much as possible the number and +competition of buyers; and upon this account +to abolish, not only all monopolies, but all +restraints upon the transportation of the home +produce from one part of the country to +another, upon its exportation to foreign countries, +or upon the importation of goods of +any kind for which it can be exchanged. He +is in this manner most likely to increase both +the quantity and value of that produce, and +consequently of his own share of it, or of his +own revenue.</p> + +<p>But a company of merchants, are, it seems, +incapable of considering themselves as sovereigns, +even after they have become such. +Trade, or buying in order to sell again, they +still consider as their principal business, and +by a strange absurdity, regard the character +of the sovereign as but an appendix to that of +the merchant; as something which ought to +be made subservient to it, or by means of +which they may be enabled to buy cheaper in +India, and thereby to sell with a better profit +in Europe. They endeavour, for this purpose, +to keep out as much as possible all +competitors from the market of the countries +which are subject to their government, and +consequently to reduce, at least, some part of +the surplus produce of those countries to what +is barely sufficient for supplying their own +demand, or to what they can expect to sell in +Europe, with such a profit as they may think +reasonable. Their mercantile habits draw them +in this manner, almost necessarily, though +perhaps insensibly, to prefer, upon all ordinary +occasions, the little and transitory profit +of the monopolist to the great and permanent +revenue of the sovereign; and would gradually +lead them to treat the countries subject +to their government nearly as the Dutch +treat the Moluccas. It is the interest of the +East India company, considered as sovereigns, +that the European goods which are carried to +their Indian dominions should be sold there +as cheap as possible; and that the Indian +goods which are brought from thence should +bring there as good a price, or should be sold +there as dear as possible. But the reverse +of this is their interest as merchants. As +sovereigns, their interest is exactly the same +with that of the country which they govern. +As merchants, their interest is directly opposite +to that interest.</p> + +<p>But if the genius of such a government, +even as to what concerns its direction in Europe, +is in this manner essentially, and perhaps +incurably faulty, that of its administration +in India is still more so. That administration +is necessarily composed of a council +of merchants, a profession no doubt extremely +respectable, but which in no country in the +world carries along with it that sort of authority +which naturally overawes the people, and +without force commands their willing obedience. +Such a council can command obedience +only by the military force with which +they are accompanied; and their government +is, therefore, necessarily military and despotical. +Their proper business, however, is that +of merchants. It is to sell, upon their +master's account, the European goods consigned +to them, and to buy, in return, Indian goods +for the European market. It is to sell the +one as dear, and to buy the other as cheap as +possible, and consequently to exclude, as +much as possible, all rivals from the particular +market where they keep their shop. The +genius of the administration, therefore, so +far as concerns the trade of the company, is +the same as that of the direction. It tends +to make government subservient to the interest +of monopoly, and consequently to stunt +the natural growth of some parts, at least, of +the surplus produce of the country, to what +is barely sufficient for answering the demand +of the company.<span class='pagenum'><a name="Page_265" id="Page_265">[Pg 265]</a></span></p> + +<p>All the members of the administration, +besides, trade more or less upon their own account; +and it is in vain to prohibit them +from doing so. Nothing can be more completely +foolish than to expect that the clerks +of a great counting-house, at ten thousand +miles distance, and consequently almost quite +out of sight, should, upon a simple order +from their master, give up at once doing any +sort of business upon their own account; +abandon for ever all hopes of making a fortune, +of which they have the means in their +hands; and content themselves with the +moderate salaries which those masters allow +them, and which, moderate as they are, can +seldom be augmented, being commonly as +large as the real profits of the company trade +can afford. In such circumstances, to prohibit +the servants of the company from trading +upon their own account, can have scarce +any other effect than to enable its superior +servants, under pretence of executing their +master's order, to oppress such of the inferior +ones as have had the misfortune to fall under +their displeasure. The servants naturally +endeavour to establish the same monopoly in +favour of their own private trade as of the +public trade of the company. If they are +suffered to act as they could wish, they will +establish this monopoly openly and directly, +by fairly prohibiting all other people from +trading in the articles in which they choose to +deal; and this, perhaps, is the best and least +oppressive way of establishing it. But if, by +an order from Europe, they are prohibited +from doing this, they will, notwithstanding, +endeavour to establish a monopoly of the +same kind secretly and indirectly, in a way +that is much more destructive to the country. +They will employ the whole authority of government, +and pervert the administration of +justice, in order to harass and ruin those who +interfere with them in any branch of commerce, +which by means of agents, either +concealed, or at least not publicly avowed, +they may choose to carry on. But the private +trade of the servants will naturally extend +to a much greater variety of articles than the +public trade of the company. The public +trade of the company extends no further than +the trade with Europe, and comprehends a +part only of the foreign trade of the country. +But the private trade of the servants may +extend to all the different branches both of +its inland and foreign trade. The monopoly +of the company can tend only to stunt the natural +growth of that part of the surplus produce +which, in the case of a free trade, would +be exported to Europe. That of the servants +tends to stunt the natural growth of every +part of the produce in which they choose to +deal; of what is destined for home consumption, +as well as of what is destined for exportation; +and consequently to degrade the +cultivation of the whole country, and to reduce +the number of its inhabitants. It tends +to reduce the quantity of every sort of produce, +even that of the necessaries of life, whenever +the servants of the country choose to deal in +them, to what those servants can both afford +to buy and expect to sell with such a profit as +pleases them.</p> + +<p>From the nature of their situation, too, the +servants must be more disposed to support +with rigourous severity their own interest, +against that of the country which they govern, +than their masters can be to support +theirs. The country belongs to their masters, +who cannot avoid having some regard for the +interest of what belongs to them; but it does +not belong to the servants. The real interest +of their masters, if they were capable of understanding +it, is the same with that of the +country;<a name="FNanchor_42_42" id="FNanchor_42_42"></a><a href="#Footnote_42_42" class="fnanchor">[42]</a> and it is from ignorance chiefly, +and the meanness of mercantile prejudice, +that they ever oppress it. But the real interest +of the servants is by no means the same +with that of the country, and the most perfect +information would not necessarily put an end +to their oppressions. The regulations, accordingly, +which have been sent out from +Europe, though they have been frequently +weak, have upon most occasions been well +meaning. More intelligence, and perhaps +less good meaning, has sometimes appeared +in those established by the servants in India. +It is a very singular government in which +every member of the administration wishes to +get out of the country, and consequently to +have done with the government, as soon as he +can, and to whose interest, the day after he +has left it, and carried his whole fortune with +him, it is perfectly indifferent though the +whole country was swallowed up by an earthquake.</p> + +<p>I mean not, however, by any thing which I +have here said, to throw any odious imputation +upon the general character of the servants +of the East India company, and much less +upon that of any particular persons. It is +the system of government, the situation in +which they are placed, that I mean to censure, +not the character of those who have +acted in it. They acted as their situation naturally +directed, and they who have clamoured +the loudest against them would probably not +have acted better themselves. In war and +negotiation, the councils of Madras and Calcutta, +have upon several occasions, conducted +themselves with a resolution and decisive +wisdom, which would have done honour to +the senate of Rome in the best days of that +republic. The members of those councils, +however, had been bred to professions very +different from war and politics. But their +situation alone, without education, experience,<span class='pagenum'><a name="Page_266" id="Page_266">[Pg 266]</a></span> +or even example, seems to have formed in +them all at once the great qualities which it +required, and to have inspired them both with +abilities and virtues which they themselves +could not well know that they possessed. If +upon some occasions, therefore, it has animated +them to actions of magnanimity which +could not well have been expected from them, +we should not wonder if, upon others, it has +prompted them to exploits of somewhat a +different nature.</p> + +<p>Such exclusive companies, therefore, are +nuisances in every respect; always more or +less inconvenient to the countries in which +they are established, and destructive to those +which have the misfortune to fall under their +government.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. VIII.</h3> + +<h4>CONCLUSION OF THE MERCANTILE SYSTEM.</h4> + + +<p>Though the encouragement of exportation, +and the discouragement of importation, are +the two great engines by which the mercantile +system proposes to enrich every country, +yet, with regard to some particular commodities, +it seems to follow an opposite plan: to +discourage exportation, and to encourage +importation. Its ultimate object, however, it +pretends, is always the same, to enrich the +country by an advantageous balance of trade. +It discourages the exportation of the materials +of manufacture, and of the instruments of +trade, in order to give our own workmen an advantage, +and to enable them to undersell those +of other nations in all foreign markets; and +by restraining, in this manner, the exportation +of a few commodities, of no great price, it +proposes to occasion a much greater and more +valuable exportation of others. It encourages +the importation of the materials of manufacture, +in order that our own people may be +enabled to work them up more cheaply, and +thereby prevent a greater and more valuable +importation of the manufactured commodities. +I do not observe, at least in our statute book, +any encouragement given to the importation +of the instruments of trade. When manufactures +have advanced to a certain pitch of +greatness, the fabrication of the instruments +of trade becomes itself the object of a great +number of very important manufactures. To +give any particular encouragement to the importation +of such instruments, would interfere +too much with the interest of those manufactures. +Such importation, therefore, instead +of being encouraged, has frequently been +prohibited. Thus the importation of wool cards, +except from Ireland, or when brought in as +wreck or prize goods, was prohibited by the +3d of Edward IV.; which prohibition was renewed +by the 39th of Elizabeth, and has been +continued and rendered perpetual by subsequent +laws.</p> + +<p>The importation of the materials of manufacture +has sometimes been encouraged by +an exemption from the duties to which other +goods are subject, and sometimes by bounties.</p> + +<p>The importation of sheep's wool from several +different countries, of cotton wool from all +countries, of undressed flax, of the greater +part of dyeing drugs, of the greater part of +undressed hides from Ireland, or the British +colonies, of seal skins from the British Greenland +fishery, of pig and bar iron from the +British colonies, as well as of several other +materials of manufacture, has been encouraged +by an exemption from all duties, if properly +entered at the custom-house. The private +interest of our merchants and manufacturers +may, perhaps, have extorted from the +legislature these exemptions, as well as the +greater part of our other commercial regulations. +They are, however, perfectly just and +reasonable; and if, consistently with the necessities +of the state, they could be extended +to all the other materials of manufacture, the +public would certainly be a gainer.</p> + +<p>The avidity of our great manufacturers, +however, has in some cases extended these +exemptions a good deal beyond what can justly +be considered as the rude materials of their +work. By the 24th Geo. II. chap. 46, a +small duty of only 1d. the pound was imposed +upon the importation of foreign brown +linen yarn, instead of much higher duties, to +which it had been subjected before, viz. of 6d. +the pound upon sail yarn, of 1s. the pound +upon all French and Dutch yarn, and of +L.2 : 13 : 4 upon the hundred weight of all +spruce or Muscovia yarn. But our manufacturers +were not long satisfied with this reduction: +by the 29th of the same king, +chap. 15, the same law which gave a bounty +upon the exportation of British and Irish +linen, of which the price did not exceed 18d. +the yard, even this small duty upon the importation +of brown linen yarn was taken away. +In the different operations, however, which +are necessary for the preparation of linen +yarn, a good deal more industry is employed, +than in the subsequent operation of preparing +linen cloth from linen yarn. To say nothing +of the industry of the flax-growers and flax-dressers, +three or four spinners at least are +necessary in order to keep one weaver in constant +employment; and more than four-fifths +of the whole quantity of labour necessary for +the preparation of linen cloth, is employed in +that of linen yarn; but our spinners are poor +people; women commonly scattered about in +all different parts of the country, without support +or protection. It is not by the sale of +their work, but by that of the complete work<span class='pagenum'><a name="Page_267" id="Page_267">[Pg 267]</a></span> +of the weavers, that our great master manufactures +make their profits. As it is their interest +to sell the complete manufacture as dear, so it +is to buy the materials as cheap as possible. By +extorting from the legislature bounties upon +the exportation of their own linen, high duties +upon the importation of all foreign linen, +and a total prohibition of the home consumption +of some sorts of French linen, they endeavour +to sell their own goods as dear as +possible. By encouraging the importation of +foreign linen yarn, and thereby bringing it +into competition with that which is made by +our own people, they endeavour to buy the +work of the poor spinners as cheap as possible. +They are as intent to keep down the +wages of their own weavers, as the earnings +of the poor spinners; and it is by no means for +the benefit of the workmen that they endeavour +either to raise the price of the complete +work, or to lower that of the rude materials. +It is the industry which is carried on for the benefit +of the rich and the powerful, that is principally +encouraged by our mercantile system. +That which is carried on for the benefit of the +poor and the indigent is too often either neglected +or oppressed.</p> + +<p>Both the bounty upon the exportation of +linen, and the exemption from the duty upon +the importation of foreign yarn, which were +granted only for fifteen years, but continued +by two different prolongations, expire with the +end of the session of parliament which shall +immediately follow the 24th of June 1786.</p> + +<p>The encouragement given to the importation +of the materials of manufacture by bounties, +has been principally confined to such as +were imported from our American plantations.</p> + +<p>The first bounties of this kind were those +granted about the beginning of the present +century, upon the importation of naval stores +from America. Under this denomination +were comprehended timber fit for masts, +yards, and bowsprits; hemp, tar, pitch, and +turpentine. The bounty, however, of L.1 the +ton upon masting-timber, and that of L.6 the +ton upon hemp, were extended to such as +should be imported into England from Scotland. +Both these bounties continued, without +any variation, at the same rate, till they +were severally allowed to expire; that upon +hemp on the 1st of January 1741, and that +upon masting-timber at the end of the session +of parliament immediately following the 24th +June 1781.</p> + +<p>The bounties upon the importation of tar, +pitch, and turpentine, underwent, during their +continuance, several alterations. Originally, +that upon tar was L.4 the ton; that upon pitch +the same; and that upon turpentine L.3 the +ton. The bounty of L.4 the ton upon tar was +afterwards confined to such as had been prepared +in a particular manner; this upon other +good, clean, and merchantable tar was reduced +to L.2, 4s. the ton. The bounty upon pitch +was likewise reduced to L.1, and that upon +turpentine to L.1 : 10s. the ton.</p> + +<p>The second bounty upon the importation +of any of the materials of manufacture, according +to the order of time, was that granted +by the 21st Geo. II. chap. 30, upon the importation +of indigo from the British plantations. +When the plantation indigo was worth +three-fourths of the price of the best French +indigo, it was, by this act, entitled to a bounty +of 6d. the pound. This bounty, which, +like most others was granted only for a limited +time, was continued by several prolongations, +but was reduced to 4d. the pound. +It was allowed to expire with the end of the +session of parliament which followed the 25th +March 1781.</p> + +<p>The third bounty of this kind was that +granted (much about the time that we were +beginning sometimes to court, and sometimes +to quarrel with our American colonies), by +the 4th Geo. III. chap. 26, upon the importation +of hemp, or undressed flax, from the +British plantations. This bounty was granted +for twenty-one years, from the 24th June +1764 to the 24th June 1785. For the first +seven years, it was to be at the rate of L.8 the +ton; for the second at L.6; and for the third +at L.4. It was not extended to Scotland, of +which the climate (although hemp is sometimes +times raised there in small quantities, and of an +inferior quality) is not very fit for that produce. +Such a bounty upon the importation +of Scotch flax in England would have been +too great a discouragement to the native produce +of the southern part of the united kingdom.</p> + +<p>The fourth bounty of this kind was that +granted by the 5th Geo. III. chap. 45, upon +the importation of wood from America. It +was granted for nine years from the 1st January +1766 to the 1st January 1775. During +the first three years, it was to be for every +hundred-and-twenty good deals, at the rate of +L.1, and for every load containing fifty cubic +feet of other square timber, at the rate of 12s. +For the second three years, it was for deals, +to be at the rate of 15s., and for other squared +timber at the rate of 8s.; and for the third +three years, it was for deals, to be at the rate +of 10s.; and for every other squared timber +at the rate of 5s.</p> + +<p>The fifth bounty of this kind was that +granted by the 9th Geo. III. chap. 38, upon +the importation of raw silk from the British +plantations. It was granted for twenty-one +years, from the 1st January 1770, to the 1st +January 1791. For the first seven years, it +was to be at the rate of L.25 for every hundred +pounds value; for the second, at L.20; +and for the third, at L.15. The management +of the silk-worm, and the preparation +of silk, requires so much hand-labour, and +labour is so very dear in America, that even<span class='pagenum'><a name="Page_268" id="Page_268">[Pg 268]</a></span> +this great bounty, I have been informed, was +not likely to produce any considerable effect.</p> + +<p>The sixth bounty of this kind was that +granted by 11th Geo. III. chap. 50, for the +importation of pipe, hogshead, and barrel-staves +and heading from the British plantations. +It was granted for nine years, from +1st January 1772 to the 1st January 1781. +For the first three years, it was, for a certain +quantity of each, to be at the rate of L.6; +for the second three years at L.4; and for the +third three years at L.2.</p> + +<p>The seventh and last bounty of this kind +was that granted by the 19th Geo. III. chap. +37, upon the importation of hemp from Ireland. +It was granted in the same manner as +that for the importation of hemp and undressed +flax from America, for twenty-one years, +from the 24th June 1779 to the 24th June +1800. The term is divided likewise into +three periods, of seven years each; and in +each of those periods, the rate of the Irish +bounty is the same with that of the American. +It does not, however, like the American +bounty, extend to the importation of undressed +flax. It would have been too great a +discouragement to the cultivation of that plant +in Great Britain. When this last bounty was +granted, the British and Irish legislatures +were not in much better humour with one +another, than the British and American had +been before. But this boon to Ireland, it is +to be hoped, has been granted under more +fortunate auspices than all those to America.</p> + +<p>The same commodities, upon which we +thus gave bounties, when imported from +America, were subjected to considerable duties +when imported from any other country. +The interest of our American colonies was +regarded as the same with that of the mother +country. Their wealth was considered as our +wealth. Whatever money was sent out to +them, it was said, came all back to us by the +balance of trade, and we could never become +a farthing the poorer by any expense which we +could lay out upon them. They were our own +in every respect, and it was an expense laid out +upon the improvement of our own property, +and for the profitable employment of our own +people. It is unnecessary, I apprehend, at +present to any any thing further, in order to +expose the folly of a system which fatal +experience has now sufficiently exposed. Had +our American colonies really been a part of +Great Britain, those bounties might have +been considered as bounties upon production, +and would still have been liable to all the +objections to which such bounties are liable, but +to no other.</p> + +<p>The exportation of the materials of manufacture +is sometimes discouraged by absolute +prohibitions, and sometimes by high duties.</p> + +<p>Our woollen manufacturers have been more +successful than any other class of workmen, +in persuading the legislature that the prosperity +of the nation depended upon the success +and extension of their particular business. +They have not only obtained a monopoly +against the consumers, by an absolute +prohibition of importing woollen cloths from +any foreign country; but they have likewise +obtained another monopoly against the sheep +farmers and growers of wool, by a similar +prohibition of the exportation of live sheep +and wool. The severity of many of the laws +which have been enacted for the security of +the revenue is very justly complained of, as +imposing heavy penalties upon actions which, +antecedent to the statutes that declared them +to be crimes, had always been understood to +be innocent. But the cruellest of our revenue +laws, I will venture to affirm, are mild +and gentle, in comparison to some of those +which the clamour of our merchants and +manufacturers has extorted from the legislature, +for the support of their own absurd and +oppressive monopolies. Like the laws of +Draco, these laws may be said to be all +written in blood.</p> + +<p>By the 8th of Elizabeth, chap. 3, the exporter +of sheep, lambs, or rams, was for the +first offence, to forfeit all his goods for ever, +to suffer a year's imprisonment, and then to +have his left hand cut off on a market town, +upon a market day, to be there nailed up; +and for the second offence, to be adjudged a +felon, and to suffer death accordingly. To +prevent the breed of our sheep from being propagated +in foreign countries, seems to have +been the object of this law. By the 13th and +14th of Charles II. chap. 18, the exportation +of wool was made felony, and the exporter +subjected to the same penalties and forfeitures +as a felon.</p> + +<p>For the honour of the national humanity, +it is to be hoped that neither of these statutes +was ever executed. The first of them, however, +so far as I know, has never been directly +repealed, and serjeant Hawkins seems to +consider it as still in force. It may, however, +perhaps be considered as virtually repealed by +the 12th of Charles II. chap. 32, sect. 3, +which, without expressly taking away the penalties +imposed by former statutes, imposes +a new penalty, viz. that of 20s. for every +sheep exported, or attempted to be exported, +together with the forfeiture of the sheep, and +of the owner's share of the sheep. The second +of them was expressly repealed by the +7th and 8th of William III. chap. 28, sect. +4, by which it is declared that 'Whereas the +statute of the 13th and 14th of king Charles +II. made against the exportation of wool, +among other things in the said act mentioned, +doth enact the same to be deemed felony, by +the severity of which penalty the prosecution +of offenders hath not been so effectually put +in execution; be it therefore enacted, by the<span class='pagenum'><a name="Page_269" id="Page_269">[Pg 269]</a></span> +authority aforesaid, that so much of the said +act, which relates to the making the said offence +felony, be repealed and made void.'</p> + +<p>The penalties, however, which are either +imposed by this milder statute, or which, +though imposed by former statutes, are not +repealed by this one, are still sufficiently +severe. Besides the forfeiture of the goods, +the exporter incurs the penalty of 3s. for +every pound weight of wool, either exported +or attempted to be exported, that is, about +four or five times the value. Any merchant, +or other person convicted of this offence, is +disabled from requiring any debt or account +belonging to him from any factor or other +person. Let his fortune be what it will, +whether he is or is not able to pay those heavy +penalties, the law means to ruin him completely. +But, as the morals of the great +body of people are not yet so corrupt as +those of the contrivers of this statute, I have +not heard that any advantage has ever been +taken of this clause. If the person convicted +of this offence is not able to pay the penalties +within three months after judgment, he is to +be transported for seven years; and if he returns +before the expiration of that time, he is +liable to the pains of felony, without benefit +of clergy. The owner of the ship, knowing +this offence, forfeits all his interest in the ship +and furniture. The master and mariners +knowing this offence, forfeit all their goods +and chattels, and suffer three months imprisonment. +By a subsequent statute, the +master suffers six months imprisonment.</p> + +<p>In order to prevent exportation, the whole +inland commerce of wool is laid under very +burdensome and oppressive restrictions. It +cannot be packed in any box, barrel, cask, +case, chest, or any other package, but only in +packs of leather or pack-cloth, on which must +be marked on the outside the words <span class="smcap">wool</span> or +<span class="smcap">yarn</span>, in large letters, not less than three +inches long, on pain of forfeiting the same +and the package, and 3s. for every pound +weight, to be paid by the owner or packer. +It cannot be loaden on any horse or cart, or +carried by land within five miles of the coast, +but between sun-rising, and sun-setting, on +pain of forfeiting the same, the horses and +carriages. The hundred next adjoining to +the sea coast, out of, or through which the +wool is carried or exported, forfeits L.20, if +the wool is under the value of L.10; and if +of greater value, then treble that value, together +with treble costs, to be sued for within +the year. The execution to be against any +two of the inhabitants, whom the sessions +must reimburse, by an assessment on the +other inhabitants, as in the cases of robbery. +And if any person compounds with the hundred +for less than this penalty, he is to be +imprisoned for five years, and any other person +may prosecute. These regulations take +place through the whole kingdom.</p> + +<p>But in the particular counties of Kent and +Sussex, the restrictions are still more troublesome. +Every owner of wool within ten miles +of the sea coast must give an account in writing, +three days after shearing, to the next +officer of the customs, of the number of his +fleeces, and of the places where they are lodged. +And before he removes any part of them, +he must give the like notice of the number +and weight of the fleeces, and of the name +and abode of the person to whom they are +sold, and of the place to which it is intended +they should be carried. No person within +fifteen miles of the sea, in the said counties, +can buy any wool, before he enters into bond +to the king, that no part of the wool which +he shall so buy shall be sold by him to any +other person within fifteen miles of the sea. +If any wool is found carrying towards the +sea side in the said counties, unless it has +been entered and security given as aforesaid, +it is forfeited, and the offender also forfeits +3s. for every pound weight. If any person +lay any wool, not entered as aforesaid, within +fifteen miles of the sea, it must be seized and +forfeited; and if, after such seizure, any person +shall claim the same, he must give security +to the exchequer, that if he is cast upon +trial he shall pay treble costs, besides all +other penalties.</p> + +<p>When such restrictions are imposed upon +the inland trade, the coasting trade, we may +believe, cannot be left very free. Every +owner of wool, who carrieth, or causeth to +be carried, any wool to any part or place on +the sea coast, in order to be from thence transported +by sea to any other place or port on +the coast, must first cause an entry thereof +to be made at the port from whence it is intended +to be conveyed, containing the weight, +marks, and number, of the packages, before +he brings the same within five miles of that +part, on pain of forfeiting the same, and also +the horses, carts, and other carriages; and +also of suffering and forfeiting, as by the +other laws in force against the exportation of +wool. This law, however (1st of William +III. chap. 32), is so very indulgent as to declare, +that 'this shall not hinder any person +from carrying his wool home from the place +of shearing, though it be within five miles of +the sea, provided that in ten days after shearing, +and before he remove the wool, he do +under his hand certify to the next officer of the +customs the true number of fleeces, and +where it is housed; and do not remove the +same, without certifying to such officer, under +his hand, his intention so to do, three +days before.' Bond must be given that the +wool to be carried coast-ways is to be landed +at the particular port for which it is entered +outwards; and if any part of it is landed +without the presence of an officer, not only +the forfeiture of the wool is incurred, as in +other goods, but the usual additional penalty<span class='pagenum'><a name="Page_270" id="Page_270">[Pg 270]</a></span> +of 3s. for every pound weight is likewise incurred.</p> + +<p>Our woollen manufacturers, in order to +justify their demand of such extraordinary restrictions +and regulations, confidently asserted, +that English wool was of a peculiar quality, +superior to that of any other country; that +the wool of other countries could not, without +some mixture of it, be wrought up into any +tolerable manufacture; that fine cloth could +not be made without it; that England, therefore, +if the exportation of it could be totally +prevented, could monopolize to herself almost +the whole woollen trade of the world; and +thus, having no rivals, could sell at what +price she pleased, and in a short time acquire +the most incredible degree of wealth by the +most advantageous balance of trade. This +doctrine, like most other doctrines which are +confidently asserted by any considerable number +of people, was, and still continues to be, +most implicitly believed by a much greater +number: by almost all those who are either +unacquainted with the woollen trade, or who +have not made particular inquiries. It is, +however, so perfectly false, that English wool +is in any respect necessary for the making of +fine cloth, that it is altogether unfit for it. +Fine cloth is made altogether of Spanish +wool. English wool, cannot be even so mixed +with Spanish wool, as to enter into the +composition without spoiling and degrading, +in some degree, the fabric of the cloth.</p> + +<p>It has been shown in the foregoing part of +this work, that the effect of these regulations +has been to depress the price of English wool, +not only below what it naturally would be in +the present times, but very much below what +it actually was in the time of Edward III. +The price of Scotch wool, when, in consequence +of the Union, it became subject to the +same regulations, is said to have fallen about +one half. It is observed by the very accurate +and intelligent author of the Memoirs of +Wool, the Reverend Mr. John Smith, that +the price of the best English wool in England, +is generally below what wool of a very +inferior quality commonly sells for in the +market of Amsterdam. To depress the price +of this commodity below what may be called +its natural and proper price, was the avowed +purpose of those regulations; and there seems +to be no doubt of their having produced the +effect that was expected from them.</p> + +<p>This reduction of price, it may perhaps be +thought, by discouraging the growing of wool, +must have reduced very much the annual +produce of that commodity, though not below +what it formerly was, yet below what, in the +present state of things, it would probably +have been, had it, in consequence of an open +and free market, been allowed to rise to the +natural and proper price. I am, however, +disposed to believe, that the quantity of the +annual produce cannot have been much, +though it may, perhaps, have been a little +affected by these regulations. The growing +of wool is not the chief purpose for which the +sheep farmer employs his industry and stock. +He expects his profit, not so much from the +price of the fleece, as from that of the carcase; +and the average or ordinary price of the latter +must even, in many cases, make up to him +whatever deficiency there may be in the average +or ordinary price of the former. It has +been observed, in the foregoing part of this +work, that 'whatever regulations tend to sink +the price, either of wool or of raw hides, +below what it naturally would be, must, in an +improved and cultivated country, have some +tendency to raise the price of butcher's meat. +The price, both of the great and small cattle +which are fed on improved and cultivated +land, must be sufficient to pay the rent which +the landlord, and the profit which the farmer, +has reason to expect from improved and cultivated +land. If it is not, they will soon +cease to feed them. Whatever part of this +price, therefore, is not paid by the wool and +the hide, must be paid by the carcase. The +less there is paid for the one, the more must +be paid for the other. In what manner this +price is to be divided upon the different parts +of the beast, is indifferent to the landlords +and farmers, provided it is all paid to them. +In an improved and cultivated country, therefore, +their interest as landlords and farmers +cannot be much affected by such regulations, +though their interest as consumers may, by +the rise in the price of provisions.' According +to this reasoning, therefore, this degradation +in the price of wool is not likely, in an +improved and cultivated country, to occasion +any diminution in the annual produce of that +commodity; except so far as, by raising the +price of mutton, it may somewhat diminish +the demand for, and consequently the production +of, that particular species of butcher's +meat. Its effect, however, even in this way, +it is probable, is not very considerable.</p> + +<p>But though its effect upon the quantity of +the annual produce may not have been very +considerable, its effect upon the quality, it +may perhaps be thought, must necessarily +have been very great. The degradation in +the quality of English wool, if not below +what it was in former times, yet below what +it naturally would have been in the present +state of improvement and cultivation, must +have been, it may perhaps be supposed, very +nearly in proportion to the degradation of +price. As the quality depends upon the +breed, upon the pasture, and upon the management +and cleanliness of the sheep, during +the whole progress of the growth of the fleece, +the attention to these circumstances, it may +naturally enough be imagined, can never be +greater than in proportion to the recompence +which the price of the fleece is likely to make +for the labour and expense which that atten<span class='pagenum'><a name="Page_271" id="Page_271">[Pg 271]</a></span>tion +requires. It happens, however, that the +goodness of the fleece depends, in great +measure, upon the health, growth, and bulk +of the animal: the same attention which is +necessary for the improvement of the carcase +is, in some respect, sufficient for that of the +fleece. Notwithstanding the degradation of +price, English wool is said to have been improved +considerably during the course even +of the present century. The improvement, +might, perhaps, have been greater if the price +had been better; but the lowness of price, +though it may have obstructed, yet certainly +it has not altogether prevented that improvement.</p> + +<p>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 do +(though I think it probable that it may have +affected the latter a good deal more than the +former); and the interest of the growers of +wool, though it must have been hurt in some +degree, seems upon the whole, to have been +much less hurt than could well have been +imagined.</p> + +<p>These considerations, however, will not +justify the absolute prohibition of the exportation +of wool; but they will fully justify the +imposition of a considerable tax upon that exportation.</p> + +<p>To hurt, in any degree, the interest of any +one order of citizens, for no other purpose +but to promote that of some other, is evidently +contrary to that justice and equality of treatment +which the sovereign owes to all the different +orders of his subjects. But the prohibition +certainly hurts, in some degree, the +interest of the growers of wool, for no other +purpose but to promote that of the manufacturers.</p> + +<p>Every different order of citizens is bound to +contribute to the support of the sovereign or +commonwealth. A tax of five, or even of ten +shillings, upon the exportation of every tod +of wool, would produce a very considerable +revenue to the sovereign. It would hurt the +interest of the growers somewhat less than +the prohibition, because it would not probably +lower the price of wool quite so much. It +would afford a sufficient advantage to the +manufacturer, because, though he might not +buy his wool altogether so cheap as under the +prohibition, he would still buy it at least five +or ten shillings cheaper than any foreign +manufacturer could buy it, besides saving the +freight and insurance which the other would +be obliged to pay. It is scarce possible to +devise a tax which could produce any considerable +revenue to the sovereign, and at the +same time occasion so little inconveniency to +any body.</p> + +<p>The prohibition, notwithstanding all the +penalties which guard it, does not prevent the +exportation of wool. It is exported, it is well +known, in great quantities. The great difference +between the price in the home and +that in the foreign market, presents such a +temptation to smuggling, that all the rigour of +the law cannot prevent it. This illegal exportation +is advantageous to nobody but the +smuggler. A legal exportation, subject to a +tax, by affording a revenue to the sovereign, +and thereby saving the imposition of some +other, perhaps more burdensome and inconvenient +taxes, might prove advantageous to all +the different subjects of the state.</p> + +<p>The exportation of fuller's earth, or fuller's +clay, supposed to be necessary for preparing +and cleansing the woollen manufactures, has +been subjected to nearly the same penalties as +the exportation of wool. Even tobacco-pipe +clay, though acknowledged to be different +from fuller's clay, yet, on account of their +resemblance, and because fuller's clay might +sometimes be exported as tobacco-pipe clay, +has been laid under the same prohibitions and +penalties.</p> + +<p>By the 13th and 14th of Charles II. chap. +7, the exportation, not only of raw hides, +but of tanned leather, except in the shape of +boots, shoes, or slippers, was prohibited; and +the law gave a monopoly to our boot-makers +and shoe-makers, not only against our graziers, +but against our tanners. By subsequent +statutes, our tanners have got themselves +exempted from this monopoly, upon +paying a small tax of only one shilling on the +hundred weight of tanned leather, weighing +one hundred and twelve pounds. They have +obtained likewise the drawback of two-thirds +of the excise duties imposed upon their commodity, +even when exported without further +manufacture. All manufactures of leather +may be exported duty free; and the exporter +is besides entitled to the drawback of the +whole duties of excise. Our graziers still +continue subject to the old monopoly. Graziers, +separated from one another, and dispersed +through all the different corners of the +country, cannot, without great difficulty, +combine together for the purpose either of +imposing monopolies upon their fellow-citizens, +or of exempting themselves from such +as may have been imposed upon them by +other people. Manufacturers of all kinds, +collected together in numerous bodies in all +great cities, easily can. Even the horns of +cattle are prohibited to be exported; and the +two insignificant trades of the horner and +comb-maker enjoy, in this respect, a monopoly +against the graziers.</p> + +<p>Restraints, either by prohibitions, or by +taxes, upon the exportation of goods which +are partially, but not completely manufactured,<br /> +<span style="margin-left: 0.5em;">are not peculiar to the manufacture of</span><br /> +leather. As long as any thing remains to be +done, in order to fit any commodity for immediate +use and consumption, our manufacturers +think that they themselves ought to<span class='pagenum'><a name="Page_272" id="Page_272">[Pg 272]</a></span> +the doing of it. Woollen yarn and worsted +are prohibited to be exported, under the +same penalties as wool. Even white cloths +are subject to a duty upon exportation; and +our dyers have so far obtained a monopoly +against our clothiers. Our clothiers would +probably have been able to defend themselves +against it; but it happens that the greater +part of our principal clothiers are themselves +likewise dyers. Watch-cases, clock-cases, and +dial-plates for clocks and watches, have been +prohibited to be exported. Our clock-makers +and watch-makers are, it seems, unwilling +that the price of this sort of workmanship +should be raised upon them by the competition +of foreigners.</p> + +<p>By some old statutes of Edward III. Henry +VIII. and Edward VI. the exportation of +all metals was prohibited. Lead and tin were +alone excepted, probably on account of the +great abundance of those metals; in the exportation +of which a considerable part of the +trade of the kingdom in those days consisted. +For the encouragement of the mining trade, +the 5th of William and Mary, chap. 17, exempted +from this prohibition iron, copper, and +mundic metal made from British ore. The +exportation of all sorts of copper bars, foreign +as well as British, was afterwards permitted +by the 9th and 10th of William III. chap 26. +The exportation of unmanufactured brass, of +what is called gun-metal, bell-metal, and +shroff-metal, still continues to be prohibited. +Brass manufactures of all sorts may be exported +duty free.</p> + +<p>The exportation of the materials of manufacture, +where it is not altogether prohibited, +is, in many cases, subjected to considerable +duties.</p> + +<p>By the 8th Geo. I. chap. 15, the exportation +of all goods, the produce or manufacture +of Great Britain, upon which any duties had +been imposed by former statutes, was rendered +duty free. The following goods, however, +were excepted: alum, lead, lead-ore, tin, +tanned leather, copperas, coals, wool, cards, +white woolen cloths, lapis calaminaris, skins +of all sorts, glue, coney hair or wool, hares +wool, hair of all sorts, horses, and litharge of +lead. If you expect horses, all these are either +materials of manufacture, or incomplete manufactures +(which may be considered as materials +for still further manufacture), or instruments +of trade. This statute leaves them +subject to all the old duties which had ever +been imposed upon them, the old subsidy, +and one per cent. outwards.</p> + +<p>By the same statute, a great number of foreign +drugs for dyers use are exempted from +all duties upon importation. Each of them, +however, is afterwards subjected to a certain +duty, not indeed a very heavy one, upon exportation. +Our dyers, it seems, while they +thought it for their interest to encourage the +importation of those drugs, by an exemption +from all duties, thought it likewise for their +own interest to throw some small discouragement +upon their exportation. The avidity, +however, which suggested this notable piece +of mercantile ingenuity, most probably disappointed +itself of its object. It necessarily +taught the importers to be more careful than +they might otherwise have been, that their +importation should not exceed what was necessary +for the supply of the home market. +The home market was at all times likely to +be more scantily supplied; the commodities +were at all times likely to be somewhat dearer +there than they would have been, had the exportation +been rendered as free as the importation.</p> + +<p>By the above-mentioned statute, gum senega, +or gum arabic, being among the enumerated +dyeing drugs, might be imported duty +free. They were subjected, indeed, to a small +poundage duty, amounting only to threepence +in the hundred weight, upon their re-exportation. +France enjoyed, at that time, an exclusive +trade to the country most productive +of those drugs, that which lies in the neighbourhood +of the Senegal; and the British +market could not easily be supplied by the +immediate importation of them from the place +of growth. By the 25th Geo. II. therefore, +gum senega was allowed to be imported (contrary +to the general dispositions of the act of +navigation) from any part of Europe. As the +law, however, did not mean to encourage this +species of trade, so contrary to the general +principles of the mercantile policy of England, +it imposed a duty of ten shillings the +hundred weight upon such importation, and +no part of this duty was to be afterwards +drawn back upon its exportation. The successful +war which began in 1755 gave Great +Britain the same exclusive trade to those countries +which France had enjoyed before. Our +manufactures, as soon as the peace was made, +endeavoured to avail themselves of this advantage, +and to establish a monopoly in their +own favour both against the growers and +against the importers of this commodity. By +the 5th Geo. III. therefore, chap. 37, the +exportation of gum senega, from his majesty's +dominions in Africa, was confined to Great +Britain, and was subjected to all the same restrictions, +regulations, forfeitures, and penalties, +as that of the enumerated commodities +of the British colonies in America and the +West Indies. Its importation, indeed, was +subjected to a small duty of sixpence the hundred +weight, but its re-exportation was subjected +to the enormous duty of one pound ten +shillings the hundred weight. It was the intention +of our manufacturers, that the whole +produce of those countries should be imported +into Great Britain; and in order that they +themselves might be enabled to buy it at their +own price, that no part of it should be exported +again, but at such an expense as would<span class='pagenum'><a name="Page_273" id="Page_273">[Pg 273]</a></span> +sufficiently discourage that exportation. Their +avidity, however, upon this, as well as upon +many other occasions, disappointed itself of its +object. This enormous duty presented such a +temptation to smuggling, that great quantities +of this commodity were clandestinely exported, +probably to all the manufacturing +countries of Europe, but particularly to Holland, +not only from Great Britain, but from +Africa. Upon this account, by the 14th +Geo. III. chap. 10, this duty upon exportation +was reduced to five shillings the hundred +weight.</p> + +<p>In the book of rates, according to which +the old subsidy was levied, beaver skins were +estimated at six shillings and eight pence a-piece; +and the different subsidies and imposts +which, before the year 1722, had been laid +upon their importation, amounted to one-fifth +part of the rate, or to sixteen pence upon +each skin; all of which, except half the old +subsidy, amounting only to twopence, was +drawn back upon exportation. This duty, upon +the importation of so important a material +of manufacture, had been thought too high; +and, in the year 1722, the rate was reduced +to two shillings and sixpence, which reduced +the duty upon importation to sixpence, and +of this only one-half was to be drawn back +upon exportation. The same successful war +put the country most productive of beaver under +the dominion of Great Britain; and beaver +skins being among the enumerated commodities, +the exportation from America was +consequently confined to the market of Great +Britain. Our manufacturers soon bethought +themselves of the advantage which they might +make of this circumstance; and in the year +1764, the duty upon the importation of beaver +skin was reduced to one penny, but the +duty upon exportation was raised to sevenpence +each skin, without any drawback of the +duty upon importation. By the same law, a +duty of eighteen pence the pound was imposed +upon the exportation of beaver wool or +woumbs, without making any alteration in the +duty upon the importation of that commodity, +which, when imported by British, and in British +shipping, amounted at that time to between +fourpence and fivepence the piece.</p> + +<p>Coals may be considered both as a material +of manufacture, and as an instrument of trade. +Heavy duties, accordingly, have been imposed +upon their exportation, amounting at present +(1783) to more than five shillings the ton, or +more than fifteen shillings the chaldron, Newcastle +measure; which is, in most cases, more +than the original value of the commodity at +the coal-pit, or even at the shipping port for +exportation.</p> + +<p>The exportation, however, of the instruments +of trade, properly so called, is commonly +restrained, not by high duties, but by +absolute prohibitions. Thus, by the 7th and +8th of William III. chap. 20, sect. 8, the exportation +of frames or engines for knitting +gloves or stockings, is prohibited, under the +penalty, not only of the forfeiture of such +frames or engines, so exported, or attempted +to be exported, but of forty pounds, one half +to the king, the other to the person who shall +inform or sue for the same. In the same +manner, by the 14th Geo. III. chap. 71, the +exportation to foreign parts, of any utensils +made use of in the cotton, linen, woollen, and +silk manufacturers, is prohibited under the penalty, +not only of the forfeiture of such utensils, +but of two hundred pounds, to be paid +by the person who shall offend in this manner; +and likewise of two hundred pounds, to +be paid by the master of the ship, who shall +knowingly suffer such utensils to be loaded on +board his ship.</p> + +<p>When such heavy penalties were imposed +upon the exportation of the dead instruments +of trade, it could not well be expected that +the living instrument, the artificer, should be +allowed to go free. Accordingly, by the 5th +Geo. I. chap. 27, the person who shall be +convicted of enticing any artificer, of or in +any of the manufactures of Great Britain, to +go into any foreign parts, in order to practise +or teach his trade, is liable, for the first offence, +to be fined in any sum not exceeding one +hundred pounds, and to three months imprisonment, +and until the fine shall be paid; and +for the second offence, to be fined in any sum, +at the discretion of the court, and to imprisonment +for twelve months, and until the fine +shall be paid. By the 23d Geo. II. chap. 13, +this penalty is increased, for the first offence, +to five hundred pounds for every artificer so +enticed, and to twelve months imprisonment, +and until the fine shall be paid; and for the +second offence, to one thousand pounds, and +to two years imprisonment, and until the fine +shall be paid.</p> + +<p>By the former of these two statutes, upon +proof that any person has been enticing any +artificer, or that any artificer has promised or +contracted to go into foreign parts, for the +purposes aforesaid, such artificer may be obliged +to give security, at the discretion of the +court, that he shall not go beyond the seas, +and may be committed to prison until he give +such security.</p> + +<p>If any artificer has gone beyond the seas, +and is exercising or teaching his trade in any +foreign country, upon warning being given to +him by any of his majesty's ministers or consuls +abroad, or by one of his majesty's secretaries +of state, for the time being, if he does +not, within six months after such warning, return +into this realm, and from henceforth +abide and inhabit continually within the same, +he is from thenceforth declared incapable of +taking any legacy devised to him within this +kingdom, or of being executor or administrator +to any person, or of taking any lands within +this kingdom, by descent, devise, or purchase.<span class='pagenum'><a name="Page_274" id="Page_274">[Pg 274]</a></span> +He likewise forfeits to the king all his lands, +goods, and chattels; is declared an alien in +every respect; and is put out of the king's +protection.</p> + +<p>It is unnecessary, I imagine, to observe how +contrary such regulations are to the boasted +liberty of the subject, of which we affect to +be so very jealous; but which, in this case, is +so plainly sacrificed to the futile interests of +our merchants and manufacturers.</p> + +<p>The laudable motive of all these regulations, +is to extend our own manufactures, not +by their own improvement, but by the depression +of those of all our neighbours, and +by putting an end, as much as possible, to +the troublesome competition of such odious +and disagreeable rivals. Our master manufacturers +think it reasonable that they themselves +should have the monopoly of the ingenuity +of all their countrymen. Though by +restraining, in some trades, the number of +apprentices which can be employed at one +time, and by imposing the necessity of a long +apprenticeship in all trades, they endeavour, +all of them, to confine the knowledge of their +respective employments to as small a number +as possible; they are unwilling, however, that +any part of this small number should go abroad +to instruct foreigners.</p> + +<p>Consumption is the sole end and purpose +of all production; and the interest of the producer +ought to be attended to, only so far as +it may be necessary for promoting that of the +consumer.</p> + +<p>The maxim is so perfectly self-evident, that +it would be absurd to attempt to prove it. +But in the mercantile system, the interest of +the consumer is almost constantly sacrificed +to that of the producer; and it seems to consider +production, and not consumption, as +the ultimate end and object of all industry +and commerce.</p> + +<p>In the restraints upon the importation of +all foreign commodities which can come into +competition with those of our own growth or +manufacture, the interest of the home consumer +is evidently sacrificed to that of the +producer. It is altogether for the benefit of +the latter, that the former is obliged to pay +that enhancement of price which this monopoly +almost always occasions.</p> + +<p>It is altogether for the benefit of the producer, +that bounties are granted upon the +exportation of some of his productions. The +home consumer is obliged to pay, first, the +tax which is necessary for paying the bounty; +and, secondly, the still greater tax which necessarily +arises from the enhancement of the +price of the commodity in the home market.</p> + +<p>By the famous treaty of commerce with +Portugal, the consumer is prevented by high +duties from purchasing of a neighbouring +country, a commodity which our own climate +does not produce; but is obliged to purchase +it of a distant country, though it is acknowledged, +that the commodity of the distant +country is of a worse quality than that of the +near one. The home consumer is obliged to +submit to this inconvenience, in order that +the producer may import into the distant +country some of his productions, upon more +advantageous terms than he otherwise would +have been allowed to do. The consumer, too, +is obliged to pay whatever enhancement in +the price of those very productions this forced +exportation may occasion in the home market.</p> + +<p>But in the system of laws which has been +established for the management of our American +and West Indies colonies, the interest of +the home consumer has been sacrificed to that +of the producer, which a more extravagant +profusion than in all our other commercial +regulations. A great empire has been established +for the sole purpose of raising up a +nation of customers, who should be obliged +to buy, from the shops of our different producers, +all the goods with which these could +supply them. For the sake of that little enhancement +of price which this monopoly +might afford our producers, the home consumers +have been burdened with the whole +expense of maintaining and defending that +empire. For this purpose, and for this purpose +only, in the last two wars, more than +two hundred millions have been spent, and a +new debt of more than a hundred and seventy +millions has been contracted, over and above +all that had been expended for the same +purpose in former wars. The interest of +this debt alone is not only greater than the +whole extraordinary profit which, it never +could be pretended, was made by the monopoly +of the colony trade, but than the whole +value of that trade, or than the whole value +of the goods which, at an average, have been +annually exported to the colonies.</p> + +<p>It cannot be very difficult to determine who +have been the contrivers of this whole mercantile +system; not the consumers, we may +believe, whose interest has been entirely neglected; +but the producers, whose interest +has been so carefully attended to; and among +this latter class, our merchants and manufacturers +have been by far the principal architects. +In the mercantile regulations, which +have been taken notice of in this chapter, the +interest of our manufacturers has been most +peculiarly attended to; and the interest, not +so much of the consumers, as that of some +other sets of producers, has been sacrificed +to it.<span class='pagenum'><a name="Page_275" id="Page_275">[Pg 275]</a></span></p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. IX.</h3> + +<h4>OF THE AGRICULTURAL SYSTEMS, OR OF THOSE +SYSTEMS OF POLITICAL ECONOMY WHICH REPRESENT +THE PRODUCE OF LAND, AS EITHER +THE SOLE OR THE PRINCIPAL SOURCE OF THE +REVENUE AND WEALTH OF EVERY COUNTRY.</h4> + + +<p>The agricultural systems of political economy +will not require so long an explanation as that +which I have thought it necessary to bestow +upon the mercantile or commercial system.</p> + +<p>That system which represents the produce +of land as the sole source of the revenue and +wealth of every country, has, so far as I know, +never been adopted by any nation, and it at +present exists only in the speculations of a +few men of great learning and ingenuity in +France. It would not, surely, be worth +while to examine at great length the errors of +a system which never has done, and probably +never will do, any harm in any part of the +world. I shall endeavour to explain, however, +as distinctly as I can, the great outlines +of this very ingenious system.</p> + +<p>Mr. Colbert, the famous minister of Lewis +XIV. was a man of probity, of great industry, +and knowledge of detail; of great experience +and acuteness in the examination of +public accounts; and of abilities, in short, +every way fitted for introducing method and +good order into the collection and expenditure +of the public revenue. That minister +had unfortunately embraced all the prejudices +of the mercantile system, in its nature and +essence a system of restraint and regulation, +and such as could scarce fail to be agreeable +to a laborious and plodding man of business, +who had been accustomed to regulate the different +departments of public offices, and to +establish the necessary checks and controuls +for confining each to its proper sphere. The +industry and commerce of a great country, +he endeavoured to regulate upon the same +model as the departments of a public office; +and instead of allowing every man to pursue +his own interest his own way, upon the liberal +plan of equality, liberty, and justice, he +bestowed upon certain branches of industry +extraordinary privileges, while he laid others +under as extraordinary restraints. He was +not only disposed, like other European ministers, +to encourage more the industry of the +towns than that of the country; but, in order +to support the industry of the towns, he +was willing even to depress and keep down +that of the country. In order to render provisions +cheap to the inhabitants of the towns, +and thereby to encourage manufactures and +foreign commerce, he prohibited altogether +the exportation of corn, and thus excluded +the inhabitants of the country from every foreign +market, for by far the most important +part of the produce of their industry. This +prohibition, joined to the restraints imposed +by the ancient provincial laws of France upon +the transportation of corn from one province +to another, and to the arbitrary and degrading +taxes which are levied upon the cultivators +in almost all the provinces, discouraged +and kept down the agriculture of that country +very much below the state to which it would +naturally have risen in so very fertile a soil, +and so very happy a climate. This state of +discouragement and depression was felt more +or less in every different part of the country, +and many different inquiries were set on foot +concerning the causes of it. One of those +causes appeared to be the preference given, by +the institutions of Mr. Colbert, to the industry +of the towns above that of the country.</p> + +<p>If the rod be bent too much one way, says +the proverb, in order to make it straight, you +must bend it as much the other. The French +philosophers, who have proposed the system +which represents agriculture as the sole source +of the revenue and wealth of every country, +seem to have adopted this proverbial maxim; +and, as in the plan of Mr. Colbert, the industry +of the towns was certainly overvalued +in comparison with that of the country, so in +their system it seems to be as certainly under-valued.</p> + +<p>The different orders of people, who have +ever been supposed to contribute in any respect +towards the annual produce of the land +and labour of the country, they divide into +three classes. The first is the class of the +proprietors of land. The second is the class +of the cultivators, of farmers and country labourers, +whom they honour with the peculiar +appellation of the productive class. The +third is the class of artificers, manufacturers, +and merchants, whom they endeavour to degrade +by the humiliating appellation of the +barren or unproductive class.</p> + +<p>The class of proprietors contributes to the +annual produce, by the expense which they +may occasionally lay out upon the improvement +of the land, upon the buildings, drains, +inclosures, and other ameliorations, which +they may either make or maintain upon it, +and by means of which the cultivators are enabled, +with the same capital, to raise a greater +produce, and consequently to pay a greater +rent. This advanced rent may be considered +as the interest or profit due to the proprietor, +upon the expense or capital which he thus +employs in the improvement of his land. +Such expenses are in this system called ground +expenses (<i>depenses foncieres</i>).</p> + +<p>The cultivators or farmers contribute to the +annual produce, by what are in this system +called the original and annual expenses (<i>depenses +primitives, et depenses annuelles</i>), which +they lay out upon the cultivation of the land. +The original expenses consist in the instruments +of husbandry, in the stock of cattle, in<span class='pagenum'><a name="Page_276" id="Page_276">[Pg 276]</a></span> +the seed, and in the maintenance of the +farmer's family, servants, and cattle, during +at least a great part of the first year of his occupancy, +or till he can receive some return +from the land. The annual expenses consist +in the seed, in the wear and tear of instruments +of husbandry, and in the annual maintenance +of the farmer's servants and cattle, +and of his family too, so far as any part of +them can be considered as servants employed +in cultivation. That part of the produce of +the land which remains to him after paying +the rent, ought to be sufficient, first, to replace +to him, within a reasonable time, at +least during the term of his occupancy, the +whole of his original expenses, together with +the ordinary profits of stock; and, secondly, +to replace to him annually the whole +of his annual expenses, together likewise +with the ordinary profits of stock. Those two +sorts of expenses are two capitals which the +farmer employs in cultivation; and unless +they are regularly restored to him, together +with a reasonable profit, he cannot carry on +his employment upon a level with other employments; +but, from a regard to his own +interest, must desert it as soon as possible, +and see some other. That part of the produce +of the land which is thus necessary for +enabling the farmer to continue his business, +ought to be considered as a fund sacred to +cultivation, which, if the landlord violates, +he necessarily reduces the produce of his own +land, and, in a few years, not only disables +the farmer from paying this racked rent, but +from paying the reasonable rent which he +might otherwise have got for his land. The +rent which properly belongs to the landlord, +is no more than the neat produce which remains +after paying, in the completest manner, +all the necessary expenses which must be previously +laid out, in order to raise the gross or +the whole produce. It is because the labour +of the cultivators, over and above paying +completely all those necessary expenses, affords +a neat produce of this kind, that this +class of people are in this system peculiarly +distinguished by the honourable appellation +of the productive class. Their original and +annual expenses are for the same reason called, +in this system, productive expenses, because, +over and above replacing their own +value, they occasion the annual reproduction +of this neat produce.</p> + +<p>The ground expenses, as they are called, +or what the landlord lays out upon the improvement +of his land, are, in this system, +too, honoured with the appellation of productive +expenses. Till the whole of those expenses, +together with the ordinary profits of +stock, have been completely repaid to him by +the advanced rent which he gets from his +land, that advanced rent ought to be regarded +as sacred and inviolable, both by the +church and by the king; ought to be subject +neither to tithe nor to taxation. If it is otherwise, +by discouraging the improvement of +land, the church discourages the future increase +of her own tithes, and the king the future +increase of his own taxes. As in a well +ordered state of things, therefore, those ground +expenses, over and above reproducing in the +completest manner their own value, occasion +likewise, after a certain time, a reproduction +of neat produce, they are in this system +considered as productive expenses.</p> + +<p>The ground expenses of the landlord, however, +together with the original and the annual +expenses of the farmer, are the only +three sorts of expenses which in this system +are considered as productive. All other expenses, +and all other orders of people, even +those who, in the common apprehensions of +men, are regarded as the most productive, +are, in this account of things, represented as +altogether barren and unproductive.</p> + +<p>Artificers and manufacturers, in particular, +whose industry, in the common apprehensions +of men, increases so much the value of the +rude produce of land, are in this system represented +as a class of people altogether +barren and unproductive. Their labour, it is +said, replaces only the stock which employs +them, together with its ordinary profits. +That stock consists in the materials, tools, +and wages, advanced to them by their employer; +and is the fund destined for their +employment and maintenance. Its profits +are the fund destined for the maintenance of +their employer. Their employer, as he advances +to them the stock of materials, tools, +and wages, necessary for their employment, +so he advances to himself what is necessary +for his own maintenance; and this maintenance +he generally proportions to the profit +which he expects to make by the price of their +work. Unless its price repays to him the +maintenance which he advances to himself, as +well as the materials, tools, and wages, which +he advances to his workmen, it evidently does +not repay to him the whole expense which he +lays out upon it. The profits of manufacturing +stock, therefore, are not, like the rent +of land, a neat produce which remains after +completely repaying the whole expense which +must be laid out in order to obtain them. +The stock of the farmer yields him a profit, +as well as that of the master manufacturer; +and it yields a rent likewise to another person, +which that of the master manufacturer does +not. The expense, therefore, laid out in employing +and maintaining artificers and manufacturers, +does no more than continue, if one +may say so, the existence of its own value, +and does not produce any new value. It is, +therefore, altogether a barren and unproductive +expense. The expense, on the contrary, +laid out in employing farmers and country +labourers, over and above continuing the existence +of its own value, produces a new value<span class='pagenum'><a name="Page_277" id="Page_277">[Pg 277]</a></span> +the rent of the landlord. It is, therefore, a +productive expense.</p> + +<p>Mercantile stock is equally barren and unproductive +with manufacturing stock. It +only continues the existence of its own value, +without producing any new value. Its profits +are only the repayment of the maintenance +which its employer advances to himself during +the time that he employs it, or till he receives +the returns of it. They are only the +repayment of a part of the expense which must +be laid out in employing it.</p> + +<p>The labour of artificers and manufacturers +never adds any thing to the value of the whole +annual amount of the rude produce of the +land. It adds, indeed, greatly to the value +of some particular parts of it. But the consumption +which, in the mean time, it occasions +of other parts, is precisely equal to the +value which it adds to those parts; so that +the value of the whole amount is not, at any +one moment of time, in the least augmented +by it. The person who works the lace of a +pair of fine ruffles for example, will sometimes +raise the value of, perhaps, a pennyworth +of flax to L.30 sterling. But though, +at first sight, he appears thereby to multiply the +value of a part of the rude produce about seven +thousand and two hundred times, he in reality +adds nothing to the value of the whole annual +amount of the rude produce. The working +of that lace costs him, perhaps, two years labour. +The L.30 which he gets for it when +it is finished, is no more than the repayment +of the subsistence which he advances to himself +during the two years that he is employed +about it. The value which, by every +day's, month's, or year's labour, he adds to +the flax, does no more than replace the value +of his own consumption during that day, +month, or year. At no moment of time, +therefore, does he add any thing to the value +of the whole annual amount of the rude produce +of the land: the portion of that produce +which he is continually consuming, being +always equal to the value which he is continually +producing. The extreme poverty of +the greater part of the persons employed in +this expensive, though trifling manufacture, +may satisfy us that the price of their work +does not, in ordinary cases, exceed the value +of their subsistence. It is otherwise with the +work of farmers and country labourers. The +rent of the landlord is a value which, in ordinary +cases, it is continually producing over +and above replacing, in the most complete +manner, the whole consumption, the whole +expense laid out upon the employment and +maintenance both of the workmen and of their +employer.</p> + +<p>Artificers, manufacturers, and merchants, +can augment the revenue and wealth of their +society by parsimony only; or, as it is expressed +in this system, by privation, that is, by depriving +themselves of a part of the funds +destined for their own subsistence. They +annually reproduce nothing but those funds. +Unless, therefore, they annually save some +part of them, unless they annually deprive +themselves of the enjoyment of some part of +them, the revenue and wealth of their society +can never be, in the smallest degree, augmented +by means of their industry. Farmers +and country labourers, on the contrary, may +enjoy completely the whole funds destined +for their own subsistence, and yet augment, +at the same time, the revenue and wealth of +their society. Over and above what is destined +for their own subsistence, their industry +annually affords a neat produce, of which the +augmentation necessarily augments the revenue +and wealth of their society. Nations, +therefore, which like France or England, +consist in a great measure, of proprietors +and cultivators, can be enriched by industry +and enjoyment. Nations, on the contrary +which, like Holland and Hamburgh, are composed +chiefly of merchants, artificers, and +manufacturers, can grow rich only through +parsimony and privation. As the interest of +nations so differently circumstanced is very +different, so is likewise the common character +of the people. In those of the former kind, +liberality, frankness, and good fellowship, +naturally make a part of their common character; +in the latter, narrowness, meanness, and +a selfish disposition, averse to all social pleasure +and enjoyment.</p> + +<p>The unproductive class, that of merchants, +artificers, and manufacturers, is maintained +and employed altogether at the expense of the +two other classes, of that of proprietors, and +of that of cultivators. They furnish it both +with the materials of its work, and with the +fund of its subsistence, with the corn and +cattle which it consumes while it is employed +about that work. The proprietors and cultivators +finally pay both the wages of all the +workmen of the unproductive class, and the +profits of all their employers. Those workmen +and their employers are properly the +servants of the proprietors and cultivators. +They are only servants who work without +doors, as menial servants work within. Both +the one and the other, however, are equally +maintained at the expense of the same masters. +The labour of both is equally unproductive. +It adds nothing to the value of the +sum total of the rude produce of the land. +Instead of increasing the value of that sum +total, it is a charge and expense which must +be paid out of it.</p> + +<p>The unproductive class, however, is not +only useful, but greatly useful, to the other +two classes. By means of the industry of +merchants, artificers, and manufacturers, the +proprietors and cultivators can purchase both +the foreign goods and the manufactured produce +of their own country, which they have +occasion for, with the produce of a much<span class='pagenum'><a name="Page_278" id="Page_278">[Pg 278]</a></span> +smaller quantity of their own labour, than +what they would be obliged to employ, if they +were to attempt, in an awkward and unskilful +manner, either to import the one, or to +make the other, for their own use. By means +of the unproductive class, the cultivators are +delivered from many cares, which would +otherwise distract their attention from the +cultivation of land. The superiority of produce, +which in consequence of this undivided +attention, they are enabled to raise, is fully +sufficient to pay the whole expense which the +maintenance and employment of the unproductive +class costs either the proprietors or +themselves. The industry of merchants, artificers, +and manufacturers, though in its own +nature altogether unproductive, yet contributes +in this manner indirectly to increase the produce +of the land. It increases the productive +powers of productive labour, by leaving +it at liberty to confine itself to its proper +employment, the cultivation of land; and the +plough goes frequently the easier and the +better, by means of the labour of the man +whose business is most remote from the +plough.</p> + +<p>It can never be the interest of the proprietors +and cultivators, to restrain or to discourage, +in any respect, the industry of merchants, +artificers, and manufacturers. The greater +the liberty which this unproductive class enjoys, +the greater will be the competition in all +the different trades which compose it, and the +cheaper will the other two classes be supplied, +both with foreign goods and with the manufactured +produce of their own country.</p> + +<p>It can never be the interest of the unproductive +class to oppress the other two classes. +It is the surplus produce of the land, or what +remains after deducting the maintenance, first +of the cultivators, and afterwards of the proprietors, +that maintains and employs the unproductive +class. The greater this surplus, +the greater must likewise be the maintenance +and employment of that class. The establishment +of perfect justice, of perfect liberty, and +of perfect equality, is the very simple secret +which most effectually secures the highest degree +of prosperity to all the three classes.</p> + +<p>The merchants, artificers, and manufacturers +of those mercantile states, which, like Holland +and Hamburgh, consist chiefly of this +unproductive class, are in the same manner +maintained and employed altogether at the +expense of the proprietors and cultivators of +land. The only difference is, that those proprietors +and cultivators are, the greater part +of them, placed at a most inconvenient distance +from the merchants, artificers, and manufacturers, +whom they supply with the materials +of their work and the fund of their +subsistence; are the inhabitants of other +countries, and the subjects of other governments.</p> + +<p>Such mercantile states, however, are not +only useful, but greatly useful, to the inhabitants +of these other countries. They fill +up, in some measure, a very important void; +and supply the place of the merchants, artificers, +and manufacturers, whom the inhabitants +of those countries ought to find at home, +but whom, from some defect in their policy, +they do not find at home.</p> + +<p>It can never be the interest of those landed +nations, if I may call them so, to discourage +or distress the industry of such mercantile +states, by imposing high duties upon their +trade, or upon the commodities which they +furnish. Such duties, by rendering those +commodities dearer, could serve only to sink +the real value of the surplus produce of their +own land, with which, or, what comes to the +same thing, with the price of which those +commodities are purchased. Such duties +could only serve to discourage the increase of +that surplus produce, and consequently the +improvement and cultivation of their own +land. The most effectual expedient, on the +contrary, for raising the value of that surplus +produce, for encouraging its increase, and +consequently the improvement and cultivation +of their own land, would be to allow the most +perfect freedom to the trade of all such mercantile +nations.</p> + +<p>This perfect freedom of trade would even +be the most effectual expedient for supplying +them, in due time, with all the artificers, +manufacturers, and merchants, whom they +wanted at home; and for filling up, in the +properest and most advantageous manner, +that very important void which they felt +there.</p> + +<p>The continual increase of the surplus produce +of their land would, in due time, create +a greater capital than what would be employed +with the ordinary rate of profit in the +improvement and cultivation of land; and +the surplus part of it would naturally turn +itself to the employment of artificers and +manufacturers, at home. But these artificers +and manufacturers, finding at home both the +materials of their work and the fund of their +subsistence, might immediately, even with +much less art and skill be able to work as +cheap as the little artificers and manufacturers +of such mercantile states, who had both to +bring from a greater distance. Even though, +from want of art and skill, they might not for +some time be able to work as cheap, yet, +finding a market at home, they might be able +to sell their work there as cheap as that of +the artificers and manufacturers of such mercantile +states, which could not be brought to +that market but from so great a distance; and +as their art and skill improved, they would +soon be able to sell it cheaper. The artificers +and manufacturers of such mercantile +states, therefore, would immediately be +rivalled in the market of those landed nations, +and soon after undersold and justled out of it<span class='pagenum'><a name="Page_279" id="Page_279">[Pg 279]</a></span> +altogether. The cheapness of the manufactures +of those landed nations, in consequence +of the gradual improvements of art and skill, +would, in due time, extend their sale beyond +the home market, and carry them to many +foreign markets, from which they would, in +the same manner, gradually justle out many +of the manufacturers of such mercantile nations.</p> + +<p>This continual increase, both of the rude +and manufactured produce of those landed +nations, would, in due time, create a greater +capital than could, with the ordinary rate of +profit, be employed either in agriculture or in +manufactures. The surplus of this capital +would naturally turn itself to foreign trade, +and be employed in exporting, to foreign +countries, such parts of the rude and manufactured +produce of its own country, as exceeded +the demand of the home market. In +the exportation of the produce of their own +country, the merchants of a landed nation +would have an advantage of the same kind +over those of mercantile nations, which its artificers +and manufacturers had over the artificers +and manufacturers of such nations; the +advantage of finding at home that cargo, and +those stores and provisions, which the others +were obliged to seek for at a distance. With +inferior art and skill in navigation, therefore, +they would be able to sell that cargo as cheap +in foreign markets as the merchants of such +mercantile nations; and with equal art and +skill they would be able to sell it cheaper. +They would soon, therefore, rival those mercantile +nations in this branch of foreign trade, +and, in due time, would justle them out of it +altogether.</p> + +<p>According to this liberal and generous system, +therefore, the most advantageous method +in which a landed nation can raise up +artificers, manufacturers, and merchants of its +own, is to grant the most perfect freedom of +trade to the artificers, manufacturers, and +merchants of all other nations. It thereby +raises the value of the surplus produce of its +own land, of which the continual increase +gradually establishes a fund, which, in due +time, necessarily raises up all the artificers, +manufacturers, and merchants, whom it has +occasion for.</p> + +<p>When a landed nation on the contrary, oppresses, +either by high duties or by prohibitions, +the trade of foreign nations, it necessarily +hurts its own interest in two different +ways. First, by raising the price of all foreign +goods, and of all sorts of manufactures, +it necessarily sinks the real value of the surplus +produce of its own land, with which, or, +what comes to the same thing, with the price +of which, it purchases those foreign goods and +manufactures. Secondly, by giving a sort of +monopoly of the home market to its own merchants, +artificers, and manufacturers, it raises +the rate of mercantile and manufacturing profit, +in proportion to that of agricultural profit; +and, consequently, either draws from +agriculture a part of the capital which had +before been employed in it, or hinders from +going to it a part of what would otherwise +have gone to it. This policy, therefore, discourages +agriculture in two different ways; +first, by sinking the real value of its produce, +and thereby lowering the rate of its profits; +and, secondly, by raising the rate of profit in +all other employments. Agriculture is rendered +less advantageous, and trade and manufactures +more advantageous, than they otherwise +would be; and every man is tempted by his +own interest to turn, as much as he can, both +his capital and his industry from the former +to the latter employments.</p> + +<p>Though, by this oppressive policy, a landed +nation should be able to raise up artificers, +manufacturers, and merchants of its own, +somewhat sooner than it could do by the freedom +of trade; a matter, however, which is +not a little doubtful; yet it would raise them +up, if one may say so, prematurely, and before +it was perfectly ripe for them. By raising +up too hastily one species of industry, it +would depress another more valuable species +of industry. By raising up too hastily a species +of industry which only replaces the stock +which employs it, together with the ordinary +profit, it would depress a species of industry +which, over and above replacing that stock, +with its profit, affords likewise a neat produce, +a free rent to the landlord. It would +depress productive labour, by encouraging too +hastily that labour which is altogether barren +and unproductive.</p> + +<p>In what manner, according to this system, +the sum total of the annual produce of the +land is distributed among the three classes +above mentioned, and in what manner the labour +of the unproductive class does no more +than replace the value of its own consumption, +without increasing in any respect the +value of that sum total, is represented by Mr +Quesnai, the very ingenious and profound +author of this system, in some arithmetical +formularies. The first of these formularies, +which, by way of eminence, he peculiarly distinguishes +by the name of the Economical +Table, represents the manner in which he supposes +this distribution takes place, in a state +of the most perfect liberty, and, therefore, of +the highest prosperity; in a state where the +annual produce is such as to afford the greatest +possible neat produce, and where each +class enjoys its proper share of the whole annual +produce. Some subsequent formularies +represent the manner in which he supposes +this distribution is made in different states of +restraint and regulation; in which, either the +class of proprietors, or the barren and unproductive +class, is more favoured than the class +of cultivators; and in which either the one or +the other encroaches, more or less, upon the<span class='pagenum'><a name="Page_280" id="Page_280">[Pg 280]</a></span> +share which ought properly to belong to this +productive class. Every such encroachment, +every violation of that natural distribution, +which the most perfect liberty would establish, +must, according to this system, necessarily +degrade, more or less, from one year to +another, the value and sum total of the annual +produce, and must necessarily occasion a gradual +declension in the real wealth and revenue +of the society; a declension, of which the +progress must be quicker or slower, according +to the degree of this encroachment, according +as that natural distribution, which +the most perfect liberty would establish, is +more or less violated. Those subsequent formularies +represent the different degrees of declension +which, according to this system, correspond +to the different degrees in which this +natural distribution of things is violated.</p> + +<p>Some speculative physicians seem to have +imagined that the health of the human body +could be preserved only by a certain precise +regimen of diet and exercise, of which every, +the smallest violation, necessarily occasioned +some degree of disease or disorder proportionate +to the degree of the violation. Experience, +however, would seem to shew, that the +human body frequently preserves, to all appearance +at least, the most perfect state of +health under a vast variety of different regimens; +even under some which are generally +believed to be very far from being perfectly +wholesome. But the healthful state of the +human body, it would seem, contains in itself +some unknown principle of preservation, capable +either of preventing or of correcting, in +many respects, the bad effects even of a very +faulty regimen. Mr Quesnai, who was himself +a physician, and a very speculative physician, +seems to have entertained a notion of the same +kind concerning the political body, and to +have imagined that it would thrive and prosper +only under a certain precise regimen, the +exact regimen of perfect liberty and perfect +justice. He seems not to have considered, that +in the political body, the natural effort which +every man is continually making to better his +own condition, is a principle of preservation +capable of preventing and correcting, in many +respects, the bad effects of a political economy, +in some degree both partial and oppressive. +Such a political economy, though it no doubt +retards more or less, is not always capable of +stopping altogether, the natural progress of a +nation towards wealth and prosperity, and still +less of making it go backwards. If a nation +could not prosper without the enjoyment of +perfect liberty and perfect justice, there is not +in the world a nation which could ever have +prospered. In the political body, however, +the wisdom of nature has fortunately made +ample provision for remedying many of the +bad effects of the folly and injustice of man; +in the same manner as it has done in the natural +body, for remedying those of his sloth +and intemperance.</p> + +<p>The capital error of this system, however, +seems to lie in its representing the class of artificers, +manufacturers, and merchants, as altogether +barren and unproductive. The following +observations may serve to shew the impropriety +of this representation:—</p> + +<p>First, this class, it is acknowledged, reproduces +annually the value of its own annual +consumption, and continues, at least, the existence +of the stock or capital which maintains +and employs it. But, upon this account +alone, the denomination of barren or unproductive +should seem to be very improperly +applied to it. We should not call a marriage +barren or unproductive, though it produced +only a son and a daughter, to replace the father +and mother, and though it did not increase +the number of the human species, but +only continued it as it was before. Farmers +and country labourers, indeed, over and above +the stock which maintains and employs them, +reproduce annually a neat produce, a free +rent to the landlord. As a marriage which +affords three children is certainly more productive +than one which affords only two, so +the labour of farmers and country labourers +is certainly more productive than that of merchants, +artificers, and manufacturers. The +superior produce of the one class, however, +does not, render the other barren or unproductive.</p> + +<p>Secondly, it seems, on this account, altogether +improper to consider artificers, manufacturers, +and merchants, 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. +Their maintenance and employment is altogether +at the expense of their masters, and +the work which they perform is not of a nature +to repay that expense. That work consists +in services which perish generally in the +very instant of their performance, and does +not fix or realize itself in any vendible commodity, +which can replace the value of their +wages and maintenance. The labour, on the +contrary, of artificers, manufacturers, and +merchants, naturally does fix and realize itself +in some such vendible commodity. It is upon +this account that, in the chapter in which +I treat of productive and unproductive labour, +I have classed artificers, manufacturers, +and merchants among the productive labourers, +and menial servants among the barren or +unproductive.</p> + +<p>Thirdly, it seems, upon every supposition, +improper to say, that the labour of artificers, +manufacturers, and merchants, does not increase +the real revenue of the society. Though +we should suppose, for example, as it seems +to be supposed in this system, that the value +of the daily, monthly, and yearly consumption<span class='pagenum'><a name="Page_281" id="Page_281">[Pg 281]</a></span> +of this class was exactly equal to that of its +daily, monthly, and yearly production; yet +it would not from thence follow, that its labour +added nothing to the real revenue, to +the real value of the annual produce of the +land and labour of the society. An artificer, +for example, who, in the first six months after +harvest, executes ten pounds worth of work, +though he should, in the same time, consume +ten pounds worth of corn and other necessaries, +yet really adds the value of ten pounds +to the annual produce of the land and labour +of the society. While he has been consuming +a half-yearly revenue of ten pounds worth +of corn and other necessaries, he has produced +an equal value of work, capable of purchasing, +either to himself, or to some other +person, an equal half-yearly revenue. The +value, therefore, of what has been consumed +and produced during these six months, is +equal, not to ten, but to twenty pounds. It +is possible, indeed, that no more than ten +pounds worth of this value may ever have existed +at any one moment of time. But if the +ten pounds worth of corn and other necessaries +which were consumed by the artificer, had +been consumed by a soldier, or by a menial +servant, the value of that part of the annual +produce which existed at the end of the six +months, would have been ten pounds less than +it actually is in consequence of the labour of +the artificer. Though the value of what the +artificer produces, therefore, should not, at +any one moment of time, be supposed greater +than the value he consumes, yet, at every moment +of time, the actually existing value of +goods in the market is, in consequence of +what he produces, greater than it otherwise +would be.</p> + +<p>When the patrons of this system assert, that +the consumption of artificers, manufacturers, +and merchants, is equal to the value of what +they produce, they probably mean no more +than that their revenue, or the fund destined +for their consumption, is equal to it. But if +they had expressed themselves more accurately, +and only asserted, that the revenue of +this class was equal to the value of what they +produced, it might readily have occurred to +the reader, that what would naturally be saved +out of this revenue, must necessarily increase +more or less the real wealth of the society. +In order, therefore, to make out something +like an argument, it was necessary that they +should express themselves as they have done; +and this argument, even supposing things +actually were as it seems to presume them to +be, turns out to be a very inconclusive one.</p> + +<p>Fourthly, farmers and country labourers +can no more augment, without parsimony, +the real revenue, the annual produce of the +land and labour of their society, than artificers, +manufacturers, and merchants. The +annual produce of the land and labour of any +society can be augmented only in two ways; +either, first, by some improvement in the +productive powers of the useful labour actually +maintained within it; or, secondly, by some +increase in the quantity of that labour.</p> + +<p>The improvement in the productive powers +of useful labour depends, first, upon the improvement +in the ability of the workman; +and, secondly, upon that of the machinery +with which he works. But the labour of artificers +and manufacturers, as it is capable of +being more subdivided, and the labour of each +workman reduced to a greater simplicity of +operation, than that of farmers and country +labourers; so it is likewise capable of both +these sorts of improvement in a much higher +degree.<a name="FNanchor_43_43" id="FNanchor_43_43"></a><a href="#Footnote_43_43" class="fnanchor">[43]</a> In this respect, therefore, the class +of cultivators can have no sort of advantage +over that of artificers and manufacturers.</p> + +<p>The increase in the quantity of useful labour +actually employed within any society +must depend altogether upon the increase of +the capital which employs it; and the increase +of that capital, again, must be exactly equal +to the amount of the savings from the revenue, +either of the particular persons who +manage and direct the employment of that +capital, or of some other persons, who lend it +to them. If merchants, artificers, and manufacturers +are, as this system seems to suppose, +naturally more inclined to parsimony and +saving than proprietors and cultivators, +they are, so far, more likely to augment the +quantity of useful labour employed within +their society, and consequently to increase its +real revenue, the annual produce of its land +and labour.</p> + +<p>Fifthly and lastly, though the revenue of +the inhabitants of every country was supposed +to consist altogether, as this system seems to +suppose, in the quantity of subsistence which +their industry could procure to them; yet, +even upon this supposition, the revenue of a +trading and manufacturing country must, +other things being equal, always be much +greater than that of one without trade or manufactures. +By means of trade and manufactures, +a greater quantity of subsistence can +be annually imported into a particular country, +than what its own lands, in the actual state +of their cultivation, could afford. The inhabitants +of a town, though they frequently +possess no lands of their own, yet draw to +themselves, by their industry, such a quantity +of the rude produce of the lands of other +people, as supplies them, not only with the +materials of their work, but with the fund of +their subsistence. What a town always is +with regard to the country in its neighbourhood, +one independent state or country may +frequently be with regard to other independent +states or countries. It is thus that Holland +draws a great part of its subsistence +from other countries; live cattle from Hol<span class='pagenum'><a name="Page_282" id="Page_282">[Pg 282]</a></span>stein +and Jutland, and corn from almost all +the different countries of Europe. A small +quantity of manufactured produce, purchases +a great quantity of rude produce. A trading +and manufacturing country, therefore, naturally +purchases, with a small part of its manufactured +produce, a great part of the rude +produce of other countries; while, on the +contrary, a country without trade and manufactures +is generally obliged to purchase, at +the expense of a great part of its rude produce, +a very small part of the manufactured +produce of other countries. The one exports +what can subsist and accommodate but a very +few, and imports the subsistence and accommodation +of a great number. The other exports +the accommodation and subsistence of a +great number, and imports that of a very +few only. The inhabitants of the one must +always enjoy a much greater quantity of subsistence +than what their own lands, in the +actual state of their cultivation, could afford. +The inhabitants of the other most always enjoy +a much smaller quantity.</p> + +<p>This system, however, with all its imperfections, +is perhaps the nearest approximation +to the truth that has yet been published upon +the subject of political economy; and is upon +that account, well worth the consideration of +every man who wishes to examine with attention +the principles of that very important +science. Though in representing the labour +which is employed upon land as the only productive +labour, the notions which it inculcates +are, perhaps, too narrow and confined; +yet in representing the wealth of nations as +consisting, not in the unconsumable riches of +money, but in the consumable goods annually +reproduced by the labour of the society, +and in representing perfect liberty as the only +effectual expedient for rendering this annual +reproduction the greatest possible, its doctrine +seems to be in every respect as just as it +is generous and liberal. Its followers are +very numerous; and as men are fond of paradoxes, +and of appearing to understand what +surpasses the comprehensions of ordinary people, +the paradox which it maintains, concerning +the unproductive nature of manufacturing +labour, has not, perhaps, contributed a little +to increase the number of its admirers. They +have for some years past made a pretty considerable +sect, distinguished in the French +republic of letters by the name of the Economists. +Their works have certainly been of +some service to their country; not only by +bringing into general discussion, many subjects +which had never been well examined +before, but by influencing, in some measure, +the public administration in favour +of agriculture. It has been in consequence +of their representations, accordingly, that the +agriculture of France has been delivered from +several of the oppressions which it before laboured +under. The term, during which such +a lease can be granted, as will be valid against +every future purchaser or proprietor of the +land, has been prolonged from nine to twenty-seven +years. The ancient provincial restraints +upon the transportation of corn from one province +of the kingdom to another, have been +entirely taken away; and the liberty of exporting +it to all foreign countries, has been +established as the common law of the kingdom +in all ordinary cases. This sect, in their +works, which are very numerous, and which +treat not only of what is properly called Political +Economy, or of the nature and causes of +the wealth of nations, but of every other +branch of the system of civil government, all +follow implicitly, and without any sensible +variation, the doctrine of Mr. Quesnai. +There is, upon this account, little variety in +the greater part of their works. The most +distinct and best connected account of this +doctrine is to be found in a little book written +by Mr. Mercier de la Riviere, some time intendant +of Martinico, entitled, The natural and +essential Order of Political Societies. The +admiration of this whole sect for their master, +who was himself a man of the greatest modesty +and simplicity, is not inferior to that of +any of the ancient philosophers for the founders +of their respective systems. 'There have +been since the world began,' says a very diligent +and respectable author, the Marquis de +Mirabeau, 'three great inventions which have +principally given stability to political societies, +independent of many other inventions which +have enriched and adorned them. The first +is the invention of writing, which alone gives +human nature the power of transmitting, +without alteration, its laws, its contracts, its +annals, and its discoveries. The second is +the invention of money, which binds together +all the relations between civilized societies. +The third is the economical table, the result +of the other two, which completes them both +by perfecting their object; the great discovery +of our age, but of which our posterity will +reap the benefit.'</p> + +<p>As the political economy of the nations of +modern Europe has been more favourable to +manufactures and foreign trade, the industry +of the towns, than to agriculture, the industry +of the country; so that of other nations +has followed a different plan, and has been +more favourable to agriculture than to manufactures +and foreign trade.</p> + +<p>The policy of China favours agriculture +more than all other employments. In China, +the condition of a labourer is said to be as +much superior to that of an artificer, as in +most parts of Europe that of an artificer is to +that of a labourer. In China, the great ambition +of every man is to get possession of a +little bit of land, either in property or in +lease; and leases are there said to be granted +upon very moderate terms, and to be sufficiently +secured to the lessees. The Chinese have<span class='pagenum'><a name="Page_283" id="Page_283">[Pg 283]</a></span> +little respect for foreign trade. Your beggarly +commerce! was the language in which the +mandarins of Pekin used to talk to Mr. De +Lange, the Russian envoy, concerning it<a name="FNanchor_44_44" id="FNanchor_44_44"></a><a href="#Footnote_44_44" class="fnanchor">[44]</a>. +Except with Japan, the Chinese carry on, +themselves, and in their own bottoms, little +or no foreign trade; and it is only into one +or two ports of their kingdom that they even +admit the ships of foreign nations. Foreign +trade, therefore, is, in China, every way confined +within a much narrower circle than that +to which it would naturally extend itself, if +more freedom was allowed to it, either in +their own ships, or in those of foreign nations.</p> + +<p>Manufactures, as in a small bulk they frequently +contain a great value, and can upon +that account be transported at less expense +from one country to another than most parts +of rude produce, are, in almost all countries, +the principal support of foreign trade. In +countries, besides, less extensive, and less favourably +circumstanced for inferior commerce +than China, they generally require the support +of foreign trade. Without an extensive +foreign market, they could not well flourish, +either in countries so moderately extensive as +to afford but a narrow home market, or in +countries where the communication between +one province and another was so difficult, as +to render it impossible for the goods of any +particular place to enjoy the whole of that +home market which the country could afford. +The perfection of manufacturing industry, it +must be remembered, depends altogether +upon the division of labour; and the degree +to which the division of labour can be introduced +into any manufacture, is necessarily +regulated, it has already been shewn, by the +extent of the market. But the great extent +of the empire of China, the vast multitude of +its inhabitants, the variety of climate, and +consequently of productions in its different +provinces, and the easy communication by +means of water-carriage between the greater +part of them, render the home market of that +country of so great extent, as to be alone sufficient +to support very great manufactures, +and to admit of very considerable subdivisions +of labour. The home market of China +is, perhaps, in extent, not much inferior to +the market of all the different countries of +Europe put together. A more extensive +foreign trade, however, which to this great +home market added the foreign market of all +the rest of the world, especially if any considerable +part of this trade was carried on in +Chinese ships, could scarce fail to increase +very much the manufactures of China, and +to improve very much the productive powers +of its manufacturing industry. By a more +extensive navigation, the Chinese would naturally +learn the art of using and constructing, +themselves, all the different machines made +use of in other countries, as well as the other +improvements of art and industry which are +practised in all the different parts of the +world. Upon their present plan, they have +little opportunity of improving themselves by +the example of any other nation, except that +of the Japanese.</p> + +<p>The policy of ancient Egypt, too, and that +of the Gentoo government of Indostan, seem +to have favoured agriculture more than all +other employments.</p> + +<p>Both in ancient Egypt and Indostan, the +whole body of the people was divided into +different casts or tribes each of which was +confined, from father to son, to a particular +employment, or class of employments. The +son of a priest was necessarily a priest; the +son of a soldier, a soldier; the son of a labourer, +a labourer; the son of a weaver, a weaver; +the son of a tailor, a tailor, &c. In both +countries, the cast of the priests holds the +highest rank, and that of the soldiers the +next; and in both countries the cast of the +farmers and labourers was superior to the casts +of merchants and manufacturers.</p> + +<p>The government of both countries was particularly +attentive to the interest of agriculture. +The works constructed by the ancient +sovereigns of Egypt, for the proper distribution +of the waters of the Nile, were famous in +antiquity, and the ruined remains of some of +them are still the admiration of travellers. +Those of the same kind which were constructed +by the ancient sovereigns of Indostan, +for the proper distribution of the waters +of the Ganges, as well as of many other rivers, +though they have been less celebrated, seem +to have been equally great. Both countries +accordingly, though subject occasionally to +dearths, have been famous for their great fertility. +Though both were extremely populous, +yet, in years of moderate plenty, they were +both able to export great quantities of grain to +their neighbours.</p> + +<p>The ancient Egyptians had a superstitious +aversion to the sea; and as the Gentoo religion +does not permit its followers to light a +fire, nor consequently to dress any victuals, +upon the water, it, in effect, prohibits them +from all distant sea voyages. Both the +Egyptians and Indians must have depended +almost altogether upon the navigation of other +nations for the exportation of their surplus +produce; and this dependency, as it must +have confined the market, so it must have +discouraged the increase of this surplus produce. +It must have discouraged, too, the +increase of the manufactured produce, more +than that of the rude produce. Manufactures +require a much more extensive market than +the most important parts of the rude produce +of the land. A single shoemaker will make +more than 300 pairs of shoes in the year;<span class='pagenum'><a name="Page_284" id="Page_284">[Pg 284]</a></span> +and his own family will not, perhaps, wear +out six pairs. Unless, therefore, he has the +custom of, at least, 50 such families as his +own, he cannot dispose of the whole produce +of his own labour. The most numerous +class of artificers will seldom, in a large country, +make more than one in 50, or one in a +100, of the whole number of families contained +in it. But in such large countries, as +France and England, the number of people +employed in agriculture has, by some authors, +been computed at a half, by others at a third, +and by no author that I know of, at less than +a fifth of the whole inhabitants of the country. +But as the produce of the agriculture of both +France and England is, the far greater part +of it, consumed at home, each person employed +in it must, according to these computations, +require little more than the custom of +one, two, or, at most, of four such families as +his own, in order in dispose of the whole produce +of his own labour. Agriculture, therefore, +can support itself under the discouragement +of a confined market much better than +manufactures. In both ancient Egypt and +Indostan, indeed, the confinement of the +foreign market was in some measure compensated +by the conveniency of many inland +navigations, which opened, in the most advantageous +manner, the whole extent of the +home market to every part of the produce of +every different district of those countries. +The great extent of Indostan, too, rendered +the home market of that country very great, +and sufficient to support a great variety of +manufactures. But the small extent of ancient +Egypt, which was never equal to England, +must at all times, have rendered the +home market of that country too narrow for +supporting any great variety of manufactures. +Bengal accordingly, the province of Indostan +which commonly exports the greatest quantity +of rice, has always been more remarkable for +the exportation of a great variety of manufactures, +than for that of its grain. Ancient +Egypt, on the contrary, though it exported +some manufactures, fine linen in particular, +as well as some other goods, was always most +distinguished for its great exportation of +grain. It was long the granary of the Roman +empire.</p> + +<p>The sovereigns of China, of ancient Egypt, +and of the different kingdoms into which Indostan +has, at different times, been divided, +have always derived the whole, or by far the +most considerable part, of their revenue, from +some sort of land tax or land rent. This +land tax, or land rent, like the tithe in Europe, +consisted in a certain proportion, a fifth +it is said, of the produce of the land, which +was either delivered in kind, or paid in money, +according to a certain valuation, and +which, therefore, varied from year to year, +according to all the variations of the produce. +It was natural, therefore, that the sovereigns +of those countries should be particularly attentive +to the interests of agriculture, upon +the prosperity or declension of which immediately +depended the yearly increase or diminution +of their own revenue.</p> + +<p>The policy of the ancient republics of +Greece, and that of Rome, though it honoured +agriculture more than manufactures or +foreign trade, yet seems rather to have discouraged +the latter employments, than to +have given any direct or intentional encouragement +to the former. In several of the +ancient states of Greece, foreign trade was +prohibited altogether; and in several others +the employments of artificers and manufacturers +were considered as hurtful to the +strength and agility of the human body, as +rendering it incapable of those habits which +their military and gymnastic exercises endeavoured +to form in it, and as thereby disqualifying +it, more or less, for undergoing the +fatigues and encountering the dangers of war. +Such occupations were considered as fit only +for slaves, and the free citizens of the states +were prohibited from exercising them. Even +in those states where no such prohibition took +place, as in Rome and Athens, the great body +of the people were in effect excluded from +all the trades which are now commonly exercised +by the lower sort of the inhabitants of +towns. Such trades were, at Athens and +Rome, all occupied by the slaves of the rich, +who exercised them for the benefit of their +masters, whose wealth, power, and protection, +made it almost impossible for a poor freeman +to find a market for his work, when it came +into competition with that of the slaves of the +rich. Slaves, however, are very seldom inventive; +and all the most important improvements, +either in machinery, or in the arrangement +and distribution of work, which +facilitate and abridge labour have been the +discoveries of freemen. Should a slave propose +any improvement of this kind, his master +would be very apt to consider the proposal +as the suggestion of laziness, and of a +desire to save his own labour at the master's +expense. The poor slave, instead of reward +would probably meet with much abuse, perhaps +with some punishment. In the manufactures +carried on by slaves, therefore, more +labour must generally have been employed +to exercise the same quantity of work, than +in those carried on by freemen. The work +of the former must, upon that account, generally +have been dearer than that of the latter. +The Hungarian mines, it is remarked by Mr. +Montesquieu, though not richer, have always +been wrought with less expense, and therefore +with more profit, than the Turkish mines in +their neighbourhood. The Turkish mines +are wrought by slaves; and the arms of those +slaves are the only machines which the Turks +have ever thought of employing. The Hungarian +mines are wrought by freemen, who<span class='pagenum'><a name="Page_285" id="Page_285">[Pg 285]</a></span> +employ a great deal of machinery, by which +they facilitate and abridge their own labour. +From the very little that is known about the +price of manufactures in the times of the +Greeks and Romans, it would appear that +those of the finer sort were excessively dear. +Silk sold for its weight in gold. It was not, +indeed, in those times an European manufacture; +and as it was all brought from the +East Indies, the distance of the carriage may +in some measure account for the greatness of +the price. The price, however, which a +lady, it is said, would sometimes pay for a +piece of very fine linen, seems to have been +equally extravagant; and as linen was always +either an European, or at farthest, an Egyptian +manufacture, this high price can be accounted +for only by the great expense of the +labour which must have been employed about +it, and the expense of this labour again could +arise from nothing but the awkwardness of +the machinery which is made use of. The +price of fine woollens, too, though not quite +so extravagant, seems, however, to have been +much above that of the present times. Some +cloths, we are told by Pliny<a name="FNanchor_45_45" id="FNanchor_45_45"></a><a href="#Footnote_45_45" class="fnanchor">[45]</a>, dyed in a particular +manner, cost a hundred denarii, or +L.3 6s. 8d. the pound weight. Others, dyed +in another manner, cost a thousand denarii +the pound weight, or L.33 6s. 8d. The Roman +pound, it must be remembered, contained +only twelve of our avoirdupois ounces. +This high price, indeed, seems to have been +principally owing to the dye. But had not +the cloths themselves been much dearer than +any which are made in the present times, so +very expensive a dye would not probably have +been bestowed upon them. The disproportion +would have been too great between the +value of the accessory and that of the principal. +The price mentioned by the same author<a name="FNanchor_46_46" id="FNanchor_46_46"></a><a href="#Footnote_46_46" class="fnanchor">[46]</a>, +of some triclinaria, a sort of woollen +pillows or cushions made use of to lean upon +as they reclined upon their couches at table, +passes all credibility; some of them being +said to have cost more than L.30,000, others +more than L.300,000. This high price, too, +is not said to have arisen from the dye. In +the dress of the people of fashion of both +sexes, there seems to have been much less variety, +it is observed by Dr. Arbuthnot, in +ancient than in modern times; and the very +little variety which we find in that of the ancient +statues, confirms his observation. He +infers from this, that their dress must, upon +the whole, have been cheaper than ours; but +the conclusion does not seem to follow. +When the expense of fashionable dress is very +great, the variety must be very small. But +when, by the improvements in the productive +powers of manufacturing art and industry, +the expense of any one dress comes to be very +moderate, the variety will naturally be very +great. The rich, not being able to distinguish +themselves by the expense of any one +dress, will naturally endeavour to do so by +the multitude and variety of their dresses.</p> + +<p>The greatest and most important branch of +the commerce of every nation, it has already +been observed, is that which is carried on between +the inhabitants of the town and those +of the country. The inhabitants of the town +draw from the country the rude produce, +which constitutes both the materials of their +work and the fund of their subsistence; and +they pay for this rude produce, by sending +back to the country a certain portion of it manufactured +and prepared for immediate use. +The trade which is carried on between these +two different sets of people, consists ultimately +in a certain quantity of rude produce exchanged +for a certain quantity of manufactured +produce. The dearer the latter, therefore, +the cheaper the former; and whatever +tends in any country to raise the price of manufactured +produce, tends to lower that of +the rude produce of the land, and thereby to +discourage agriculture. The smaller the +quantity of manufactured produce, which any +given quantity of rude produce, or, what +comes to the same thing, which the price of +any given quantity of rude produce, is capable +of purchasing, the smaller the exchangeable +value of that given quantity of rude produce; +the smaller the encouragement which +either the landlord has to increase its quantity +by improving, or the farmer by cultivating +the land. Whatever, besides, tends to diminish +in any country the number of artificers +and manufacturers, tends to diminish the +home market, the most important of all +markets, for the rude produce of the land, +and thereby still further to discourage agriculture.</p> + +<p>Those systems, therefore, which preferring +agriculture to all other employments, in order +to promote it, impose restraints upon manufactures +and foreign trade, act contrary to +the very end which they propose, and indirectly +discourage that very species of industry +which they mean to promote. They are so +far, perhaps, more inconsistent than even the +mercantile system. That system, by encouraging +manufactures and foreign trade +more than agriculture, turns a certain portion +of the capital of the society, from supporting +a more advantageous, to support a less advantageous +species of industry. But still it really, +and in the end, encourages that species +of industry which it means to promote. +Those agricultural systems, on the contrary, +really, and in the end, discourage their own +favourite species of industry.</p> + +<p>It is thus that every system which endeavours, +either, by extraordinary encouragements +to draw towards a particular species of +industry a greater share of the capital of the +society than what would naturally go to it,<span class='pagenum'><a name="Page_286" id="Page_286">[Pg 286]</a></span> +or, by extraordinary restraints, to force from +a particular species of industry some share of +the capital which would otherwise be employed +in it, is, in reality subversive of the great +purpose which it means to promote. It retards, +instead of accelerating, the progress of +the society towards real wealth and greatness; +and diminishes, instead of increasing, the +real value of the annual produce of its land +and labour.</p> + +<p>All systems, either of preference or of restraint, +therefore, being thus completely taken +away, the obvious and simple system of natural +liberty establishes itself of its own accord. +Every man, as long as he does not +violate the laws of justice, is left perfectly +free to pursue his own interest his own way, +and to bring both his industry and capital into +competition with those of any other man, +or order of men. The sovereign is completely +discharged from a duty, in the attempting +to perform which he must always be exposed +to innumerable delusions, and for the proper +performance of which, no human wisdom or +knowledge could ever be sufficient; the duty +of superintending the industry of private people, +and of directing it towards the employments +most suitable to the interest of the society. +According to the system of natural +liberty, the sovereign has only three duties to +attend to; three duties of great importance, +indeed, but plain and intelligible to common +understandings: first, the duty of protecting +the society from violence and invasion +of other independent societies; secondly, the +duty of protecting, as far as possible, every +member of the society from the injustice or +oppression of every other member of it, or +the duty of establishing an exact administration +of justice; and, thirdly, the duty of erecting +and maintaining certain public works, +and certain public institutions, which it can +never be for the interest of any individual, +or small number of individuals to erect and +maintain; because the profit could never repay +the expense to any individual, or small +number of individuals, though it may frequently +do much more than repay it to a +great society.</p> + +<p>The proper performance of those several +duties of the sovereign necessarily supposes a +certain expense; and this expense again necessarily +requires a certain revenue to support +it. In the following book, therefore, I shall +endeavour to explain, first, what are the necessary +expenses of the sovereign or commonwealth; +and which of those expenses ought +to be defrayed by the general contribution of +the whole society; and which of them, by that +of some particular part only, or of some particular +members of the society; secondly, +what are the different methods in which the +whole society may be made to contribute towards +defraying the expenses incumbent on +the whole society; and what are the principal +advantages and inconveniences of each of +those methods; and thirdly, what are the reasons +and causes which have induced almost all +modern governments to mortgage some part +of this revenue, or to contract debts; and +what have been the effects of those debts upon +the real wealth, the annual produce of the +land and labour of the society. The following +book, therefore, will naturally be divided +into three chapters.</p> + + + +<hr style="width: 15%;" /> +<p><span class='pagenum'><a name="Page_287" id="Page_287">[Pg 287]</a></span></p> +<h3><a name="APPENDIX" id="APPENDIX"></a>INDEX.</h3> + + +<p>The two following accounts are subjoined, in order to illustrate and confirm what is said in +the fifth chapter of the fourth book, concerning the Tonnage Bounty to the White-herring +Fishery. The reader, I believe, may depend upon the accuracy of both accounts.</p> + + +<h4><i>An Account of Busses fitted out in Scotland for eleven Years, with the Number of empty Barrels +carried out, and the Number of Barrels of Herrings caught; also the Bounty, at a +Medium, on each Barrel of Sea-sticks, and on each Barrel when fully packed.</i></h4> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary="" rules="cols"> +<tr><th class='bbox'>Years.</th><th class='bbox'>Number of<br />Busses.</th><th class='bbox'>Empty Barrels<br />carried out.</th><th class='bbox'>Barrels of<br />Herrings caught.</th><th class='bbox'>Bounty paid<br />on the Busses.</th></tr> +<tr><td align='center'></td><td align='center'></td><td align='center'></td><td align='center'></td><td align='right'> L. s. d.</td></tr> +<tr><td align='center'> 1771</td><td align='center'> 29</td><td align='center'> 5,948</td><td align='center'> 2,832</td><td align='right'> 2,885 0 0</td></tr> +<tr><td align='center'> 1772</td><td align='center'> 168</td><td align='center'> 41,316</td><td align='center'> 22,237</td><td align='right'> 11,055 7 6</td></tr> +<tr><td align='center'> 1773</td><td align='center'> 190</td><td align='center'> 42,333</td><td align='center'> 42,055</td><td align='right'> 12,510 8 6</td></tr> +<tr><td align='center'> 1774</td><td align='center'> 240</td><td align='center'> 59,303</td><td align='center'> 56,365</td><td align='right'> 26,952 2 6</td></tr> +<tr><td align='center'> 1775</td><td align='center'> 275</td><td align='center'> 69,144</td><td align='center'> 52,879</td><td align='right'> 19,315 15 0</td></tr> +<tr><td align='center'> 1776</td><td align='center'> 294</td><td align='center'> 76,329</td><td align='center'> 51,863</td><td align='right'> 21,290 7 6</td></tr> +<tr><td align='center'> 1777</td><td align='center'> 240</td><td align='center'> 62,679</td><td align='center'> 45,313</td><td align='right'> 17,592 2 6</td></tr> +<tr><td align='center'> 1778</td><td align='center'> 220</td><td align='center'> 56,390</td><td align='center'> 40,958</td><td align='right'> 16,316 2 6</td></tr> +<tr><td align='center'> 1779</td><td align='center'> 206</td><td align='center'> 55,194</td><td align='center'> 29,367</td><td align='right'> 15,287 0 0</td></tr> +<tr><td align='center'> 1780</td><td align='center'> 181</td><td align='center'> 48,315</td><td align='center'> 19,885</td><td align='right'> 13,445 12 6</td></tr> +<tr><td align='center'> 1781</td><td align='center'> 135</td><td align='center'> 33,992</td><td align='center'> 16,593</td><td align='right'> 9,613 15 6</td></tr> +<tr><td class='bbox'> Total,</td><td class='bbox'> 2,186</td><td class='bbox'> 550,943</td><td class='bbox'> 378,347</td><td class='bbox'>L.165,463 14 0</td></tr> +</table></div> + +<p> </p> +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><td align='left'>Sea-sticks,</td><td align='left'>378,347</td></tr> +<tr><td align='left'>1-3d deducted,</td><td align='left'>126,115<sup>2</sup>⁄<sub>3</sub></td></tr> +<tr><td align='left'></td><td align='left'>————</td></tr> +<tr><td align='left'>Barrels fully packed, </td><td align='left'>252,231<sup>1</sup>⁄<sub>3</sub></td></tr> +</table></div> + +<p> </p> + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary=""> +<colgroup><col width="90%" /><col width="10%" /></colgroup> +<tr><td align='left'>Bounty, at a medium, for each barrel of sea-sticks,</td><td align='left'>L.0 8 2¼</td></tr> +<tr><td align='left'>But a barrel of sea-sticks being only reckoned +two thirds of a barrel fully packed, one third +is to be deducted, which brings the bounty to</td><td align='left'>L.0 12 3¾</td></tr> +<tr><td align='left'>And if the herrings are exported, there is besides, a premium of</td><td align='left'>L.0 2 8</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'>So that the bounty paid by government in money, for each barrel, is</td><td align='left'>L.0 14 11¾</td></tr> +<tr><td align='left'>But if to this, the duty of the salt usually taken credit for +as expended in curing each barrel, which, at a medium, is, of +foreign, one bushel and one-fourth of a bushel, at 10s. +a-bushel, be added. viz.</td><td align='left'> 0 12 6</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'>the bounty on each barrel would amount to</td><td align='left'>L.1 7 5¾</td></tr> +<tr><td align='left'></td><td align='left'>—————<span class='pagenum'><a name="Page_288" id="Page_288">[Pg 288]</a></span></td></tr> +<tr><td align='center'>If the herrings are cured with British salt, it will stand thus, viz.</td></tr> +<tr><td align='left'>Bounty, as before</td><td align='left'>L.0 14 11¾</td></tr> +<tr><td align='left'>But if to this bounty, the duty on two bushels of Scotch salt, +at 1s. 6d. per bushel, supposed to be the quantity, at a +medium, used in curing each barrel, is added, viz.</td><td align='left'> 0 3 0</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'>the bounty on each barrel will amount to</td><td align='left'>L.0 17 11¾</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> + +<tr><td align='left'>And when buss herrings are entered for home consumption in Scotland, and +pay the shilling a-barrel of duty, the bounty stands thus, to wit, as +before</td><td align='left'>L.0 12 3</td></tr> +<tr><td align='left'>From which the 1s. a-barrel is to be deducted</td><td align='left'> 0 1 0</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'></td><td align='left'>L.0 11 3¾</td></tr> +<tr><td align='left'>But to that there is to be added again, the duty of the +foreign salt used in curing a barrel of herrings, viz.</td><td align='left'> 0 12 6</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'>So that the premium allowed for each barrel of herrings +entered for home consumption is</td><td align='left'>L.1 3 9¾</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> + +<tr><td align='center'>If the herrings are cured with British salt, it will stand as +follows, viz.</td></tr> +<tr><td align='left'>Bounty on each barrel brought in by the busses, as above</td><td align='left'>L.0 12 3¾</td></tr> +<tr><td align='left'>From which deduct the 1s. a-barrel, paid at the time they are +entered for home consumption</td><td align='left'> 0 1 0</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'></td><td align='left'>L.0 11 3¾</td></tr> +<tr><td align='left'>But if to the bounty, the duty on two bushels of Scotch salt, +at 1s. 6d. per bushel, supposed to be the quantity, at a +medium, used in curing each barrel, is added, viz.</td><td align='left'> 0 3 0</td></tr> +<tr><td align='left'></td><td align='left'>—————</td></tr> +<tr><td align='left'>the premium for each barrel entered for home consumption will be</td><td align='left'>L.0 14 3¾</td></tr> +</table></div> + + +<p>Though the loss of duties upon herrings exported cannot, perhaps, properly +be considered as bounty, that upon herrings entered for home consumption +certainly may.</p> + +<h4><i>An Account of the Quantity of Foreign Salt imported into Scotland, and of Scotch Salt delivered +Duty-free from the Works there, for the Fishery, from the 5th of April 1771 to the 5th of +April 1782, with the Medium of both for one Year.</i></h4> + + + +<div class='center'> +<table border="1" cellpadding="4" cellspacing="0" summary=""> +<tr><th rowspan='2'>PERIOD.</th><th>Foreign Salt imported.</th><th>Scotch Salt delivered<br />from the Works.</th></tr> +<tr><td align='center'> Bushels</td><td align='center'> Bushels</td></tr> +<tr><td align='left'>From the 5th of April 1771 to the 5th April 1782.</td><td align='center'> 936,974</td><td align='center'> 168,226</td></tr> +<tr><td align='left'>Medium for one year</td><td align='center'> 85,179<sup>5</sup>⁄<sub>11</sub></td><td align='center'> 15,293<sup>3</sup>⁄<sub>11</sub></td></tr> +</table></div> + +<p>It is to be observed, that the bushel of foreign salt weighs 48lb. that of British salt, 56lb. +only.</p> + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_289" id="Page_289">[Pg 289]</a></span></p> +<h2><a name="BOOK_V" id="BOOK_V"></a>BOOK V.</h2> + +<h4>OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH.</h4> + + + +<hr style="width: 15%;" /> +<h3>CHAP. I.</h3> + +<h4>OF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH.</h4> + + +<h4>PART I.</h4> + +<h4><i>Of the Expense of Defence.</i></h4> + +<p>The first duty of the sovereign, that of protecting +the society from the violence and +invasion of other independent societies, can +be performed only by means of a military +force. But the expense both of preparing +this military force in time of peace, and of +employing it in time of war, is very different +in the different states of society, in the different +periods of improvement.</p> + +<p>Among nations of hunters, the lowest and +rudest state of society, such as we find it +among the native tribes of North America, +every man is a warrior, as well as a hunter. +When he goes to war, either to defend his +society, or to revenge the injuries which have +been done to it by other societies, he maintains +himself by his own labour, in the same +manner as when he lives at home. His society +(for in this state of things there is properly +neither sovereign nor commonwealth) +is at no sort of expense, either to prepare +him for the field, or to maintain him while he +is in it.</p> + +<p>Among nations of shepherds, a more advanced +state of society, such as we find it +among the Tartar and Arabs, every man is, +in the same manner a warrior. Such nations +have commonly no fixed habitation, but live +either in tents, or in a sort of covered wagons, +which are easily transported from place +to place. The whole tribe, or nation, changes +its situation according to the different seasons +of the year, as well as according to other +accidents. When its herds and flocks have +consumed the forage of one part of the +country, it removes to another, and from +that to a third. In the dry season, it comes +down to the banks of the rivers; in the wet +season, it retires to the upper country. +When such a nation goes to war, the warriors +will not trust their herds and flocks to +the feeble defence of their old men, their +women and children; and their old men, +their women and children, will not be left +behind without defence, and without subsistence. +The whole nation, besides, being accustomed +to a wandering life, even in time +of peace, easily takes the field in time of war. +Whether it marches as an army, or moves +about as a company of herdsmen, the way of +life is nearly the same, though the object +proposed by it be very different. They all +go to war together, therefore, and every one +does as well as he can. Among the Tartars, +even the women have been frequently known +to engage in battle. If they conquer, whatever +belongs to the hostile tribe is the recompence +of the victory; but if they are vanquished, +all is lost; and not only their herds +and flocks, but their women and children, +become the booty of the conqueror. Even +the greater part of those who survive the action +are obliged to submit to him for the sake +of immediate subsistence. The rest are commonly +dissipated and dispersed in the desert.</p> + +<p>The ordinary life, the ordinary exercise of +a Tartar or Arab, prepare him sufficiently +for war. Running, wrestling, cudgel-playing, +throwing the javelin, drawing the bow, +&c. are the common pastimes of those who +live in the open air, and are all of them the +images of war. When a Tartar or Arab +actually goes to war, he is maintained by his +own herds and flocks, which he carries with +him, in the same manner as in peace. His +chief or sovereign (for those nations have all<span class='pagenum'><a name="Page_290" id="Page_290">[Pg 290]</a></span> +chiefs or sovereigns) is at no sort of expense +in preparing him for the field; and when he +is in it, the chance of plunder is the only pay +which he either expects or requires.</p> + +<p>An army of hunters can seldom exceed two +or three hundred men. The precarious subsistence +which the chace affords, could seldom +allow a greater number to keep together for +any considerable time. An army of shepherds, +on the contrary, may sometimes amount +to two or three hundred thousand. As long +as nothing stops their progress, as long as they +can go on from one district, of which they +have consumed the forage, to another, which +is yet entire; there seems to be scarce any +limit to the number who can march on together. +A nation of hunters can never be +formidable to the civilized nations in their +neighbourhood; a nation of shepherds may. +Nothing can be more contemptible than an +Indian war in North America; nothing, on +the contrary, can be more dreadful than a +Tartar invasion has frequently been in Asia. +The judgement of Thucydides, that both Europe +and Asia could not resist the Scythians +united, has been verified by the experience of +all ages. The inhabitants of the extensive, +but defenceles plains of Scythia or Tartary, +have been frequently united under the dominion +of the chief of some conquering horde +or clan; and the havock and devastation of +Asia have always signalized their union. The +inhabitants of the inhospitable deserts of +Arabia, the other great nation of shepherds, +have never been united but once, under Mahomet +and his immediate successors. Their +union, which was more the effect of religious +enthusiasm than of conquest, was signalized +in the same manner. If the hunting nations +of America should ever become shepherds, +their neighbourhood would be much more +dangerous to the European colonies than it is +at present.</p> + +<p>In a yet more advanced state of society, +among those nations of husbandmen who have +little foreign commerce, and no other manufactures +but those coarse and household ones, +which almost every private family prepares +for its own use, every man, in the same +manner, either is a warrior, or easily becomes +such. Those who live by agriculture generally +pass the whole day in the open air, exposed +to all the inclemencies of the seasons. +The hardiness of their ordinary life prepares +them for the fatigues of war, to some of which +their necessary occupations bear a great analogy. +The necessary occupation of a ditcher +prepares him to work in the trenches, and to +fortify a camp, as well as to inclose a field. +The ordinary pastimes of such husbandmen +are the same as those of shepherds, and are in +the same manner the images of war. But as +husbandmen have less leisure than shepherds, +they are not so frequently employed in those +pastimes. They are soldiers, but soldiers not +quite so much masters of their exercise. Such +as they are, however, it seldom costs the sovereign +or commonwealth any expense to prepare +them for the field.</p> + +<p>Agriculture, even in its rudest and lowest +state, supposes a settlement, some sort of fixed +habitation, which cannot be abandoned +without great loss. When a nation of mere +husbandmen, therefore, goes to war, the whole +people cannot take the field together. The +old men, the women and children, at least, +must remain at home, to take care of the habitation. +All the men of the military age, +however, may take the field, and in small nations +of this kind, have frequently done so. +In every nation, the men of the military age +are supposed to amount to about a fourth or +a fifth part of the whole body of the people. +If the campaign, too, should begin after seed-time, +and end before harvest, both the husbandman +and his principal labourers can be +spared from the farm without much loss. He +trusts that the work which must be done in +the mean time, can be well enough executed +by the old men, the women, and the children. +He is not unwilling, therefore, to serve without +pay during a short campaign; and it frequently +costs the sovereign or commonwealth +as little to maintain him in the field as to prepare +him for it. The citizens of all the different +states of ancient Greece seem to have +served in this manner till after the second +Persian war; and the people of Peloponnesus +till after the Peloponnesian war. The +Peloponnesians, Thucydides observes, generally +left the field in the summer, and returned +home to reap the harvest. The Roman +people, under their kings, and during the first +ages of the republic, served in the same manner. +It was not till the siege of Veii, that +they who staid at home began to contribute +something towards maintaining those who +went to war. In the European monarchies, +which were founded upon the ruins of the +Roman empire, both before, and for some +time after, the establishment of what is properly +called the feudal law, the great lords, +with all their immediate dependents, used to +serve the crown at their own expense. In +the field, in the same manner as at home, +they maintained themselves by their own revenue, +and not by any stipend or pay which +they received from the king upon that particular +occasion.</p> + +<p>In a more advanced state of society, two +different causes contribute to render it altogether +impossible that they who take the field +should maintain themselves at their own expense. +Those two causes are, the progress of +manufactures, and the improvement in the art +of war.</p> + +<p>Though a husbandman should be employed +in an expedition, provided it begins after seed-time, +and ends before harvest, the interruption +of his business will not always occasion any<span class='pagenum'><a name="Page_291" id="Page_291">[Pg 291]</a></span> +considerable diminution of his revenue. Without +the intervention of his labour, Nature +does herself the greater part of the work which +remains to be done. But the moment that an +artificer, a smith, a carpenter, or a weaver, +for example, quits his workhouse, the sole +source of his revenue is completely dried up. +Nature does nothing for him; he does all for +himself. When he takes the field, therefore, +in defence of the public, as he has no revenue +to maintain himself, he must necessarily be +maintained by the public. But in a country, +of which a great part of the inhabitants are +artificers and manufacturers, a great part +the people who go to war must be drawn from +those classes, and must, therefore, be maintained +by the public as long as they are employed +in its service.</p> + +<p>When the art of war, too, has gradually +grown up to be a very intricate and complicated +science; when the event of war ceases +to be determined, as in the first ages of society, +by a single irregular skirmish or battle; +but when the contest is generally spun out +through several different campaigns, each of +which lasts during the greater part of the +year; it becomes universally necessary that +the public should maintain those who serve +the public in war, at least while they are employed +in that service. Whatever, in time of +peace, might be the ordinary occupation of +those who go to war, so very tedious and expensive +a service would otherwise be by far +too heavy a burden upon them. After the second +Persian war, accordingly, the armies of +Athens seem to have been generally composed +of mercenary troops, consisting, indeed, partly +of citizens, but partly, too, of foreigners; +and all of them equally hired and paid at the +expense of the state. From the time of the +siege of Veii, the armies of Rome received +pay for their service during the time which +they remained in the field. Under the feudal +governments, the military service, both of the +great lords, and of their immediate dependents, +was, after a certain period, universally +exchanged for a payment in money, which +was employed to maintain those who served +in their stead.</p> + +<p>The number of those who can go to war, +in proportion to the whole number of the +people, is necessarily much smaller in a civilized +than in a rude state of society. In +a civilized society, as the soldiers are maintained +altogether by the labour of those +who are not soldiers, the number of the former +can never exceed what the latter can +maintain, over and above maintaining, in a +manner suitable to their respective stations, +both themselves and the other officers of government +and law, whom they are obliged to +maintain. In the little agrarian states of ancient +Greece, a fourth or a fifth part of the +whole body of the people considered themselves +as soldiers, and would sometimes, it is +said, take the field. Among the civilized nations +of modern Europe, it is commonly computed, +that not more than the one hundredth +part of the inhabitants of any country can be +employed as soldiers, without ruin to the +country which pays the expense of their service.</p> + +<p>The expense of preparing the army for the +field seems not to have become considerable +in any nation, till long after that of maintaining +it in the field had devolved entirely upon +the sovereign or commonwealth. In all the +different republics of ancient Greece, to learn +his military exercises, was a necessary part of +education imposed by the state upon every +free citizen. In every city there seems to +have been a public field, in which, under the +protection of the public magistrate, the young +people were taught their different exercises +by different masters. In this very simple institution +consisted the whole expense which +any Grecian state seems ever to have been at, +in preparing its citizens for war. In ancient +Rome, the exercises of the Campus Martius +answered the same purpose with those of the +Gymnasium in ancient Greece. Under the +feudal governments, the many public ordinances, +that the citizens of every district should +practise archery, as well as several other military +exercises, were intended for promoting +the same purpose, but do not seem to have +promoted it so well. Either from want of +interest in the officers entrusted with the execution +of those ordinances, or from some other +cause, they appear to have been universally +neglected; and in the progress of all those +governments, military exercises seem to have +gone gradually into disuse among the great +body of the people.</p> + +<p>In the republic of ancient Greece and +Rome, during the whole period of their existence, +and under the feudal governments, for +a considerable time after their first establishment, +the trade of a soldier was not a separate, +distinct trade, which constituted the sole +or principal occupation of a particular class of +citizens; every subject of the state, whatever +might be the ordinary trade or occupation by +which he gained his livelihood, considered +himself, upon all ordinary occasions, as fit +likewise to exercise the trade of a soldier, and, +upon many extraordinary occasions, as bound +to exercise it.</p> + +<p>The art of war, however, as it is certainly +the noblest of all arts, so, in the progress of +improvement, it necessarily becomes one of +most complicated among them. The state +of the mechanical, as well as some other arts, +with which it is necessarily connected, determines +the degree of perfection to which it is +capable of being carried at any particular +time. But in order to carry it to this degree +of perfection, it is necessary that it should become +the sole or principal occupation of a +particular class of citizens; and the division<span class='pagenum'><a name="Page_292" id="Page_292">[Pg 292]</a></span> +of labour is as necessary for the improvement +of this, as of every other art. Into other +arts, the division of labour is naturally introduced +by the prudence of individuals, who +find that they promote their private interest +better by confining themselves to a particular +trade, than by exercising a great number. +But it is the wisdom of the state only, which +can render the trade of a soldier a particular +trade, separate and distinct from all others. +A private citizen, who, in time of profound +peace, and without any particular encouragement +from the public, should spend the greater +part of his time in military exercises, might, +no doubt, both improve himself very much in +them, and amuse himself very well; but he +certainly would not promote his own interest. +It is the wisdom of the state only, which can +render it for his interest to give up the greater +part of his time to this peculiar occupation; +and states have not always had this wisdom, +even when their circumstances had become +such, that the preservation of their existence +required that they should have it.</p> + +<p>A shepherd has a great deal of leisure; a +husbandman, in the rude state of husbandry, +has some; an artificer or manufacturer has +none at all. The first may, without any loss, +employ a great deal of his time in martial exercises; +the second may employ some part of +it; but the last cannot employ a single hour +in them without some loss, and his attention +to his own interest naturally leads him to neglect +them altogether. Those improvements in +husbandry, too, which the progress of arts +and manufacturers necessarily introduces, leave +the husbandman as little leisure as the artificer. +Military exercises come to be as much +neglected by the inhabitants of the country as +by those of the town, and the great body of the +people becomes altogether unwarlike. That +wealth, at the same time, which always follows +the improvements of agriculture and manufactures, +and which, in reality, is no more than +the accumulated produce of those improvements, +provokes the invasion of all their +neighbours. An industrious, and, upon that +account, a wealthy nation, is of all nations +the most likely to be attacked; and unless the +states takes some new measure for the public +defence, the natural habits of the people render +them altogether incapable of defending +themselves.</p> + +<p>In these circumstances, there seem to be +but two methods by which the state can +make any tolerable provision for the public +defence.</p> + +<p>If may either, first, by means of a very rigorous +police, and in spite of the whole bent +of the interest, genius, and inclinations of the +people, enforce the practice of military exercises, +and oblige either all the citizens of the +military age, or a certain number of them, to +join in some measure the trade of a soldier to +whatever other trade or profession they may +happen to carry on.</p> + +<p>Or, secondly, by maintaining and employing +a certain number of citizens in the constant +practice of military exercises, it may +render the trade of a soldier a particular trade, +separate and distinct from all others.</p> + +<p>If the state has recourse to the first of those +two expedients, its military force is said to +consist in a militia; if to the second, it is +said to consist in a standing army. The practice +of military exercises is the sole or principal +occupation of the soldiers of a standing +army, and the maintenance or pay which the +state affords them is the principal and ordinary +fund of their subsistence. The practice +of military exercises is only the occasional occupation +of the soldiers of a militia, and they +derive the principal and ordinary fund of their +subsistence from some other occupation. In +a militia, the character of the labourer, artificer, +or tradesman, predominates over that of +the soldier; in a standing army, that of the +soldier predominates over every other character; +and in this distinction seems to consist the +essential difference between those two different +species of military force.</p> + +<p>Militias have been of several different kinds. +In some countries, the citizens destined for +defending the state seem to have been exercised +only, without being, if I may say so, regimented; +that is, without being divided into +separate and distinct bodies of troops, each +of which performed its exercises under its +own proper and permanent officers. In the +republics of ancient Greece and Rome, each +citizen, as long as he remained at home, seems +to have practiced his exercises, either separately +and independently, or with such of his +equals as he liked best; and not to have been +attached to any particular body of troops, till +he was actually called upon to take the field. +In other countries, the militia has not only +been exercised, but regimented. In England, +in Switzerland, and, I believe, in every other +country of modern Europe, where any imperfect +military force of this kind has been +established, every militiaman is, even in time +of peace, attached to a particular body of +troops, which performs its exercises under its +own proper and permanent officers.</p> + +<p>Before the invention of fire-arms, that army +was superior in which the soldiers had, each +individually, the greatest skill and dexterity +in the use of their arms. Strength and agility +of body were of the highest consequence, +and commonly determined the fate of battles. +But this skill and dexterity in the use of their +arms could be acquired only, in the same +manner as fencing is at present, by practising, +not in great bodies, but each man separately, +in a particular school, under a particular +master, or with his own particular equals and +companions. Since the invention of <span class='pagenum'><a name="Page_293" id="Page_293">[Pg 293]</a></span>fire-arms, +strength and agility of body, or even +extraordinary dexterity and skill in the use of +arms, though they are far from being of no +consequence, are, however, of less consequence. +The nature of the weapon, though +it by no means puts the awkward upon a +level with the skilful, puts him more nearly +so than he ever was before. All the dexterity +and skill, it is supposed, which are necessary +for using it, can be well enough acquired by +practising in great bodies.</p> + +<p>Regularity, order, and prompt obedience to +command, are qualities which, in modern +armies, are of more importance towards determining +the fate of battles, than the dexterity +and skill of the soldiers in the use of their +arms. But the noise of fire-arms, the smoke, +and the invisible death to which every man +feels himself every moment exposed, as soon +as he comes within cannon-shot, and frequently +a long time before the battle can be +well said to be engaged, must render it very +difficult to maintain any considerable degree +of this regularity, order, and prompt obedience, +even in the beginning of a modern +battle. In an ancient battle, there was no +noise but what arose from the human voice; +there was no smoke, there was no invisible +cause of wounds or death. Every man, till +some mortal weapon actually did approach +him, saw clearly that no such weapon was +near him. In these circumstances, and +among troops who had some confidence in +their own skill and dexterity in the use of +their arms, it must have been a good deal +less difficult to preserve some degree of regularity +and order, not only in the beginning, +but through the whole progress of an ancient +battle, and till one of the two armies was +fairly defeated. But the habits of regularity, +order, and prompt obedience to command, +can be acquired only by troops which are +exercised in great bodies.</p> + +<p>A militia, however, in whatever manner it +may be either disciplined or exercised, must +always be much inferior to a well disciplined +and well exercised standing army.</p> + +<p>The soldiers who are exercised only once a-week, +or once a-month, can never be so expert +in the use of their arms, as those who are +exercised every day, or every other day; and +though this circumstance may not be of so +much consequence in modern, as it was in +ancient times, yet the acknowledged superiority +of the Prussian troops, owing, it is said, +very much to their superior expertness in +their exercise, may satisfy us that it is, even +at this day, of very considerable consequence.</p> + +<p>The soldiers, who are bound to obey their +officer only once a-week, or once a-month, +and who are at all other times at liberty to +manage their own affairs their own way, +without being, in any respect, accountable to +him, can never be under the same awe in his +presence, can never have the same disposition +to ready obedience, with those whose whole +life and conduct are every day directed by +him, and who every day even rise and go to +bed, or at least retire to their quarters, according +to his orders. In what is called discipline, +or in the habit of ready obedience, a +militia must always be still more inferior to a +standing army, than it may sometimes be in +what is called the manual exercise, or in the +management and use of its arms. But, in +modern war, the habit of ready and instant +obedience is of much greater consequence +than a considerable superiority in the management +of arms.</p> + +<p>Those militias which, like the Tartar or Arab +militia, go to war under the same chieftains +whom they are accustomed to obey in peace, +are by far the best. In respect for their +officers, in the habit of ready obedience, +they approach nearest to standing armies. +The Highland militia, when it served under +its own chieftains, had some advantage of the +same kind. As the Highlanders, however, +were not wandering, but stationary shepherds, +as they had all a fixed habitation, and were +not, in peaceable times, accustomed to follow +their chieftain from place to place; so, in +time of war, they were less willing to follow +him to any considerable distance, or to continue +for any long time in the field. When +they had acquired any booty, they were eager +to return home, and his authority was seldom +sufficient to detain them. In point of obedience, +they were always much inferior to +what is reported of the Tartars and Arabs. +As the Highlanders, too, from their stationary +life, spend less of their time in the open air, +they were always less accustomed to military +exercises, and were less expert in the use of +their arms than the Tartars and Arabs are said +to be.</p> + +<p>A militia of any kind, it must be observed, +however, which has served for several successive +campaigns in the field, becomes in +every respect a standing army. The soldiers +are every day exercised in the use of their +arms, and, being constantly under the command +of their officers, are habituated to the +same prompt obedience which takes place in +standing armies. What they were before +they took the field, is of little importance. +They necessarily become in every respect a +standing army, after they have passed a few +campaigns in it. Should the war in America +drag out through another campaign, the +American militia may become, in every respect, +a match for that standing army, of +which the valour appeared, in the last war at +least, not inferior to that of the hardiest veterans +of France and Spain.</p> + +<p>This distinction being well understood, the +history of all ages, it will be found, bears +testimony to the irresistible superiority which +a well regulated standing army has over a +militia.<span class='pagenum'><a name="Page_294" id="Page_294">[Pg 294]</a></span></p> + +<p>One of the first standing armies, of which +we have any distinct account in any well +authenticated history, is that of Philip of +Macedon. His frequent wars with the Thracians, +Illyrians, Thessalians, and some of the +Greek cities in the neighbourhood of Macedon, +gradually formed his troops, which in +the beginning were probably militia, to the +exact discipline of a standing army. When +he was at peace, which he was very seldom, +and never for any long time together, he was +careful not to disband that army. It vanquished +and subdued, after a long and violent +struggle, indeed, the gallant and well +exercised militias of the principal republics +of ancient Greece; and afterwards, with very +little struggle, the effeminate and ill exercised +militia of the great Persian empire. The +fall of the Greek republics, and of the Persian +empire was the effect of the irresistible +superiority which a standing army has over +every other sort of militia. It is the first +great revolution in the affairs of mankind of +which history has preserved any distinct and +circumstantial account.</p> + +<p>The fall of Carthage, and the consequent +elevation of Rome, is the second. All the +varieties in the fortune of those two famous +republics may very well be accounted for from +the same cause.</p> + +<p>From the end of the first to the beginning +of the second Carthaginian war, the armies +of Carthage were continually in the field, and +employed under three great generals, who +succeeded one another in the command; +Amilcar, his son-in-law Asdrubal, and his +son Annibal: first in chastising their own +rebellious slaves, afterwards in subduing the +revolted nations of Africa; and lastly, in +conquering the great kingdom of Spain. The +army which Annibal led from Spain into +Italy must necessarily, in those different +wars, have been gradually formed to the +exact discipline of standing army. The +Romans, in the meantime, though they had +not been altogether at peace, yet they had +not, during this period, been engaged in any +war of very great consequence; and their +military discipline, it is generally said, was a +good deal relaxed. The Roman armies +which Annibal encountered at Trebi, Thrasymenus, +and Cannæ, were militia opposed to +a standing army. This circumstance, it is +probable, contributed more than any other to +determine the fate of those battles.</p> + +<p>The standing army which Annibal left +behind him in Spain had the like superiority +over the militia which the Romans sent to +oppose it; and, in a few years, under the +command of his brother, the younger Asdrubal, +expelled them almost entirely from +that country.</p> + +<p>Annibal was ill supplied from home. The +Roman militia, being continually in the field, +became, in the progress of the war, a well +disciplined and well exercised standing army; +and the superiority of Annibal grew every +day less and less. Asdrubal judged it necessary +to lead the whole, or almost the +whole, of the standing army which he commanded +in Spain, to the assistance of his +brother in Italy. In this march, he is said +to have been misled by his guides; and in a +country which he did not know, was surprised +and attacked, by another standing +army, in every respect equal or superior to +his own, and was entirely defeated.</p> + +<p>When Asdrubal had left Spain, the great +Scipio found nothing to oppose him but a +militia inferior to his own. He conquered +and subdued that militia, and, in the course +of the war, his own militia necessarily became +a well disciplined and well exercised standing +army. That standing army was afterwards +carried to Africa, where it found nothing but +a militia to oppose it. In order to defend +Carthage, it became necessary to recal the +standing army of Annibal. The disheartened +and frequently defeated African militia joined +it, and, at the battle of Zama, composed the +greater part of the troops of Annibal. The +event of that day determined the fate of the +two rival republics.</p> + +<p>From the end of the second Carthaginian +war till the fall of the Roman republic, the +armies of Rome were in every respect standing +armies. The standing army of Macedon +made some resistance to their arms. In the +height of their grandeur, it cost them two +great wars, and three great battles, to subdue +that little kingdom, of which the conquest +would probably have been still more difficult, +had it not been for the cowardice of its last +king. The militias of all the civilized nations +of the ancient word, of Greece, of Syria, +and of Egypt, made but a feeble resistance +to the standing armies of Rome. The militias +of some barbarous nations defended +themselves much better. The Scythian or +Tartar militia, which Mithridates drew from +the countries north of the Euxine and Caspian +seas, were the most formidable enemies +whom the Romans had to encounter after the +second Carthaginian war. The Parthian and +German militias, too, were always respectable, +and upon several occasions, gained very considerable +advantages over the Roman armies. +In general, however, and when the Roman +armies were well commanded, they appear to +have been very much superior; and if the +Romans did not pursue the final conquest +either of Parthia or Germany, it was probably +because they judged that it was not worth +while to add those two barbarous countries to +an empire which was already too large. The +ancient Parthians appear to have been a nation +of Scythian or Tartar extraction, and to +have always retained a good deal of the manners +of their ancestors. The ancient Germans +were, like the Scythians or Tartars, a<span class='pagenum'><a name="Page_295" id="Page_295">[Pg 295]</a></span> +nation of wandering shepherds, who went to +war under the same chiefs whom they were +accustomed to follow in peace. Their militia +was exactly of the same kind with that of the +Scythians or Tartars, from whom, too, they +were probably descended.</p> + +<p>Many different causes contributed to relax +the discipline of the Roman armies. Its extreme +severity was, perhaps, one of those +causes. In the days of their grandeur, when +no enemy appeared capable of opposing them, +their heavy armour was laid aside as unnecessarily +burdensome, their laborious exercises +were neglected, as unnecessarily toilsome. +Under the Roman emperors, besides, the +standing armies of Rome, those particularly +which guarded the German and Pannonian +frontiers, became dangerous to their masters, +against whom they used frequently to set up +their own generals. In order to render them +less formidable, according to some authors, +Dioclesian, according to others, Constantine, +first withdrew them from the frontier, where +they had always before been encamped in great +bodies, generally of two or three legions each, +and dispersed them in small bodies through +the different provincial towns, from whence +they were scarce ever removed, but when it +became necessary to repel an invasion. Small +bodies of soldiers, quartered in trading and +manufacturing towns, and seldom removed +from those quarters, became themselves +tradesmen, artificers, and manufacturers. +The civil came to predominate over the military +character; and the standing armies of +Rome gradually degenerated into a corrupt, +neglected, and undisciplined militia, incapable +of resisting the attack of the German and +Scythian militias, which soon afterwards invaded +the western empire. It was only by +hiring the militia of some of those nations to +oppose to that of others, that the emperors +were for some time able to defend themselves. +The fall of the western empire is the third +great revolution in the affairs of mankind, of +which ancient history has preserved any distinct +or circumstantial account. It was +brought about by the irresistible superiority +which the militia of a barbarous has over +that of a civilized nation; which the militia +of a nation of shepherds has over that of a nation +of husbandmen, artificers, and manufacturers. +The victories which have been gained +by militias have generally been, not over standing +armies, but over other militias, in exercise +and discipline inferior to themselves. Such +were the victories which the Greek militia +gained over that of the Persian empire; and +such, too, were those which, in later times, +the Swiss militia gained over that of the Austrians +and Burgundians.</p> + +<p>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. It was a militia of shepherds +and husbandmen, which, in time of war, took +the field under the command of the same +chieftains whom it was accustomed to obey in +peace. It was, therefore, tolerably well exercised, +and tolerably well disciplined. As +arts and industry advanced, however, the authority +of the chieftains gradually decayed, and +the great body of the people had less time to +spare for military exercises. Both the discipline +and the exercise of the feudal militia, +therefore, went gradually to ruin, and standing +armies were gradually introduced to +supply the place of it. When the expedient +of a standing army, besides, had once been +adopted by one civilized nation, it became +necessary that all its neighbors should follow +the example. They soon found that their +safety depended upon their doing so, and that +their own militia was altogether incapable of +resisting the attack of such an army.</p> + +<p>The soldiers of a standing army, though +they may never have seen an enemy, yet have +frequently appeared to possess all the courage +of veteran troops, and, the very moment that +they took the field, to have been fit to face +the hardiest and most experienced veterans. +In 1756, when the Russian army marched +into Poland, the valour of the Russian soldiers +did not appear inferior to that of the +Prussians, at that time supposed to be the +hardiest and most experienced veterans in +Europe. The Russian empire, however, +had enjoyed a profound peace for near twenty +years before, and could at that time have very +few soldiers who had ever seen an enemy. +When the Spanish war broke out in 1739, +England had enjoyed a profound peace for +about eight-and-twenty years. The valour +of her soldiers, however, far from being corrupted +by that long peace, was never more +distinguished than in the attempt upon Carthagena, +the first unfortunate exploit of that +unfortunate war. In a long peace, the generals, +perhaps, may sometimes forget their +skill; but where a well regulated standing +army has been kept up, the soldiers seem never +to forget their valour.</p> + +<p>When a civilized nation depends for its +defence upon a militia, it is at all times exposed +to be conquered by any barbarous nation +which happens to be in its neighbourhood. +The frequent conquests of all the +civilized countries in Asia by the Tartars, +sufficiently demonstrates the natural superiority +which the militia of a barbarous has +over that of a civilized nation. A well regulated +standing army is superior to every +militia. Such an army, as it can best be +maintained by an opulent and civilized nation, +so it can alone defend such a nation against +the invasion of a poor and barbarous neighbour. +It is only by means of a standing +army, therefore, that the civilization of any<span class='pagenum'><a name="Page_296" id="Page_296">[Pg 296]</a></span> +country can be perpetuated, or even preserved, +for any considerable time.</p> + +<p>As it is only 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 suddenly and tolerably +civilised. A standing army establishes, +with an irresistible force, the law +of the sovereign through the remotest provinces +of the empire, and maintains some degree +of regular government in countries +which could not otherwise admit of any. +Whoever examines with attention, the improvements +which Peter the Great introduced +into the Russian empire, will find that they +almost all resolve themselves into the establishment +of a well regulated standing army. +It is the instrument which executes and maintains +all his other regulations. That degree +of order and internal peace, which that empire +has ever since enjoyed, is altogether owing +to the influence of that army.</p> + +<p>Men of republican principles have been +jealous of a standing army, as dangerous to +liberty. It certainly is so, wherever the interest +of the general, and that of the principal +officers, are not necessarily connected with +the support of the constitution of the state. +The standing army of Cæsar destroyed the +Roman republic. The standing army of +Cromwell turned the long parliament out of +doors. But where the sovereign is himself +the general, and the principal nobility and +gentry of the country the chief officers of the +army; where the military force is placed under +the command of those who have the +greatest interest in the support of the civil +authority, because they have themselves the +greatest share of that authority, a standing +army can never be dangerous to liberty. On +the contrary, it may, in some cases, be favourable +to liberty. The security which it +gives to the sovereign renders unnecessary +that troublesome jealousy, which, in some +modern republics, seems to watch over the +minutest actions, and to be at all times ready +to disturb the peace of every citizen. Where +the security of the magistrate, though supported +by the principal people of the country, +is endangered by every popular discontent; +where a small tumult is capable of bringing +about in a few hours a great revolution, the +whole authority of government must be employed +to suppress and punish every murmur +and complaint against it. To a sovereign, +on the contrary, who feels himself supported, +not only by the natural aristocracy of the +country, but by a well regulated standing +army, the rudest, the most groundless, and +the must licentious remonstrances, can give +little disturbance. He can safely pardon or +neglect them, and his consciousness of his +own superiority naturally disposes him to do +so. That degree of liberty which approaches +to licentiousness, can be tolerated only in +countries where the sovereign is secured by a +well regulated standing army. It is in such +countries only, that the public safety does +not require that the sovereign should be trusted +with any discretionary power, for suppressing +even the impertinent wantonness of this +licentious liberty.</p> + +<p>The first duty of the sovereign, therefore, +that of defending the society from the violence +and injustice of other independent societies, +grows gradually more and more expensive, +as the society advances in civilization. +The military force of the society, +which originally cost the sovereign no expense, +either in time of peace, or in time of +war, must, in the progress of improvement, +first be maintained by him in time of war, +and afterwards even in time of peace.</p> + +<p>The great change introduced into the art +of war by the invention of fire-arms, has enhanced +still further both the expense of exercising +and disciplining any particular number +of soldiers in time of peace, and that of employing +them in time of war. Both their +arms and their ammunition are become more +expensive. A musket is a more expensive +machine than a javelin or a bow and arrows; +a cannon or a mortar, than a balista or a catapulta. +The powder which is spent in a +modern review is lost irrecoverably, and occasions +a very considerable expense. The +javelins and arrows which were thrown or +shot in an ancient one, could easily be picked +up again, and were, besides, of very little +value. The cannon and the mortar are not +only much dearer, but much heavier machines +than the balista or catapulta; and require a +greater expense, not only to prepare them for +the field, but to carry them to it. As the +superiority of the modern artillery, too, over +that of the ancients, is very grant; it has become +much more difficult, and consequently +much more expensive, to fortify a town, so +as to resist, even for a few weeks, the attack +of that superior artillery. In modern times, +many different causes contribute to render the +defence of the society more expensive. The +unavoidable effects of the natural progress of +improvement have, in this respect, been a +good deal enhanced by a great revolution in +the the art of war, to which a mere accident, the +invention of gunpowder, seems to have given +occasion.</p> + +<p>In modern war, the great expense of fire-arms +gives an evident advantage to the nation +which can best afford that expense; and +consequently, to an opulent and civilized, +over a poor and barbarous nation. In ancient +times, the opulent and civilized found +it difficult to defend themselves against the +poor and barbarous nations. In modern +times, the poor and barbarous find it difficult +to defend themselves against the opulent and<span class='pagenum'><a name="Page_297" id="Page_297">[Pg 297]</a></span> +civilized. The invention of fire-arms, an +invention which at first sight appears to be so +pernicious, is certainly favourable, both to +the permanency and to the extension of civilisation.</p> + + +<h4>PART II.</h4> + +<h4><i>Of the Expense of Justice.</i></h4> + +<p>The second duty of the sovereign, that of +protecting, as far as possible, every member +of the society from the injustice or oppression +of every other member of it, or the duty of +establishing an exact administration of justice, +requires two very different degrees of expense +in the different periods of society.</p> + +<p>Among nations of hunters, as there is +scarce any property, or at least none that exceeds +the value of two or three days labour; +so there is seldom any established magistrate, +or any regular administration of justice. +Men who have no property, can injure one +another only in their persons or reputations. +But when one man kills, wounds, beats, or +defames another, though he to whom the injury +is done suffers, he who does it receives +no benefit. It is otherwise with the injuries +to property. The benefit of the person who +does the injury is often equal to the loss of +him who suffers it. Envy, malice, or resentment, +are the only passions which can prompt +one man to injure another in his person or +reputation. But the greater part of men are +not very frequently under the influence of +those passions; and the very worst men are +so only occasionally. As their gratification, +too, how agreeable soever it may be to certain +characters, is not attended with any real +or permanent advantage, it is, in the greater +part of men, commonly restrained by prudential +considerations. Men may live together +in society with some tolerable degree of security, +though there is no civil magistrate to +protect them from the injustice of those passions. +But avarice and ambition in the rich, +in the poor the hatred of labour and the love +of present ease and enjoyment, are the passions +which prompt to invade property; passions +much more steady in their operation, +and much more universal in their influence. +Wherever there is a great property, there is +great inequality. For one very rich man, +there must be at least five hundred poor, and +the affluence of the few supposes the indigence +of the many. The affluence of the rich +excites the indignation of the poor, who are +often both driven by want, and prompted by +envy to invade his possessions. It is only +under the shelter of the civil magistrate, that +the owner of that valuable property, which is +acquired by the labour of many years, or +perhaps of many successive generations, can +sleep a single night in security. He is at all +times surrounded by unknown enemies, +whom, though he never provoked, he can +never appease, and from whose injustice he +can be protected only by the powerful arm of +the civil magistrate, continually held up to +chastise it. The requisition of valuable and +extensive property, therefore, necessarily +requires the establishment of civil government. +Where there is no property, or at least none +that exceeds the value of two or three days +labour, civil government is not so necessary.</p> + +<p>Civil government supposes a certain +subordination. But as the necessity of civil +government gradually grows up with the acquisition +of valuable property, so the principal +causes, which naturally introduce subordination, +gradually grow up with the growth of +that valuable property.</p> + +<p>The causes or circumstances which naturally +introduce subordination, or which naturally +and antecedent to any civil institution, give +some men some superiority over the greater +part of their brethren, seem to be four in +number.</p> + +<p>The first of those causes or circumstances, +is the superiority of personal qualifications, +of strength, beauty, and agility of body; of +wisdom and virtue of prudence, justice, +fortitude, and moderation of mind. The +qualifications of the body, unless supported +by those of the mind, can give little authority +in any period of society. He is a very strong +man, who, by mere strength of body, can +force two weak ones to obey him. The +qualifications of the mind can alone give very +great authority. They are however, invisible +qualities; always disputable, and generally +disputed. No society, whether barbarous or +civilized, has ever found it convenient to settle +the rules of precedency of rank and subordination, +according to those invisible qualities; +but according to something that is more +plain and palpable.</p> + +<p>The second of those causes or circumstances +is the superiority of age. An old man, provided +his age is not so far advanced as to give +suspicion of dotage, is everywhere more +respected than a young man of equal rank, fortune, +and abilities. Among nations of hunters, +such as the native tribes of North America, +age is the sole foundation of rank and +precedency. Among them, father is the +appellation of a superior; brother, of an equal; +and son, of an inferior. In the most opulent +and civilized nations, age regulates rank +among those who are in every other respect +equal; and among whom, therefore, there is nothing +else to regulate it. Among brothers and +among sisters, the eldest always takes place; +and in the succession of the paternal estate, +every thing which cannot be divided, but must +go entire to one person, such as a title of honour, +is in most cases given to the eldest. +Age is a plain and palpable quality, which admits +of no dispute.<span class='pagenum'><a name="Page_298" id="Page_298">[Pg 298]</a></span></p> + +<p>The third of those causes or circumstances, +is the superiority of fortune. The authority +of riches, however, though great in every age +of society, is, perhaps, greatest in the rudest +ages of society, which admits of any considerable +inequality of fortune. A Tartar chief, +the increase of whose flocks and herds is +sufficient to maintain a thousand men, cannot +well employ that increase in any other way +than in maintaining a thousand men. The +rude state of his society does not afford him +any manufactured produce; any trinkets or +baubles of any kind, for which he can exchange +that part of his rude produce which +is over and above his own consumption. The +thousand men whom he thus maintains, depending +entirely upon him for their subsistence, +must both obey his orders in war, and +submit to his jurisdiction in peace. He is necessarily +both their general and their judge, +and his chieftainship is the necessary effect of +the superiority of his fortune. In an opulent +and civilized society, a man may possess a +much greater fortune, and yet not be able to +command a dozen of people. Though the +produce of his estate may be sufficient to maintain, +and may, perhaps, actually maintain, +more than a thousand people, yet, as those +people pay for every thing which they get +from him, as he gives scarce any thing to any +body but in exchange for an equivalent, there +is scarce any body who considers himself as +entirely dependent upon him, and his authority +extends only over a few menial servants. +The authority of fortune, however, is very +great, even in an opulent and civilized society. +That it is much greater than that either of age +or of personal qualities, has been the constant +complaint of every period of society which +admitted of any considerable inequality of fortune. +The first period of society, that of +hunters, admits of no such inequality. Universal +poverty establishes their universal equality; +and the superiority, either of age or of +personal qualities, are the feeble, but the sole +foundations of authority and subordination. +There is, therefore, little or no authority or +subordination in this period of society. The +second period of society, that of shepherds, +admits of very great inequalities of fortune, +and there is no period in which the superiority +of fortune gives so great authority to those +who possess it. There is no period, accordingly, +in which authority and subordination +are more perfectly established. The authority +of an Arabian scherif is very great; that of a +Tartar khan altogether despotical.</p> + +<p>The fourth of those causes or circumstances, +is the superiority of birth. Superiority of +birth supposes an ancient superiority of fortune +in the family of the person who claims +it. All families are equally ancient; and the +ancestors of the prince, though they may be +better known, cannot well be more numerous +than those of the beggar. Antiquity of family +means everywhere the antiquity either +of wealth, or of that greatness which is commonly +either founded upon wealth, or accompanied +with it. Upstart greatness is everywhere +less respected than ancient greatness. +The hatred of usurpers, the love of the family +of an ancient monarch, are in a great measure +founded open the contempt which men +naturally have for the former, and upon their +veneration for the latter. As a military officer +submits, without reluctance, to the authority +of a superior by whom he has always been +commanded, but cannot bear that his inferior +should be set over his head; so men easily +submit to a family to whom they and their +ancestors have always submitted; but are +fired with indignation when another family, +in whom they had never acknowledged any +such superiority, assumes a dominion over +them.</p> + +<p>The distinction of birth, being subsequent +to the inequality of fortune, can have no place +in nations of hunters, among whom all men, +being equal in fortune, must likewise be very +nearly equal in birth. The son of a wise and +brave man may, indeed, even among them, +be somewhat more respected than a man of +equal merit, who has the misfortune to be +the son of a fool or a coward. The difference, +however, will not be very great; and +there never was, I believe, a great family in +the world, whose illustration was entirely derived +from the inheritance of wisdom and +virtue.</p> + +<p>The distinction of birth not only may, but +always does, take place among nations of +shepherds. Such nations are always strangers +to every sort of luxury, and great wealth can +scarce ever be dissipated among them by improvident +profusion. There are no nations, +accordingly, who abound more in families revered +and honoured on account of their descent +from a long race of great and illustrious +ancestors; because there are no nations +among whom wealth is likely to continue +longer in the same families.</p> + +<p>Birth and fortune are evidently the two circumstances +which principally set one man above +another. They are the two great sources of personal +distinction, and are, therefore, the principal +causes which naturally establish authority +and subordination among men. Among +nations of shepherds, both those causes operate +with their full force. The great shepherd +or herdsman, respected on account of +his great wealth, and of the great number of +those who depend upon him for subsistence, +and revered on account of the nobleness of +his birth, and of the immemorial antiquity of +his illustrious family, has a natural authority +over all the inferior shepherds or herdsmen of +his horde or clan. He can command the +united force of a greater number of people +than any of them. His military power is +greater than that of any of them. In time of<span class='pagenum'><a name="Page_299" id="Page_299">[Pg 299]</a></span> +war, they are all of them naturally disposed +to muster themselves under his banner, rather +than under that of any other person; and his +birth and fortune thus naturally procure to +him some sort of executive power. By commanding, +too, the united force of a greater +number of people than any of them, he is best +able to compel any one of them, who may +have injured another, to compensate the +wrong. He is the person, therefore, to whom +all those who are too weak to defend themselves +naturally look up for protection. It is +to him that they naturally complain of the +injuries which they imagine have been done to +them; and his interposition, in such cases, is +more easily submitted to, even by the person +complained of, than that of any other person +would be. His birth and fortune thus naturally +procure him some sort of judicial authority.</p> + +<p>It is in the age of shepherds, in the second +period of society, that the inequality of fortune +first begins to take place, and introduces +among men a degree of authority and subordination, +which could not possibly exist before. +It thereby introduces some degree of +that civil government which is indispensably +necessary for its own preservation; and it +seems to do this naturally, and even independent +of the consideration of that necessity. +The consideration of that necessity comes, no +doubt, afterwards, to contribute very much to +maintain and secure that authority and subordination. +The rich, in particular, are necessarily +interested to support that order of +things, which can alone secure them in the +possession of their own advantages. Men of +inferior wealth combine to defend those of +superior wealth in the possession of their property, +in order that men of superior wealth +may combine to defend them in the possession +of theirs. All the inferior shepherds and +herdsmen feel, that the security of their own +herds and flocks depends upon the security of +those of the great shepherd or herdsman; +that the maintenance of their lesser authority +depends upon that of his greater authority; +and that upon their subordination to him depends +his power of keeping their inferiors in +subordination to them. They constitute a +sort of little nobility, who feel themselves interested +to defend the property, and to support +the authority, of their own little sovereign, +in order that he may be able to defend +their property, and to support their authority. +Civil government, so far as it is instituted for +the security of property, is, in reality, instituted +for the defence of the rich against the poor, +or of those who have some property against +those who have none at all.</p> + +<p>The judicial authority of such a sovereign, +however, far from being a cause of expense, +was, for a long time, a source of revenue to +him. The persons who applied to him for +justice were always willing to pay for it, and +a present never failed to accompany a petition. +After the authority of the sovereign, +too, was thoroughly established, the person +found guilty, over and above the satisfaction +which he was obliged to make to the party, +was likewise forced to pay an amercement to +the sovereign. He had given trouble, he had +disturbed, he had broke the peace of his lord +the king, and for those offences an amercement +was thought due. In the Tartar governments +of Asia, in the governments of +Europe which were founded by the German +and Scythian nations who overturned the +Roman empire, the administration of justice +was a considerable source of revenue, both to +the sovereign, and to all the lesser chiefs or +lords who exercised under him any particular +jurisdiction, either over some particular tribe +or clan, or over some particular territory or +district. Originally, both the sovereign and +the inferior chiefs used in exercise this jurisdiction +in their own persons. Afterwards, +they universally found it convenient to delegate +it to some substitute, bailiff, or judge. +This substitute, however, was still obliged to +account to his principal or constituent for the +profits of the jurisdiction. Whoever reads the +instructions<a name="FNanchor_47_47" id="FNanchor_47_47"></a><a href="#Footnote_47_47" class="fnanchor">[47]</a> which were given to the judges +of the circuit in the time of Henry II. will +see clearly that those judges were a sort of +itinerant factors, sent round the country for +the purpose of levying certain branches of the +king's revenue. In those days, the administration +of justice not only afforded a certain +revenue to the sovereign, but, to procure +this revenue, seems to have been one of the +principal advantages which he proposed to obtain +by the administration of justice.</p> + +<p>This scheme of making the administration +of justice subservient to the purposes of revenue, +could scarce fail to be productive of several +very gross abuses. The person who applied +for justice with a large present in his +hand, was likely to get something more than +justice; while he who applied for it with a +small one was likely to get something less. +Justice, too, might frequently be delayed, in +order that this present might be repeated. +The amercement, besides, of the person complained +of, might frequently suggest a very +strong reason for finding him in the wrong, +even when he had not really been so. That +such abuses were far from being uncommon, +the ancient history of every country in Europe +bears witness.</p> + +<p>When the sovereign or chief exercises his +judicial authority in his own person, how +much soever he might abuse it, it must have +been scarce possible to get any redress; because +there could seldom be any body powerful +enough to call him to account. When he +exercised it by a bailiff, indeed, redress might +sometimes be had. If it was for his own be<span class='pagenum'><a name="Page_300" id="Page_300">[Pg 300]</a></span>nefit +only, that the bailiff had been guilty of +an act of injustice, the sovereign himself might +not always be unwilling to punish him, or to +oblige him to repair the wrong. But if it +was for the benefit of his sovereign; if it was +in order to make court to the person who appointed +him, and who might prefer him, that +he had committed any act of oppression; redress +would, upon most occasions be as impossible +as if the sovereign had committed it +himself. In all barbarous governments, accordingly, +in all those ancient governments of +Europe in particular, which were founded +upon the ruins of the Roman empire, the administration +of justice appears for a long time +to have been extremely corrupt; far from being +quite equal and impartial, even under the +best monarchs, and altogether profligate under +the worst.</p> + +<p>Among nations of shepherds, where the sovereign +or chief is only the greatest shepherd +or herdsman of the horde or clan, he is maintained +in the same manner as any of his vassals +or subjects, by the increase of his own +herds or flocks. Among those nations of husbandmen, +who are but just come out of the +shepherd state, and who are not much advanced +beyond that state, such as the Greek +tribes appear to have been about the time of +the Trojan war, and our German and Scythian +ancestors, when they first settled upon the +ruins of the western empire; the sovereign +or chief is, in the same manner, only the +greatest landlord of the country, and is maintained +in the same manner as any other landlord, +by a revenue derived from his own private +estate, or from what, in modern Europe, +was called the demesne of the crown. His +subjects, upon ordinary occasions, contribute +nothing to his support, except when, in order +to protect them from the oppression of some +of their fellow-subjects, they stand in need of +his authority. The presents which they make +him upon such occasions constitute the whole +ordinary revenue, the whole of the emoluments +which, except, perhaps, upon some very +extraordinary emergencies, he derives from +his dominion over them. When Agamemnon, +in Homer, offers to Achilles, for his friendship, +the sovereignty of seven Greek cities, the sole +advantage which he mentions as likely to be +derived from it was, that the people would +honour him with presents. As long as such +presents, as long as the emoluments of justice, +or what may be called the fees of court, +constituted, in this manner, the whole ordinary +revenue which the sovereign derived from +his sovereignty, it could not well be expected, +it could not even decently be proposed, that +he should give them up altogether. It might, +and it frequently was proposed, that he should +regulate and ascertain then. But after they +had been so regulated and ascertained, how +to hinder a person who was all-powerful from +extending them beyond those regulations, was +still very difficult, not to say impossible. During +the continuance of this state of things, +therefore, the corruption of justice, naturally +resulting from the arbitrary and uncertain nature +of those presents, scarce admitted of any +effectual remedy.</p> + +<p>But when, from different causes, chiefly +from the continually increasing expense of +defending the nation against the invasion of +other nations, the private estate of the sovereign +had become altogether insufficient for +defraying the expense of the sovereignty; +and when it had become necessary that the +people should, for their own security, contribute +towards this expense by taxes of different +kinds; it seems to have been very +commonly stipulated, that no present for the +administration of justice should, under any +pretence, be accepted either by the sovereign, +or by his bailiffs and substitutes, the judges. +Those presents, it seems to have been supposed, +could more easily be abolished altogether, +than effectually regulated and ascertained. +Fixed salaries were appointed to the judges, +which were supposed to compensate to them +the loss of whatever might have been their +share of the ancient emoluments of justice; +as the taxes more than compensated to the +sovereign the loss of his. Justice was then +said to be administered gratis.</p> + +<p>Justice, however, never was in reality administered +gratis in any country. Lawyers +and attorneys, at least, must always be paid +by the parties; and if they were not, they +would perform their duty still worse than +they actually perform it. The fees annually +paid to lawyers and attorneys, amount, in +every court, to a much greater sum than the +salaries of the judges. The circumstance of +those salaries being paid by the crown, can +nowhere much diminish the necessary expense +of a law-suit. But it was not so much to +diminish the expense, as to prevent the corruption +of justice, that the judges were prohibited +from receiving any present or fee from +the parties.</p> + +<p>The office of judge is in itself so very honourable, +that men are willing to accept of it, +though accompanied with very small emoluments. +The inferior office of justice of +peace, though attended with a good deal of +trouble, and in most cases with no emoluments +at all, is an object of ambition to the +greater part of our country gentlemen. The +salaries of all the different judges, high and +low, together with the whole expense of the +administration and execution of justice, even +where it is not managed with very good +economy, makes, in any civilized country, +but a very inconsiderable part of the whole +expense of government.</p> + +<p>The whole expense of justice, too, might +easily be defrayed by the fees of court; and, +without exposing the administration of justice +to any real hazard of corruption, the public<span class='pagenum'><a name="Page_301" id="Page_301">[Pg 301]</a></span> +revenue might thus be entirely discharged +from a certain, though perhaps but a small +incumbrance. It is difficult to regulate the +fees of court effectually, where a person so +powerful as the sovereign is to share in them, +and to derive any considerable part of his revenue +from them. It is very easy, where the +judge is the principal person who can reap any +benefit from them. The law can very easily +oblige the judge to respect the regulation, +though it might not always be able to make +the sovereign respect it. Where the fees of +court are precisely regulated and ascertained; +where they are paid all at once, at a certain +period of every process, into the hands of a +cashier or receiver, to be by him distributed +in certain known proportions among the +different judges after the process is decided, +and not till it is decided; there seems to be +no more danger of corruption than where +such fees are prohibited altogether. Those +fees, without occasioning any considerable +increase in the expense of a law-suit, might +be rendered fully sufficient for defraying the +whole expense of justice. But not being +paid to the judges till the process was determined, +they might be some incitement to the +diligence of the court in examining and deciding +it. In courts which consisted of a +considerable number of judges, by proportioning +the share of each judge to the number +of hours and days which he had employed in +examining the process, either in the court, or +in a committee, by order of the court, those +fees might give some encouragement to the +diligence of each particular judge. Public +services are never better performed, than +when their reward comes only in consequence +of their being performed, and is proportioned +to the diligence employed in performing +them. In the different parliaments of +France, the fees of court (called epices and +vacations) constitute the far greater part of +the emoluments of the judges. After all +deductions are made, the neat salary paid by +the crown to a counsellor or judge in the +parliament of Thoulouse, in rank and dignity +the second parliament of the kingdom, +amounts only to 150 livres, about L.6. 11s. +sterling a-year. About seven years ago, that +sum was in the same place the ordinary yearly +wages of a common footman. The distribution +of these epices, too, is according to the +diligence of the judges. A diligent judge +gains a comfortable, though moderate revenue, +by his office; an idle one gets little +more than his salary. Those parliaments +are, perhaps, in many respects, not very convenient +courts of justice, but they have +never been accused; they seem never even to +have been suspected of corruption.</p> + +<p>The fees of court seem originally to have +been the principal support of the different +courts of justice in England. Each court +endeavoured to draw to itself as much business +as it could, and was, upon that account, +willing to take cognizance of many suits +which were not originally intended to fall +under its jurisdiction. The court of king's +bench, instituted for the trial of criminal +causes only, took cognizance of civil suits; +the plaintiff pretending that the defendant, in +not doing him justice, had been guilty of +some trespass or misdemeanour. The court +of exchequer, instituted for the levying of the +king's revenue, and for enforcing the payment +of such debts only as were due to the +king, took cognizance of all other contract +debts; the plaintiff alleging that he could not +pay the king, because the defendant would +not pay him. In consequence of such fictions, +it came, in many cases, to depend altogether +upon the parties, before what court +they would choose to 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 +constitution of the courts of justice +in England was, perhaps, originally, in a +great measure, formed by this emulation, +which anciently took place between their respective +judges; each judge endeavouring to +give, in his own court, the speediest and +most effectual remedy which the law would +admit, for every sort of injustice. Originally, +the courts of law gave damages only +for breach of contract. The court of chancery, +as a court of conscience, first took upon +it to enforce the specific performance of +agreements. When the breach of contract +consisted in the non-payment of money, the +damage sustained could be compensated in +no other way than by ordering payment, +which was equivalent to a specific performance +of the agreement. In such cases, +therefore, the remedy of the courts of law +was sufficient. It was not so in others. +When the tenant sued his lord for having +unjustly outed him of his lease, the damages +which he recovered were by no means equivalent +to the possession of the land. Such +causes, therefore, for some time, went all to +the court of chancery, to the no small loss of +the courts of law. It was to draw back such +causes to themselves, that the courts of law +are said to have invented the artificial and +fictitious writ of ejectment, the most effectual +remedy for an unjust outer or dispossession +of land.</p> + +<p>A stamp-duty upon the law proceedings +by each particular court, to be levied by that +court, and applied towards the maintenance +of the judges, and other officers belonging to +it, might in the same manner, afford a revenue +sufficient for defraying the expense of +the administration of justice, without bringing +any burden upon the general revenue of +the society. The judges, indeed, might in +this case, be under the temptation of multiplying +unnecessarily the proceedings upon<span class='pagenum'><a name="Page_302" id="Page_302">[Pg 302]</a></span> +every cause, in order to increase, as much as +possible, the produce of such a stamp-duty. +It has been the custom in modern Europe to +regulate, upon most occasions, the payment +of the attorneys and clerks of court according +to the number of pages which they had +occasion to write; the court, however, requiring +that each page should contain so +many lines, and each line so many words. +In order to increase their payment, the attorneys +and clerks have contrived to multiply +words beyond all necessity, to the corruption +of the law language of, I believe, every court +of justice in Europe. A like temptation +might, perhaps, occasion a like corruption in +the form of law proceedings.</p> + +<p>But whether the administration of justice +be so contrived as to defray its own expense, +or whether the judges be maintained by fixed +salaries paid to them from some other fund, +it does not seem necessary that the person or +persons entrusted with the executive power +should be charged with the management of +that fund, or with the payment of those salaries. +That fund might arise from the rent of +landed estates, the management of each +estate being entrusted to the particular court +which was to be maintained by it. That +fund might arise even from the interest of a +sum of money, the lending out of which +might, in the same manner, be entrusted to +the court which was to be maintained by it. +A part, though indeed but a small part of the +salary of the judges of the court of session +in Scotland, arises from the interest of a sum +of money. The necessary instability of such +a fund seems, however, to render it an improper +one for the maintenance of an institution +which ought to last for ever.</p> + +<p>The separation of the judicial from the +executive power, seems originally to have +arisen from the increasing business of the +society, in consequence of its increasing improvement. +The administration of justice +became so laborious and so complicated a +duty, as to require the undivided attention of +the person to whom it was entrusted. The +person entrusted with the executive power, +not having leisure to attend to the decision +of private causes himself, a deputy was appointed +to decide them in his stead. In the +progress of the Roman greatness, the consul +was too much occupied with the political affairs +of the state, to attend to the administration +of justice. A prætor, therefore, was +appointed to administer it in his stead. In +the progress of the European monarchies, +which were founded upon the ruins of the +Roman empire, the sovereigns and the great +lords came universally to consider the administration +of justice as an office both too laborious +and too ignoble for them to execute +in their own persons. They universally, +therefore, discharged themselves of it, by appointing +a deputy, bailiff, or judge.</p> + +<p>When the judicial is united to the executive +power, it is scarce possible that justice +should not frequently be sacrificed to what is +vulgarly called politics. The persons entrusted +with the great interests of the state +may even without any corrupt views, sometimes +imagine it necessary to sacrifice to those +interests the rights of a private man. But +upon the impartial administration of justice +depends the liberty of every individual, the +sense which he has of his own security. In +order to make every individual feel himself +perfectly secure in the possession of every +right which belongs to him, it is not only necessary +that the judicial should be separated +from the executive power, but that it should +be rendered as much as possible independent +of that power. The judge should not be +liable to be removed from his office according +to the caprice of that power. The regular +payment of his salary should not depend upon +the good will, or even upon the good economy +of that power.</p> + + +<h4>PART III.</h4> + +<h4><i>Of the Expense of public Works and public Institutions.</i></h4> + +<p>The third and last duty of the sovereign or +commonwealth, is that of erecting and maintaining +those public institutions and those +public works, which though they may be in +the highest degree advantageous to a great +society, are, however, of such a nature, that +the profit could never repay the expense to +any individual, or small number of individuals; +and which it, therefore, cannot be +expected that any individual, or small number +of individuals, should erect or maintain. +The performance of this duty requires, too, +very different degrees of expense in the different +periods of society.</p> + +<p>After the public institutions and public +works necessary for the defence of the society, +and for the administration of justice, both of +which have already been mentioned, the other +works and institutions of this kind are chiefly +for facilitating the commerce of the society, +and those for promoting the instruction of +the people. The institutions for instruction +are of two kinds: those for the education of +the youth, and those for the instruction of +people of all ages. The consideration of the +manner in which the expense of those different +sorts of public works and institutions +may be most properly defrayed will divide this +third part of the present chapter into three +different articles.</p> +<p><span class='pagenum'><a name="Page_303" id="Page_303">[Pg 303]</a></span></p> + +<h4><small>ART. I.</small>—<i>Of the public Works and Institutions +for facilitating the Commerce of the Society.</i></h4> + +<h4><i>And, first, of those which are necessary for +facilitating Commerce in general.</i></h4> + +<p>That the erections and maintenance of the +public works which facilitate the commerce +of any country, such as good roads, bridges, +navigable canals, harbours, &c. must require +very different degrees of expense in the different +periods of society, is evident without +any proof. The expense of making and +maintaining the public roads of any country +must evidently increase with the annual produce +of the land and labour of that country, +or with the quantity and weight of the goods +which it becomes necessary to fetch and carry +upon those roads. The strength of a bridge +must be suited to the number and weight of +the carriages which are likely to pass over it. +The depth and the supply of water for a navigable +canal must be proportional to the +number and tonnage of the lighters which +are likely to carry goods upon it; the extent +of a harbour, to the number of the shipping +which are likely to take shelter in it.</p> + +<p>It does not seem necessary that the expense +of those public works should be defrayed +from that public revenue, as it is commonly +called, of which the collection and application +are in most countries, assigned to the +executive power. The greater part of such +public works may easily be so managed, as to +afford a particular revenue, sufficient for defraying +their own expense, without bringing +any burden upon the general revenue of the +society.</p> + +<p>A highway, a bridge, a navigable canal, for +example, may, in most cases, be both made +and maintained by a small toll upon the carriages +which make use of them; a harbour, +by a moderate port-duty upon the tonnage of +the shipping which load or unload in it. +The coinage, another institution for facilitating +commerce, in many countries, not only +defrays its own expense, but affords a small +revenue or a seignorage to the sovereign. +The post-office, another institution for the same +purpose, over and above defraying its own +expense, affords, in almost all countries, a +very considerable revenue to the sovereign.</p> + +<p>When the carriages which pass over a highway +or a bridge, and the lighters which sail +upon a navigable canal, pay toll in proportion +to their weight or their tonnage, they pay for +the maintenance of these public works exactly +in proportion to the wear and tear which they +occasion of them. It seems scarce possible +to invent a more equitable way of maintaining +such works. This tax or toll, too, though +it is advanced by the carrier, is finally paid +by the consumer, to whom it must always be +charged in the price of the goods. As the +expense of carriage, however, is very much +reduced by means of such public works, the +goods, notwithstanding the toll, come cheaper +to the consumer than they could otherwise +have done, their price not being so much raised +by the toll, as it is lowered by the cheapness +of the carriage. The person who finally +pays this tax, therefore, gains by the application +more than he loses by the payment of +it. His payment is exactly in proportion to +his gain. It is, in reality, no more than a +part of that gain which he is obliged to give +up, in order to get the rest. It seems impossible +to imagine a more equitable method +of raising a tax.</p> + +<p>When the toll upon carriages of luxury, +upon coaches, post-chaises, &c. is made +somewhat higher in proportion to their +weight, than upon carriages of necessary use, +such as carts, waggons, &c. the indolence and +vanity of the rich is made to contribute, in a +very easy manner, to the relief of the poor, +by rendering cheaper the transportation of +heavy goods to all the different parts of the +country.</p> + +<p>When high-roads, bridges, canals, &c. are +in this manner made and supported by the +commerce which is carried on by means of +them, they can be made only where that +commerce requires them, and, consequently, +where it is proper to make them, Their expense, +too, their grandeur and magnificence, +must be suited to what that commerce can +afford to pay. They must be made, consequently, +as it is proper to make them. A +magnificent high-road cannot be made through +a desert country, where there is little or no +commerce, or merely because it happens to +lead to the country villa of the intendant of +the province, or to that of some great lord, +to whom the intendant finds it convenient to +make his court. A great bridge cannot be +thrown over a river at a place where nobody +passes, or merely to embellish the view from +the windows of a neighbouring palace; things +which sometimes happen in countries, where +works of this kind are carried on by any other +revenue than that which they themselves are +capable of affording.</p> + +<p>In several different parts of Europe, the +toll or lock-duty upon a canal is the property +of private persons, whose private interest +obliges them to keep up the canal. If it is +not kept in tolerable order, the navigation +necessarily ceases altogether, and, along with +it, the whole profit which they can make by +the tolls. If those tolls were put under the +the management of commissioners, who had +themselves no interest in them, they might +be less attentive to the maintenance of the +works which produced them. The canal of +Languedoc cost the king of France and the +province upwards of thirteen millions of livres, +which (at twenty-eight livres the mark of sil<span class='pagenum'><a name="Page_304" id="Page_304">[Pg 304]</a></span>ver, +the value of French money in the end +of the last century) amounted to upwards of +nine hundred thousand pounds sterling. +When that great work was finished, the most +likely method, it was found, of keeping it in +constant repair, was to make a present of the +tolls to Riquet, the engineer who planned +and conducted the work. Those tolls constitute, +at present, a very large estate to the +different branches of the family of that gentleman, +who have, therefore, a great interest +to keep the work in constant repair. But had +those tolls been put under the management +of commissioners, who had no such interest, +they might perhaps, have been dissipated in +ornamental and unnecessary expenses, while +the most essential parts of the works were allowed +to go to ruin.</p> + +<p>The tolls for the maintenance of a high-road +cannot, with any safety, be made the +property of private persons. A high-road, +though entirely neglected, does not become +altogether impassable, though a canal does. +The proprietors of the tolls upon a high-road, +therefore, might neglect altogether the repair +of the road, and yet continue to levy very +nearly the same tolls. It is proper, therefore, +that the tolls for the maintenance of such a +work should be put under the management +of commissioners or trustees.</p> + +<p>In Great Britain, the abuses which the very +trustees have committed in the management +of those tolls, have, in many cases, been very +justly complained of. At many turnpikes, +it has been said, the money levied is more +than double of what is necessary for executing, +in the completest manner, the work, +which is often executed in a very slovenly +manner, and sometimes not executed at all. +The system of repairing the high-roads by +tolls of this kind, it must be observed, is not +of very long standing. We should not wonder, +therefore, if it has not yet been brought +that degree of perfection of which it seems +capable. If mean and improper persons are +frequently appointed trustees; and if proper +courts of inspection and account have not yet +been established for controlling their conduct, +and for reducing the tolls to what is barely +sufficient for executing the work to be done +by them; the recency of the institution both +accounts and apologizes for those defects, of +which, by the wisdom of parliament, the +greater part may, in due time, be gradually +remedied.</p> + +<p>The money levied at the different turnpikes +in Great Britain, is supposed to exceed so +much what is necessary for repairing the +roads, that the savings which, with proper +economy, might be made from it, have been +considered, even by some ministers, as a very +great resource, which might, at some time or +another, be applied to the exigencies of the +state. Government, it has been said, by taking +the management of the turnpikes into its +own hands, and by employing the soldiers, +who would work for a very small addition to +their pay, could keep the roads in good order, +at a much less expense than it can be done by +trustees, who have no other workmen to employ, +but such as derive their whole subsistence +from their wages. A great revenue, +half a million, perhaps<a name="FNanchor_48_48" id="FNanchor_48_48"></a><a href="#Footnote_48_48" class="fnanchor">[48]</a>, it has been pretended, +might in this manner be gained, without +laying any new burden upon the people; and +the turnpike roads might be made to contribute +to the general expense of the state, in +the same manner as the post-office does at +present.</p> + +<p>That a considerable revenue might be gained +in this manner, I have no doubt, though +probably not near so much as the projectors +of this plan have supposed. The plan itself, +however, seems liable to several very important +objections.</p> + +<p>First, If the tolls which are levied at the +turnpikes should ever be considered as one of +the resources for supplying the exigencies of +the state, they would certainly be augmented +as those exigencies were supposed to require. +According to the policy of Great Britain, +therefore, they would probably be augmented +very fast. The facility with which a great +revenue could be drawn from them, would +probably encourage administration to recur +very frequently to this resource. Though it +may, perhaps, be more than doubtful, whether +half a million could by any economy be +saved out of the present tolls, it can scarcely +be doubted, but that a million might be saved +out of them, if they were doubled; and perhaps +two millions, if they were tripled<a name="FNanchor_49_49" id="FNanchor_49_49"></a><a href="#Footnote_49_49" class="fnanchor">[49]</a>. This +great revenue, too, might be levied without +the appointment of a single new officer to collect +and receive it. But the turnpike tolls, +being continually augmented in this manner, +instead of facilitating the inland commerce of +the country, as at present, would soon become +a very great incumbrance upon it. The +expense of transporting all heavy goods from +one part of the country to another, would +soon be so much increased, the market for +all such goods, consequently, would soon be +so much narrowed, that their production +would be in a great measure discouraged, +and the most important branches of the domestic +industry of the country annihilated altogether.</p> + +<p>Secondly, A tax upon carriages, in proportion +to their weight, though a very equal +tax when applied to the sole purpose of repairing +the roads, is a very unequal one when<span class='pagenum'><a name="Page_305" id="Page_305">[Pg 305]</a></span> +applied to any other purpose, or to supply +the common exigencies of the state. When +it is applied to the sole purpose above mentioned, +each carriage is supposed to pay exactly +for the wear and tear which that carriage +occasions of the roads. But when it is applied +to any other purpose, each carriage is +supposed to pay for more than that wear and +tear, and contributes to the supply of some +other exigency of the state. But as the turnpike +toll raises the price of goods in proportion +to their weight and not to their value, it +is chiefly paid by the consumers of coarse +and bulky, not by those of precious and light +commodities. Whatever exigency of the +state, therefore, this tax might be intended +to supply, that exigency would be chiefly +supplied at the expense of the poor, not of +the rich; at the expense of those who are +least able to supply it, not of those who are +most able.</p> + +<p>Thirdly, If government should at any time +neglect the reparation of the high-roads, it +would be still more difficult, than it is at present, +to compel the proper application of any +part of the turnpike tolls. A large revenue +might thus be levied upon the people, without +any part of it being applied to the only +purpose to which a revenue levied in this +manner ought ever to be applied. If the +meanness and poverty of the trustees of turnpike +roads render it sometimes difficult, at +present, to oblige them to repair their wrong; +their wealth and greatness would render it +ten times more so in the case which is here +supposed.</p> + +<p>In France, the funds destined for the reparation +of the high-roads are under the immediate +direction of the executive power. +Those funds consist, partly in a certain number +of days labour, which the country people are +in most parts of Europe obliged to give to the +reparation of the highways; and partly in +such a portion of the general revenue of the +state as the king chooses to spare from his +other expenses.</p> + +<p>By the ancient law of France, as well as +by that of most other parts of Europe, the +labour of the country people was under the +direction of a local or provincial magistracy, +which had no immediate dependency upon +the king's council. But, by the present +practice, both the labour of the country people, +and whatever other fund the king may +choose to assign for the reparation of the +high-roads in any particular province or generality, +are entirely under the management +of the intendant; an officer who is appointed +and removed by the king's council who receives +his orders from it, and is in constant +correspondence with it. In the progress of +despotism, the authority of the executive +power gradually absorbs that of every other +power in the state, and assumes to itself the +management of every branch of revenue +which is destined for any public purpose. In +France, however, the great post-roads, the +roads which make the communication between +the principal towns of the kingdom, are in +general kept in good order; and, in some +provinces, are even a good deal superior to +the greater part of the turnpike roads of +England. But what we call the cross roads, +that is, the far greater part of the roads in +the country, are entirely neglected, and are +in many places absolutely impassable for any +heavy carriage. In some places it is even +dangerous to travel on horseback, and mules +are the only conveyance which can safely be +trusted. The proud minister of an ostentatious +court, may frequently take pleasure in executing +a work of splendour and magnificence, +such as a great highway, which is frequently +seen by the principal nobility, whose +applauses not only flatter his vanity, but even +contribute to support his interest at court. +But to execute a great number of little works, +in which nothing that can be done can make +any great appearance, or excite the smallest +degree of admiration in any traveller, and +which, in short, have nothing to recommend +them but their extreme utility, is a business +which appears, in every respect, too mean +and paltry to merit the attention of so great a +magistrate. Under such an administration, +therefore, such works are almost always entirely +neglected.</p> + +<p>In China, and in several other governments +of Asia, the executive power charges itself +both with the reparation of the high-roads, +and with the maintenance of the navigable +canals. In the instructions which are given +to the governor of each province, those objects, +it is said, are constantly recommended to +him, and the judgment which the court forms +of his conduct is very much regulated by the +attention which he appears to have paid to this +part of his instructions. This branch of +public police, accordingly, is said to be very +much attended to in all those countries, but +particularly in China, where the high-roads, +and still more the navigable canals, it is pretended, +exceed very much every thing of the +same kind which is known in Europe. The +accounts of those works, however, which have +been transmitted to Europe, have generally +been drawn up by weak and wondering travellers; +frequently by stupid and lying missionaries. +If they had been examined by +more intelligent eyes, and if the accounts of +them had been reported by more faithful +witnesses, they would not, perhaps, appear to +be so wonderful. The account which Bernier +gives of some works of this kind in +Indostan, falls very short of what had been +reported of them by other travellers, more +disposed to the marvellous than he was. It +may too, perhaps, be in those countries, as it +is in France, where the great roads, the great +communications, which are likely to be the<span class='pagenum'><a name="Page_306" id="Page_306">[Pg 306]</a></span> +subjects of conversation at the court and in +the capital, are attended to, and all the rest +neglected. In China, besides, in Indostan, +and in several other governments of Asia, +the revenue of the sovereign arises almost altogether +from a land tax or land rent, which +rises or falls with the rise and fall of the +annual produce of the land. The great interest +of the sovereign, therefore, his revenue, +is in such countries necessarily and immediately +connected with the cultivation of the +land, with the greatness of its produce, and +with the value of its produce. But in order +to render that produce both as great and as +valuable as possible, it is necessary to procure +to it as extensive a market as possible, and +consequently to establish the freest, the +easiest, and the least expensive communication +between all the different parts of the +country; which can be done only by means +of the best roads and the best navigable canals. +But the revenue of the sovereign does +not, in any part of Europe, arise chiefly from +a land tax or land rent. In all the great +kingdoms of Europe, perhaps, the greater +part of it may ultimately depend upon the +produce of the land: but that dependency is +neither so immediate nor so evident. In +Europe, therefore, the sovereign does not feel +himself so directly called upon to promote +the increase, both in quantity and value of the +produce of the land, or, by maintaining good +roads and canals, to provide the most extensive +market for that produce. Though it +should be true, therefore, what I apprehend +is not a little doubtful, that in some parts of +Asia this department of the public police is +very properly managed by the executive +power, there is not the least probability that, +during the present state of things, it could be +tolerably managed by that power in any part +of Europe.</p> + +<p>Even those public works, which are of +such a nature that they cannot afford any revenue +for maintaining themselves, but of +which the conveniency is nearly confined to +some particular place or district, are always +better maintained by a local or provincial revenue, +under the management of a local and +provincial administration, than by the general +revenue of the state, of which the executive +power must always have the management. +Were the streets of London to be lighted and +paved at the expense of the treasury, is there +any probability that they would be so well +lighted and paved as they are at present, or +even at so small an expense? The expense, +besides, instead of being raised by a local tax +upon the inhabitants of each particular street, +parish, or district in London, would, in this +case, be defrayed out of the general revenue +of the state, and would consequently be raised +by a tax upon all the inhabitants of the +kingdom, of whom the greater part derive no +sort of benefit from the lighting and paving of +the streets of London.</p> + +<p>The abuses which sometimes creep into the +local and provincial administration of a local +and provincial revenue, how enormous soever +they may appear, are in reality, however, almost +always very trifling in comparison of +those which commonly take place in the administration +and expenditure of the revenue +of a great empire. They are, besides, much +more easily corrected. Under the local or +provincial administration of the justices of +the peace in Great Britain, the six days labour +which the country people are obliged to +give to the reparation of the highways, is not +always, perhaps, very judiciously applied, but +it is scarce ever exacted with any circumstance +of cruelty or oppression. In France, +under the administration of the intendants, +the application is not always more judicious, +and the exaction is frequently the most cruel +and oppressive. Such corvees, as they are +called, make one of the principal instruments +of tyranny by which these officers chastise any +parish or communeaute, which has had the +misfortune to fall under their displeasure.</p> + + +<h4><i>Of the public Works and Institutions which are +necessary for facilitating particular Branches +of Commerce.</i></h4> + +<p>The object of the public works and institutions +above mentioned, is to facilitate commerce +in general. But in order to facilitate +some particular branches of it, particular institutions +are necessary, which again require +a particular and extraordinary expense.</p> + +<p>Some particular branches of commerce +which are carried on with barbarous and uncivilized +nations, require extraordinary protection. +An ordinary store or counting-house +could give little security to the goods +of the merchants who trade to the western +coast of Africa. To defend them from the +barbarous natives, it is necessary that the +place where they are deposited should be in +same measure fortified. The disorders in +the government of Indostan have been supposed +to render a like precaution necessary, +even among that mild and gentle people; +and it was under pretence of securing their +persons and property from violence, that both +the English and French East India companies +were allowed to erect the first forts +which they possessed in that country. Among +other nations, whose vigorous government +will suffer no strangers to possess any fortified +place within their territory, it may be necessary +to maintain some ambassador, minister, +or consul, who may both decide, +according to their own customs, the differences +arising among his own countrymen; +and, in their disputes with the natives, may<span class='pagenum'><a name="Page_307" id="Page_307">[Pg 307]</a></span> +by means of his public character, interfere +with more authority and afford them a more +powerful protection than they could expect +from any private man. The interests of +commerce have frequently made it necessary +to maintain ministers in foreign countries, +where the purposes either of war or alliance +would not have required any. The commerce +of the Turkey company first occasioned the +establishment of an ordinary ambassador at +Constantinople. The first English embassies +to Russia arose altogether from commercial +interests. The constant interference with +those interests, necessarily occasioned between +the subjects of the different states of Europe, +has probably introduced the custom of keeping, +in all neighbouring countries, ambassadors +or ministers constantly resident, even in +the time of peace. This custom, unknown to +ancient times, seems not to be older than the +end of the fifteenth, or beginning of the sixteenth +century; that is, than the time when +commerce first began to extend itself to the +greater part of the nations of Europe, and +when they first began to attend to its interests.</p> + +<p>It seems not unreasonable, that the extraordinary +expense which the protection of any +particular branch of commerce may occasion, +should be defrayed by a moderate tax upon +that particular branch; by a moderate fine, +for example, to be paid by the traders when +they first enter into it; or, what is more +equal, by a particular duty of so much per +cent. upon the goods which they either import +into, or export out of, the particular +countries with which it is carried on. The +protection of trade, in general, from pirates +and freebooters, is said to have given occasion +to the first institution of the duties of customs. +But, if it was thought reasonable to +lay a general tax upon trade, in order to defray +the expense of protecting trade in general, +it should seem equally reasonable to lay +a particular tax upon a particular branch of +trade, in order to defray the extraordinary +expense of protecting that branch.</p> + +<p>The protection of trade, in general, has +always been considered as essential to the +defence of the commonwealth, and, upon that +account, a necessary part of the duty of the +executive power. The collection and application +of the general duties of customs, +therefore, have always been left to that power. +But the protection of any particular branch +of trade is a part of the general protection of +trade; a part, therefore, of the duty of that +power; and if nations always acted consistently, +the particular duties levied for the +purposes of such particular protection, should +always have been left equally to its disposal. +But in this respect, as well as in many others, +nations have not always acted consistently; +and in the greater part of the commercial +states of Europe, particular companies of +merchants have had the address to persuade +the legislature to entrust to them the performance +of this part of the duty of the sovereign, +together with all the powers which are +necessarily connected with it.</p> + +<p>These companies, though they may, perhaps, +have been useful for the first introduction +of some branches of commerce, by +making, at their own expense, an experiment +which the state might not think it prudent to +make, have in the long-run proved, universally, +either burdensome or useless, and have +either mismanaged or confined the trade.</p> + +<p>When those companies do not trade upon a +joint stock, but are obliged to admit any person, +properly qualified, upon paying a certain +fine, and agreeing to submit to the regulations +of the company, each member trading upon +his own stock, and at his own risk, they are +called regulated companies. When they trade +upon a joint stock, each member sharing in +the common profit or loss, in proportion to his +share in this stock, they are called joint-stock +companies. Such companies, whether regulated +or joint-stock, sometimes have, and sometimes +have not, exclusive privileges.</p> + +<p>Regulated companies resemble, in every respect, +the corporation of trades, so common in +the cities and towns of all the different countries +of Europe; and are a sort of enlarged +monopolies of the same kind. As no inhabitant +of a town can exercise an incorporated +trade, without first obtaining his freedom in +the incorporation, so, in most cases, no subject +of the state can lawfully carry on any branch +of foreign trade, for which a regulated company +is established, without first becoming a +member of that company. The monopoly is +more or less strict, according as the terms of +admission are more or less difficult, and according +as the directors of the company have +more or less authority, or have it more or less +in their power to manage in such a manner as +to confine the greater part of the trade to themselves +and their particular friends. In the +most ancient regulated companies, the privileges +of apprenticeship were the same as in +other corporations, and entitled the person +who had served his time to a member of the +company, to become himself a member, either +without paying any fine, or upon paying a +much smaller one than what was exacted of +other people. The usual corporation spirit, +wherever the law does not restrain it, prevails +in all regulated companies. When they have +been allowed to act according to their natural +genius, they have always, in order to confine +the competition to as small a number of persons +as possible, endeavoured to subject the +trade to many burdensome regulations. When +the law has restrained them from doing this, +they have become altogether useless and insignificant.</p> + +<p>The regulated companies for foreign commerce +which at present subsist in Great Bri<span class='pagenum'><a name="Page_308" id="Page_308">[Pg 308]</a></span>tain, +are the ancient merchant-adventurers +company, now commonly called the Hamburgh +company, the Russia company, the +Eastland company, the Turkey company, and +the African company.</p> + +<p>The terms of admission into the Hamburgh +company are now said to be quite easy; and +the directors either have it not in their power +to subject the trade to any troublesome restraint +or regulations, or, at least, have not of +late exercised that power. It has not always +been so. About the middle of the last century, +the fine for admission was fifty, and at +one time one hundred pounds, and the conduct +of the company was said to be extremely +oppressive. In 1643, in 1645, and in 1661, +the clothiers and free traders of the west of +England complained of them to parliament, +as of monopolists, who confined the trade, +and oppressed the manufactures of the country. +Though those complaints produced no +act of parliament, they had probably intimidated +the company so far, as to oblige them to +reform their conduct. Since that time, at +least, there have been no complaints against +them. By the 10th and 11th of William III. +c. 6, the fine for admission into the Russia +company was reduced to five pounds; and by +the 25th of Charles II. c. 7, that for admission +into the Eastland company to forty shillings; +while, at the same time, Sweden, Denmark, +and Norway, all the countries on the +north side of the Baltic, were exempted from +their exclusive charter. The conduct of those +companies had probably given occasion to those +two acts of parliament. Before that time, +Sir Josiah Child had represented both these +and the Hamburgh company as extremely oppressive, +and imputed to their bad management +the low state of the trade, which we at +that time carried on to the countries comprehended +within their respective charters. But +though such companies may not, in the present +times, be very oppressive, they are certainly +altogether useless. To be merely useless, +indeed, is perhaps, the highest eulogy +which can ever justly be bestowed upon a regulated +company; and all the three companies +above mentioned seem, in their present +state, to deserve this eulogy.</p> + +<p>The fine for admission into the Turkey +company was formerly twenty-five pounds +for all persons under twenty-six years of +age, and fifty pounds for all persons above +that age. Nobody but mere merchants could +be admitted; a restriction which excluded +all shop-keepers and retailers. By a bye-law, +no British manufactures could be exported +to Turkey but in the general ships +of the company; and as those ships sailed +always from the port of London, this +restriction confined the trade to that expensive +port, and the traders in those who lived in +London and in its neighbourhood. By another +bye-law, no person living within twenty +miles of London, and not free of the city +could be admitted a member; another restriction +which, joined to the foregoing, necessarily +excluded all but the freemen of London. +As the time for the loading and sailing of +those general ships depended altogether upon +the directors, they could easily fill them with +their own goods, and those of their particular +friends, to the exclusion of others, who, they +might pretend, had made their proposals too +late. In this state of things, therefore, this +company was, in every respect, a strict and +oppressive monopoly. Those abuses gave occasion +to the act of the 26th of George II. c. +18, reducing the fine for admission to twenty +pounds for all persons, without any distinction +of ages, or any restriction, either to mere merchants, +or to the freemen of London; and +granting to all such persons the liberty of exporting, +from all the ports of Great Britain, +to any port in Turkey, all British goods, of +which the exportation was not prohibited, upon +paying both the general duties of customs, +and the particular duties assessed for defraying +the necessary expenses of the company; +and submitting, at the same time, to the lawful +authority of the British ambassador and +consuls resident in Turkey, and to the bye-laws +of the company duly enacted. To prevent +any oppression by those bye-laws, it was +by the same act ordained, that if any seven +members of the company conceived themselves +aggrieved by any bye-law which should be +enacted after the passing of this act, they might +appeal to the board of trade and plantations +(to the authority of which a committee of the +privy council has now succeeded), provided +such appeal was brought within twelve months +after the bye-law was enacted; and that, if +any seven members conceived themselves aggrieved +by any bye-law which had been enacted +before the passing of this act, they might +bring a like appeal, provided it was within +twelve months after the day on which this act +was to take place. The experience of one +year, however, may not always be sufficient to +discover to all the members of a great company +the pernicious tendency of a particular +bye-law; and if several of them should afterwards +discover it, neither the board of trade, +nor the committee of council, can afford them +any redress. The object, besides, of the greater +part of the bye-laws of all regulated companies, +as well as of all other corporations, is +not so much to oppress those who are already +members, as to discourage others from becoming +so; which may be done, not only by a +high fine, but by many other contrivances. +The constant view of such companies is always +to raise the rate of their own profit as +high as they can; to keep the market, both +for the goods which they export, and for those +which they import, as much understocked as +they can; which can be done only by restraining +the competition, or by discouraging new<span class='pagenum'><a name="Page_309" id="Page_309">[Pg 309]</a></span> +adventurers from entering into the trade. A +fine, even of twenty pounds, besides, though +it may not, perhaps, be sufficient to discourage +any man from entering into the Turkey +trade, with an intention to continue in it, may +be enough to discourage a speculative merchant +from hazarding a single adventure in it. +In all trades, the regular established traders, +even though not incorporated, naturally combine +to raise profits, which are noway so likely +to be kept, at all times, down to their proper +level, as by the occasional competition of +speculative adventurers. The Turkey trade, +though in some measure laid open by this act +of parliament, is still considered by many people +as very far from being altogether free. +The Turkey company contribute to maintain +an ambassador and two or three consuls, who, +like other public ministers, ought to be maintained +altogether by the state, and the trade +laid open to all his majesty's subjects. The +different taxes levied by the company, for this +and other corporation purposes, might afford +a revenue much more than sufficient to enable +a state to maintain such ministers.</p> + +<p>Regulated companies, it was observed by +Sir Josiah Child, though they had frequently +supported public ministers, had never maintained +any forts or garrisons in the countries +to which they traded; whereas joint-stock +companies frequently had. And, in reality, +the former seem to be much more unfit for +this sort of service than the latter. First, the +directors 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 maintained. The +decay of that general trade may even frequently +contribute to the advantage of their own +private trade; as, by diminishing the number +of their competitors, it may enable them both +to buy cheaper, and to sell dearer. The directors +of a joint-stock company, on the contrary, +having only their share in the profits +which are made upon the common stock committed +to their management, have no private +trade of their own, of which the interest can +be separated from that of the general trade of +the company. Their private interest is connected +with the prosperity of the general trade +of the company, and with the maintenance of +the forts and garrisons which are necessary for +its defence. They are more likely, therefore, +to have that continual and careful attention +which that maintenance necessarily requires. +Secondly, The directors of a joint-stock company +have always the management of a large +capital, the joint stock of the company, a +part of which they may frequently employ, +with propriety, in building, repairing, and +maintaining such necessary forts and garrisons. +But the directors of a regulated company, +having the management of no common +capital, have no other fund to employ in this +way, but the casual revenue arising from the +admission fines, and from the corporation duties +imposed upon the trade of the company. +Though they had the same interest, therefore, +to attend to the maintenance of such forts and +garrisons, they can seldom have the same ability +to render that attention effectual. The +maintenance of a public minister, requiring +scarce any attention, and but a moderate and +limited expense, is a business much more suitable +both to the temper and abilities of a regulated +company.</p> + +<p>Long after the time of Sir Josiah Child, +however, in 1750, a regulated company was +established, the present company of merchants +trading to Africa; which was expressly charged +at first with the maintenance of all the British +forts and garrisons 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 +(the 23d of George II. c. 31), seems to +have had two distinct objects in view; first, +to restrain effectually the oppressive and monopolizing +spirit which is natural to the directors +of a regulated company; and, secondly, +to force them, as much as possible, to give +an attention, which is not natural to them, +towards the maintenance of forts and garrisons.</p> + +<p>For the first of these purposes, the fine for +admission is limited to forty shillings. The +company is prohibited from trading in their +corporate capacity, or upon a joint stock; from +borrowing money upon common seal, or from +laying any restraints upon the trade, which +may be carried on freely from all places, and +by all persons being British subjects, and paying +the fine. The government is in a committee +of nine persons, who meet at London, but +who are chosen annually by the freemen of +the company at London, Bristol, and Liverpool; +three from each place. No committee-man +can be continued in office for more than +three years together. Any committee-man +might be removed by the board of trade and +plantations, now by a committee of council, after +being heard in his own defence. The +committee are forbid to export negroes from +Africa, or to import any African goods into +Great Britain. But as they are charged with +the maintenance of forts and garrisons, they +may, for that purpose export from Great Britain +to Africa goods and stores of different +kinds. Out of the moneys which they shall +receive from the company, they are allowed a +sum, not exceeding eight hundred pounds, for +the salaries of their clerks and agents at London, +Bristol, and Liverpool, the house-rent of +their offices at London, and all other expenses +of management, commission, and agency, in +England. What remains of this sum, after +defraying these different expenses, they may +divide among themselves, as compensation for +their trouble, in what manner they think pro<span class='pagenum'><a name="Page_310" id="Page_310">[Pg 310]</a></span>per. +By this constitution, it might have been +expected, that the spirit of monopoly would +have been effectually restrained, and the first +of these purposes sufficiently answered. It +would seem, however, that it had not. Though +by the 4th of George III. c. 20, the fort of +Senegal, with all its dependencies, had been +invested in the company of merchants trading +to Africa, yet, in the year following (by the +5th of George III. c. 44), not only Senegal +and its dependencies, but the whole coast, +from the port of Sallee, in South Barbary, to +Cape Rouge, was exempted from the jurisdiction +of that company, was vested in the crown, +and the trade to it declared free to all his majesty's +subjects. The company had been suspected +of restraining the trade and of establishing +some sort of improper monopoly. It +is not, however, very easy to conceive how, +under the regulations of the 23d George II. +they could do so. In the printed debates of +the house of commons, not always the most +authentic records of truth, I observe, however, +that they have been accused of this. +The members of the committee of nine being +all merchants, and the governors and factors +in their different forts and settlements being +all dependent upon them, it is not unlikely +that the latter might have given peculiar attention +to the consignments and commissions +of the former, which would establish a real +monopoly.</p> + +<p>For the second of these purposes, the maintenance +of the forts and garrisons, an annual +sum has been allotted to them by parliament, +generally about L.13,000. For the proper +application of this sum, the committee is +obliged to account annually to the cursitor +baron of exchequer; which account is afterwards +to be laid before parliament. But parliament, +which gives so little attention to the +application of millions, is not likely to give +much to that of L.13,000 a-year; and the +cursitor baron of exchequer, from his profession +and education, is not likely to be profoundly +skilled in the proper expense of forts +and garrisons. The captains of his majesty's +navy, indeed, or any other commissioned officers, +appointed by the board of admiralty, +may inquire into the condition of the forts and +garrisons, and report their observations to that +board. But that board seems to have no direct +jurisdiction over the committee, nor any +authority to correct those whose conduct it +may thus inquire into; and the captains of +his majesty's navy, besides, are not supposed +to be always deeply learned in the science of +fortification. Removal from an office, which +can be enjoyed only for the term of three +years, and of which the lawful emoluments, +even during that term, are so very small, +seems to be the utmost punishment to which +any committee-man is liable, for any fault, +except direct malversation, or embezzlement, +either of the public money, or of that of the +company; and the fear of the punishment can +never be a motive of sufficient weight to force +a continual and careful attention to a business +to which he has no other interest to attend. +The committee are accused of having +sent out bricks and stones from England for +the reparation of Cape Coast Castle, on the +coast of Guinea; a business for which parliament +had several times granted an extraordinary +sum of money. These bricks and stones, +too, which had thus been sent upon so long a +voyage, were said to have been of so bad a +quality, that it was necessary to rebuild, from +the foundation, the walls which had been repaired +with them. The forts and garrisons +which lie north of Cape Rouge, are not only +maintained at the expense of the state, but are +under the immediate government of the executive +power; and why those which lie south +of that cape, and which, too, are, in part at +least, maintained at the expense of the state, +should be under a different government, it +seems not very easy even to imagine a good +reason. The protection of the Mediterranean +trade was the original purpose or pretence of +the garrisons of Gibraltar and Minorca; and +the maintenance and government of those garrisons +have always been, very properly, committed, +not to the Turkey company, but to +the executive power. In the extent of its dominion +consists, in a great measure, the pride +and dignity of that power; and it is not very +likely to fail in attention to what is necessary +for the defence of that dominion. The garrisons +at Gibraltar and Minorca, accordingly, +have never been neglected. Though Minorca +has been twice taken, and is now probably +lost for ever, that disaster has never been imputed +to any neglect in the executive power. +I would not, however, be understood to insinuate, +that either of those expensive garrisons +was ever, even in the smallest degree, necessary +for the purpose for which they were originally +dismembered from the Spanish monarchy. +That dismemberment, perhaps, never +served any other real purpose than to alienate +from England her natural ally the king of +Spain, and to unite the two principal branches +of the house of Bourbon in a much stricter +and more permanent alliance than the ties of +blood could ever have united them.</p> + +<p>Joint-stock companies, established either by +royal charter, or by act of parliament, are different +in several respects, not only from regulated +companies, but from private copartneries.</p> + +<p>First, In a private copartnery, no partner +without the consent of the company, can +transfer his share to another person, or introduce +a new member into the company. Each +member, however, may, upon proper warning, +withdraw from the copartnery, and demand +payment from them of his share of the common +stock. In a joint-stock company, on +the contrary, no member can demand pay<span class='pagenum'><a name="Page_311" id="Page_311">[Pg 311]</a></span>ment +of his share from the company; but +each member can, without their consent, +transfer his share to another person, and +thereby introduce a new member. The value +of a share in a joint stock is always the +price which it will bring in the market; and +this may be either greater or less in any proportion, +than the sum which its owner stands +credited for in the stock of the company.</p> + +<p>Secondly, In a private copartnery, 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 his share.</p> + +<p>The trade of a joint-stock company is always +managed by a court of directors. This +court, indeed, is frequently subject, in many +respects, to the control of a general court of +proprietors. But the greater part of these +proprietors seldom pretend to understand any +thing of the business of the company; and +when the spirit of faction happens not to prevail +among them, give themselves no trouble +about it, but receive contentedly such half-yearly +or yearly dividend as the directors +think proper to make to them. This total +exemption from trouble and from risk, beyond +a limited sum, encourages many people +to become adventurers in joint-stock companies, +who would, upon no account, hazard +their fortunes in any private copartnery. +Such companies, therefore, commonly draw +to themselves much greater stocks, than any +private copartnery can boast of. The trading +stock of the South Sea company at one time +amounted to upwards of thirty-three millions +eight hundred thousand pounds. The divided +capital of the Bank of England amounts, +at present, to ten millions seven hundred +and eighty thousand pounds. The directors +of such companies, however, being the managers +rather of other people's money than of +their own, it cannot well be expected that +they should watch over it with the same anxious +vigilance with which the partners in a +private copartnery frequently watch over their +own. Like the stewards of a rich man, they +are apt to consider attention to small matters +as not for their master's honour, and very +easily give themselves a dispensation from +having it. Negligence and profusion, therefore, +must always prevail, more or less, in +the management of the affairs of such a company. +It is upon this account, that joint-stock +companies for foreign trade have seldom +been able to maintain the competition against +private adventurers. They have, accordingly, +very seldom succeeded without an exclusive +privilege; and frequently have not succeeded +with one. Without an exclusive privilege, +they have commonly mismanaged the +trade. With an exclusive privilege, they +have both mismanaged and confined it.</p> + +<p>The Royal African company, the predecessors +of the present African company, had +an exclusive privilege by charter; but as that +charter had not been confirmed by act of parliament, +the trade, in consequence of the declaration +of rights, was, soon after the Revolution, +laid open to all his majesty's subjects. +The Hudson's Bay company are, as to their +legal rights, in the same situation as the +Royal African company. Their exclusive +charter has not been confirmed by act of parliament. +The South Sea company, as long +as they continued to be a trading company, +had an exclusive privilege confirmed by act +of parliament; as have likewise the present +united company of merchants trading to the +East Indies.</p> + +<p>The Royal African company soon found +that they could not maintain the competition +against private adventurers, whom, notwithstanding +the declaration of rights, they continued +for some time to call interlopers, and +to persecute as such. In 1698, however, the +private adventurers were subjected to a duty +of ten per cent. upon almost all the different +branches of their trade, to be employed by +the company in the maintenance of their forts +and garrisons. But, notwithstanding this +heavy tax, the company were still unable to +maintain the competition. Their stock and +credit gradually declined. In 1712, their +debts had become so great, that a particular +act of parliament was thought necessary, both +for their security and for that of their creditors. +It was enacted, that the resolution of +two-thirds of these creditors in number and +value should bind the rest, both with regard +to the time which should be allowed to the +company for the payment of their debts, and +with regard to any other agreement which it +might be thought proper to make with them +concerning those debts. In 1730, their affairs +were in so great disorder, that they were altogether +incapable of maintaining their forts +and garrisons, the sole purpose and pretext +of their institution. From that year till their +final dissolution, the parliament judged it necessary +to allow the annual sum of ten thousand +pounds for that purpose. In 1732, after +having been for many years losers by the trade +of carrying negroes to the West Indies, they at +last resolved to give it up altogether; to sell +to the private traders to America the negroes +which they purchased upon the coast; and to +employ their servants in a trade to the inland +parts of Africa for gold dust, elephants teeth, +dyeing drugs, &c. But their success in this +more confined trade was not greater than in +their former extensive one. Their affairs +continued to go gradually to decline, till at +last, being in every respect a bankrupt company, +they were dissolved by act of parliament, +and their forts and garrisons vested in +the present regulated company of merchants +trading to Africa. Before the erection of +the Royal African company, there had been<span class='pagenum'><a name="Page_312" id="Page_312">[Pg 312]</a></span> +three other joint-stock companies successively +established, one after another, for the African +trade. They were all equally unsuccessful. +They all, however, had exclusive charters, +which, though not confirmed by act of parliament, +were in those days supposed to convey +a real exclusive privilege.</p> + +<p>The Hudson's Bay company, before their +misfortunes in the late war, had been much +more fortunate than the Royal African company. +Their necessary expense is much smaller. +The whole number of people whom they +maintain in their different settlements and habitations, +which they have honoured with the +name of forts, is said not to exceed a hundred +and twenty persons. This number, however, +is sufficient to prepare beforehand the +cargo of furs and other goods necessary for +loading their ships, which, on account of the +ice, can seldom remain above six or eight +weeks in those seas. This advantage of having +a cargo ready prepared, could not, for several +years, be acquired by private adventurers; +and without it there seems to be no possibility +of trading to Hudson's Bay. The +moderate capital of the company, which, it is +said, does not exceed one hundred and ten +thousand pounds, may, besides, be sufficient +to enable them to engross the whole, or almost +the whole trade and surplus produce, of the +miserable though extensive country comprehended +within their charter. No private adventurers, +accordingly, have ever attempted +to trade to that country in competition with +them. This company, therefore, have always +enjoyed an exclusive trade, in fact, though +they may have no right to it in law. Over +and above all this, the moderate capital of this +company is said to be divided among a very +small number of proprietors. But a joint-stock +company, consisting of a small number +of proprietors, with a moderate capital, approaches +very nearly to the nature of a private +copartnery, and may be capable of nearly +the same degree of vigilance and attention. +It is not to be wondered at, therefore, if, in +consequence of these different advantages, the +Hudson's Bay company had, before the late +war, been able to carry on their trade with a +considerable degree of success. It does not +seem probable, however, that their profits ever +approached to what the late Mr Dobbs imagined +them. A much more sober and judicious +writer, Mr Anderson, author of the Historical +and Chronological Deduction of Commerce, +very justly observes, that upon examining +the accounts which Mr Dobbs himself +has given for several years together, of their +exports and imports, and upon making proper +allowances for their extraordinary risk and +expense, it does not appear that their profits +deserve to be envied, or that they can much, +if at all, exceed the ordinary profits of trade.</p> + +<p>The South Sea company never had any forts +or garrisons to maintain, and therefore were +entirely exempted from one great expense, to +which other joint-stock companies for foreign +trade are subject; but they had an immense +capital divided among an immense number of +proprietors. It was naturally to be expected, +therefore, that folly, negligence, and profusion, +should prevail in the whole management +of their affairs. The knavery and extravagance +of their stock-jobbing projects are sufficiently +known, and the explication of them +would be foreign to the present subject. Their +mercantile projects were not much better conducted. +The first trade which they engaged +in, was that of supplying the Spanish West +Indies with negroes, of which (in consequence +of what was called the Assiento Contract granted +them by the treaty of Utrecht) they had +the exclusive privilege. But as it was not +expected that much profit could be made by +this trade, both the Portuguese and French +companies, who had enjoyed it upon the same +terms before them, having been ruined by it, +they were allowed, as compensation, to send +annually a ship of a certain burden, to trade +directly to the Spanish West Indies. Of the +ten voyages which this annual ship was allowed +to make, they are said to have gained considerably +by one, that of the Royal Caroline, in +1731; and to have been losers, more or less, +by almost all the rest. Their ill success was +imputed, by their factors and agents, to the +extortion and oppression of the Spanish government; +but was, perhaps, principally owing +to the profusion and depredations of those very +factors and agents; some of whom are said to +have acquired great fortunes, even in one year. +In 1734, the company petitioned the king, that +they might be allowed to dispose of the trade +and tonnage of their annual ship, on account +of the little profit which they made by it, and +to accept of such equivalent as they could obtain +from the king of Spain.</p> + +<p>In 1724, this company had undertaken the +whale fishery. Of this, indeed, they had no +monopoly; but as long as they carried it on, +no other British subjects appear to have engaged +in it. Of the eight voyages which their +ships made to Greenland, they were gainers +by one, and losers by all the rest. After their +eighth and last voyage, when they had sold +their ships, stores, and utensils, they found +that their whole loss upon this branch, capital +and interest included, amounted to upwards +of two hundred and thirty-seven thousand +pounds.</p> + +<p>In 1722, this company petitioned the parliament +to be allowed to divide their immense +capital of more than thirty-three millions eight +hundred thousand pounds, the whole of which +been lent to government, into two equal +parts; the one half, or upwards of sixteen +millions nine hundred thousand pounds, to be +put upon the same footing with other government +annuities, and not to be subject to the +debts contracted, or losses incurred, by the<span class='pagenum'><a name="Page_313" id="Page_313">[Pg 313]</a></span> +directors of the company, in the prosecution +of their mercantile projects; the other half to +remain as before, a trading stock, and to be +subject to those debts and losses. The petition +was too reasonable not to be granted. +In 1733, they again petitioned the parliament, +that three-fourths of their trading stock might +be turned into annuity stock, and only one-fourth +remain as trading stock, or exposed to +the hazards arising from the bad management +of their directors. Both their annuity and +trading stocks had, by this time, been reduced +more than two millions each, by several different +payments from government; so that this +fourth amounted only to L.3,662,784 : 8 : 6. +In 1748, all the demands of the company upon +the king of Spain, in consequence of the +assiento contract, were, by the treaty of Aix-la-Chapelle, +given up for what was supposed +an equivalent. An end was put to their trade +with the Spanish West Indies; the remainder +of their trading stock was turned into an annuity +stock; and the company ceased, in every +respect, to be a trading company.</p> + +<p>It ought to be observed, that in the trade +which the South Sea company carried on by +means of their annual ship, the only trade by +which it ever was expected that they could +make any considerable profit, they were not +without competitors, either in the foreign or +in the home market. At Carthagena, Porto +Bello, and La Vera Cruz, they had to encounter +the competition of the Spanish merchants, +who brought from Cadiz to those markets +European goods, of the same kind with +the outward cargo of their ship; and in England +they had to encounter that of the English +merchants, who imported from Cadiz +goods of the Spanish West Indies, of the same +kind with the inward cargo. The goods, both +of the Spanish and English merchants, indeed, +were, perhaps, subject to higher duties. But +the loss occasioned by the negligence, profusion, +and malversation of the servants of the +company, had probably been a tax much heavier +than all those duties. That a joint-stock +company should be able to carry on successfully +any branch of foreign trade, when private +adventurers can come into any sort of +open and fair competition with them, seems +contrary to all experience.</p> + +<p>The old English East India company was +established in 1600, by a charter from Queen +Elizabeth. In the first twelve voyages which +they fitted out for India, they appear to have +traded as a regulated company, with separate +stocks, though only in the general ships of the +company. In 1612, they united into a joint +stock. Their charter was exclusive, and, +though not confirmed by act of parliament, +was in those days supposed to convey a real +exclusive privilege. For many years, therefore, +they were not much disturbed by interlopers. +Their capital, which never exceeded +seven hundred and fourty-four thousand +pounds, and of which fifty pounds was a share, +was not so exorbitant, nor their dealings so +extensive, as to afford either a pretext for gross +negligence and profusion, or a cover to gross +malversation. Notwithstanding some extraordinary +losses, occasioned partly by the malice +of the Dutch East India company, and +partly by other accidents, they carried on for +many years a successful trade. But in process +of time, when the principles of liberty +were better understood, it became every day +more and more doubtful, how far a royal +charter, not confirmed by act of parliament, +could convey an exclusive privilege. Upon +this question the decisions of the courts of justice +were not uniform, but varied with the authority +of government, and the humours of the +times. Interlopers multiplied upon them; +and towards the end of the reign of Charles +II., through the whole of that of James II., +and during a part of that of William III., reduced +them to great distress. In 1698, a proposal +was made to parliament, of advancing +two millions to government, at eight per cent. +provided the subscribers were erected into a +new East India company, with exclusive privileges. +The old East India company offered +seven hundred thousand pounds, nearly the +amount of their capital, at four per cent. upon +the same conditions. But such was at that +time the state of public credit, that it was more +convenient for government to borrow two millions +at eight per cent. than seven hundred +thousand pounds at four. The proposal of +the new subscribers was accepted, and a new +East India company established in consequence. +The old East India company, however, +had a right to continue their trade till +1701. They had, at the same time, in the +name of their treasurer, subscribed very artfully +three hundred and fifteen thousand +pounds into the stock of the new. By a negligence +in the expression of the act of parliament, +which vested the East India trade in +the subscribers to this loan of two millions, it +did not appear evident that they were all obliged +to unite into a joint stock. A few private +traders, whose subscriptions amounted +only to seven thousand two hundred pounds, +insisted upon the privilege of trading separately +upon their own stocks, and at their own +risks. The old East India company had a +right to a separate trade upon their own stock +till 1701; and they had likewise, both before +and after that period, a right, like that of +other private traders, to a separate trade upon +the three hundred and fifteen thousand pounds, +which they had subscribed into the stock of +the new company. The competition of the +two companies with the private traders, and +with one another, is said to have well nigh +ruined both. Upon a subsequent occasion, in +1730, when a proposal was made to parliament +for putting the trade under the management +of a regulated company, and thereby<span class='pagenum'><a name="Page_314" id="Page_314">[Pg 314]</a></span> +laying it in some measure open, the East India +company, in opposition to this proposal, +represented, in very strong terms, what had +been, at this time, the miserable effects, as +they thought them, of this competition. In +India, they said, it raised the price of goods +so high, that they were not worth the buying; +and in England, by overstocking the market, +it sunk their price so low, that no profit could +be made by them. That by a more plentiful +supply, to the great advantage and conveniency +of the public, it must have reduced very +much the price of India goods in the English +market, cannot well be doubted; but that it +should have raised very much their price in +the Indian market, seems not very probable, +as all the extraordinary demand which that +competition could occasion must have been +but as a drop of water in the immense ocean +of Indian commerce. The increase of demand, +besides, though in the beginning it may +sometimes raise the price of goods, never fails +to lower it in the long-run. It encourages +production, and thereby increases the competition +of the producers, who, in order to undersell +one another, have recourse to new divisions +of labour and new improvements of +art, which might never otherwise have been +thought of. The miserable effects of which +the company complained, were the cheapness +of consumption, and the encouragement given +to production; precisely the two effects which +it is the great business of political economy to +promote. The competition, however, of which +they gave this doleful account, had not been +allowed to be of long continuance. In 1702, +the two companies were, in some measure, +united by an indenture tripartite, to which the +queen was the third party; and in 1708, they +were by act of parliament, perfectly consolidated +into one company, by their present +name of the United Company of Merchants +trading to the East Indies. Into this act it +was thought worth while to insert a clause, +allowing the separate traders to continue their +trade till Michaelmas 1711; but at the same +time empowering the directors, upon three +years notice, to redeem their little capital of +seven thousand two hundred pounds, and +thereby to convert the whole stock of the company +into a joint stock. By the same act, the +capital of the company, in consequence of a +new loan to government, was augmented from +two millions to three millions two hundred +thousand pounds. In 1743, the company advanced +another million to government. But +this million being raised, not by a call upon +the proprietors, but by selling annuities and +contracting bond-debts, it did not augment +the stock upon which the proprietors could +claim a dividend. It augmented, however, +their trading stock, it being equally liable +with the other three millions two hundred +thousand pounds, to the losses sustained, and +debts contracted by the company in prosecution +of their mercantile projects. From 1708, +or at least from 1711, this company, being +delivered from all competitors, and fully established +in the monopoly of the English +commerce to the East Indies, carried on a +successful trade, and from their profits, made +annually a moderate dividend to their proprietors. +During the French war, which began +in 1741, the ambition of Mr. Dupleix, the +French governor of Pondicherry, involved +them in the wars of the Carnatic, and in the +politics of the Indian princes. After many +signal successes, and equally signal losses, +they at last lost Madras, at that time their +principal settlement in India. It was restored +to them by the treaty of Aix-la-Chapelle; +and, about this time the spirit of war and +conquest seems to have taken possession of +their servants in India, and never since to +have left them. During the French war, +which began in 1755, their arms partook of +the general good fortune of those of Great +Britain. They defended Madras, took Pondicherry, +recovered Calcutta, and acquired the +revenues of a rich and extensive territory, amounting, +it was then said, to upwards of +three millions a-year. They remained for +several years in quiet possession of this revenue; +but in 1767, administration laid claim +to their territorial acquisitions, and the revenue +arising from them, as of right belonging +to the crown; and the company, in compensation +for this claim, agreed to pay to government +four hundred thousand pounds a-year. +They had, before this, gradually augmented +their dividend from about six to ten per cent.; +that is, upon their capital of three millions +two hundred thousand pounds, they had increased +it by a hundred and twenty-eight +thousand pounds, or had raised it from one +hundred and ninety-two thousand to three +hundred and twenty thousand pounds a-year. +They were attempting about this time to raise +it still further, to twelve and a-half per cent., +which would have made their annual payments +to their proprietors equal to what they +had agreed to pay annually to government, or +to four hundred thousand pounds a-year. +But during the two years in which their agreement +with government was to take place, +they were restrained from any further increase +of dividend by two successive acts of parliament, +of which the object was to enable them +to make a speedier progress in the payment +of their debts, which were at this time estimated +at upwards of six or seven millions +sterling. In 1769, they renewed their agreement +with government for five years more, +and stipulated, that during the course of that +period, they should be allowed gradually to +increase their dividend to twelve and a-half +per cent; never increasing it, however, more +than one per cent. in one year. This increase +of dividend, therefore, when it had risen to its +utmost height, could augment their annual<span class='pagenum'><a name="Page_315" id="Page_315">[Pg 315]</a></span> +payments, to their proprietors and government +together, but by six hundred and eight thousand +pounds, beyond what they had been before +their late territorial acquisitions. What +the gross revenue of those territorial acquisitions +was supposed to amount to, has already +been mentioned; and by an account brought +by the Cruttenden East Indiaman in 1769, +the neat revenue, clear of all deductions and +military charges, was stated at two millions +forty-eight thousand seven hundred and forty-seven +pounds. They were said, at the same +time, to possess another revenue, arising partly +from lands, but chiefly from the customs +established at their different settlements, amounting +to four hundred and thirty-nine +thousand pounds. The profits of their trade, +too, according to the evidence of their chairman +before the house of commons, amounted, +at this time, to at least four hundred thousand +pounds a-year; according to that of their +accountant, to at least five hundred thousand; +according to the lowest account, at least equal +to the highest dividend that was to be paid to +their proprietors. So great a revenue might +certainly have afforded augmentation of six +hundred and eight thousand pounds in their +annual payments; and, at the same time, have +left a large sinking fund, sufficient for the +speedy reduction of their debt. In 1773, +however, their debts, instead of being reduced, +were augmented by an arrear to the treasury +in the payment of the four hundred thousand +pounds; by another to the custom-house +for duties unpaid; by a large debt to the +bank, for money borrowed; and by a fourth, +for bills drawn upon them from India, and +wantonly accepted, to the amount of upwards +of twelve hundred thousand pounds. The +distress which these accumulated claims +brought upon them, obliged them not only to +reduce all at once their dividend to six per +cent. but to throw themselves upon the mercy +of government, and to supplicate, first, a release +from the further payment of the stipulated +four hundred thousand pounds a-year; +and, secondly, a loan of fourteen hundred +thousand, to save them from immediate bankruptcy. +The great increase of their fortune +had, it seems, only served to furnish their servants +with a pretext for greater profusion, and +a cover for greater malversation, than in proportion +even to that increase of fortune. The +conduct of their servants in India, and the general +state of their affairs both in India and in +Europe, became the subject of a parliamentary +inquiry: in consequence of which, several +very important alterations were made in +the constitution of their government, both at +home and abroad. In India, their principal +settlements of Madras, Bombay, and Calcutta, +which had before been altogether independent +of one another, were subjected to a governor-general, +assisted by a council of four +assessors, parliament assuming to itself the +first nomination of this governor and council, +who were to reside at Calcutta; that city having +now become, what Madras was before, the +most important of the English settlements in +India. The court of the Mayor of Calcutta, +originally instituted for the trial of mercantile +causes, which arose in the city and neighbourhood, +had gradually extended its jurisdiction +with the extension of the empire. It was now +reduced and confined to the original purpose +of its institution. Instead of it, a new supreme +court of judicature was established, consisting +of a chief justice and three judges, to +be appointed by the crown. In Europe, the +qualification necessary to entitle a proprietor +to vote at their general courts was raised, from +five hundred pounds, the original price of a +share in the stock of the company, to a thousand +pounds. In order to vote upon this qualification, +too, it was declared necessary, that +he should have possessed it, if acquired by his +own purchase, and not by inheritance, for at +least one year, instead of six months, the term +requisite before. The court of twenty-four +directors had before been chosen annually; +but it was now enacted, that each director +should, for the future, be chosen for four +years; six of them, however, to go out of office +by rotation every year, and not be capable +of being re-chosen at the election of the six +new directors for the ensuing year. In consequence +of these alterations, the courts, both +of the proprietors and directors, it was expected, +would be likely to act with more dignity +and steadiness than they had usually done before. +But it seems impossible, by any alterations, +to render those courts, in any respect, +fit to govern, or even to share in the government +of a great empire; because the greater +part of their members must always have too +little interest in the prosperity of that empire, +to give any serious attention to what may promote +it. Frequently a man of great, sometimes +even a man of small fortune, is willing +to purchase a thousand pounds share in India +stock, merely for the influence which he expects +to acquire by a vote in the court of proprietors. +It gives him a share, though not +in the plunder, yet in the appointment of the +plunderers of India; the court of directors, +though they make that appointment, being necessarily +more or less under the influence of +the proprietors, who not only elect those directors, +but sometimes over-rule the appointments +of their servants in India. Provided +he can enjoy this influence for a few years, and +thereby provide for a certain number of his +friends, he frequently cares little about the dividend, +or even about the value of the stock +upon which his vote in founded. About the +prosperity of the great empire, in the government +of which that vote gives him a share, he +seldom cares at all. No other sovereigns ever +were, or, from the nature of things, ever could +be, so perfectly indifferent about the happiness<span class='pagenum'><a name="Page_316" id="Page_316">[Pg 316]</a></span> +or misery of their subjects, the improvement +or waste of their dominions, the glory or disgrace +of their administration, as, from irresistible +moral causes, the greater part of the proprietors +of such a mercantile company are, and +necessarily must be. This indifference, too, +was more likely to be increased than diminished +by some of the new regulations which were +made in consequence of the parliamentary inquiry. +By a resolution of the house of commons, +for example, it was declared, that when +the L.1,400,000 lent to the company by government, +should be paid, and their bond-debts +be reduced to L.1,500,000, they might then, +and not till then, divide eight per cent. upon +their capital; and that whatever remained of +their revenues and neat profits at home should +be divided into four parts; three of them to +be paid into the exchequer for the use of the +public, and the fourth to be reserved as a fund, +either for the further reduction of their bond-debts, +or for the discharge of other contingent +exigencies which the company might labour +under. But if the company were bad stewards +and bad sovereigns, when the whole of +their neat revenue and profits belonged to +themselves, and were at their own disposal, +they were surely not likely to be better when +three-fourths of them were to belong to other +people, and the other fourth, though to be +laid out for the benefit of the company, yet to +be so under the inspection and with the approbation +of other people.</p> + +<p>It might be more agreeable to the company, +that their own servants and dependants should +have either the pleasure of wasting, or the +profit of embezzling, whatever surplus might +remain, after paying the proposed dividend of +eight per cent. than that it should come into +the hands of a set of people with whom those +resolutions could scarce fail to set them in +some measure at variance. The interest of +those servants and dependants might so far +predominate in the court of proprietors, as +sometimes to dispose it to support the authors +of depredations which had been committed +in direct violation of its own authority. +With the majority of proprietors, the support +even of the authority of their own court +might sometimes be a matter of less consequence +than the support of those who had set +that authority at defiance.</p> + +<p>The regulations of 1773, accordingly, did +not put an end to the disorder of the company's +government in India. Notwithstanding +that, during a momentary fit of good conduct, +they had at one time collected into the +treasury of Calcutta more than L.3,000,000 +sterling; notwithstanding that they had afterwards +extended either their dominion or their +depredations over a vast accession of some of +the richest and most fertile countries in India, +all was wasted and destroyed. They found +themselves altogether unprepared to stop or +resist the incursion of Hyder Ali; and in +consequence of those disorders, the company +is now (1784) in greater distress than ever; +and, in order to prevent immediate bankruptcy, +is once more reduced to supplicate +the assistance of government. Different +plans have been proposed by the different +parties in parliament for the better management +of its affairs; and all those plans seem +to agree in supposing, what was indeed always +abundantly evident, that it is altogether +unfit to govern its territorial possessions. +Even the company itself seems to be convinced +of its own incapacity so far, and seems, +upon that account willing to give them up to +government.</p> + +<p>With the right of possessing forts and garrisons +in distant and barbarous countries, is +necessarily connected the right of making +peace and war in those countries. The +joint-stock companies, which have had the +one right, have constantly exercised the other, +and have frequently had it expressly conferred +upon them. How unjustly, how capriciously, +how cruelly, they have commonly +exercised it, is too well known from recent +experience.</p> + +<p>When a company of merchants undertake, +at their own risk and expense, to establish a +new trade with some remote and barbarous +nation, it may not be unreasonable to incorporate +them into a joint-stock company, and +to grant them, in case of their success, a monopoly +of the trade for a certain number of +years. It is the easiest and most natural +way in which the state can recompense them +for hazarding a dangerous and expensive experiment, +of which the public is afterwards to +reap the benefit. A temporary monopoly +of this kind may be vindicated, upon the +same principles upon which a like monopoly +of a new machine is granted to its inventor, +and that of a new book to its author. But +upon the expiration of the term, the monopoly +ought certainly to determine; the forts +and garrisons, if it was found necessary to +establish any, to be taken into the hands of +government, their value to be paid to the +company, and the trade to be laid open to all +the subjects of the state. By a perpetual +monopoly, all the other subjects of the state +are taxed very absurdly in two different ways: +first, by the high price of goods, which, in +the case of a free trade, they could buy much +cheaper; and, secondly, by their total exclusion +from a branch of business which it might +be both convenient and profitable for many +of them to carry on. It is for the most +worthless of all purposes, too, that they are +taxed in this manner. It is merely to enable +the company to support the negligence, profusion, +and malversation of their own servants, +whose disorderly conduct seldom allows +the dividend of the company to exceed the +ordinary rate of profit in trades which are +altogether free, and very frequently makes it<span class='pagenum'><a name="Page_317" id="Page_317">[Pg 317]</a></span> +fall even a good deal short of that rate. +Without a monopoly, however, a joint-stock +company, it would appear from experience, +cannot long carry on any branch of foreign +trade. To buy in one market, in order to +sell with profit in another, when there are +many competitors in both; to watch over, +not only the occasional variations in the demand, +but the much greater and more frequent +variations in the competition, or in the +supply which that demand is likely to get +from other people; and to suit with dexterity +and judgment both the quantity and quality +of each assortment of goods to all these +circumstances, is a species of warfare, of which +the operations are continually changing, and +which can scarce ever be conducted successfully, +without such an unremitting exertion +of vigilance and attention as cannot long be +expected from the directors of a joint-stock +company. The East India company, upon +the redemption of their funds, and the expiration +of their exclusive privilege, have a +right, by act of parliament, to continue a +corporation with a joint stock, and to trade in +their corporate capacity to the East Indies, +in common with the rest of their fellow subjects. +But in this situation, the superior vigilance +and attention of a private adventurer +would, in all probability, soon make them +weary of the trade.</p> + +<p>An eminent French author, of great knowledge +in matters of political economy, the +Abbé Morellet, gives a list of fifty-five joint-stock +companies for foreign trade, which have +been established in different parts of Europe +since the year 1600, and which, according +to him, have all failed from mismanagement, +notwithstanding they had exclusive privileges. +He has been misinformed with regard to the +history of two or three of them, which were +not joint-stock companies and have not failed. +But, in compensation, there have been +several joint-stock companies which have failed, +and which he has omitted.</p> + +<p>The only trades which it seems possible for +a joint-stock company to carry on successfully, +without an exclusive privilege, are those, +of which all the operations are capable of +bring reduced to what is called a routine, or +to such a uniformity of method as admits +of little or no variation. Of this kind is, +first, the banking trade; secondly, the trade +of insurance from fire and from sea risk, and +capture in time of war; thirdly, the trade of +making and maintaining a navigable cut or +canal; and, fourthly, the similar trade of +bringing water for the supply of a great city.</p> + +<p>Though the principles of the banking trade +may appear somewhat abstruse, the practice +is capable of being reduced to strict rules. +To depart upon any occasion from those +rules, in consequence of some flattering speculation +of extraordinary gain, is almost always +extremely dangerous and frequently +fatal to the banking company which attempts +it. But the constitution of joint-stock companies +renders them in general, more tenacious +of established rules than any private +copartnery. Such companies, therefore, seem +extremely well fitted for this trade. The +principal banking companies in Europe, accordingly, +are joint-stock companies, many +of which manage their trade very successfully +without any exclusive privilege. The bank +of England has no other exclusive privilege, +except that no other banking company in +England shall consist of more than six persons. +The two banks of Edinburgh are +joint-stock companies, without any exclusive +privilege.</p> + +<p>The value of the risk, either from fire, or +from loss by sea, or by capture, though it +cannot, perhaps, be calculated very exactly, admits, +however, of such a gross estimation, as +renders it, in some degree, reducible to strict +rule and method. The trade of insurance, +therefore, may be carried on successfully by a +joint-stock company, without any exclusive +privilege. Neither the London Assurance, +nor the Royal Exchange Assurance companies, +have any such privilege.</p> + +<p>When a navigable cut or canal has been +once made, the management of it becomes +quite simple and easy, and it is reducible to +strict rule and method. Even the making of +it is so, as it may be contracted for with undertakers, +at so much a mile, and so much a +lock. The same thing may be said of a canal, +an aqueduct, or a great pipe for bringing +water to supply a great city. Such undertakings, +therefore, may be, and accordingly +frequently are, very successfully managed by +joint-stock companies, without any exclusive +privilege.</p> + +<p>To establish a joint-stock company, however, +for any undertaking, merely because +such a company might be capable of managing +it successfully; or, to exempt a particular +set of dealers from some of the general +laws which take place with regard to all their +neighbours, merely because they might be +capable of thriving, if they had such an +exemption, would certainly not be reasonable. +To render such an establishment perfectly +reasonable, with the circumstance of being +reducible to strict rule and method, two other +circumstances ought to concur. First, it +ought to appear with the clearest evidence, +that the undertaking is of greater and more +general utility than the greater part of common +trades; and, secondly, that it requires a +greater capital than can easily be collected +into a private copartnery. If a moderate +capital were sufficient, the great utility of the +undertaking would not be a sufficient reason +for establishing a joint-stock company; because, +in this case, the demand for what it +was to produce, would readily and easily be +supplied by private adventurers. In the four<span class='pagenum'><a name="Page_318" id="Page_318">[Pg 318]</a></span> +trades above mentioned, both those circumstances +concur.</p> + +<p>The great and general utility of the banking +trade, when prudently managed, has been +fully explained in the second book of this +Inquiry. But a public bank, which is to +support public credit, and, upon particular +emergencies, to advance to government the +whole produce of a tax, to the amount, perhaps, +of several millions, a year or two before +it comes in, requires a greater capital than +can easily be collected into any private copartnery.</p> + +<p>The trade of insurance gives great security +to the fortunes of private people, and, by +dividing among a great many that loss which +would ruin an individual, makes it fall light +and easy upon the whole society. In order +to give this security, however, it is necessary +that the insurers should have a very large +capital. Before the establishment of the two +joint-stock companies for insurance in London, +a list, it is said, was laid before the attorney-general, +of one hundred and fifty private +insurers, who had failed in the course of +a few years.</p> + +<p>That navigable cuts and canals, and the +works which are sometimes necessary for +supplying a great city with water, are of +great and general utility, while, at the same +time, they frequently require a greater expense +than suits the fortunes of private people, is +sufficiently obvious.</p> + +<p>Except the four trades above mentioned, I +have not been able to recollect any other, in +which all the three circumstances requisite for +rendering reasonable the establishment of a +joint-stock company concur. The English +copper company of London, the lead-smelting +company, the glass-grinding company, +have not even the pretext of any great or +singular utility in the object which they pursue; +nor does the pursuit of that object seem +to require any expense unsuitable to the fortunes +of many private men. Whether the +trade which those companies carry on, is reducible +to such strict rule and method as to +render it fit for the management of a joint-stock +company, or whether they have any +reason to boast of their extraordinary profits, +I do not pretend to know. The mine-adventurers +company has been long ago bankrupt. +A share in the stock of the British Linen +company of Edinburgh sells, at present, very +much below par, though less so than it did +some years ago. The joint-stock companies, +which are established for the public-spirited +purpose of promoting some particular manufacture, +over and above managing their own +affairs ill, to the diminution of the general stock +of the society, can, in other respects, scarce +ever fail to do more harm than good. Notwithstanding +the most upright intentions, the +unavoidable partiality of their directors to +particular branches of the manufacture, of +which the undertakers mislead and impose +upon them, is a real discouragement to the +rest, and necessarily breaks, more or less, that +natural proportion which would otherwise +establish itself between judicious industry and +profit, and which, to the general industry of +the country, is of all encouragements the +greatest and the most effectual.</p> + + +<h4><small>ART. II.</small>—<i>Of the Expense of the Institution +for the Education of Youth.</i></h4> + +<p>The institutions for the education of the +youth may, in the same manner, furnish a +revenue sufficient for defraying their own expense. +The fee or honorary, which the +scholar pays to the master, naturally constitutes +a revenue of this kind.</p> + +<p>Even where the reward of the master does +not arise altogether from this natural revenue, +it still is not necessary that it should be derived +from that general revenue of the society, +of which the collection and application +are, in most countries, assigned to the executive +power. Through the greater part of +Europe, accordingly, the endowment of +schools and colleges makes either no charge +upon that general revenue, or but a very +small one. It everywhere arises chiefly from +some local or provincial revenue, from the +rent of some landed estate, or from the interest +of some sum of money, allotted and +put under the management of trustees for +this particular purpose, sometimes by the sovereign +himself, and sometimes by some private +donor.</p> + +<p>Have those public endowments contributed +in general, to promote the end of their institution? +Have they contributed to encourage +the diligence, and to improve the abilities, of +the teachers? Have they directed the course +of education towards objects more useful, +both to the individual and to the public, than +those to which it would naturally have gone +of its own accord? It should not seem very +difficult to give at least a probable answer to +each of those questions.</p> + +<p>In every profession, the exertion of the +greater part of those who exercise it, is always +in proportion to the necessity they are +under of making that exertion. This necessity +is greatest with those to whom the emoluments +of their profession are the only +source from which they expect their fortune, +or even their ordinary revenue and subsistence. +In order to acquire this fortune, or +even to get this subsistence, they must, in the +course of a year, execute a certain quantity +of work of a known value; and, where the +competition is free, the rivalship of competitors, +who are all endeavouring to justle one another +out of employment, obliges every man to endeavour +to execute his work with a certain +degree of exactness. The greatness of the ob<span class='pagenum'><a name="Page_319" id="Page_319">[Pg 319]</a></span>jects +which are to be acquired by success in +some particular professions may, no doubt, +sometimes animate the exertion of a few men +of extraordinary spirit and ambition. Great +objects, however, are evidently not necessary, +in order to occasion the greatest exertions. +Rivalship and emulation render excellency, +even in mean professions, an object of ambition, +and frequently occasion the very greatest +exertions. Great objects, on the contrary, +alone and unsupported by the necessity +of application, have seldom been sufficient to +occasion any considerable exertion. In England, +success in the profession of the law +leads to some very great objects of ambition; +and yet how few men, born to easy fortunes, +have ever in this country been eminent in that +profession?</p> + +<p>The endowments of schools and colleges +have necessarily diminished, more or less, the +necessity of application in the teachers. Their +subsistence, so far as it arises from their salaries, +is evidently derived from a fund, altogether +independent of their success and reputation +in their particular professions.</p> + +<p>In some universities, the salary makes but +a part, and frequently but a small part, of +the emoluments of the teacher, of which the +greater part arises from the honoraries or fees +of his pupils. The necessity of application, +though always more or less diminished, is +not, in this case, entirely taken away. Reputation +in his profession is still of some importance +to him, and he still has some dependency +upon the affection, gratitude, and +favourable report of those who have attended +upon his instructions; and these favourable +sentiments he is likely to gain in no way so +well as by deserving them, that is, by the +abilities and diligence with which he discharges +every part of his duty.</p> + +<p>In other universities, the teacher is prohibited +from receiving any honorary or fee +from his pupils, and his salary constitutes the +whole of the revenue which he derives from +his office. His interest is, in this case, set +as directly in opposition to his duty as it is +possible to set it. It is the interest of every +man to live as much at his ease as he can; +and if his emoluments are to be precisely the +same, whether he does or does not perform +some very laborious duty, it is certainly his +interest, at least as interest is vulgarly understood, +either to neglect it altogether, or, +if he is subject to some authority which will +not suffer him to do this, to perform it in as +careless and slovenly a manner as that authority +will permit. If he is naturally active +and a lover of labour, it is his interest to employ +that activity in any way from which he +can derive some advantage, rather than in the +performance of his duty, from which he can +derive none.</p> + +<p>If the authority to which he is subject resides +in the body corporate, the college, or +university, of which he himself is a member, +and in which the greater part of the other +members are, like himself, persons who either +are, or ought to be teachers, they are likely +to make a common cause, to be all very indulgent +to one another, and every man to +consent that his neighbour may neglect his +duty, provided he himself is allowed to neglect +his own. In the university of Oxford, +the greater part of the public professors have, +for these many years, given up altogether +even the pretence of teaching.</p> + +<p>If the authority to which he is subject resides, +not so much in the body corporate, of +which he is a member, as in some other extraneous +persons, in the bishop of the diocese, +for example, in the governor of the province, +or, perhaps, in some minister of state, +it is not, indeed, in this case, very likely that +he will be suffered to neglect his duty altogether. +All that such superiors, however, +can force him to do, is to attend upon his +pupils a certain number of hours, that is, to +give a certain number of lectures in the week, +or in the year. What those lectures shall +be, must still depend upon the diligence of +the teacher; and that diligence is likely to be +proportioned to the motives which he has for +exerting it. An extraneous jurisdiction of +this kind, besides, is liable to be exercised +both ignorantly and capriciously. In its nature, +it is arbitrary and discretionary; and +the persons who exercise it, neither attending +upon the lectures of the teacher themselves, +nor perhaps understanding the sciences which +it is his business to teach, are seldom capable +of exercising it with judgment. From the +insolence of office, too, they are frequently +indifferent how they exercise it, and are very +apt to censure or deprive him of his office +wantonly and without any just cause. The +person subject to such jurisdiction is necessarily +degraded by it, and, instead of being +one of the most respectable, is rendered one +of the meanest and most contemptible persons +in the society. It is by powerful protection +only, that he can effectually guard +himself against the bad usage to which he is +at all times exposed; and this protection he +is most likely to gain, not by ability or diligence +in his profession, but by obsequiousness +to the will of his superiors, and by being +ready, at all times, to sacrifice to that will +the rights, the interest, and the honour of +the body corporate, of which he is a member. +Whoever has attended for any considerable +time to the administration of a French university, +must have had occasion to remark the +effects which naturally result from an arbitrary +and extraneous jurisdiction of this kind.</p> + +<p>Whatever forces a certain number of students +to any college or university, independent +of the merit or reputation of the teachers, +tends more or less to diminish the necessity +of that merit or reputation.<span class='pagenum'><a name="Page_320" id="Page_320">[Pg 320]</a></span></p> + +<p>The privileges of graduates in arts, in law, +physic, and divinity, when they can be obtained +only by residing a certain number of years +in certain universities, necessarily force a certain +number of students to such universities, +independent of the merit or reputation of the +teachers. The privileges of graduates are a +sort of statutes of apprenticeship, which have +contributed to the improvement of education, +just as the other statutes of apprenticeship +have to that of arts and manufactures.</p> + +<p>The charitable foundations of scholarships, +exhibitions, bursaries, &c. necessarily attach +a certain number of students to certain colleges, +independent altogether of the merit of +those particular colleges. Were the students +upon such charitable foundations left free to +choose what college they liked best, such liberty +might perhaps contribute to excite some +emulation among different colleges. A regulation, +on the contrary, which prohibited +even the independent members of every particular +college from leaving it, and going to +any other, without leave first asked and obtained +of that which they meant to abandon, +would tend very much to extinguish that +emulation.</p> + +<p>If in each college, the tutor or teacher, +who was to instruct each student in all arts +and sciences, should not be voluntarily chosen +by the student, but appointed by the head of +the college; and if, in case of neglect, inability, +or bad usage, the student should not be +allowed to change him for another, without +leave first asked and obtained; such a regulation +would not only tend very much to extinguish +all emulation among the different +tutors of the same college, but to diminish +very much, in all of them, the necessity of +diligence and of attention to their respective +pupils. Such teachers, though very well +paid by their students, might be as much disposed +to neglect them, as those who are not +paid by them at all or who have no other recompense +but their salary.</p> + +<p>If the teacher happens to be a man of +sense, it must be an unpleasant thing to him +to be conscious, while he is lecturing to his +students, that he is either speaking or reading +nonsense, or what is very little better than +nonsense. It must, too, be unpleasant to +him to observe, that the greater part of his +students desert his lectures; or perhaps, attend +upon them with plain enough marks of +neglect, contempt, and derision. If he is +obliged, therefore, to give a certain number +of lectures, these motives alone, without any +other interest, might dispose him to take +some pains to give tolerably good ones. Several +different expedients, however, may be +fallen upon, which will effectually blunt the +edge of all those incitements to diligence. +The teacher, instead of explaining to his pupils +himself the science in which he proposes +to instruct them, may read some book upon +it; and if this book is written in a foreign +and dead language, by interpreting it to +them into their own, or, what would give +him still less trouble, by making them interpret +it to him, and by now and then making +an occasional remark upon it, he may flatter +himself that he is giving a lecture. The +slightest degree of knowledge and application +will enable him to do this, without exposing +himself to contempt or derision, by saying +any thing that is really foolish, absurd, or +ridiculous. The discipline of the college, at +the same time, may enable him to force all +his pupils to the most regular attendance upon +his sham lecture, and to maintain the +most decent and respectful behaviour during +the whole time of the performance.</p> + +<p>The discipline of colleges and universities +is in general contrived, not for the benefit of +the students, but for the interest, or, more +properly speaking, for the ease of the masters. +Its object is, in all cases, to maintain the authority +of the master, and, whether he neglects +or performs his duty, to oblige the students +in all cases to behave to him as if he +performed it with the greatest diligence and +ability. It seems to presume perfect wisdom +and virtue in the one order, and the greatest +weakness and folly in the other. Where the +masters, however, really perform their duty, +there are no examples, I believe, that the +greater part of the students ever neglect +theirs. No discipline is ever requisite to +force attendance upon lectures which are +really worth the attending, as is well known +wherever any such lectures are given. Force +and restraint may, no doubt, be in some degree +requisite, in order to oblige children, or +very young boys, to attend to those parts of +education, which it is thought necessary for +them to acquire during that early period of +life; but after twelve or thirteen years of age, +provided the master does his duty, force or +restraint can scarce ever be necessary to carry +on any part of education. Such is the generosity +of the greater part of young men, that +so far from being disposed to neglect or despise +the instructions of their master, provided +he shews some serious intention of being +of use to them, they are generally inclined +to pardon a great deal of incorrectness in +the performance of his duty, and sometimes +even to conceal from the public a good deal +of gross negligence.</p> + +<p>Those parts of education, it is to be observed, +for the teaching of which there are no +public institutions, are generally the best +taught. When a young man goes to a fencing +or a dancing school, he does not, indeed, +always learn to fence or to dance very well; +but he seldom fails of learning to fence or to +dance. The good effects of the riding school +are not commonly so evident. The expense +of a riding school is so great, that in most +places it is a public institution. The three<span class='pagenum'><a name="Page_321" id="Page_321">[Pg 321]</a></span> +most essential parts of literary education, to +read, write, and account, it still continues to +be more common to acquire in private than in +public schools; and it very seldom happens, +that anybody fails of acquiring them to the +degree in which it is necessary to acquire +them.</p> + +<p>In England, the public schools are much +less corrupted than the universities. In the +schools, the youth are taught, or at least may +be taught, Greek and Latin; that is, every +thing which the masters pretend to teach, or +which it is expected they should teach. In +the universities, the youth neither are taught, +nor always can find any proper means of +being taught the sciences, which it is the business +of those incorporated bodies to teach. +The reward of the schoolmaster, in most +cases, depends principally, in some cases almost +entirely, upon the fees or honoraries of +his scholars. Schools have no exclusive privileges. +In order to obtain the honours of +graduation, it is not necessary that a person +should bring a certificate of his having studied +a certain number of years at a public school. +If, upon examination, he appears to understand +what is taught there, no questions are +asked about the place where he learnt it.</p> + +<p>The parts of education which are commonly +taught in universities, it may perhaps be +said, are not very well taught. But had it +not been for those institutions, they would +not have been commonly taught at all; and +both the individual and the public would have +suffered a good deal from the want of those +important parts of education.</p> + +<p>The present universities of Europe were +originally, the greater part of them, ecclesiastical +corporations, instituted for the education +of churchmen. They were founded by +the authority of the pope; and were so entirely +under his immediate protection, that +their members, whether masters or students, +had all of them what was then called the benefit +of clergy, that is, were exempted from +the civil jurisdiction of the countries in which +their respective universities were situated, and +were amenable only to the ecclesiastical tribunals. +What was taught in the greater part +of those universities was suitable to the end +of their institution, either theology, or something +that was merely preparatory to theology.</p> + +<p>When Christianity was first established by +law, a corrupted Latin had become the common +language of all the western parts of +Europe. The service of the church, accordingly, +and the translation of the Bible which +were read in churches, were both in that corrupted +Latin; that is, in the common language +of the country. After the irruption of +the barbarous nations who overturned the +Roman empire, Latin gradually ceased to be +the language of any part of Europe. But +the reverence of the people naturally preserves +the established forms and ceremonies of religion +long after the circumstances which first +introduced and rendered them reasonable, are +no more. Though Latin, therefore, was no +longer understood anywhere by the great +body of the people, the whole service of the +church still continued to be performed in that +language. Two different languages were +thus established in Europe, in the same manner +as in ancient Egypt: a language of the +priests, and a language of the people; a +sacred and a profane, a learned and an unlearned +language. But it was necessary that +the priests should understand something of +that sacred and learned language in which +they were to officiate; and the study of the +Latin language therefore made, from the +beginning, an essential part of university +education.</p> + +<p>It was not so with that either of the Greek +or of the Hebrew language. The infallible +decrees of the church had pronounced the +Latin translation of the Bible, commonly +called the Latin Vulgate, to have been equally +dictated by divine inspiration, and therefore +of equal authority with the Greek and +Hebrew originals. The knowledge of those +two languages, therefore, not being indispensably +requisite to a churchman, the study +of them did not for a long time make a necessary +part of the common course of university +education. There are some Spanish +universities, I am assured, in which the study +of the Greek language has never yet made +any part of that course. The first reformers +found the Greek text of the New Testament, +and even the Hebrew text of the Old, more +favourable to their opinions than the vulgate +translation, which, as might naturally +be supposed, had been gradually accommodated +to support the doctrines of the Catholic +Church. They set themselves, therefore, to +expose the many errors of that translation, +which the Roman catholic clergy were thus +put under the necessity of defending or explaining. +But this could not well be done +without some knowledge of the original languages, +of which the study was therefore gradually +introduced into the greater part of +universities; both of those which embraced, +and of those which rejected, the doctrines of +the reformation. The Greek language was +connected with every part of that classical +learning, which, though at first principally +cultivated by catholics and Italians, happened +to come into fashion much about the same +time that the doctrines of the reformation +were set on foot. In the greater part of universities, +therefore, that language was taught +previous to the study of philosophy, and as +soon as the student had made some progress +in the Latin. The Hebrew language having +no connection with classical learning, and, +except the Holy Scriptures, being the language +of not a single book in any esteem<span class='pagenum'><a name="Page_322" id="Page_322">[Pg 322]</a></span> +the study of it did not commonly commence +till after that of philosophy, and when the +student had entered upon the study of theology.</p> + +<p>Originally, the first rudiments, both of the +Greek and Latin languages, were taught in +universities; and in some universities they +still continue to be so. In others, it is expected +that the student should have previously +acquired, at least, the rudiments of one or +both of those languages, of which the study +continues to make everywhere a very considerable +part of university education.</p> + +<p>The ancient Greek philosophy was divided +into three great branches; physics, or natural +philosophy; ethics, or moral philosophy; and +logic. This general division seems perfectly +agreeable to the nature of things.</p> + +<p>The great phenomenon of nature, the revolutions +of the heavenly bodies, eclipses, comets; +thunder and lightning, and other extraordinary +meteors; the generation, the life, +growth, and dissolution of plants and animals; +are objects which, as they necessarily +excite the wonder, so they naturally call forth +the curiosity of mankind to inquire into their +causes. Superstition first attempted to satisfy +this curiosity, by referring all those +wonderful appearances to the immediate agency +of the gods. Philosophy afterwards +endeavoured to account for them from more +familiar causes, or from such as mankind +were better acquainted with, than the agency +of the gods. As those great phenomena are +the first objects of human curiosity, so the +science which pretends to explain them must +naturally have been the first branch of philosophy +that was cultivated. The first philosophers, +accordingly, of whom history has +preserved any account, appears to have been +natural philosophers.</p> + +<p>In every age and country of the world, +men must have attended to the characters, +designs, and actions of one another; and +many reputable rules and maxims for the +conduct of human life must have been laid +down and approved of by common consent. +As soon as writing came into fashion, wise +men, or those who fancied themselves such, +would naturally endeavour to increase the +number of those established and respected +maxims, and to express their own sense of +what was either proper or improper conduct, +sometimes in the more artificial form of apologues, +like what are called the fables of +Æsop; and sometimes in the more simple +one of apophthegms or wise sayings, like the +proverbs of Solomon, the verses of Theognis +and Phocyllides, and some part of the works +of Hesiod. They might continue in this +manner, for a long time, merely to multiply +the number of those maxims of prudence and +morality, without even attempting to arrange +them in any very distinct or methodical order, +much less to connect them together by one or +more general principles, from which they +were all deducible, like effects from their natural +causes. The beauty of a systematical +arrangement of different observations, connected +by a few common principles, was first +seen in the rude essays of those ancient times +towards a system of natural philosophy. +Something of the same kind was afterwards +attempted in morals. The maxims of common +life were arranged in some methodical +order, and connected together by a few common +principles, in the same manner as they +had attempted to arrange and connect the +phenomena of nature. The science which +pretends to investigate and explain those connecting +principles, is what is properly called +Moral Philosophy.</p> + +<p>Different authors gave different systems, +both of natural and moral philosophy. But +the arguments by which they supported those +different systems, far from being always demonstrations, +were frequently at best but +very slender probabilities, and sometimes +mere sophisms, which had no other foundation +but the inaccuracy and ambiguity of +common language. Speculative systems, +have, in all ages of the world, been adopted +for reasons too frivolous to have determined +the judgment of any man of common sense, +in a matter of the smallest pecuniary interest. +Gross sophistry has scarce ever had any influence +upon the opinions of mankind, except +in matters of philosophy and speculation; +and in these it has frequently had the +greatest. The patrons of each system of natural +and moral philosophy, naturally endeavoured +to expose the weakness of the arguments +adduced to support the systems which +were opposite to their own. In examining +those arguments, they were necessarily led to +consider the difference between a probable +and a demonstrative argument, between a +fallacious and a conclusive one; and logic, +or the science of the general principles of +good and bad reasoning, necessarily arose +out of the observations which a scrutiny of +this kind gave occasion to; though, in its origin, +posterior both to physics and to ethics, it +was commonly taught, not indeed in all, but +in the greater part of the ancient schools of +philosophy, previously to either of those +sciences. The student, it seems to have been +thought, ought to understand well the difference +between good and bad reasoning, before +he was led to reason upon subjects of so great +importance.</p> + +<p>This ancient division of philosophy into +three parts was, in the greater part of the +universities of Europe, changed for another +into five.</p> + +<p>In the ancient philosophy, whatever was +taught concerning the nature either of the +human mind or of the Deity, made a part of +the system of physics. Those beings, in +whatever their essence might be supposed to<span class='pagenum'><a name="Page_323" id="Page_323">[Pg 323]</a></span> +consist, were parts of the great system of the +universe, and parts, too, productive of the +most important effects. Whatever human +reason could either conclude or conjecture +concerning them, made, as it were, two +chapters, though no doubt two very important +ones, of the science which pretended to give +an account of the origin and revolutions of +the great system of the universe. But in +the universities of Europe, where philosophy +was taught only as subservient to theology, it +was natural to dwell longer upon these two +chapters than upon any other of the science. +They were gradually more and more extended, +and were divided into many inferior chapters; +till at last the doctrine of spirits, of +which so little can be known, came to take up +as much room in the system of philosophy as +the doctrine of bodies, of which so much can +be known. The doctrines concerning those +two subjects were considered as making two +distinct sciences. What are called metaphysics, +or pneumatics, were set in opposition +to physics, and were cultivated not only as +the more sublime, but, for the purposes of a +particular profession, as the more useful +science of the two. The proper subject of +experiment and observation, a subject in +which a careful attention is capable of making +so many useful discoveries, was almost +entirely neglected. The subject in which, +after a very few simple and almost obvious +truths, the most careful attention can discover +nothing but obscurity and uncertainty, and +can consequently produce nothing but subtleties +and sophisms, was greatly cultivated.</p> + +<p>When these two sciences had thus been set +in opposition to one another, the comparison +between them naturally gave birth to a third, +to what was called ontology, or the science +which treated of the qualities and attributes +which were common to both the subjects of +the other two sciences. But if subtleties and +sophisms composed the greater part of the +metaphysics or pneumatics of the schools, +they composed the whole of this cobweb +science of ontology, which was likewise sometimes +called metaphysics.</p> + +<p>Wherein consisted the happiness and perfection +of a man, considered not only as an +individual, but as the member of a family, of +a state, and of the great society of mankind, +was the object which the ancient moral philosophy +proposed to investigate. In that 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 subservient to theology, the duties of +human life were treated of as chiefly subservient +to the happiness of a life to come. In +the ancient philosophy, the perfection of virtue +was represented as necessarily productive, +to the person who possessed it, of the most +perfect happiness in this life. In the modern +philosophy, it was frequently represented as +generally, or rather as almost always, inconsistent +with any degree of happiness in this +life; and heaven was to be earned only by +penance and mortification, by the austerities +and abasement of a monk, not by the liberal, +generous, and spirited conduct of a man. +Casuistry, and an ascetic morality, made up, +in most cases, the greater part of the moral +philosophy of the schools. By far the most +important of all the different branches of philosophy +became in this manner by far the most +corrupted.</p> + +<p>Such, therefore, was the common course of +philosophical education in the greater part of +the universities in Europe. Logic was taught +first; ontology came in the second place; +pneumatology, comprehending the doctrine +concerning the nature of the human soul and +of the Deity, in the third; in the fourth followed +a debased system of moral philosophy, +which was considered as immediately connected +with the doctrines of pneumatology, +with the immortality of the human soul, and +with the rewards and punishments which, +from the justice of the Deity, were to be expected +in a life to come: a short and superficial +system of physics usually concluded the +course.</p> + +<p>The alterations which the universities of +Europe thus introduced into the ancient course +of philosophy were all meant for the education +of ecclesiastics, and to render it a more +proper introduction to the study of theology. +But the additional quantity of subtlety and +sophistry, the casuistry and ascetic morality +which those alterations introduced into it, certainly +did not render it more for the education +of gentlemen or men of the world, or more +likely either to improve the understanding or +to mend the heart.</p> + +<p>This course of philosophy is what still continues +to be taught in the greater part of the +universities of Europe, with more or less diligence, +according as the constitution of each +particular university happens to render diligence +more or less necessary to the teachers. +In some of the richest and best endowed universities, +the tutors content themselves with +teaching a few unconnected shreds and parcels +of this corrupted course; and even these +they commonly teach very negligently and superficially.</p> + +<p>The improvements which, in modern times, +have been made in several different branches +of philosophy, have not, the greater part of +them, been made in universities, though some, +no doubt, have. The greater part of universities +have not even been very forward to +adopt those improvements after they were +made; and several of those learned societies +have chosen to remain, for a long time, the +sanctuaries in which exploded systems and obsolete +prejudices found shelter and protection, +after they had been hunted out of every other<span class='pagenum'><a name="Page_324" id="Page_324">[Pg 324]</a></span> +corner of the world. In general, the richest +and best endowed universities have been slowest +in adopting those improvements, and the +most averse to permit any considerable change +in the established plan of education. Those +improvements were more easily introduced into +some of the poorer universities, in which +the teachers, depending upon their reputation +for the greater part of their subsistence, +were obliged to pay more attention to the current +opinions of the world.</p> + +<p>But though the public schools and universities +of Europe were originally intended only +for the education of a particular profession, +that of churchmen; and though they were not +always very diligent in instructing their pupils, +even in the sciences which were supposed +necessary for that profession; yet they gradually +drew to themselves the education of +almost all other people, particularly of almost +all gentlemen and men of fortune. No better +method, it seems, could be fallen upon, of +spending, with any advantage, the long interval +between infancy and that period of life +at which men begin to apply in good earnest +to the real business of the world, the business +which is to employ them during the remainder +of their days. The greater part of what is +taught in schools and universities, however, +does not seem to be the most proper preparation +for that business.</p> + +<p>In England, it becomes every day more and +more the custom to send young people to travel +in foreign countries immediately upon their +leaving school, and without sending them to +any university. Our young people, it is said, +generally return home much improved by their +travels. A young man, who goes abroad at +seventeen or eighteen, and returns home at +one-and-twenty, returns three or four years +older than he was when he went abroad; and +at that age it is very difficult not to improve +a good deal in three or four years. In the +course of his travels, he generally acquires +some knowledge of one or two foreign languages; +a knowledge, however, which is seldom +sufficient to enable him either to speak or +write them with propriety. In other respects, +he commonly returns home more conceited, +more unprincipled, more dissipated, and more +incapable of any serious application, either to +study or to business, than he could well have +become in so short a time had he lived at +home. By travelling so very young, by spending +in the must frivolous dissipation the most +precious years of his life, at a distance from +the inspection and controul of his parents and +relations, every useful habit, which the earlier +parts of his education might have had some +tendency to form in him, instead of being riveted +and confirmed, is almost necessarily +either weakened or effaced. Nothing but the +discredit into which the universities are allowing +themselves to fall, could ever have brought +into repute so very absurd a practice as that +of travelling at this early period of life. By +sending his son abroad, a father delivers himself, +at least for some time, from so disagreeable +an object as that of a son unemployed, +neglected, and going to ruin before +his eyes.</p> + +<p>Such have been the effects of some of the +modern institutions for education.</p> + +<p>Different plans and different institutions for +education seem to have taken place in other +ages and nations.</p> + +<p>In the republics of ancient Greece, every +free citizen was instructed, under the direction +of the public magistrate, in gymnastic exercises +and in music. By gymnastic exercises, +it was intended to harden his body, to sharpen +his courage, and to prepare him for the fatigues +and dangers of war; and as the Greek +militia was, by all accounts, one of the best +that ever was in the world, this part of their +public education must have answered completely +the purpose for which it was intended. +By the other part, music, it was proposed, at +least by the philosophers and historians, who +have given us an account of those institutions, +to humanize the mind, to soften the +temper, and to dispose it for performing all +the social and moral duties of public and private +life.</p> + +<p>In ancient Rome, the exercises of the Campus +Martius answered the same purpose as +those of the Gymnasium in ancient Greece, +and they seem to have answered it equally +well. But among the Romans there was nothing +which corresponded to the musical education +of the Greeks. The morals of the Romans, +however, both in private and public +life, seem to have been, not only equal, but, +upon the whole, a good deal superior to those +of the Greeks. That they were superior in +private life, we have the express testimony of +Polybius, and of Dionysius of Halicarnassus, +two authors well acquainted with both nations; +and the whole tenor of the Greek and +Roman history bears witness to the superiority +of the public morals of the Romans. The +good temper and moderation of contending +factions seem to be the most essential circumstances +in the public morals of a free people. +But the factions of the Greeks were almost +always violent and sanguinary; whereas, +till the time of the Gracchi, no blood had +ever been shed in any Roman faction; and +from the time of the Gracchi, the Roman republic +may be considered as in reality dissolved. +Notwithstanding, therefore, the very respectable +authority of Plato, Aristotle, and +Polybius, and notwithstanding the very ingenious +reasons by which Mr. Montesquieu endeavours +to support that authority, it seems +probable that the musical education of the +Greeks had no great effect in mending their +morals, since, without any such education, +those of the Romans were, upon the whole, +superior. The respect of those ancient sages<span class='pagenum'><a name="Page_325" id="Page_325">[Pg 325]</a></span> +for the institutions of their ancestors had probably +disposed them to find much political +wisdom in what was, perhaps, merely an ancient +custom, continued, without interruption, +from the earliest period of those societies, to +the times in which they had arrived at a considerable +degree of refinement. Music and +dancing are the great amusements of almost +all barbarous nations, and the great accomplishments +which are supposed to fit any man +for entertaining his society. It is so at this +day among the negroes on the coast of Africa. +It was so among the ancient Celtes, among +the ancient Scandinavians, and, as we may +learn from Homer, among the ancient Greeks, +in the times preceding the Trojan war. When +the Greek tribes had formed themselves into +little republics, it was natural that the study +of those accomplishments should for a long +time make a part of the public and common +education of the people.</p> + +<p>The masters who instructed the young people, +either in music or in military exercises, +do not seem to have been paid, or even appointed +by the state, either in Rome or even +at Athens, the Greek republic of whose laws +and customs we are the best informed. The +state required that every free citizen should fit +himself for defending it in war, and should +upon that account, learn his military exercises. +But it left him to learn them of such +masters as he could find; and it seems to have +advanced nothing for this purpose, but a public +field or place of exercise, in which he should +practise and perform them.</p> + +<p>In the early ages, both of the Greek and +Roman republics, the other parts of education +seem to have consisted in learning to read, +write, and account, according to the arithmetic +of the times. These accomplishments the +richer citizens seem frequently to have acquired +at home, by the assistance of some domestic +pedagogue, who was, generally, either a +slave or a freedman; and the poorer citizens +in the schools of such masters as made a trade +of teaching for hire. Such parts of education, +however, were abandoned altogether to +the care of the parents or guardians of each +individual. It does not appear that the state +ever assumed any inspection or direction of +them. By a law of Solon, indeed, the children +were acquitted from maintaining those parents +who had neglected to instruct them in +some profitable trade or business.</p> + +<p>In the progress of refinement, when philosophy +and rhetoric came into fashion, the better +sort of people used to send their children +to the schools of philosophers and rhetoricians, +in order to be instructed in these fashionable +sciences. But those schools were not supported +by the public. They were, for a long time, +barely tolerated by it. The demand for philosophy +and rhetoric was, for a long time, so +small, that the first professed teachers of either +could not find constant employment in any +one city, but were obliged to travel about from +place to place. In this manner lived Zeno of +Elea, Protagoras, Gorgias, Hippias, and many +others. As the demand increased, the schools, +both of philosophy and rhetoric, became stationary, +first in Athens, and afterwards in several +other cities. The state, however, seems +never to have encouraged them further, than +by assigning to some of them a particular +place to teach in, which was sometimes done, +too, by private donors. The state seems to +have assigned the Academy to Plato, the Lyceum +to Aristotle, and the Portico to Zeno of +Citta, the founder of the Stoics. But Epicurus +bequeathed his gardens to his own +school. Till about the time of Marcus Antoninus, +however, no teacher appears to have +had any salary from the public, or to have had +any other emoluments, but what arose from +the honoraries or fees of his scholars. The +bounty which that philosophical emperor, as +we learn from Lucian, bestowed upon one of +the teachers of philosophy, probably lasted no +longer than his own life. There was nothing +equivalent to the privileges of graduation; +and to have attended any of those schools was +not necessary, in order to be permitted to +practise any particular trade or profession. If +the opinion of their own utility could not +draw scholars to them, the law neither forced +anybody to go to them, nor rewarded anybody +for having gone to them. The teachers had +no jurisdiction over their pupils, nor any other +authority besides that natural authority which +superior virtue and abilities never fail to procure +from young people towards those who +are entrusted with any part of their education.</p> + +<p>At Rome, the study of the civil law made +a part of the education, not of the greater +part of the citizens, but of some particular +families. The young people, however, who +wished to acquire knowledge in the law, had +no public school to go to, and had no other +method of studying it, than by frequenting +the company of such of their relations and +friends as were supposed to understand it. +It is, perhaps, worth while to remark, that +though the laws of the twelve tables were +many of them copied from those of some ancient +Greek republics, yet law never seems +to have grown up to be a science in any republic +of ancient Greece. In Rome it became +a science very early, and gave a considerable +degree of illustration to those citizens +who had the reputation of understanding +it. In the republics of ancient Greece, particularly +in Athens, the ordinary courts of +justice consisted of numerous, and therefore +disorderly, bodies of people, who frequently +decided almost at random, or as clamour, +faction, and party-spirit, happened to determine. +The ignominy of an unjust decision, +when it was to be divided among five hundred, +a thousand, or fifteen hundred people (for<span class='pagenum'><a name="Page_326" id="Page_326">[Pg 326]</a></span> +some of their courts were so very numerous), +could not fall very heavy upon any individual. +At Rome, on the contrary, the principal +courts of justice consisted either of a +single judge, or of a small number of judges, +whose characters, especially as they deliberated +always in public, could not fail to be +very much affected by any rash or unjust decision. +In doubtful cases such courts, from +their anxiety to avoid blame, would naturally +endeavour to shelter themselves under the example +or precedent of the judges who had sat +before them, either in the same or in some +other court. This attention to practice and +precedent, necessarily formed the Roman +law into that regular and orderly system in +which it has been delivered down to us; and +the like attention has had the like effects upon +the laws of every other country where +such attention has taken place. The superiority +of character in the Romans over that +of the Greeks, so much remarked by Polybius +and Dionysius of Halicarnassus, was +probably more owing to the better constitution +of their courts of justice, than to any of +the circumstances to which those authors +ascribe it. The Romans are said to have +been particularly distinguished for their superior +respect to an oath. But the people +who were accustomed to make oath only before +some diligent and well informed court of +justice, would naturally be much more attentive +to what they swore, than they who were +accustomed to do the same thing before mobbish +and disorderly assemblies.</p> + +<p>The abilities, both civil and military, of +the Greeks and Romans, will readily be allowed +to have been at least equal to those of +any modern nation. Our prejudice is perhaps +rather to overrate them. But except in +what related to military exercises, the state +seems to have been at no pains to form those +great abilities; for I cannot be induced to +believe that the musical education of the +Greeks could be of much consequence in +forming them. Masters, however, had been +found, it seems, for instructing the better +sort of people among those nations, in every +art and science in which the circumstances of +their society rendered it necessary or convenient +for them to be instructed. The demand +for such instruction produced, what it +always produces, the talent for giving it; and +the emulation which an unrestrained competition +never fails to excite, appears to have +brought that talent to a very high degree of +perfection. In the attention which the ancient +philosophers excited, in the empire +which they acquired over the opinions and +principles of their auditors, in the faculty +which they possessed of giving a certain tone +and character to the conduct and conversation +of those auditors, they appear to have been +much superior to any modern teachers. In +modern times, the diligence of public teachers +is more or less corrupted by the circumstances +which render them more or less independent +of their success and reputation in +their particular professions. Their salaries, +too, put the private teacher, who would pretend +to come into competition with them, in +the same state with a merchant who attempts +to trade without a bounty, in competition +with those who trade with a considerable one. +If he sells his goods at nearly the same price, +he cannot have the same profit; and poverty +and beggary at least, if not bankruptcy and +ruin, will infallibly be his lot. If he attempts +to sell them much dearer, he is likely +to have so few customers, that his circumstances +will not be much mended. The privileges +of graduation, besides, are in many +countries necessary, or at least extremely convenient, +to most men of learned professions, +that is, to the far greater part of those who +have occasion for a learned education. But +those privileges can be obtained only by attending +the lectures of the public teachers. +The most careful attendance upon the ablest +instructions of any private teacher cannot always +give any title to demand them. It is +from these different causes that the private +teacher of any of the sciences, which are +commonly taught in universities, is, in modern +times, generally considered as in the +very lowest order of men of letters. A man +of real abilities can scarce find out a more +humiliating or a more unprofitable employment +to turn them to. The endowments of +schools and colleges have in this manner not +only corrupted the diligence of public teachers, +but have rendered it almost impossible +to have any good private ones.</p> + +<p>Were there no public institutions for education, +no system, no science, would be +taught, for which there was not some demand, +or which the circumstances of the +times did not render it either necessary or +convenient, or at least fashionable to learn. +A private teacher could never find his account +in teaching either an exploded and antiquated +system of a science acknowledged to be useful, +or a science universally believed to be a +mere useless and pedantic heap of sophistry +and nonsense. Such systems, such sciences, +can subsist nowhere but in those incorporated +societies for education, whose prosperity and +revenue are in a great measure independent +of their industry. Were there no public institutions +for education, a gentleman, after +going through, with application and abilities, +the most complete course of education which +the circumstances of the times were supposed +to afford, could not come into the world completely +ignorant of every thing which is the +common subject of conversation among gentlemen +and men of the world.</p> + +<p>There are no public institutions for the +education of women, and there is accordingly +nothing useless, absurd, or fantastical, in the<span class='pagenum'><a name="Page_327" id="Page_327">[Pg 327]</a></span> +common course of their education. They are +taught what their parents or guardians judge +it necessary or useful for them to learn, and +they are taught nothing else. Every part of +their education tends evidently to some useful +purpose; either to improve the natural attractions +of their person, or to form their mind +to reserve, to modesty, to chastity, and to +economy; to render them both likely to become +the mistresses of a family, and to behave +properly when they have become such. +In every part of her life, a woman feels some +conveniency or advantage from every part of +her education. It seldom happens that a +man, in any part of his life, derives any conveniency +or advantage from some of the most +laborious and troublesome parts of his education.</p> + +<p>Ought the public, therefore, to give no +attention, it may be asked, to the education +of the people? Or, if it ought to give any, +what are the different parts of education +which it ought to attend to in the different +orders of the people? and in what manner +ought it to attend to them?</p> + +<p>In some cases, the state of society necessarily +places the greater part of individuals in +such situations as naturally form in them, +without any attention of government, almost +all the abilities and virtues which that state +requires, or perhaps can admit of. In other +cases, the state of the society does not place +the greater part of individuals in such situations; +and some attention of government is +necessary, in order to prevent the almost entire +corruption and degeneracy of the great +body of the people.</p> + +<p>In the progress of the division of labour, +the employment of the far greater part of +those who live by labour, that is, of the great +body of the people, comes to be confined to +a few very simple operations; frequently to +one or two. But the understandings of the +greater part of men are necessarily formed +by their ordinary employments. The man +whose whole life is spent in performing a few +simple operations, of which the effects, too, +are perhaps always the same, or very nearly +the same, has no occasion to exert his understanding, +or to exercise his invention, in +finding out expedients for removing difficulties +which never occur. He naturally loses, +therefore, the habit of such exertion, and generally +becomes as stupid and ignorant as it +is possible for a human creature to become. +The torpor of his mind renders him not only +incapable of relishing or bearing a part in +any rational conversation, but of conceiving +any generous, noble, or tender sentiment, +and consequently of forming any just judgment +concerning many even of the ordinary +duties of private life. Of the great and extensive +interests of his country he is altogether +incapable of judging; and unless very +particular pains have been taken to render +him otherwise, he is equally incapable of defending +his country in war. The uniformity +of his stationary life naturally corrupts the +courage of his mind, and makes him regard, +with abhorrence, the irregular, uncertain, and +adventurous life of a soldier. It corrupts +even the activity of his body, and renders +him incapable of exerting his strength with +vigour and perseverance in any other employment, +than that to which he has been bred. +His dexterity at his own particular trade +seems, in this manner, to be acquired at the +expense of his intellectual, social, and martial +virtues. But in every improved and civilized +society, this is the state into which the labouring +poor, that is, the great body of the +people, must necessarily fall, unless government +takes some pains to prevent it.</p> + +<p>It is otherwise in the barbarous societies, as +they are commonly called, of hunters, of shepherds, +and even of husbandmen in that rude +state of husbandry which precedes the improvement +of manufactures, and the extension +of foreign commerce. In such societies, the +varied occupations of every man oblige every +man to exert his capacity, and to invent expedients +for removing difficulties which are +continually occurring. Invention is kept +alive, and the mind is not suffered to fall into +that drowsy stupidity, which, in a civilized +society, seems to benumb the understanding +of almost all the inferior ranks of people. +In those barbarous societies, as they are called, +every man, it has already been observed, +is a warrior. Every man, too, is in some +measure a statesman, and can form a tolerable +judgment concerning the interest of the +society, and the conduct of those who govern +it. How far their chiefs are good judges in +peace, or good leaders in war, is obvious to +the observation of almost every single man +among them. In such a society, indeed, no +man can well acquire that improved and refined +understanding which a few men sometimes +possess in a more civilized state. +Though in a rude society there is a good +deal of variety in the occupations of every +individual, there is not a great deal in those +of the whole society. Every man does, or is +capable of doing, almost every thing which +any other man does, or is capable of doing. +Every man has a considerable degree of +knowledge, ingenuity, and invention; but +scarce any man has a great degree. The degree, +however, which is commonly possessed, +is generally sufficient for conducting the +whole simple business of the society. In a +civilized state, on the contrary, though there +is little variety in the occupations of the +greater part of individuals, there is an almost +infinite variety in those of the whole society. +These varied occupations present an almost +infinite variety of objects to the contemplation +of those few, who, being attached to no +particular occupation themselves, have leisure<span class='pagenum'><a name="Page_328" id="Page_328">[Pg 328]</a></span> +and inclination to examine the occupations +of other people. The contemplation of so +great a variety of objects necessarily exercises +their minds in endless comparisons end combinations, +and renders their understandings, +in an extraordinary degree, both acute and +comprehensive. Unless those few, however, +happen to be placed in some very particular +situations, their great abilities, though honourable +to themselves, may contribute very +little to the good government or happiness of +their society. Notwithstanding the great abilities +of those few, all the nobler parts of the +human character may be, in a great measure, +obliterated end extinguished in the great +body of the people.</p> + +<p>The education of the common people requires, +perhaps, in a civilized and commercial +society, the attention of the public, more than +that of people of some rank and fortune. +People of some rank and fortune are generally +eighteen or nineteen years of age, before +they enter upon that particular business, profession, +or trade, by which they propose to +distinguish themselves in the world. They +have, before that, full time to acquire, or at +least to fit themselves for afterwards acquiring, +every accomplishment which can recommend +them to the public esteem, or render +them worthy of it. Their parents or guardians +are generally sufficiently anxious that +they should be so accomplished, and are, in +most cases, willing enough to lay out the expense +which is necessary for that purpose. If +they are not always properly educated, it is +seldom from the want of expense laid out upon +their education, but from the improper application +of that expense. It is seldom from +the want of masters, but from the negligence +and incapacity of the masters who are to be +had, and from the difficulty, or rather from +the impossibility, which there is, in the present +state of things, of finding any better. +The employments, too, in which people of +some rank or fortune spend the greater part +of their lives, are not, like those of the common +people, simple and uniform. They are +almost all of them extremely complicated, +and such as exercise the head more than the +hands. The understandings of those who are +engaged in such employments, can seldom +grow torpid for want of exercise. The +employments of people of some rank and fortune, +besides, are seldom such as harass them +from morning to night. They generally have +a good deal of leisure, during which they +may perfect themselves in every branch, either +of useful or ornamental knowledge, of which +they may have laid the foundation, or for +which they may have acquired some taste in +the earlier part of life.</p> + +<p>It is otherwise with the common people. +They have little time to spare for education. +Their parents can scarce afford to maintain +them, even in infancy. As soon as they are +able to work, they must apply to some trade, +by which they can earn their subsistence. +That trade, too, is generally so simple and +uniform, as to give little exercise to the understanding; +while, at the same time, their +labour is both so constant and so severe, that +it leaves them little leisure and less inclination +to apply to, or even to think of any thing +else.</p> + +<p>But though the common people cannot, in +any civilized society, be so well instructed as +people of some rank and fortune; the most +essential parts of education, however, to read, +write, and account, can be acquired at so +early a period of life, that the greater part, +even of those who are to be bred to the lowest +occupations, have time to acquire them before +they can be employed in those occupations. +For a very small expense, the public can facilitate, +can encourage, and can even impose +upon almost the whole body of the people, the +necessity of acquiring those most essential +parts of education.</p> + +<p>The public can facilitate this acquisition, +by establishing in every parish or district a +little school, where children may be taught +for a reward so moderate, that even a common +labourer may afford it; the master being partly, +but not wholly, paid by the public; because, if +he was wholly, or even principally, paid by it, +he would soon learn to neglect his business. +In Scotland, the establishment of such parish +schools has taught almost the whole common +people to read, and a very great proportion of +them to write and account. In England, the +establishment of charity schools has had an +effect of the same kind, though not so universally, +because the establishment is not so +universal. If, in those little schools, the +books by which the children are taught to +read, were a little more instructive than they +commonly are; and if, instead of a little +smattering in Latin, which the children of the +common people are sometimes taught there, +and which can scarce ever be of any use to +them, they were instructed in the elementary +parts of geometry and mechanics; the literary +education of this rank of people would, perhaps, +be as complete as can be. There is +scarce a common trade, which does not afford +some opportunities of applying to it the principles +of geometry and mechanics, and which +would not, therefore, gradually exercise and +improve the common people in those principles, +the necessary introduction to the most +sublime, as well as to the most useful sciences.</p> + +<p>The public can encourage the acquisition +of those most essential parts of education, by +giving small premiums, and little badges of +distinction, to the children of the common +people who excel in them.</p> + +<p>The public can impose upon almost the +whole body of the people the necessity of acquiring +the most essential parts of education, +by obliging every man to undergo an exami<span class='pagenum'><a name="Page_329" id="Page_329">[Pg 329]</a></span>nation +or probation in them, before he can +obtain the freedom in any corporation, or be +allowed to set up any trade, either in a village +or town corporate.</p> + +<p>It was in this manner, by facilitating the +acquisition of their military and gymnastic +exercises, by encouraging it, and even by imposing +upon the whole body of the people the +necessity of learning those exercises, that the +Greek and Roman republics maintained the +martial spirit of their respective citizens. They +facilitated the acquisition of those exercises, +by appointing a certain place for learning and +practising them, and by granting to certain +masters the privilege of teaching in that place. +Those masters do not appear to have had either +salaries or exclusive privileges of any +kind. Their reward consisted altogether in +what they got from their scholars; and a citizen, +who had learnt his exercises in the public +gymnasia, had no sort of legal advantage +over one who had learnt them privately, provided +the latter had learned them equally +well. Those republics encouraged the acquisition +of those exercises, by bestowing little +premiums and badges of distinction upon those +who excelled in them. To have gained a +prize in the Olympic, Isthmian, or Nemæan +games, gave illustration, not only to the person +who gained it, but to his whole family and +kindred. The obligation which every citizen +was under, to serve a certain number of years, +if called upon, in the armies of the republic, +sufficient imposed the necessity of learning +those exercises, without which he could not +be fit for that service.</p> + +<p>That in the progress of improvement, the +practice of military exercises, unless government +takes proper pains to support it, goes +gradually to decay, and, together with it, the +martial spirit of the great body of the people, +the example of modern Europe sufficiently +demonstrates. But the security of every society +must always depend, more or less, upon the +martial spirit of the great body of the people. +In the present times, indeed, that martial spirit +alone, and unsupported by a well-disciplined +standing army, would not, perhaps, be sufficient +for the defence and security of any society. +But where every citizen had the spirit +of a soldier, a smaller standing army would +surely be requisite. That spirit, besides, would +necessarily diminish very much the dangers +to liberty, whether real or imaginary, which +are commonly apprehended from a standing +army. As it would very much facilitate the +operations of that army against a foreign invader; +so it would obstruct them as much, if +unfortunately they should ever be directed +against the constitution of the state.</p> + +<p>The ancient institutions of Greece and +Rome seem to have been much more effectual +for maintaining the martial spirit of the great +body of the people, than the establishment of +what are called the militias of modern times. +They were much more simple. When they +were once established, they executed themselves, +and it required little or no attention +from government to maintain them in the +most perfect vigour. Whereas to maintain, +even in tolerable execution, the complex regulations +of any modern militia, requires the +continual and painful attention of government, +without which they are constantly falling +into total neglect and disuse. The influence, +besides, of the ancient institutions, was +much more universal. By means of them, the +whole body of the people was completely instructed +in the use of arms; whereas it is but +a very small part of them who can ever be +so instructed by the regulations of any modern +militia, except, perhaps, that of Switzerland. +But a coward, a man incapable either +of defending or of revenging himself, evidently +wants one of the most essential parts +of the character of a man. He is as much +mutilated and deformed in his mind as another +is in his body, who is either deprived of +some of its most essential members, or has +lost the use of them. He is evidently the +more wretched and miserable of the two; because +happiness and misery, which reside altogether +in the mind, must necessarily depend +more upon the healthful or unhealthful, the +mutilated or entire state of the mind, than +upon that of the body. 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 mutilation, deformity, and +wretchedness, which cowardice necessarily involves +in it, from spreading themselves through +the great body of the people, would still deserve +the most serious attention of government; +in the same manner as it would deserve +its most serious attention to prevent a +leprosy, or any other loathsome and offensive +disease, though neither mortal nor dangerous, +from spreading itself among them; though, +perhaps, no other public good might result +from such attention, besides the prevention of +so great a public evil.</p> + +<p>The same thing may be said of the gross +ignorance and stupidity which, in a civilized +society, seem so frequently to benumb the +understandings of all the inferior ranks of +people. A man without the proper use of the +intellectual faculties of a man, is, if possible, +more contemptible than even a coward, and +seems to be mutilated and deformed in a still +more essential part of the character of human +nature. Though the state was to derive no +advantage from the instruction of the inferior +ranks of people, it would still deserve its attention +that they should not be altogether uninstructed. +The state, however, derives no +inconsiderable advantage from their instruction. +The more they are instructed, the less +liable they are to the delusions of enthusiasm +and superstition, which, among ignorant nations +frequently occasion the most dreadful<span class='pagenum'><a name="Page_330" id="Page_330">[Pg 330]</a></span> +disorders. An instructed and intelligent people, +besides, are always more decent and orderly +than an ignorant and stupid one. They +feel themselves, each individually, more respectable, +and more likely to obtain the respect +of their lawful superiors, and they are, +therefore, more disposed to respect those superiors. +They are more disposed to examine, +and more capable of seeing through, the interested +complaints of faction and sedition; +and they are, upon that account, less apt to +be misled into any wanton or unnecessary opposition +to the measures of government. In +free countries, where the safety of government +depends very much upon the favourable +judgment which the people may form +of its conduct, it must surely be of the highest +importance, that they should not be disposed +to judge rashly or capriciously concerning it.</p> + + +<h4><small>ART. III.</small>—<i>Of the Expense of the Institutions +for the Instruction of People of all Ages.</i></h4> + +<p>The institutions for the instruction of people +of all ages, are chiefly those for religious +instruction. This is a species of instruction, +which the object is not so much to render +the people good citizens in this world, as to +prepare them for another and a better world +in the life to come. The teachers of the +doctrine which contains this instruction, in +the same manner as other teachers, may either +depend altogether for their subsistence upon +the voluntary contributions of their hearers; +or they may derive it from some other fund, +to which the law of their country may entitle +them; such as a landed estate, a tythe or +land tax, an established salary or stipend. +Their exertion, their zeal and industry, are +likely to be much greater in the former situation +than in the latter. In this respect, the +teachers of a new religion have always had a +considerable advantage in attacking these ancient +and established systems, of which the +clergy, reposing themselves upon their benefices, +had neglected to keep up the fervour of +faith and devotion in the great body of the +people; and having given themselves up to +indolence, were become altogether incapable +of making any vigorous exertion in defence +even of their own establishment. The clergy +of an established and well endowed religion +frequently become men of learning and elegance, +who possess all the virtues of gentlemen, +or which can recommend them to the +esteem of gentlemen; but they are apt gradually +to lose the qualities, both good and +bad, which gave them authority and influence +with the inferior ranks of people, and which +had perhaps been the original causes of the +success and establishment of their religion. +Such a clergy, when attacked by a set of popular +and bold, though perhaps stupid and +ignorant enthusiasts, feel themselves as perfectly +defenceless as the indolent, effeminate, and +full fed nations of the southern parts of Asia, +when they were invaded by the active, hardy, +and hungry Tartars of the north. Such a +clergy, upon such an emergency, have commonly +no other resource than to call upon the +civil magistrate to persecute, destroy, or +drive out their adversaries, as disturbers of +the public peace. It was thus that the Roman +catholic clergy called upon the civil +magistrate to persecute the protestants, and +the church of England to persecute the dissenters; +and that in general every religious +sect, when it has once enjoyed, for a century +or two, the security of a legal establishment, +has found itself incapable of making any +vigorous defence against any new sect which +chose to attack its doctrine or discipline. +Upon such occasions, the advantage, in point +of learning and good writing, may sometimes +be on the side of the established church. +But the arts of popularity, all the arts of +gaining proselytes, are constantly on the side +of its adversaries. In England, those arts +have been long neglected by the well endowed +clergy of the established church, and are +at present chiefly cultivated by the dissenters +and by the methodists. The independent +provisions, however, which in many places +have been made for dissenting teachers, by +means of voluntary subscriptions, of trust +rights, and other evasions of the law, seem +very much to have abated the zeal and activity +of those teachers. They have many of +them become very learned, ingenious, and +respectable men; but they have in general +ceased to be very popular preachers. The +methodists, without half the learning of the +dissenters, are much more in vogue.</p> + +<p>In the church of Rome the industry and +zeal of the inferior clergy are kept more alive +by the powerful motive of self-interest, than +perhaps in any established protestant church. +The parochial clergy derive many of them, a +very considerable part of their subsistence +from the voluntary oblations of the people; +a source of revenue, which confession gives +them many opportunities of improving. The +mendicant orders derive their whole subsistence +from such oblations. It is with them +as with the hussars and light infantry of some +armies; no plunder, no pay. The parochial +clergy are like those teachers whose reward +depends partly upon their salary, and partly +upon the fees or honoraries which they get +from their pupils; and these must always depend, +more or less, upon their industry and +reputation. The mendicant orders are like +those teachers whose subsistence depends +altogether upon their industry. They are +obliged, therefore, to use every art which can +animate the devotion of the common people. +The establishment of the two great mendicant +orders of St. Dominic and St. Francis, it is<span class='pagenum'><a name="Page_331" id="Page_331">[Pg 331]</a></span> +observed by Machiavel, revived, in the thirteenth +and fourteenth centuries, the languishing +faith and devotion of the catholic church. +In Roman catholic countries, the spirit of +devotion is supported altogether by the +monks, and by the poorer parochial clergy. +The great dignitaries of the church, with all +the accomplishments of gentlemen and men +of the world, and sometimes with those of +men of learning, are careful to maintain the +necessary discipline over their inferiors, but +seldom give themselves any trouble about the +instruction of the people.</p> + +<p>"Most of the arts and professions in a +state," says by far the most illustrious philosopher +and historian of the present age, "are +of such a nature, that, while they promote the +interests of the society, they are also useful +or agreeable to some individuals; and, in +that case, the constant rule of the magistrate, +except, perhaps, on the first introduction of +any art, is, to leave the profession to itself, +and trust its encouragement to the individuals +who reap the benefit of it. The artisans, +finding their profits to rise by the favour +of their customers, increase, as much as possible, +their skill and industry; and as matters +are not disturbed by any injudicious tampering, +the commodity is always sure to be at +all times nearly proportioned to the demand."</p> + +<p>"But there are also some callings which, +though useful and even necessary in a state, +bring no advantage or pleasure to any individual; +and the supreme power is obliged to +alter its conduct with regard to the retainers +of those professions. It must give them +public encouragement in order to their subsistence; +and it must provide against that +negligence to which they will naturally be +subject, either by annexing particular honours +to profession, by establishing a long +subordination of ranks, and a strict dependence, +or by some other expedient. The +persons employed in the finances, fleets, and +magistracy, are instances of this order of +men.</p> + +<p>"It may naturally be thought, at first +sight, that the ecclesiastics belong to the first +class, and that their encouragement, as well +as that of lawyers and physicians, may safely +be entrusted to the liberality of individuals, +who are attached to their doctrines, and who +find benefit or consolation from their spiritual +ministry and assistance. Their industry and +vigilance will, no doubt, be whetted by such +an additional motive; and their skill in the +profession, as well as their address in governing +the minds of the people, must receive +daily increase, from their increasing practice, +study, and attention.</p> + +<p>"But if we consider the matter more closely, +we shall find that this interested diligence +of the clergy is what every wise legislator will +study to prevent; because, in every religion +except the true, it is highly pernicious, and it +has even a natural tendency to pervert the +truth, by infusing into it a strong mixture of +superstition, folly, and delusion. Each +ghostly practitioner, in order to render himself +more precious and sacred in the eyes of +his retainers, will inspire them with the most +violent abhorrence of all other sects, and +continually endeavour, by some novelty, to +excite the languid devotion of his audience. +No regard will be paid to truth, morals, or +decency, in the doctrines inculcated. Every +tenet will be adopted that best suits the disorderly +affections of the human frame. Customers +will be drawn in each conventicle by +new industry and address, in practising on +the passions and credulity of the populace. +And, in the end, the civil magistrate will find +that he has dearly paid for his intended frugality, +in saving a fixed establishment for the +priests; and that, in reality, the most decent +and advantageous composition, which he can +make with the spiritual guides, is to bribe +their indolence, by assigning stated salaries +to their profession, and rendering it superfluous +for them to be farther active, than +merely to prevent their flock from straying in +quest of new pastors. And in this manner +ecclesiastical establishments, though commonly +they arose at first from religious views, +prove in the end advantageous to the political +interests of society."</p> + +<p>But whatever may have been the good or +bad effects of the independent provision of +the clergy, it has, perhaps, been very seldom +bestowed upon them from any view to those +effects. Times of violent religious controversy +have generally been times of equally +violent political faction. Upon such occasions, +each political party has either found it, +or imagined it, for his interest, to league itself +with some one or other of the contending +religious sects. But this could be done only +by adopting, or, at least, by favouring the +tenets of that particular sect. The sect +which had the good fortune to be leagued +with the conquering party necessarily shared +in the victory of its ally, by whose favour +and protection it was soon enabled, in some +degree, to silence and subdue all its adversaries. +Those adversaries had generally leagued +themselves with the enemies of the conquering +party, and were, therefore the enemies +of that party. The clergy of this particular +sect having thus become complete masters of +the field, and their influence and authority +with the great body of the people being in +its highest vigour, they were powerful enough +to overawe the chiefs and leaders of their +own party, and to oblige the civil magistrate +to respect their opinions and inclinations. +Their first demand was generally that he +should silence and subdue all their adversaries; +and their second, that he should bestow +an independent provision on themselves. +As they had generally contributed a good<span class='pagenum'><a name="Page_332" id="Page_332">[Pg 332]</a></span> +deal to the victory, it seemed not unreasonable +that they should have some share in the +spoil. They were weary, besides, of humouring +the people, and of depending upon +their caprice for a subsistence. In making +this demand, therefore, they consulted their +own ease and comfort, without troubling +themselves about the effect which it might +have, in future times, upon the influence and +authority of their order. The civil magistrate, +who could comply with their demand +only by giving them something which he +would have chosen much rather to take, or +to keep to himself, was seldom very forward +to grant it. Necessity, however, always +forced him to submit at last, though frequently +not till after many delays, evasions, and +affected excuses.</p> + +<p>But if politics had never called in the aid +of religion, had the conquering party never +adopted the tenets of one sect more than +those of another, when it had gained the +victory, it would probably have dealt equally +and impartially with all the different sects, +and have allowed every man to choose his +own priest, and his own religion, as he +thought proper. There would, and, in this +case, no doubt, have been, a great multitude +of religious sects. Almost every different +congregation might probably have had a +little sect by itself, or have entertained some +peculiar tenets of its own. Each teacher, +would, no doubt, have felt himself under the +necessity of making the utmost exertion, +and of using every art, both to preserve and +to increase the number of his disciples. But +as every other teacher would have felt himself +under the same necessity, the success of +no one teacher, or sect of teachers, could have +been very great. The interested and active +zeal of religious teachers can be dangerous +and troublesome only where there is either +but one sect tolerated in the society, or +where the whole of a large society is divided +into two or three great sects; the teachers +of each acting by concert, and under a +regular discipline and subordination. But +that zeal must be altogether innocent, where +the society is divided into two or three hundred, +or, perhaps, into as many thousand +small sects, of which no one could be considerable +enough to disturb the public tranquillity. +The teachers of each sect, seeing +themselves surrounded on all sides with more +adversaries than friends, would be obliged to +learn that candour and moderation which are +so seldom to be found among the teachers of +those great sects, whose tenets, being supported +by the civil magistrate, are held in veneration +by almost all the inhabitants of extensive +kingdoms and empires, and who, therefore, +see nothing round them but followers, +disciples, and humble admirers. The teachers +of each little sect, finding themselves almost +alone, would be obliged to respect those of +almost every other sect; and the concessions +which they would mutually find in both convenient +and agreeable to make one to another, +might in time, probably reduce the +doctrine of the greater part of them to that +pure and rational religion, free from every +mixture of absurdity, imposture, or fanaticism, +such as wise men have, in all ages of the world, +wished to see established; but such as positive +law has, perhaps, never yet established, and +probably never will establish in any country; +because, with regard to religion, positive law +always has been, and probably always will +be, more or less influenced by popular superstition +and enthusiasm. This plan of +ecclesiastical government, or, more properly, +of no ecclesiastical government, was what +the sect called Independents (a sect, no +doubt, of very wild enthusiasts), proposed to +establish in England towards the end of the +civil war. If it had been established, though +of a very unphilosophical origin, it would +probably, by this time, have been productive +of the most philosophical good temper and +moderation with regard to every sort of religious +principle. It has been established in +Pennsylvania, where, though the quakers +happen to be the most numerous, the law, in +reality, favours no one sect more than another; +and it is there said to have been productive +of this philosophical good temper and +moderation.</p> + +<p>But though this equality of treatment +should not be productive of this good temper +and moderation in all, or even in the greater +part of the religious sects of a particular +country; yet, provided those sects were sufficiently +numerous, and each of them consequently +too small to disturb the public +tranquillity, the excessive zeal of each for its +particular tenets could not well be productive +of any very hurtful effects, but, on the contrary, +of several good ones; and if the government +was perfectly decided, both to let +them all alone, and to oblige them all to let +alone one another, there is little danger that +they would not of their own accord, subdivide +themselves fast enough, so as soon to +become sufficiently numerous.</p> + +<p>In every civilized society, in every society +where the distinction of ranks has once been +completely established, there have been always +two different schemes or systems of morality +current at the same time; of which the one +may be called the strict or austere; the +other the liberal, or, if you will, the loose +system. The former is generally admired +and revered by the common people; the +latter is commonly more esteemed and adopted +by what are called the people of fashion. +The degree of disapprobation with which we +ought to mark the vices of levity, the vices +which are apt to arise from great prosperity, +and from the excess of gaiety and good humour, +seems to constitute the principal dis<span class='pagenum'><a name="Page_333" id="Page_333">[Pg 333]</a></span>tinction +between those two opposite schemes +or systems. In the liberal or loose system, +luxury, wanton, and even disorderly mirth, +the pursuit of pleasure to some degree of +intemperance, the breach of chastity, at least +in one of the two sexes, &c. provided they +are not accompanied with gross indecency, +and do not lead to falsehood and injustice, are +generally treated with a good deal of indulgence, +and are easily either excused or pardoned +altogether. In the austere system, on +the contrary, those excesses are regarded with +the utmost abhorrence and detestation. The +vices of levity are always ruinous to the common +people, and a single week's thoughtlessness +and dissipation is often sufficient to +undo a poor workman for ever, and to drive +him, through despair, upon committing the +most enormous crimes. The wiser and better +sort of the common people, therefore, +have always the utmost abhorrence and +detestation of such excesses, which their +experience tells them are so immediately fatal to +people of their condition. The disorder and +extravagance of several years, on the contrary, +will not always ruin a man of fashion; +and people of that rank are very apt to consider +the power of indulging in some degree +of excess, as one of the advantages of their +fortune; and the liberty of doing so without +censure or reproach, as one of the privileges +which belong to their station. In people of +their own station, therefore, they regard such +excesses with but a small degree of disapprobation, +and censure them either very slightly +or not at all.</p> + +<p>Almost all religious sects have begun +among the common people, from whom they +have generally drawn their earliest, as well +as their most numerous proselytes. The austere +system of morality has, accordingly, +been adopted by those sects almost constantly, +or with very few exceptions; for there +have been some. It was the system by which +they could best recommend themselves to that +order of people, to whom they first proposed +their plan of reformation upon what had been +before established. Many of them, perhaps +the greater part of them, have even endeavoured +to gain credit by refining upon this +austere system, and by carrying it to some +degree of folly and extravagance; and this +excessive rigour has frequently recommended +them, more than any thing else, to the respect +and veneration of the common people.</p> + +<p>A man of rank and fortune is, by his station, +the distinguished member of a great society, +who attend to every part of his conduct, +and who thereby oblige him to attend to every +part of it himself. His authority and consideration +depend very much upon the respect +which this society bears to him. He dares +not do any thing which would disgrace or +discredit him in it; and he is obliged to a +very strict observation of that species of +morals, whether liberal or austere, which the +general consent of this society prescribes to +persons of his rank and fortune. A man of +low condition, on the contrary, is far from +being a distinguished member of any great +society. While he remains in a country village, +his conduct may be attended to, and he +may be obliged to attend to it himself. In +this situation, and in this situation only, he +may have what is called a character to lose. +But as soon as he comes into a great city, he +is sunk in obscurity and darkness. His conduct +is observed and attended to by nobody; +and he is, therefore, very likely to neglect it +himself, and to abandon himself to every sort +of low profligacy and vice. He never +emerges so effectually from this obscurity, his +conduct never excites so much the attention +of any respectable society, as by his becoming +the member of a small religious sect. +He from that moment acquires a degree of +consideration which he never had before. +All his brother sectaries are, for the credit of +the sect, interested to observe his conduct; +and, if he gives occasion to any scandal, if +he deviates very much from those austere +morals which they almost always require of +one another, to punish him by what is always +a very severe punishment, even where no evil +effects attend it, expulsion or excommunication +from the sect. In little religious sects, +accordingly, the morals of the common people +have been almost always remarkably regular +and orderly; generally much more so +than in the established church. The morals +of those little sects, indeed, have frequently +been rather disagreeably rigorous and unsocial.</p> + +<p>There are two very easy and effectual remedies, +however, by whose joint operation +the state might, without violence, correct +whatever was unsocial or disagreeably rigorous +in the morals of all the little sects into +which the country was divided.</p> + +<p>The first of those remedies is the study of +science and philosophy, which the state might +render almost universal among all people of +middling or more than middling rank and +fortune; not by giving salaries to teachers in +order to make them negligent and idle, but +by instituting some sort of probation, even in +the higher and more difficult sciences, to be +undergone by every person before he was permitted +to exercise any liberal profession, or +before he could be received as a candidate for +any honourable office, of trust or profit. If +the state imposed upon this order of men the +necessity of learning, it would have no occasion +to give itself any trouble about providing +them with proper teachers. They would +soon find better teachers for themselves, than +any whom the state could provide for them. +Science is the great antidote to the poison of +enthusiasm and superstition; and where all +the superior ranks of people were secured +from it, the inferior ranks could not be much +exposed to it.<span class='pagenum'><a name="Page_334" id="Page_334">[Pg 334]</a></span></p> + +<p>The second of those remedies is the frequency +and gaiety of public diversions. The +state, by encouraging, that is, by giving entire +liberty to all those who, from their own +interest, would attempt, without scandal or +indecency, to amuse and divert the people +by painting, poetry, music, dancing; by all +sorts of dramatic representations and exhibitions; +would easily dissipate, in the greater +part of them, that melancholy and gloomy +humour which is almost always the nurse of +popular superstition and enthusiasm. Public +diversions have always been the objects of +dread and hatred to all the fanatical promoters +of those popular frenzies. The gaiety and +good humour which those diversions inspire, +were altogether inconsistent with that temper +of mind which was fittest for their purpose, +or which they could best work upon. Dramatic +representations, besides, frequently exposing +their artifices to public ridicule, and +sometimes even to public execration, were, +upon that account, more than all other diversions, +the objects of their peculiar abhorrence.</p> + +<p>In a country where the law favoured the +teachers of no one religion more than those +of another, it would not be necessary that +any of them should have any particular or +immediate dependency upon the sovereign or +executive power; or that he should have any +thing to do either in appointing or in dismissing +them from their offices. In such a situation, +he would have no occasion to give +himself any concern about them, further than +to keep the peace among them, in the same +manner as among the rest of his subjects, +that is, to hinder them from persecuting, +abusing, or oppressing one another. But it +is quite otherwise in countries where there is +an established or governing religion. The +sovereign can in this case never be secure, +unless he has the means of influencing in a +considerable degree the greater part of the +teachers of that religion.</p> + +<p>The clergy of every established church +constitute a great incorporation. They can +act in concert, and pursue their interest upon +one plan, and with one spirit as much as if +they were under the direction of one man; +and they are frequently, too, under such +direction. Their interest as an incorporated +body is never the same with that of the sovereign, +and is sometimes directly opposite to +it. Their great interest is to maintain their +authority with the people, and this authority +depends upon the supposed certainty and +importance of the whole doctrine which they +inculcate, and upon the supposed necessity +of adopting every part of it with the most implicit +faith, in order to avoid eternal misery. +Should the sovereign have the imprudence +to appear either to deride, or doubt himself +of the most trifling part of their doctrine, or +from humanity, attempt to protect those who +did either the one or the other, the punctilious +honour of a clergy, who have no sort of +dependency upon him, is immediately provoked +to proscribe him as a profane person, +and to employ all the terrors of religion, in +order to oblige the people to transfer their +allegiance to some more orthodox and obedient +prince. Should he oppose any of their +pretensions or usurpations, the danger is +equally great. The princes who have dared +in this manner to rebel against the church, +over and above this crime of rebellion, have +generally been charged, too, with the additional +crime of heresy, notwithstanding their +solemn protestations of their faith, and humble +submission to every tenet which she +thought proper to prescribe to them. But +the authority of religion is superior to every +other authority. The fears which it suggests +conquer all other fears. When the authorized +teachers of religion propagate through +the great body of the people, doctrines subversive +of the authority of the sovereign, it is +by violence only, or by the force of a standing +army, that he can maintain his authority. +Even a standing army cannot in this case give +him any lasting security; because if the soldiers +are not foreigners, which can seldom be +the case, but drawn from the great body of +the people, which must almost always be the +case, they are likely to be soon corrupted by +those very doctrines. The revolutions which +the turbulence of the Greek clergy was continually +occasioning at Constantinople, as +long as the eastern empire subsisted; the +convulsions which, during the course of several +centuries, the turbulence of the Roman +clergy was continually occasioning in every +part of Europe, sufficiently demonstrate how +precarious and insecure must always be the +situation of the sovereign, who has no proper +means of influencing the clergy of the established +and governing religion of his country.</p> + +<p>Articles of faith, as well as all other spiritual +matters, it is evident enough, are not +within the proper department of a temporal +sovereign, who, though he may be very well +qualified for protecting, is seldom supposed +to be so for instructing the people. With +regard to such matters, therefore, his authority +can seldom be sufficient to counterbalance +the united authority of the clergy of the established +church. The public tranquillity, +however, and his own security, may frequently +depend upon the doctrines which +they may think proper to propagate concerning +such matters. As he can seldom directly oppose +their decision, therefore, with proper weight +and authority, it is necessary that he should +be able to influence it; and he can influence +it only by the fears and expectations which +he may excite in the greater part of the individuals +of the order. Those fears and ex<span class='pagenum'><a name="Page_335" id="Page_335">[Pg 335]</a></span>pectations +may consist in the fear of deprivation +or other punishment, and in the expectation +of further preferment.</p> + +<p>In all Christian churches, the benefices of +the clergy are a sort of freeholds, which they +enjoy, not during pleasure, but during life or +good behaviour. If they held them by a +more precarious tenure, and were liable to be +turned out upon every slight disobligation +either of the sovereign or of his ministers, it +would perhaps be impossible for them to +maintain their authority with the people, who +would then consider them as mercenary +dependents upon the court, in the sincerity of +whose instructions they could no longer have +any confidence. But should the sovereign +attempt irregularly, and by violence, to deprive +any number of clergymen of their freeholds, +on account, perhaps, of their having +propagated, with more than ordinary zeal, +some factious or seditious doctrine, he would +only render, by such persecution, both them +and their doctrine ten times more popular, +and therefore ten times more troublesome and +dangerous, than they had been before. Fear +is in almost all cases a wretched instrument +of government, and ought in particular never +to be employed against any order of men who +have the smallest pretensions to independency. +To attempt to terrify them, serves only to +irritate their bad humour, and to confirm +them in an opposition, which more gentle +usage, perhaps, might easily induce them +either to soften, or to lay aside altogether. +The violence which the French government +usually employed in order to oblige all their +parliaments, or sovereign courts of justice, +to enregister any unpopular edict, very seldom +succeeded. The means commonly employed, +however, the imprisonment of all the +refractory members, one would think, were +forcible enough. The princes of the house +of Stuart sometimes employed the like means +in order to influence some of the members of +the parliament of England, and they generally +found them equally intractable. The parliament +of England is now managed in another +manner; and a very small experiment, +which the duke of Choiseul made, about +twelve years ago, upon the parliament of +Paris, demonstrated sufficiently that all the +parliaments of France might have been managed +still more easily in the same manner. +That experiment was not pursued. For +though management and persuasion are always +the easiest and safest instruments of +government as force and violence are the +worst and the most dangerous; yet such, it +seems, is the natural insolence of man, that +he almost always disdains to use the good instrument, +except when he cannot or dare not +use the bad one. The French government +could and durst use force, and therefore disdained +to use management and persuasion. +But there is no order of men, it appears I +believe, from the experience of all ages, upon +whom it is so dangerous or rather so perfectly +ruinous, to employ force and violence, as upon +the respected clergy of an established +church. The rights, the privileges, the personal +liberty of every individual ecclesiastic, +who is upon good terms with his own order, +are, even in the most despotic governments, +more respected than those of any other person +of nearly equal rank and fortune. It is so in +every gradation of despotism, from that of the +gentle and mild government of Paris, to that +of the violent and furious government of Constantinople. +But though this order of men +can scarce ever be forced, they may be managed +as easily as any other; and the security +of the sovereign, as well as the public tranquillity, +seems to depend very much upon the +means which he has of managing them; and +those means seem to consist altogether in the +preferment which he has to bestow upon them.</p> + +<p>In the ancient constitution of the Christian +church, 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; and +while they did retain it, they almost always +acted under the influence of the clergy, who, +in such spiritual matters, appeared to be their +natural guides. The clergy, however, soon +grew weary of the trouble of managing them, +and found it easier to elect their own bishops +themselves. The abbot, in the same manner, +was elected by the monks of the monastery, +at least in the greater part of abbacies. All +the inferior ecclesiastical benefices comprehended +within the diocese were collated by +the bishop, who bestowed them upon such +ecclesiastics as he thought proper. All church +preferments were in this manner in the disposal +of the church. The sovereign, though +he might have some indirect influence in those +elections, and though it was sometimes usual +to ask both his consent to elect, and his approbation +of the election, yet had no direct or +sufficient means of managing the clergy. The +ambition of every clergyman naturally led him +to pay court, not so much to his sovereign as +to his own order, from which only he could +expect preferment.</p> + +<p>Through the greater part of Europe, the +pope gradually drew to himself, first the collation +of almost all bishoprics and abbacies, +or of what were called consistorial benefices, +and afterwards, by various machinations +and pretences, of the greater part of inferior +benefices comprehended within each diocese, +little more being left to the bishop than what +was barely necessary to give him a decent +authority with his own clergy. By this arrangement +the condition of the sovereign was +still worse than it bad been before. The clergy +of all the different countries of Europe were +thus formed into a sort of spiritual army, dispersed +in different quarters, indeed, but of<span class='pagenum'><a name="Page_336" id="Page_336">[Pg 336]</a></span> +which all the movements and operations could +now be directed by one head, and conducted upon +one uniform plan. The clergy of each particular +country might be considered as a particular +detachment of that army, of which the +operations could easily be supported and seconded +by all the other detachments quartered +in the different countries round about. Each +detachment was not only independent of the +sovereign of the country in which it was quartered, +and by which it was maintained, but +dependent upon a foreign sovereign, who +could at any time turn its arms against the +sovereign of that particular country, and support +them by the arms of all the other detachments.</p> + +<p>Those arms were the most formidable that +can well be imagined. In the ancient state +of Europe, 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 great barons +gave them over their respective vassals, +tenants, and retainers. In the great landed +estates, which the mistaken piety both of +princes and private persons had bestowed upon +the church, jurisdictions were established, of +the same kind with those of the great barons, +and for the same reason. In those great landed +estates, the clergy, or their bailiffs, could easily +keep the peace, without the support or +assistance either of the king or of any other +person; and neither the king nor any other +person could keep the peace there without the +support and assistance of the clergy. The jurisdictions +of the clergy, therefore, in their +particular baronies or manors, were equally +independent, and equally exclusive of the authority +of the king's courts, as those of the +great temporal lords. The tenants of the +clergy were, like those of the great barons, +almost all tenants at will, entirely dependent +upon their immediate lords, and, therefore, +liable to be called out at pleasure, in order to +fight in any quarrel in which the clergy might +think proper to engage them. Over and +above the rents of those estates, the clergy possessed +in the tithes a very large portion of the +rents of all the other estates in every kingdom +of Europe. The revenues arising from both +those species of rents were, the greater part of +them, paid in kind, in corn, wine, cattle, poultry, +&c. The quantity exceeded greatly what +the clergy could themselves consume; and +there were neither arts nor manufactures, for +the produce of which they could exchange +the surplus. The clergy could derive advantage +from this immense surplus in no other +way than by employing it, as the great barons +employed the like surplus of their revenues, +in the most profuse hospitality, and in +the most extensive charity. Both the hospitality +and the charity of the ancient clergy, +accordingly, are said to have been very great. +They not only maintained almost the whole +poor of every kingdom, but many knights and +gentlemen had frequently no other means of +subsistence than by travelling about from monastery +to monastery, under pretence of devotion, +but in reality to enjoy the hospitality of +the clergy. The retainers of some particular +prelates were often as numerous as those of +the greatest lay-lords; and the retainers of all +the clergy taken together were, perhaps, more +numerous than those of all the lay-lords. +There was always much more union among +the clergy than among the lay-lords. The +former were under a regular discipline and +subordination to the papal authority. The latter +were under no regular discipline or subordination, +but almost always equally jealous of +one another, and of the king. Though the +tenants and retainers of the clergy, therefore, +had both together been less numerous than +those of the great lay-lords, and their tenants +were probably much less numerous, yet their +union would have rendered them more formidable. +The hospitality and charity of the +clergy, too, not only gave them the command of +a great temporal force, but increased very much +the weight of their spiritual weapons. Those +virtues procured them the highest respect and +veneration among all the inferior ranks of +people, of whom many were constantly, and +almost all occasionally, fed by them. Every +thing belonging or related to so popular an +order, its possessions, its privileges, its doctrines, +necessarily appeared sacred in the eyes +of the common people; and every violation +of them, whether real or pretended, the highest +act of sacrilegious wickedness and profaneness. +In this state of things, if the sovereign +frequently found it difficult to resist the +confederacy of a few of the great nobility, we +cannot wonder that he should find it still +more so to resist the united force of the clergy +of his own dominions, supported by that of the +clergy of all the neighbouring dominions. In +such circumstances, the wonder is, not that +he was sometimes obliged to yield, but that he +ever was able to resist.</p> + +<p>The privileges of the clergy in those ancient +times (which to us, who live in the present +times, appear the most absurd), their total +exemption from the secular jurisdiction, +for example, or what in England was called +the benefit of clergy, were the natural, or rather +the necessary, consequences of this state +of things. How dangerous must it have been +for the sovereign to attempt to punish a clergyman +for any crime whatever, if his order were +disposed to protect him, and to represent either +the proof as insufficient for convicting so holy +a man, or the punishment as too severe to be +inflicted upon one whose person had been +rendered sacred by religion? The sovereign +could, in such circumstances, do no better +than leave him to be tried by the ecclesiastical +courts, who, for the honour of their own +order, were interested to restrain, as much as<span class='pagenum'><a name="Page_337" id="Page_337">[Pg 337]</a></span> +possible, every member of it from committing +enormous crimes, or even from giving occasion +to such gross scandal as might disgust +the minds of the people.</p> + +<p>In the state in which things were, through +the greater part of Europe, during the tenth, +eleventh, twelfth, and thirteenth centuries, and +for some time both before and after that period, +the constitution of the church of Rome +may be considered as the must formidable +combination that ever was formed against the +authority and security of civil government, as +well as against the liberty, reason, and happiness +of mankind, which can flourish only +where civil government is able to protect +them. In that constitution, the grossest delusions +of superstition were supported in such +a manner by the private interests of so great +a number of people, as put them out of all +danger from any assault of human reason; +because, though human reason might, perhaps, +have been able to unveil, even to the +eyes of the common people, some of the delusions +of superstition, it could never have dissolved +the ties of private interest. Had this +constitution been attacked by no other enemies +but the feeble efforts of human reason, +it must have endured for ever. But that immense +and well-built fabric, which all the +wisdom and virtue of man could never have +shaken, much less have overturned, was, by +the natural course of things, first weakened, +and afterwards in part destroyed; and is +now likely, in the course of a few centuries +more, perhaps, to crumble into ruins altogether.</p> + +<p>The gradual improvements of arts, manufactures, +and commerce, the same causes which +destroyed the power of the grant barons, destroyed, +in the same manner, through the +greater part of Europe, the whole temporal +power of the clergy. In the produce of arts, +manufactures, and commerce, the clergy, like +the great barons, found something for which +they could exchange their rude produce, and +thereby discovered the means of spending their +whole revenues upon their own persons, without +giving any considerable share of them to +other people. Their charity became gradually +less extensive, their hospitality less liberal, +or less profuse. Their retainers became +consequently less numerous, and, by degrees, +dwindled away altogether. The clergy, too, +like the great barons, wished to get a better +rent from their landed estates, in order to spend +it, in the same manner, upon the gratification +of their own private vanity and folly. But +this increase of rent could be got only by +granting leases to their tenants, who thereby +became, in a great measure, independent of +them. The ties of interest, which bound the +inferior ranks of people to the clergy, were in +this manner gradually broken and dissolved. +They were even broken and dissolved sooner +than those which bound the same ranks of +people to the great barons; because the benefices +of the church being, the greater part of +them, much smaller than the estates of the +great barons, the possessor of each benefice +was much sooner able to spend the whole of +its revenue upon his own person. During +the greater part of the fourteenth and fifteenth +centuries, the power of the great barons was, +through the greater part of Europe, in full +vigour. But the temporal power of the clergy, +the absolute command which they had once +had over the great body of the people was +very much decayed. The power of the church +was, by that time, very nearly reduced, through +the greater part of Europe, to what arose +from their spiritual authority; and even that +spiritual authority was much weakened, when +it ceased to be supported by the charity and +hospitality of the clergy. The inferior ranks +of people no longer looked upon that order as +they had done before; as the comforters of +their distress, and the relievers of their indigence. +On the contrary, they were provoked +and disgusted by the vanity, luxury, and expense +of the richer clergy, who appeared to +spend upon their own pleasures what had always +before been regarded as the patrimony +of the poor.</p> + +<p>In this situation of things, the sovereigns +in the different states of Europe endeavoured +to recover the influence which they had once +had in the disposal of the great benefices of +the church; by procuring to the deans and +chapters of each diocese the restoration of +their ancient right of electing the bishop; and +to the monks of each abbacy that of electing the +abbot. The reestablishing this ancient order +was the object of several statutes enacted in +England during the course of the fourteenth +century, particularly of what is called the statute +of provisors; and of the pragmatic sanction, +established in France in the fifteenth century. +In order to render the election valid, it +was necessary that the sovereign should both +consent to it before hand, and afterwards approve +of the person elected; and though the +election was still supposed to be free, he had, +however all the indirect means which his situation +necessarily afforded him, of influencing the +clergy in his own dominions. Other regulations, +of a similar tendency, were established +in other parts of Europe. But the power of +the pope, in the collation of the great benefices +of the church, seems, before the reformation, +to have been nowhere so effectually +and so universally restrained as in France and +England. The concordat afterwards, in the +sixteenth century, gave to the kings of France +the absolute right of presenting to all the +great, or what are called the consistorial, benefices +of the Gallican church.</p> + +<p>Since the establishment of the pragmatic +sanction and of the concordat, the clergy of +France have, in general shewn less respect to +the decrees of the papal court, than the<span class='pagenum'><a name="Page_338" id="Page_338">[Pg 338]</a></span> +clergy of any other catholic country. In all +the disputes which their sovereign has had +with the pope, they have almost constantly +taken part with the former. This independency +of the clergy of France upon the court +of Rome seems to be principally founded upon +the pragmatic sanction and the concordat. +In the earlier periods of the monarchy, +the clergy of France appear to have been as +much devoted to the pope as those of any +other country. When Robert, the second +prince of the Capetian race, was most unjustly +excommunicated by the court of Rome, +his own servants, it is said, threw the victuals +which came from his table to the dogs, and +refused to taste any thing themselves which +had been polluted by the contact of a person +in his situation. They were taught to do so, +it may very safely be presumed, by the clergy +of his own dominions.</p> + +<p>The claim of collating to the great benefices +of the church, a claim in defence of +which the court of Rome had frequently shaken, +and sometimes overturned, the thrones +of some of the greatest sovereigns in Christendom, +was in this manner either restrained +or modified, or given up altogether, in +many different parts of Europe, even before +the time of the reformation. As the clergy +had now less influence over the people, so the +state had more influence over the clergy. +The clergy, therefore, had both less power, +and less inclination, to disturb the state.</p> + +<p>The authority of the church of Rome was +in this state of declension, when the disputes +which gave birth to the reformation began in +Germany, and soon spread themselves through +every part of Europe. The new doctrines +were everywhere received with a high degree +of popular favour. They were propagated +with all that enthusiastic zeal which commonly +animates the spirit of party, when it attacks +established authority. The teachers of those +doctrines, though perhaps, in other respects, +not more learned than many of the divines +who defended the established church, seem in +general to have been better acquainted with +ecclesiastical history, and with the origin and +progress of that system of opinions upon +which the authority of the church was established; +and they had thereby the advantage +in almost every dispute. The austerity of +their manners gave them authority with the +common people, who contrasted the strict +regularity of their conduct with the disorderly +lives of the greater part of their own clergy. +They possessed, too, in a much higher degree +than their adversaries, all the arts of popularity +and of gaining proselytes; arts which the +lofty and dignified sons of the church had +long neglected, as being to them in a great +measure useless. The reason of the new +doctrines recommended them to some, their +novelty to many; the hatred and contempt of +the established clergy to a still greater number: +but the zealous, passionate, and fanatical, +though frequently coarse and rustic eloquence, +with which they were almost everywhere +inculcated, recommended them to by +far the greatest number.</p> + +<p>The success of the new doctrines was almost +everywhere so great, that the princes, who at +that time happened to be on bad terms with +the court of Rome, were, by means of them, +easily enabled, in their own dominions, to +overturn the church, which having lost the +respect and veneration of the inferior ranks +of people, could make scarce any resistance. +The court of Rome had disobliged some of +the smaller princes in the northern parts of +Germany, whom it had probably considered +as too insignificant to be worth the managing. +They universally, therefore, established +the reformation in their own dominions. +The tyranny of Christiern II., and of Troll +archbishop of Upsal, enabled Gustavus Vasa +to expel them both from Sweden. The pope +favoured the tyrant and the archbishop, and +Gustavus Vasa found no difficulty in establishing +the reformation in Sweden. Christiern II. +was afterwards deposed from the +throne of Denmark, where his conduct had +rendered him as odious as in Sweden. The +pope, however, was still disposed to favour +him; and Frederic of Holstein, who had +mounted the throne in his stead, revenged +himself, by following the example of Gustavus +Vasa. The magistrates of Berne and +Zurich, who had no particular quarrel with +the pope, established with great ease the +reformation in their respective cantons, where +just before some of the clergy had, by an +imposture somewhat grosser than ordinary, rendered +the whole order both odious and contemptible.</p> + +<p>In this critical situation of its affairs the +papal court was at sufficient pains to cultivate +the friendship of the powerful sovereigns of +France and Spain, of whom the latter was at that +time emperor of Germany. With their assistance, +it was enabled, though not without great +difficulty, and much bloodshed, either to suppress +altogether, or obstruct very much, the +progress of the reformation in their dominions. +It was well enough inclined, too, to be complaisant +to the king of England. But from the +circumstances of the times, it could not be so +without giving offense to a still greater sovereign, +Charles V., king of Spain and emperor +of Germany. Henry VIII., accordingly, +though he did not embrace himself the greater +part of the doctrines of the reformation was +yet enabled, by their general prevalence, to +suppress all the monasteries, and to abolish +the authority of the church of Rome in his +dominions. That he should go so far, +though he went no further, gave some satisfaction +to the patrons of the reformation, +who, having got possession of the government +in the reign of his son and successor, com<span class='pagenum'><a name="Page_339" id="Page_339">[Pg 339]</a></span>pleted, +without any difficulty, the work which +Henry VIII. had begun.</p> + +<p>In some countries, as in Scotland, where +the government was weak, unpopular, and +not very firmly established, the reformation +was strong enough to overturn, not only the +church, but the state likewise, for attempting +to support the church.</p> + +<p>Among the followers of the reformation, +dispersed in all the different countries of Europe, +there was no general tribunal, which, +like that of the court of Rome, or an œcumenical +council, could settle all disputes +among them, and, with irresistible authority, +prescribe to all of them the precise limits of +orthodoxy. When the followers of the reformation +in one country, therefore, happened +to differ from their brethren in another, as +they had no common judge to appeal to, the +dispute could never be decided; and many +such disputes arose among them. Those +concerning the government of the church, and +the right of conferring ecclesiastical benefices, +were perhaps the most interesting to the +peace and welfare of civil society. They +gave birth, accordingly, to the two principal +parties or sects among the followers of the +reformation, the Lutheran and Calvinistic +sects, the only sects among them, of which +the doctrine and discipline have ever yet been +established by law in any part of Europe.</p> + +<p>The followers of Luther, together with +what is called the church of England, preserved +more or less of the episcopal government, +established subordination among the +clergy, gave the sovereign the disposal of all +the bishoprics, and other consistorial benefices +within his dominions, and thereby rendered +him the real head of the church; and +without depriving the bishop of the right of +collating to the smaller benefices within his +diocese, they, even to those benefices, not +only admitted, but favoured the right of presentation, +both in the sovereign and in all +other lay patrons. This system of church +government was, from the beginning, favourable +to peace and good order, and to +submission to the civil sovereign. It has +never, accordingly, been the occasion of any +tumult or civil commotion in any country in +which it has once been established. The +church of England, in particular, has always +valued herself, with great reason, upon the +unexceptionable loyalty of her principles. +Under such a government, the clergy naturally +endeavour to recommend themselves +to the sovereign, to the court, and to the +nobility and gentry of the country, by whose +influence they chiefly expect to obtain preferment. +They pay court to those patrons, +sometimes, no doubt, by the vilest flattery +and assentation; but frequently, too, by cultivating +all those arts which best deserve, and +which are therefore most likely to gain them, +the esteem of people of rank and fortune; +by their knowledge in all the different +branches of useful and ornamental learning, +by the decent liberality of their manners, by +the social good humour of their conversation, +and by their avowed contempt of those absurd +and hypocritical austerities which fanatics inculcate +and pretend to practise, in order to +draw upon themselves the veneration, and +upon the greater part of men of rank and +fortune, who avow that they do not practise +them, the abhorrence of the common people. +Such a clergy, however, while they pay their +court in this manner to the higher ranks of +life, are very apt to neglect altogether the +means of maintaining their influence and authority +with the lower. They are listened to, +esteemed, and respected by their superiors; +but before their inferiors they are frequently +incapable of defending, effectually, and to +the conviction of such hearers, their own sober +and moderate doctrines, against the most +ignorant enthusiast who chooses to attack +them.</p> + +<p>The followers of Zuinglius, or more properly +those of Calvin, on the contrary, bestowed +upon the people of each parish, whenever +the church became vacant, the right of +electing their own pastor; and established, +at the same time, the most perfect equality +among the clergy. The former part of this +institution, as long as it remained in vigour, +seems to have been productive of nothing +but disorder and confusion, and to have tended +equally to corrupt the morals both of the +clergy and of the people. The latter part +seems never to have had any effects but what +were perfectly agreeable.</p> + +<p>As long as the people of each parish preserved +the right of electing their own pastors, +they acted almost always under the influence +of the clergy, and generally of the most factious +and fanatical of the order. The clergy, +in order to preserve their influence in those +popular elections, became, or affected to become, +many of them, fanatics themselves, +encouraged fanaticism among the people, and +gave the preference almost always to the +most fanatical candidate. So small a matter +as the appointment of a parish priest, occasioned +almost always a violent contest, not +only in one parish, but in all the neighbouring +parishes who seldom failed to take part +in the quarrel. When the parish happened +to be situated in a great city, it divided all +the inhabitants into two parties; and when +that city happened, either to constitute itself +a little republic, or to be the head and capital +of a little republic, as in the case with many +of the considerable cities in Switzerland and +Holland, every paltry dispute of this kind, +over and above exasperating the animosity of +all their other factions, threatened to leave +behind it, both a new schism in the church, +and a new faction in the state. In those +small republics, therefore, the magistrate very<span class='pagenum'><a name="Page_340" id="Page_340">[Pg 340]</a></span> +soon found it necessary, for the sake of preserving +the public peace, to assume to himself +the right of presenting to all vacant benefices. +In Scotland, the most extensive +country in which this presbyterian form of +church government has ever been established, +the rights of patronage were in effect abolished +by the act which established presbytery +in the beginning of the reign of William III. +That act, at least, put in the power of certain +classes of people in each parish to purchase, +for a very small price, the right of electing +their own pastor. The constitution which +this act established, was allowed to subsist for +about two-and-twenty years, but was abolished +by the 10th of queen Anne, ch. 12, on +account of the confusions and disorders which +this more popular mode of election had almost +everywhere occasioned. In so extensive +a country as Scotland, however, a tumult +in a remote parish was not so likely to +give disturbance to government as in a smaller +state. The 10th of queen Anne restored +the rights of patronage. But though, in +Scotland, the law gives the benefice, without +any exception to the person presented by the +patron; yet the church requires sometimes +(for she has not in this respect been very uniform +in her decisions) a certain concurrence +of the people, before she will confer upon +the presentee what is called the cure of souls, +or the ecclesiastical jurisdiction in the parish. +She sometimes, at least, from an affected +concern for the peace of the parish, delays +the settlement till this concurrence can be +procured. The private tampering of some +of the neighbouring clergy, sometimes to +procure, but more frequently to prevent this +concurrence, and the popular arts which they +cultivate, in order to enable them upon such +occasions to tamper more effectually, are +perhaps the causes which principally keep up +whatever remains of the old fanatical spirit, +either in the clergy or in the people of Scotland.</p> + +<p>The equality which the presbyterian form +of church government establishes among the +clergy, consists, first, in the equality of authority +or ecclesiastical jurisdiction; and, +secondly, in the equality of benefice. In all +presbyterian churches, the equality of authority +is perfect; that of benefice is not so. +The difference, however, between one benefice +and another, is seldom so considerable, +as commonly to tempt the possessor even of +the small one to pay court to his patron, by +the vile arts of flattery and assentation, in +order to get a better. In all the presbyterian +churches, where the rights of patronage are +thoroughly established, it is by nobler and +better arts, that the established clergy in general +endeavour to gain the favour of their +superiors; by their learning, by the irreproachable +regularity of their life, and by the +faithful and diligent discharge of their duty. +Their patrons even frequently complain of +the independency of their spirit, which they +are apt to construe into ingratitude for past +favours, but which, at worst, perhaps, is seldom +any more than that indifference which +naturally arises from the consciousness that +no further favours of the kind are ever to be +expected. There is scarce, perhaps, to be +found anywhere in Europe, a more learned, +decent, independent, and respectable set of +men, than the greater part of the presbyterian +clergy of Holland, Geneva, Switzerland, and +Scotland.</p> + +<p>Where the church benefices are all nearly +equal, none of them can be very great; and +this mediocrity of benefice, though it may +be, no doubt, carried too far, has, however, +some very agreeable effects. Nothing but +exemplary morals can give dignity to a man +of small fortune. The vices of levity and +vanity necessarily render him ridiculous, and +are, besides, almost as ruinous to him as they +are to the common people. In his own conduct, +therefore, he is obliged to follow that +system of morals which the common people +respect the most. He gains their esteem and +affection, by that plan of life which his own +interest and situation would lead him to follow. +The common people look upon him +with that kindness with which we naturally +regard one who approaches somewhat to our +own condition, but who, we think, ought to +be in a higher. Their kindness naturally +provokes his kindness. He becomes careful +to instruct them, and attentive to assist and +relieve them. He does not even despise the +prejudices of people who are disposed to be +so favourable to him, and never treats them +with those contemptuous and arrogant airs, +which we so often meet with in the proud +dignitaries of opulent and well endowed +churches. The presbyterian clergy, accordingly, +have more influence over the minds of +the common people, than perhaps the clergy +of any other established church. It is, accordingly, +in presbyterian countries only, +that we ever find the common people converted, +without persecution completely, and +almost to a man, to the established church.</p> + +<p>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 benefice. The +universities have, in this case, the picking +and chusing of their members from all the +churchmen of the country, who, in every +country, constitute by far the most numerous +class of men of letters. Where church benefices, +on the contrary, are many of them +very considerable, the church naturally draws +from the universities the greater part of their +eminent men of letters; who generally find +some patron, who does himself honour by +procuring them church preferment. In the +former situation, we are likely to find the<span class='pagenum'><a name="Page_341" id="Page_341">[Pg 341]</a></span> +universities filled with the most eminent men +of letters that are to be found in the country. +In the latter, we are likely to find few +eminent men among them, and those few +among the youngest members of the society, +who are likely, too, to be drained away from +it, before they can have acquired experience +and knowledge enough to be of much use to +it. It is observed by Mr. de Voltaire, that +father Porée, a jesuit of no great eminence +in the republic of letters, was the only professor +they had ever had in France, whose +works were worth the reading. In a country +which has produced so many eminent men of +letters, it must appear somewhat singular, +that scarce one of them should have been a +professor in a university. The famous Cassendi +was, in the beginning of his life, a +professor in the university of Aix. Upon +the first dawning of his genius, it was represented +to him, that by going into the church +he could easily find a much more quiet and +comfortable subsistence, as well as a better +situation for pursuing his studies; and he +immediately followed the advice. The observation +of Mr. de Voltaire may be applied, +I believe, not only to France, but to all +other Roman Catholic countries. We very +rarely find in any of them an eminent man +of letters, who is a professor in a university, +except, perhaps, in the professions of law +and physic; professions from which the +church is not so likely to draw them. After +the church of Rome, that of England is by +far the richest and best endowed church in +Christendom. In England, accordingly, the +church is continually draining the universities +of all their best and ablest members; +and an old college tutor who is known and +distinguished in Europe as an eminent man +of letters, is as rarely to be found there as in +any Roman catholic country. In Geneva, +on the contrary, in the protestant cantons of +Switzerland, in the protestant countries of +Germany, in Holland, in Scotland, in Sweden, +and Denmark, the most eminent men of +letters whom those countries have produced, +have, not all indeed, but the far greater part +of them, been professors in universities. In +those countries, the universities are continually +draining the church of all its most eminent +men of letters.</p> + +<p>It may, perhaps, be worth while to remark, +that, if we except the poets, a few orators, +and a few historians, the far greater part of +the other eminent men of letters, both of +Greece and Rome, appear to have been either +public or private teachers; generally either +of philosophy or of rhetoric. This remark +will be found to hold true, from the days of +Lysias and Isocrates, of Plato and Aristotle, +down to those of Plutarch and Epictetus, +Suetonius, and Quintilian. To impose upon +any man the necessity of teaching, year after +year, in any particular branch of science +seems in reality to be the most effectual method +for rendering him completely master of +it himself. By being obliged to go every +year over the same ground, if he is good for +any thing, he necessarily becomes, in a few +years, well acquainted with every part of it: +and if, upon any particular point, he should +form too hasty an opinion one year, when he +comes, in the course of his lectures to reconsider +the same subject the year thereafter, +he is very likely to correct it. As to be a +teacher of science is certainly the natural +employment of a mere man of letters; so is +it likewise, perhaps, the education which is +most likely to render him a man of solid +learning and knowledge. The mediocrity of +church benefices naturally tends to draw the +greater part of men of letters in the country +where it takes place, to the employment in +which they can be the most useful to the +public, and at the same time to give them the +best education, perhaps, they are capable of +receiving. It tends to render their learning +both as solid as possible, and as useful as possible.</p> + +<p>The revenue of every established church, +such parts of it excepted as may arise from +particular lands or manors, is a branch, it +ought to be observed, of the general revenue +of the state, which is thus diverted to a purpose +very different from the defence of the +state. The tithe, for example, is a real land-tax, +which puts it out of the power of the +proprietors of land to contribute so largely towards +the defence of the state as they otherwise +might be able to do. The rent of land, +however, is, according to some, the sole fund; +and, according to others, the principal fund, +from which, in all great monarchies, the exigencies +of the state must be ultimately supplied. +The more of this fund that is given to +the church, the less, it is evident, can be spared +to the state. It may be laid down as a certain +maxim, that all other things being supposed +equal, the richer the church, the poorer +must necessarily be, either the sovereign on +the one hand, or the people on the other; +and, in all cases, the less able must the state +be to defend itself. In several protestant +countries, particularly in all the protestant +cantons of Switzerland, the revenue which +anciently belonged to the Roman catholic +church, the tithes and church lands, has been +found a fund sufficient, not only to afford +competent salaries to the established clergy, +but to defray, with little or no addition, all +the other expenses of the state. The magistrates +of the powerful canton of Berne, in +particular, have accumulated, out of the savings +from this fund, a very large sum, supposed +to amount to several millions; part of +which is deposited in a public treasure, and +part is placed at interest in what are called +the public funds of the different indebted nations +of Europe; chiefly in those of France<span class='pagenum'><a name="Page_342" id="Page_342">[Pg 342]</a></span> +and Great Britain. What may be the amount +of the whole expense which the church, either +of Berne, or of any other protestant canton, +costs the state, I do not pretend to know. By +a very exact account it appears, that, in 1755, +the whole revenue of the clergy of the church +of Scotland, including their glebe or church +lands, and the rent of their manses or dwelling-houses, +estimated according to a reasonable +valuation, amounted only to L.68,514, +1s. 5<sup>1</sup>⁄<sub>12</sub>d. This very moderate revenue affords +a decent subsistence to nine hundred and forty-four +ministers. The whole expense of the +church, including what is occasionally laid out +for the building and reparation of churches, +and of the manses of ministers, cannot well +be supposed to exceed eighty or eighty-five +thousand pounds a-year. The most opulent +church in Christendom does not maintain better +the uniformity of faith, the fervour of devotion, +the spirit of order, regularity, and austere +morals, in the great body of the people, than +this very poorly endowed church of Scotland. +All the good effects, both civil and religious, +which an established church can be supposed +to produce, are produced by it as completely +as by any other. The greater part of the protestant +churches of Switzerland, which, in general, +are not better endowed than the church +of Scotland, produce those effects in a still +higher degree. In the greater part of the +protestant cantons, there is not a single person +to be found, who does not profess himself +to be of the established church. If he professes +himself to be of any other, indeed, the +law obliges him to leave the canton. But so +severe, or, rather, indeed, so oppressive a law, +could never have been executed in such free +countries, had not the diligence of the clergy +beforehand converted to the established church +the whole body of the people, with the exception +of, perhaps, a few individuals only. +In some parts of Switzerland, accordingly, +where, from the accidental union of a protestant +and Roman catholic country, the conversion +has not been so complete, both religions +are not only tolerated, but established +by law.</p> + +<p>The proper performance of every service +seems to require, that its pay or recompence +should be, as exactly as possible, proportioned +to the nature of the service. If any service +is very much underpaid, it is very apt to suffer +by the meanness and incapacity of the +greater part of those who are employed in it. +If it is very much overpaid, it is apt to suffer, +perhaps still more, by their negligence +and idleness. A man of a large revenue, +whatever may be his profession, thinks he +ought to live like other men of large revenues; +and to spend a great part of his time +in festivity, in vanity, and in dissipation. +But in a clergyman, this train of life not only +consumes the time which ought to be employed +in the duties of his function, but in the +eyes of the common people, destroys almost +entirely that sanctity of character, which can +alone enable him to perform these duties with +proper weight and authority.</p> + + +<h4>PART IV.</h4> + +<h4><i>Of the Expense of supporting the Dignity of +the Sovereign.</i></h4> + +<p>Over and above the expenses necessary for +enabling the sovereign to perform his several +duties, a certain expense is requisite for the +support of his dignity. This expense varies, +both with the different periods of improvement, +and with the different forms of government.</p> + +<p>In an opulent and improved society, where +all the different orders of people are growing +every day more expensive in their houses, in +their furniture, in their tables, in their dress, +and in their equipage; it cannot well be expected +that the sovereign should alone hold out +against the fashion. He naturally, therefore, +or rather necessarily, becomes more expensive +in all those different articles too. His dignity +even seems to require that he should become +so.</p> + +<p>As, in point of dignity, a monarch is more +raised above his subjects than the chief magistrate +of any republic is ever supposed to +be above his fellow-citizens; so a greater expense +is necessary for supporting that higher +dignity. We naturally expect more splendour +in the court of a king, than in the mansion-house +of a doge or burgo-master.</p> + + +<h4>CONCLUSION.</h4> + +<p>The expense of defending the society, and +that of supporting the dignity of the chief +magistrate, are both laid out for the general +benefit of the whole society. It is reasonable, +therefore, that they should be defrayed +by the general contribution of the whole society; +all the different members contributing, +as nearly as possible, in proportion to their respective +abilities.</p> + +<p>The expense of the administration of justice, +too, may no doubt be considered as laid +out for the benefit of the whole society. There +is no impropriety, therefore, in its being defrayed +by the general contribution of the whole +society. The persons, however, who give occasion +to this expense, are those who, by their +injustice in one way or another, make it necessary +to seek redress or protection from the +courts of justice. The persons, again, most +immediately benefited by this expense, are +those whom the courts of justice either restore +to their rights, or maintain in their<span class='pagenum'><a name="Page_343" id="Page_343">[Pg 343]</a></span> +rights. The expense of the administration of +justice, therefore, may very properly be defrayed +by the particular contribution of one +or other, or both, of those two different sets +of persons, according as different occasions +may require, that is, by the fees of court. It +cannot be necessary to have recourse to the +general contribution of the whole society, except +for the conviction of those criminals who +have not themselves any estate or fund sufficient +for paying those fees.</p> + +<p>Those local or provincial expenses, of which +the benefit is local or provincial (what is laid +out, for example, upon the police of a particular +town or district), ought to be defrayed +by a local or provincial revenue, and ought to +be no burden upon the general revenue of the +society. It is unjust that the whole society +should contribute towards an expense, of +which the benefit is confined to a part of the +society.</p> + +<p>The expense of maintaining good roads +and communications is, no doubt, beneficial +to the whole society, and may, therefore, without +any injustice, be defrayed by the general +contributions of the whole society. This expense, +however, is most immediately and directly +beneficial to those who travel or carry +goods from one place to another, and to those +who consume such goods. The turnpike tolls +in England, and the duties called peages in +other countries, lay it altogether upon those +two different sets of people, and thereby discharge +the general revenue of the society from +a very considerable burden.</p> + +<p>The expense of the institutions for education +and religious instruction, is likewise, no +doubt, beneficial to the whole society, and +may, therefore, without injustice, be defrayed +by the general contribution of the whole society. +This expense, however, might, perhaps, +with equal propriety, and even with +some advantage, be defrayed altogether by +those who receive the immediate benefit of +such education and instruction, or by the voluntary +contribution of those who think they +have occasion for either the one or the other.</p> + +<p>When the institutions, or public works, +which are beneficial to the whole society, either +cannot be maintained altogether, or are +not maintained altogether, by the contribution +of such particular members of the society as +are most immediately benefited by them; the +deficiency must, in most cases, be made up +by the general contribution of the whole society. +The general revenue of the society, over +and above defraying the expense of defending +the society, and of supporting the dignity of +the chief magistrate, must make up for the +deficiency of many particular branches of revenue. +The sources of this general or public +revenue, I shall endeavour to explain in +the following chapter.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. II.</h3> + +<h4>OF THE SOURCES OF THE GENERAL OR PUBLIC +REVENUE OF THE SOCIETY.</h4> + + +<p>The revenue which must defray, not only +the expense of defending the society and of +supporting the dignity of the chief magistrate, +but all the other necessary expenses of government, +for which the constitution of the state +has not provided any particular revenue may +be drawn, either, first, from some fund which +peculiarly belongs to the sovereign or commonwealth, +and which is independent of the +revenue of the people; or, secondly, from the +revenue of the people.</p> + + +<h4>PART I.</h4> + +<h4><i>Of the Funds, or Sources, of Revenue, which +may peculiarly belong to the Sovereign or +Commonwealth.</i></h4> + +<p>The funds, or sources, of revenue, which +may peculiarly belong to the sovereign or +commonwealth, must consist, either in stock, +or in land.</p> + +<p>The sovereign, like any other owner of +stock, may derive a revenue from it, either +by employing it himself, or by lending it. His +revenue is, in the one case, profit, in the other +interest.</p> + +<p>The revenue of a Tartar or Arabian chief +consists in profit. It arises principally from +the milk and increase of his own herds and +flocks, of which he himself superintends the +management, and is the principal shepherd or +herdsman of his own horde or tribe. It is, +however, in this earliest and rudest state of +civil government only, that profit has ever +made the principal part of the public revenue +of a monarchical state.</p> + +<p>Small republics have sometimes derived a +considerable revenue from the profit of mercantile +projects. The republic of Hamburgh +is said to do so from the profits of a public +wine-cellar and apothecary's shop.<a name="FNanchor_50_50" id="FNanchor_50_50"></a><a href="#Footnote_50_50" class="fnanchor">[50]</a> That state +cannot be very great, of which the sovereign has +leisure to carry on the trade of a wine-merchant +or an apothecary. The profit of a public bank +has been a source of revenue to more con<span class='pagenum'><a name="Page_344" id="Page_344">[Pg 344]</a></span>siderable +states. It has been so, not only to +Hamburgh, but to Venice and Amsterdam. +A revenue of this kind has even by some +people been thought not below the attention +of so great an empire as that of Great Britain. +Reckoning the ordinary dividend of the bank +of England at five and a-half per cent., and +its capital at ten millions seven hundred and +eighty thousand pounds, the net annual profit, +after paying the expense of management, +must amount, it is said, to five hundred and +ninety-two thousand nine hundred pounds. +Government, it is pretended, could borrow +this capital at three per cent. interest, and, by +taking the management of the bank into its +own hands, might make a clear profit of two +hundred and sixty-nine thousand five hundred +pounds a-year. The orderly, vigilant, and +parsimonious administration of such aristocracies +as those of Venice and Amsterdam, is extremely +proper, it appears from experience, +for the management of a mercantile project of +this kind. But whether such a government +as that of England, which, whatever may be +its virtues, has never been famous for good +economy; which, in time of peace, has generally +conducted itself with the slothful and +negligent profusion that is, perhaps, natural +to monarchies; and, in time of war, has constantly +acted with all the thoughtless extravagance +that democracies are apt to fall into, +could be safely trusted with the management +of such a project, must at least be good deal +more doubtful.</p> + +<p>The post-office is properly a mercantile project. +The government advances the expense +of establishing the different offices, and of buying +or hiring the necessary horses or carriages, +and is repaid, with a large profit, by the duties +upon what is carried. It is, perhaps, the only +mercantile project which has been successfully +managed by, I believe, every sort of government. +The capital to be advanced is not very +considerable. There is no mystery in the business. +The returns are not only certain, but +immediate.</p> + +<p>Princes, however, have frequently engaged +in many other mercantile projects, and have +been willing, like private persons, to mend their +fortunes, by becoming adventurers in the common +branches of trade. They have scarce +ever succeeded. The profusion with which +the affairs of princes are always managed, +renders it almost impossible that they should. +The agents of a prince regard the wealth of +their master as inexhaustible; are careless at +what price they buy, are careless at what price +they sell, are careless at what expense they +transport his goods from one place to another. +Those agents frequently live with the profusion +of princes; and sometimes, too, in spite +of that profusion, and by a proper method of +making up their accounts, acquire the fortunes +of princes. It was thus, as we are told by +Machiavel, that the agents of Lorenzo of Medicis, +not a prince of mean abilities, carried on +his trade. The republic of Florence was +several times obliged to pay the debt into +which their extravagance had involved him. +He found it convenient, accordingly to give up +the business of merchant, the business to which +his family had originally owed their fortune, +and, in the latter part of his life, to employ +both what remained of that fortune, and the +revenue of the state, of which he had the disposal, +in projects and expenses more suitable +to his station.</p> + +<p>No two characters seem more inconsistent +than those of trader and sovereign. If the +trading spirit of the English East India company +renders them very bad sovereigns, the +spirit of sovereignty seems to have rendered +them equally bad traders. While they were +traders only, they managed their trade successfully, +and were able to pay from their profits +a moderate dividend to the proprietors of +their stock. Since they became sovereigns, +with a revenue which, it is said, was originally +more than three millions sterling, they have +been obliged to beg the ordinary assistance of +government, in order to avoid immediate bankruptcy. +In their former situation, their servants +in India considered themselves as the +clerks of merchants; in their present situation, +those servants consider themselves as the ministers +of sovereigns.</p> + +<p>A state may sometimes derive some part of +its public revenue from the interest of money, +as well as from the profits of stock. If it has +amassed a treasure, it may lend a part of that +treasure, either to foreign states, or to its own +subjects.</p> + +<p>The canton of Berne derives a considerable +revenue by lending a part of its treasure to +foreign states, that is, by placing it in the +public funds of the different indebted nations +of Europe, chiefly in those of France and +England. The security of this revenue must +depend, first, upon the security of the funds +in which it is placed, or upon the good faith +of the government which has the management +of them; and, secondly, upon the certainty or +probability of the continuance of peace with +the debtor nation. In the case of a war, the +very first act of hostility on the part of the +debtor nation might be the forfeiture of the +funds of its creditor. This policy of lending +money to foreign states is, so far as I know +peculiar to the canton of Berne.</p> + +<p>The city of Hamburgh<a name="FNanchor_51_51" id="FNanchor_51_51"></a><a href="#Footnote_51_51" class="fnanchor">[51]</a> has established a +sort of public pawn-shop, which lends money +to the subjects of the state, upon pledges, at +six per cent. interest. This pawn-shop, or +lombard, as it is called, affords a revenue, it +is pretended, to the state, of a hundred and<span class='pagenum'><a name="Page_345" id="Page_345">[Pg 345]</a></span> +fifty thousand crowns, which, at four and sixpence +the crown, amounts to L.33,750 sterling.</p> + +<p>The government of Pennsylvania, without +amassing any treasure, invented a method of +lending, not money, indeed, but what is equivalent +to money, to its subjects. By advancing +to private people, at interest, and +upon land security to double the value, paper +bills of credit, to be redeemed fifteen years after +their date; and, in the mean time, made +transferable from hand to hand, like banknotes, +and declared by act of assembly to be a +legal tender in all payments from one inhabitant +of the province to another, it raised a +moderate revenue, which went a considerable +way towards defraying an annual expense of +about L.4500, the whole ordinary expense of +that frugal and orderly government. The +success of an expedient of this kind must have +depended upon three different circumstances: +first, upon the demand for some other instrument +of commerce, besides gold and silver +money, or upon the demand for such a quantity +of consumable stock as could not be had +without sending abroad the greater part of +their gold and silver money, in order to purchase +it; secondly, upon the good credit of +the government which made use of this expedient; +and, thirdly, upon the moderation with +which it was used, the whole value of the +paper bills of credit never exceeding that of +the gold and silver money which would have +been necessary for carrying on their circulation, +had there been no paper bills of credit. +The same expedient was, upon different occasions, +adopted by several other American +colonies; but, from want of this moderation, +it produced, in the greater part of them, much +more disorder than conveniency.</p> + +<p>The unstable and perishable nature of stock +and credit, however, renders them unfit to be +trusted to as the principal funds of that sure, +steady, and permanent revenue, which can alone +give security and dignity to government. +The government of no great nation, that was +advanced beyond the shepherd state, seems +ever to have derived the greater part of its +public revenue from such sources.</p> + +<p>Land is a fund of more stable and permanent +nature; and the rent of public lands, accordingly, +has been the principal source of +the public revenue of many a great nation +that was much advanced beyond the shepherd +state. From the produce or rent of the public +lands, the ancient republics of Greece and +Italy derived for a long time the greater part +of that revenue which defrayed the necessary +expenses of the commonwealth. The rent of +the crown lands constituted for a long time +the greater part of the revenue of the ancient +sovereigns of Europe.</p> + +<p>War, and the preparation for war, are the +two circumstances which, in modern times, +occasion the greater part of the necessary expense +of all great states. But in the ancient +republics of Greece and Italy, every citizen +was a soldier, and both served, and prepared +himself for service, at his own expense. +Neither of those two circumstances, therefore, +could occasion any very considerable expense +to the state. The rent of a very moderate +landed estate might be fully sufficient +for defraying all the other necessary expenses +of government.</p> + +<p>In the ancient monarchies of Europe, the +manners and customs of the times sufficiently +prepared the great body of the people for +war; and when they took the field, they +were, by the condition of their feudal tenures, +to be maintained either at their own +expense, or at that of their immediate lords, +without bringing any new charge upon the +sovereign. The other expenses of government +were, the greater part of them, very +moderate. The administration of justice, it +has been shewn, instead of being a cause of +expense was a source of revenue. The labour +of the country people, for three days +before, and for three days after, harvest, was +thought a fund sufficient for making and +maintaining all the bridges, highways, and +other public works, which the commerce of +the country was supposed to require. In +those days the principal expense of the sovereign +seems to have consisted in the maintenance +of his own family and household. +The officers of his household, accordingly, +were then the great officers of state. The +lord treasurer received his rents. The lord +steward and lord chamberlain looked after +the expense of his family. The care of his +stables was committed to the lord constable +and the lord marshal. His houses were all +built in the form of castles, and seem to have +been the principal fortresses which he possessed. +The keepers of those houses or castles +might be considered as a sort of military governors. +They seem to have been the only +military officers whom it was necessary to +maintain in time of peace. In these circumstances, +the rent of a great landed estate +might, upon ordinary occasions, very well +defray all the necessary expenses of government.</p> + +<p>In the present state of the greater part of +the civilized monarchies of Europe, the rent +of all the lands in the country, managed as +they probably would be, if they all belonged +to one proprietor, would scarce, perhaps, +amount to the ordinary revenue which they +levy upon the people even in peaceable times. +The ordinary revenue of Great Britain, for +example, including not only what is necessary +for defraying the current expense of the year, +but for paying the interest of the public +debts, and for sinking a part of the capital +of those debts, amounts to upwards of ten +millions a-year. But the land tax, at four +shillings in the pound, falls short of two millions +a-year. This land tax, as it is called,<span class='pagenum'><a name="Page_346" id="Page_346">[Pg 346]</a></span> +however, is supposed to be one-fifth, not only +of the rent of all the land, but of that of all +the houses, and of the interest of all the capital +stock of Great Britain, that part of it +only excepted which is either lent to the public, +or employed as farming stock in the cultivation +of land. A very considerable part +of the produce of this tax arises from the +rent of houses and the interest of capital stock. +The land tax of the city of London, for example, +at four shillings in the pound, amounts +to L.123,399 : 6 : 7; that of the city +of Westminster to L.63,092 : 1 : 5; that of +the palaces of Whitehall and St. James's to +L.30,754 : 6 : 3. A certain proportion of +the land tax is, in the same manner, assessed +upon all the other cities and towns corporate +in the kingdom; and arises almost altogether, +either from the rent of houses, or from what +is supposed to be the interest of trading and +capital stock. According to the estimation, +therefore, by which Great Britain is rated to +the land tax, the whole mass of revenue arising +from the rent of all the lands, from that +of all the houses, and from the interest of all +the capital stock, that part of it only excepted +which is either lent to the public, or employed +in the cultivation of land, does not +exceed ten millions sterling a-year, the ordinary +revenue which government levies upon +the people even in peaceable times. The +estimation by which Great Britain is rated to +the land tax is, no doubt, taking the whole +kingdom at an average, very much below the +real value; though in several particular counties +and districts it is said to be nearly equal +to that value. The rent of the lands alone, +exclusive of that of houses and of the interest +of stock, has by many people been estimated +at twenty millions; an estimation +made in a great measure at random, and +which, I apprehend, is as likely to be above +as below the truth. But if the lands of +Great Britain, in the present state of their +cultivation, do not afford a rent of more than +twenty millions a-year, they could not well +afford the half, most probably not the fourth +part of that rent, if they all belonged to a +single proprietor, and were put under the +negligent, expensive, and oppressive management +of his factors and agents. The crown +lands of Great Britain do not at present afford +the fourth part of the rent which could +probably be drawn from them if they were +the property of private persons. If the crown +lands were more extensive, it is probable, they +would be still worse managed.</p> + +<p>The revenue which the great body of the +people derives from land is, in proportion, +not to the rent, but to the produce of the +land. The whole annual produce of the +land of every country, if we except what is +reserved for seed, is either annually consumed +by the great body of the people, or exchanged +for something else that is consumed +by them. Whatever keeps down the produce +of the land below what it would otherwise +rise to, keeps down the revenue of the great +body of the people, still more than it does +that of the proprietors of land. The rent of +land, that portion of the produce which belongs +to the proprietors, is scarce anywhere +in Great Britain supposed to be more than a +third part of the whole produce. If the land +which, in one state of cultivation, affords a +revenue of ten millions sterling a-year, would +in another afford a rent of twenty millions; +the rent being, in both cases, supposed a +third part of the produce, the revenue of the +proprietors would be less than it otherwise +might be, by ten millions a-year only; but +the revenue of the great body of the people +would be less than it otherwise might be, by +thirty millions a-year, deducting only what +would be necessary for seed. The population +of the country would be less by the number +of people which thirty millions a-year, deducting +always the seed, could maintain, according +to the particular mode of living, and +expense which might take place in the different +ranks of men, among whom the remainder +was distributed.</p> + +<p>Though there is not at present in Europe, +any civilized state of any kind 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 +of Europe, there are still many large tracts +of land which belong to the crown. They +are generally forest, and sometimes forests +where, after travelling several miles, you will +scarce find a single tree; a mere waste and +loss of country, in respect both of produce +and population. In every great monarchy of +Europe, the sale of the crown lands would +produce a very large sum of money, which, +if applied to the payment of the public debts, +would deliver from mortgage a much greater +revenue than any which those lands have ever +afforded to the crown. In countries where +lands, improved and cultivated very highly, +and yielding, at the time of sale, as great a +rent as can easily be got from them, commonly +sell at thirty years purchase; the unimproved, +uncultivated, and low-rented crown +lands, might well be expected to sell at forty, +fifty, or sixty years purchase. The crown +might immediately enjoy the revenue which +this great price would redeem from mortgage. +In the course of a few years, it would +probably enjoy another revenue. When the +crown lands had become private property, +they would, in the course of a few years, become +well improved and well cultivated. +The increase of their produce would increase +the population of the country, by augmenting +the revenue and consumption of the people. +But the revenue which the crown derives<span class='pagenum'><a name="Page_347" id="Page_347">[Pg 347]</a></span> +from the duties of custom and excise, would +necessarily increase with the revenue and consumption +of the people.</p> + +<p>The revenue which, in any civilized monarchy, +the crown derives from the crown +lands, though it appears to cost nothing to +individuals, in reality costs more to the society +than perhaps any other equal revenue +which the crown enjoys. It would, in all +cases, be for the interest of the society, to replace +this revenue to the crown by some other +equal revenue, and to divide the lands among +the people, which could not well be done better, +perhaps, than by exposing them to public +sale.</p> + +<p>Lands, for the purposes of pleasure and +magnificence, parks, gardens, public walks, +&c. possessions which are everywhere considered +as causes of expense, not as sources of +revenue, seem to be the only lands which, in +a great and civilized monarchy, ought to belong +to the crown.</p> + +<p>Public stock and public lands, therefore, +the two sources of revenue which may peculiarly +belong to the sovereign or commonwealth, +being both improper and insufficient +funds for defraying the necessary expense of +any great and civilized state; it remains that +this expense must, the greater part of it, be +defrayed by taxes of one kind or another; +the people contributing a part of their own +private revenue, in order to make up a public +revenue to the sovereign or commonwealth.</p> + + +<h4>PART II.</h4> + +<h4><i>Of Taxes.</i></h4> + +<p>The private revenue of individuals, it has +been shown in the first book of this Inquiry, +arises, ultimately from the three different sources; +rent, profit, and wages. Every tax must +finally be paid from some one or other of +those three different sources of revenue, or +from all of them indifferently. I shall endeavour +to give the best account I can, first, +of those taxes which, it is intended should fall +upon rent; secondly, of those which, it is +intended should fall upon profit; thirdly, of +those which, it is intended should fall upon +wages; and fourthly, of those which, it is intended +should fall indifferently upon all those +three different sources of private revenue. +The particular consideration of each of these +four different sources of taxes will divide the +second part of the present chapter into four +articles, three of which will require several +other subdivisions. Many of these taxes, it +will appear from the following review, are +not finally paid from the fund, or source of +revenue, upon which it is intended they should +fall.</p> + +<p>Before I enter upon the examination of particular +taxes, it is necessary to premise the +four following maxims with regard to taxes in +general.</p> + +<p>1. The subjects of every state ought to +contribute towards the support of the government, +as nearly as possible, in proportion to +their respective abilities; that is, in proportion +to the revenue which they respectively +enjoy under the protection of the state. The +expense of government to the individuals of +a great nation, is like the expense of management +to the joint tenants of a great estate, +who are all obliged to contribute in proportion +to their respective interests in the estate. +In the observation or neglect of this maxim, +consists what is called the equality or inequality +of taxation. Every tax, it must be observed +once for all, which falls finally upon +one only of the three sorts of revenue above +mentioned, is necessarily unequal, in so far +as it does not affect the other two. In the +following examination of different taxes, I +shall seldom take much farther notice of this +sort of inequality; but shall, in most cases, +confine my observations to that inequality +which is occasioned by a particular tax falling +unequally upon that particular sort of private +revenue which is affected by it.</p> + +<p>2. The tax which each individual is bound +to pay, ought to be certain and not arbitrary. +The time of payment, the manner of payment, +the quantity to be paid, ought all to be clear +and plain to the contributor, and to every +other person. Where it is otherwise, every +person subject to the tax is put more or less in +the power of the tax-getherer, who can either +aggravate the tax upon any obnoxious contributor, +or extort, by the terror of such aggravation, +some present or perquisite to himself. +The uncertainty of taxation encourages the +insolence, and favours the corruption, of an +order of men who are naturally unpopular, even +where they are neither insolent nor corrupt. +The certainty of what each individual ought +to pay is, in taxation, a matter of so great importance, +that a very considerable degree of +inequality, it appears, I believe, from the experience +of all nations, is not near so great an +evil as a very small degree of uncertainty.</p> + +<p>3. Every tax ought to be levied at the time, +or in the manner, in which it is most likely to +be convenient for the contributor to pay it. A +tax upon the rent of land or of houses, payable +at the same term at which such rents are usually +paid, is levied at the time when it is most +likely to be convenient for the contributor to +pay; or when he is most likely to have wherewithal +to pay. Taxes upon such consumable +goods as are articles of luxury, are all finally +paid by the consumer, and generally in a +manner that is very convenient for him. He +pays them by little and little, as he has occasion +to buy the goods. As he is at liberty +too, either to buy or not to buy, as he pleases, +it must be his own fault if he ever suffers any +considerable inconveniency from such taxes.<span class='pagenum'><a name="Page_348" id="Page_348">[Pg 348]</a></span></p> + +<p>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 into the public treasury +of the state. A tax may either take out or +keep out of the pockets of the people a great +deal more than it brings into the public +treasury, in the four following ways. First, +the levying of it may require a great number +of officers, whose salaries may eat up the +greater part of the produce of the tax, and +whose perquisites may impose another additional +tax upon the people. Secondly, it may +obstruct the industry of the people, and discourage +them from applying to certain branches +of business which might give maintenance +and employment to great multitudes. While +it obliges the people to pay, it may thus diminish, +or perhaps destroy, some of the funds +which might enable them more easily to do so. +Thirdly, by the forfeitures and other penalties +which those unfortunate individuals incur, +who attempt unsuccessfully to evade the tax, +it may frequently ruin them, and thereby put +an end to the benefit which the community +might have received from the employment of +their capitals. An injudicious tax offers a +great temptation to smuggling. But the +penalties of smuggling must arise in proportion +to the temptation. The law, contrary to +all the ordinary principles of justice, first +creates the temptation, and then punishes those +who yield to it; and it commonly enhances +the punishment, too, in proportion to the very +circumstance which ought certainly to alleviate +it, the temptation to commit the crime.<a name="FNanchor_52_52" id="FNanchor_52_52"></a><a href="#Footnote_52_52" class="fnanchor">[52]</a> +Fourthly, by subjecting the people to the +frequent visits and the odious examination of +the tax-gatherers, it may expose them to much +unnecessary trouble, vexation, and oppression; +and though vexation is not, strictly speaking, +expense, it is certainly equivalent to the expense +at which every man would be willing +to redeem himself from it. It is in some one +or other of these four different ways, that +taxes are frequently so much more burdensome +to the people than they are beneficial to the +sovereign.</p> + +<p>The evident justice and utility of the foregoing +maxims have recommended them, more +or less, to the attention of all nations. All +nations have endeavoured, to the best of their +judgment, to render their taxes as equal as +they could contrive; as certain, as convenient +to the contributor, both the time and the mode +of payment, and in proportion to the revenue +which they brought to the prince, as little +burdensome to the people. The following +short review of some of the principal taxes +which have taken place in different ages and +countries, will show, that the endeavours of +all nations have not in this respect been equally +successful.</p> + + +<h4><small>ART. I.</small>—<i>Taxes upon Rent—Taxes upon the +Rent of Land.</i></h4> + +<p>A tax upon the rent of land may either be +imposed according to a certain canon, every +district being valued at a certain rent, which +valuation is not afterwards to be altered; or +it may be imposed in such a manner, as to +vary with every variation in the real rent of +the land, and to rise or fall with the improvement +or declaration of its cultivation.</p> + +<p>A land tax which, like that of Great Britain, +is assessed upon each district according +to a certain invariable canon, though +it should be equal at the time of its first establishment, +necessarily becomes unequal in +process of time, according to the unequal degrees +of improvement or neglect in the cultivation +of the different parts of the country. +In England, the valuation, according +to which the different counties and parishes +were assessed to the land tax by the 4th of +William and Mary, was very unequal even at +its first establishment. This tax, therefore, +so far offends against the first of the four +maxims above mentioned. It is perfectly +agreeable to the other three. It is perfectly +certain. The time of payment for the tax, +being the same as that for the rent, is as convenient +as it can be to the contributor. Though +the landlord is, in all cases, the real contributor, +the tax is commonly advanced by the +tenant, to whom the landlord is obliged to allow +it in the payment of the rent. This tax +is levied by a much smaller number of officers +than any other which affords nearly the same +revenue. As the tax upon each district does +not rise with the rise of the rent, the sovereign +does not share in the profits of the landlord's +improvements. Those improvements sometimes +contribute, indeed, to the discharge of +the other landlords of the district. But the +aggravation of the tax, which this may sometimes +occasion upon a particular estate, is always +so very small, that it never can discourage +those improvements, nor keep down the produce +of the land below what it would otherwise +rise to. As it has no tendency to diminish +the quantity, it can have none to raise the +price of that produce. It does not obstruct +the industry of the people; it subjects the +landlord to no other inconveniency besides the +unavoidable one of paying the tax.</p> + +<p>The advantage, however, which the landlord +has derived from the invariable constancy +of the valuation, by which all the lands of +Great Britain are rated to the land-tax, has +been principally owing to some circumstances +altogether extraneous to the nature of the +tax.<span class='pagenum'><a name="Page_349" id="Page_349">[Pg 349]</a></span></p> + +<p>It has been owing in part, to the great +prosperity of almost every part of the country, +the rents of almost all the estates of Great +Britain having, since the time when this valuation +was first established, been continually +rising, and scarce any of them having fallen. +The landlords, therefore, have almost all gained +the difference between the tax which they +would have paid, according to the present rent +of their estates, and that which they actually pay +according to the ancient valuation. Had the +state of the country been different, had rents +been gradually falling in consequence of the +declension of cultivation, the landlords would +almost all have lost this difference. In the +state of things which has happened to take +place since the revolution, the constancy of +the valuation has been advantageous to the +landlord and hurtful to the sovereign. In a +different state of things it might have been +advantageous to the sovereign and hurtful to +the landlord.</p> + +<p>As the tax is made payable in money, so +the valuation of the land is expressed in money. +Since the establishment of this valuation, the +value of silver has been pretty uniform, and +there has been no alteration in the standard +of the coin, either as to weight or fineness. +Had silver risen considerably in its value, as +it seems to have done in the course of the +two centuries which preceded the discovery of +the mines of America, the constancy of the +valuation might have proved very oppressive +to the landlord. Had silver fallen considerably +in its value, as it certainly did for about +a century at least after the discovery of those +mines, the same constancy of valuation would +have reduced very much this branch of the +revenue of the sovereign. Had any considerable +alteration been made in the standard +of the money, either by sinking the same +quantity of silver to a lower denomination, +or by raising it to a higher; had an ounce of +silver, for example, instead of being coined +into five shillings and two pence, been coined +either into pieces which bore so low a denomination +as two shillings and seven pence, or +into pieces which bore so high a one as ten +shillings and four pence, it would, in the one +case, have hurt the revenue of the proprietor, +in the other that of the sovereign.</p> + +<p>In circumstances, therefore, somewhat different +from those which have actually taken +place, this constancy of valuation might have +been a very great inconveniency, either to the +contributors or to the commonwealth. In +the course of ages, such circumstances, however, +must at some time or other happen. But +though empires, like all the other works of men, +have all hitherto proved mortal, yet every empire +aims at immortality. Every constitution, +therefore, which it is meant should be as permanent +as the empire itself, ought to be convenient, +not in certain circumstances only, +but in all circumstances; or ought to be +suited, not to those circumstances which are +transitory, occasional, or accidental, but to +those which are necessary, and therefore always +the same.</p> + +<p>A tax upon the rent of land, which varies +with every variation of the rent, or which rises +and falls according to the improvement or +neglect of cultivation, is recommended by that +sect of men of letters in France, who call +themselves the economists, as the most equitable +of all taxes. All taxes, they pretend, +fall ultimately upon the rent of land, and +ought, therefore, to be imposed equally upon +the fund which must finally pay them. That +all taxes ought to fall as equally as possible +upon the fund which must finally pay them, +is certainly true. But without entering into +the disagreeable discussion of the metaphysical +arguments by which they support their +very ingenious theory, it will sufficiently appear, +from the following review, what are the +taxes which fall finally upon the rent of the +land, and what are those which fall finally upon +some other fund.</p> + +<p>In the Venetian territory, all the arable +lands which are given in lease to farmers are +taxed at a tenth of the rent.<a name="FNanchor_53_53" id="FNanchor_53_53"></a><a href="#Footnote_53_53" class="fnanchor">[53]</a> The leases are +recorded in a public register, which is kept +by the officers of revenue in each province or +district. When the proprietor cultivates his +own lands, they are valued according to an +equitable estimation, and he is allowed a deduction +of one-fifth of the tax; so that for +such land he pays only eight instead of ten +per cent. of the supposed rent.</p> + +<p>A land-tax of this kind is certainly more +equal than the land-tax of England. It might +not, perhaps, be altogether so certain, and the +assessment of the tax might frequently occasion +a good deal more trouble to the landlord. +It might, too, be a good deal more expensive +in the levying.</p> + +<p>Such a system of administration, however, +might, perhaps, be contrived, as would in a +great measure both prevent this uncertainty, +and moderate this expense.</p> + +<p>The landlord and tenant, for example, might +jointly be obliged to record their lease in a +public register. Proper penalties might be +enacted against concealing or misrepresenting +any of the conditions; and if part of those +penalties were to be paid to either of the two +parties who informed against and convicted +the other of such concealment or misrepresentation, +it would effectually deter them from +combining together in order to defraud the +public revenue. All the conditions of the +lease might be sufficiently known from such a +record.</p> + +<p>Some landlords, instead of raising the rent, +take a fine for the renewal of the lease. This +practice is, in most cases, the expedient of a +spendthrift, who, for a sum of ready money<span class='pagenum'><a name="Page_350" id="Page_350">[Pg 350]</a></span> +sells a future revenue of much greater value. +It is, in most cases, therefore, hurtful to the +landlord; it is frequently hurtful to the tenant; +and it is always hurtful to the community. +It frequently takes from the tenant so +great a part of his capital, and thereby diminishes +so much his ability to cultivate the +land, that he finds it more difficult to pay a +small rent than it would otherwise have been +to pay a great one. Whatever diminishes his +ability to cultivate, necessarily keeps down, +below what it would otherwise have been, the +most important part of the revenue of the community. +By rendering the tax upon such fines +a good deal heavier than upon the ordinary +rent, this hurtful practice might be discouraged, +to the no small advantage of all the +different parties concerned, of the landlord, of +the tenant, of the sovereign, and of the whole +community.</p> + +<p>Some leases prescribe to the tenant a certain +mode of cultivation, and a certain succession +of crops, during the whole continuance +of the lease. This condition, which is generally +the effect of the landlord's conceit of his +own superior knowledge (a conceit in most +cases very ill-founded), ought always to be +considered as an additional rent, as a rent in +service, instead of a rent in money. In order +to discourage the practice, which is generally +a foolish one, this species of rent might +be valued rather high, and consequently taxed +somewhat higher than common money-rents.</p> + +<p>Some landlords, instead of a rent in money, +require a rent in kind, in corn, cattle, poultry, +wine, oil, &c.; others, again, require a rent +in service. Such rents are always more hurtful +to the tenant than beneficial to the landlord. +They either take more, or keep more +out of the pocket of the former, than they +put into that of the latter. In every country +where they take place, the tenants are poor +and beggarly, pretty much according to the +degree in which they take place. By valuing, +in the same manner, such rents rather +high, and consequently taxing them somewhat +higher than common money-rents, a +practice which is hurtful to the whole community, +might, perhaps, be sufficiently discouraged.</p> + +<p>When the landlord chose to occupy himself +a part of his own lands, the rent might be valued +according to an equitable arbitration of +the farmers and landlords in the neighbourhood, +and a moderate abatement of the tax +might be granted to him, in the same manner +as in the Venetian territory, provided the rent +of the lands which he occupied did not exceed +a certain sum. It is of importance that the +landlord should be encouraged to cultivate a +part of his own land. His capital is generally +greater than that of the tenant, and, with less +skill, he can frequently raise a greater produce. +The landlord can afford to try experiments, +and in generally disposed to do so. +His unsuccessful experiments occasion only a +moderate loss to himself. His successful ones +contribute to the improvement and better cultivation +of the whole country. It might be +of importance, however, that the abatement of +the tax should encourage him to cultivate to +a certain extent only. If the landlords should, +the greater part of them, be tempted to farm +the whole of their own lands, the country (instead +of sober and industrious tenants, who +are bound by their own interest to cultivate +as well as their capital and skill will allow +them) would be filled with idle and profligate +bailiffs, whose abusive management would +soon degrade the cultivation, and reduce the +annual produce of the land, to the diminution, +not only of the revenue of their masters, +but of the most important part of that of the +whole society.</p> + +<p>Such a system of administration might, +perhaps, free a tax of this kind from any degree +of uncertainty, which could occasion either oppression +or inconveniency to the contributor; +and might, at the same time, serve to introduce +into the common management of land +such a plan of policy as might contribute a +good deal to the general improvement and +good cultivation of the country.</p> + +<p>The expense of levying a land-tax, which +varied with every variation of the rent, would, +no doubt, be somewhat greater than that of +levying one which was always rated according +to a fixed valuation. Some additional expense +would necessarily be incurred, both by the +different register-offices which it would be +proper to establish in the different districts +of the country, and by the different valuations +which might occasionally be made of the lands +which the proprietor chose to occupy himself. +The expense of all this, however, might be +very moderate, and much below what is incurred +in the levying of many other taxes, which +afford a very inconsiderable revenue in comparison +of what might easily be drawn from a +tax of this kind.</p> + +<p>The discouragement which a variable land-tax +of this kind might give to the improvement +of land, seems to be the most important +objection which can be made to it. The landlord +would certainly be less disposed to improve, +when the sovereign, who contributed +nothing to the expense, was to share in the +profit of the improvement. Even this objection +might, perhaps, be obviated, by allowing +the landlord, before he began his improvement, +to ascertain, in conjunction with the officers +of revenue, the actual value of his lands, according +to the equitable arbitration of a certain +number of landlords and farmers in the +neighbourhood, equally chosen by both parties: +and by rating him, according to this valuation, +for such a number of years as might +be fully sufficient for his complete indemnification. +To draw the attention of the sovereign +towards the improvement of the land,<span class='pagenum'><a name="Page_351" id="Page_351">[Pg 351]</a></span> +from a regard to the increase of his own revenue, +is one of the principal advantages proposed +by this species of land-tax. The term, +therefore, allowed, for the indemnification of +the landlord, ought not to be a great deal +longer than what was necessary for that purpose, +lest the remoteness of the interest should +discourage too much this attention. It had +better, however, be somewhat too long, than +in any respect too short. No incitement to +the attention of the sovereign can ever counterbalance +the smallest discouragement to that +of the landlord. The attention of the sovereign +can be, at best, but a very general and +vague consideration of what is likely to contribute +to the better cultivation of the greater +part of his dominions. The attention of the +landlord is a particular and minute consideration +of what is likely to be the most advantageous +application of every inch of ground +upon his estate. The principal attention of +the sovereign ought to be, to encourage, by +every means in his power, the attention both +of the landlord and of the farmer, by allowing +both to pursue their own interest in their +own way, and according to their own judgment; +by giving to both the most perfect security +that they shall enjoy the full recompence +of their own industry; and by procuring +to both the most extensive market for +every part of their produce, in consequence +of establishing the easiest and safest communications, +both by land and by water, through +every part of his own dominions, as well as +the most unbounded freedom of exportation +to the dominions of all other princes.</p> + +<p>If, by such a system of administration, a +tax of this kind could be so managed as to +give, not only no discouragement, but, on the +contrary, some encouragement to the improvement +of land, it does not appear likely to occasion +any other inconveniency to the landlord, +except always the unavoidable one of +being obliged to pay the tax.</p> + +<p>In all the variations of the state of the society, +in the improvement and in the declension +of agriculture; in all the variations in +the value of silver, and in all those in the +standard of the coin, a tax of this kind would, +of its own accord, and without any attention +of government, readily suit itself to the actual +situation of things, and would be equally just +and equitable in all those different changes. +It would, therefore, be much more proper to +be established as a perpetual and unalterable +regulation, or as what is called a fundamental +law of the commonwealth, than any tax which +was always to be levied according to a certain +valuation.</p> + +<p>Some states, instead of the simple and obvious +expedient of a register of leases, have +had recourse to the laborious and expensive +one of an actual survey and valuation of all +the lands in the country. They have suspected, +probably, that the lessor and lessee, in order +to defraud the public revenue, might combine +to conceal the real terms of the lease. +Doomsday-book seems to have been the result +of a very accurate survey of this kind.</p> + +<p>In the ancient dominions of the king of +Prussia, the land-tax is assessed according to an +actual survey and valuation, which is reviewed +and altered from time to time.<a name="FNanchor_54_54" id="FNanchor_54_54"></a><a href="#Footnote_54_54" class="fnanchor">[54]</a> According +to that valuation, the lay proprietors pay +from twenty to twenty-five per cent. of their +revenue; ecclesiastics from forty to forty-five +per cent. The survey and valuation of Silesia +was made by order of the present king, it +is said, with great accuracy. According to +that valuation, the lands belonging to the +bishop of Breslaw are taxed at twenty-five +per cent. of their rent. The other revenues +of the ecclesiastics of both religions at fifty +per cent. The commanderies of the Teutonic +order, and of that of Malta, at forty per cent. +Lands held by a noble tenure, at thirty-eight +and one-third per cent. Lands held by a +base tenure, at thirty-five and one-third per +cent.</p> + +<p>The survey and valuation of Bohemia is +said to have been the work of more than a +hundred years. It was not perfected till after +the peace of 1748, by the orders of the present +empress queen.<a name="FNanchor_55_55" id="FNanchor_55_55"></a><a href="#Footnote_55_55" class="fnanchor">[55]</a> The survey of the duchy +of Milan, which was begun in the time of +Charles VI., was not perfected till after 1760. +It is esteemed one of the most accurate that +has ever been made. The survey of Savoy +and Piedmont was executed under the orders +of the late king of Sardinia.<a name="FNanchor_56_56" id="FNanchor_56_56"></a><a href="#Footnote_56_56" class="fnanchor">[56]</a></p> + +<p>In the dominions of the king of Prussia, +the revenue of the church is taxed much higher +than that of lay proprietors. The revenue of +the church is, the greater part of it, a burden +upon the rent of land. It seldom happens +that any part of it is applied towards the improvement +of land; or is so employed as to +contribute, in any respect, towards increasing +the revenue of the great body of the people. +His Prussian majesty had probably, upon +that account, thought it reasonable that it +should contribute a good deal more towards +relieving the exigencies of the state. In some +countries, the lands of the church are exempted +from all taxes. In others, they are taxed +more lightly than other lands. In the duchy +of Milan, the lands which the church possessed +before 1575, are rated to the tax at a third +only of their value.</p> + +<p>In Silesia, lands held by a noble tenure are +taxed three per cent. higher than those held +by a base tenure. The honours and privileges +of different kinds annexed to the former, +his Prussian majesty had probably imagined, +would sufficiently compensate to the +proprietor a small aggravation of the tax;<span class='pagenum'><a name="Page_352" id="Page_352">[Pg 352]</a></span> +while, at the same time, the humiliating inferiority +of the latter would be in some measure +alleviated, by being taxed somewhat more +lightly. In other countries, the system of +taxation, instead of alleviating, aggravates this +inequality. In the dominions of the king of +Sardinia, and in those provinces of France +which are subject to what is called the real or +predial taille, the tax falls altogether upon the +lands held by a base tenure. Those held by a +noble one are exempted.</p> + +<p>A land tax assessed according to a general +survey and valuation, how equal soever it may +be at first, must, in the course of a very moderate +period of time, become unequal. To +prevent its becoming so would require the +continual and painful attention of government +to all the variations in the state and +produce of every different farm in the country. +The governments of Prussia, of Bohemia, +of Sardinia, and of the duchy of Milan, +actually exert an attention of this kind; an +attention so unsuitable to the nature of government, +that it is not likely to be of long +continuance, and which, if it is continued, will +probably, in the long-run, occasion much more +trouble and vexation then it can possibly bring +relief to the contributors.</p> + +<p>In 1666, the generality of Montauban was +assessed to the real or predial taille, according, +it is said, to a very exact survey and valuation.<a name="FNanchor_57_57" id="FNanchor_57_57"></a><a href="#Footnote_57_57" class="fnanchor">[57]</a> +By 1727, this assessment had become +altogether unequal. In order to remedy +this inconveniency, government has found no +better expedient, than to impose upon the +whole generality an additional tax of a hundred +and twenty thousand livres. This additional +tax is rated upon all the different districts +subject to the taille according to the old +assessment. But it is levied only upon those +which, in the actual state of things, are by +that assessment under-taxed; and it is applied +to the relief of those which, by the same assessment, +are over-taxed. Two districts, for +example, one of which ought, in the actual +state of things, to be taxed at nine hundred, +the other at eleven hundred livres, are, by the +old assessment, both taxed at a thousand +livres. Both these districts are, by the additional +tax, rated at eleven hundred livres each. +But this additional tax is levied only upon the +district under-charged, and it is applied altogether +to the relief of that overcharged, which +consequently pays only nine hundred livres. +The government neither gains nor loses by +the additional tax, which is applied altogether +to remedy the inequalities arising from the +old assessment. The application is pretty +much regulated according to the discretion of +the intendant of the generality, and must, +therefore, be in a great measure arbitrary.</p> + + +<h4><i>Taxes which are proportioned, not to the Rent, +but to the Produce of Land.</i></h4> + +<p>Taxes upon the produce of land are, in +reality, taxes upon the rent; and though they +may be originally advanced by the farmer, +are finally paid by the landlord. When a +certain portion of the produce is to be paid +away for a tax, the farmer computes as well +as he can, what the value of this portion is, one +year with another, likely to amount to, and he +makes a proportionable abatement in the rent +which he agrees to pay to the landlord. +There is no farmer who does not compute before +hand what the church tythe, which is a +land tax of this kind, is, one year with another, +likely to amount to.</p> + +<p>The tythe, and every other land tax of this +kind, under the appearance of perfect equality, +are very unequal taxes; a certain portion +of the produce being in different situations, +equivalent to a very different portion +of the rent. In some very rich lands, the +produce is so great, that the one half of it is +fully sufficient to replace to the farmer his +capital employed in cultivation, together with +the ordinary profits of farming stock in the +neighbourhood. The other half, or, what +comes to the same thing, the value of the +other half, he could afford to pay as rent to +the landlord, if there was no tythe. But if +a tenth of the produce is taken from him in +the way of tythe, he must require an abatement +of the fifth part of his rent, otherwise +he cannot get back his capital with the ordinary +profit. In this case, the rent of the +landlord, instead of amounting to a half, or +five-tenths of the whole produce, will amount +only to four-tenths of it. In poorer lands, +on the contrary, the produce is sometimes so +small, and the expense of cultivation so great, +that it requires four-fifths of the whole produce, +to replace to the farmer his capital with +the ordinary profit. In this case, though +there was no tythe, the rent of the landlord +could amount to no more than one-fifth or +two-tenths of the whole produce. But if the +farmer pays one-tenth of the produce in the +way of tythe, he must require an equal abatement +of the rent of the landlord, which will +thus be reduced to one-tenth only of the +whole produce. Upon the rent of rich lands +the tythe may sometimes be a tax of no more +than one-fifth part, or four shillings in the +pound; whereas upon that of poorer lands, it +may sometimes be a tax of one half, or of ten +shillings in the pound.</p> + +<p>The tythe, as it is frequently a very unequal +tax upon the rent, so it is always a great +discouragement, both to the improvements of +the landlord, and to the cultivation of the farmer. +The one cannot venture to make the +most important, which are generally the most<span class='pagenum'><a name="Page_353" id="Page_353">[Pg 353]</a></span> +expensive improvements; nor the other to +raise the most valuable, which are generally, +too, the most expensive crops; when the +church, which lays out no part of the expense, +is to share so very largely in the profit. The +cultivation of madder was, for a long time, +confined by the tythe to the United Provinces, +which, being presbyterian countries, and +upon that account exempted from this destructive +tax, enjoyed a sort of monopoly of that +useful dyeing drug against the rest of Europe. +The late attempts to introduce the +culture of this plant into England, have been +made only in consequence of the statute, +which enacted that five shillings an acre should +be received in lieu of all manner of tythe upon +madder.</p> + +<p>As through the greater part of Europe, the +church, so in many different countries of +Asia, the state, is principally supported by a +land tax, proportioned not to the rent, but to +the produce of the land. In China, the +principal revenue of the sovereign consists in +a tenth part of the produce of all the lands of +the empire. This tenth part, however, is estimated +so very moderately, that, in many +provinces, it is said not to exceed a thirtieth +part of the ordinary produce. The land tax +or land rent which used to be paid to the Mahometan +government of Bengal, before that +country fell into the hands of the English East +India company, is said to have amounted to +about a fifth part of the produce. The land +tax of ancient Egypt is said likewise to have +amounted to a fifth part.</p> + +<p>In Asia, this sort of land tax is said to interest +the sovereign in the improvement and +cultivation of land. The sovereigns of +China, those of Bengal while under the Mahometan +government, and those of ancient +Egypt, are said, accordingly, to have been +extremely attentive to the making and maintaining +of good roads and navigable canals, +in order to increase, as much as possible, +both the quantity and value of every part of +the produce of the land, by procuring to +every part of it the most extensive market +which their own dominions could afford. +The tythe of the church is divided into such +small portions that no one of its proprietors +can have any interest of this kind. The parson +of a parish could never find his account +in making a road or canal to a distant part of +the country, in order to extend the market +for the produce of his own particular parish. +Such taxes, when destined for the maintenance +of the state, have some advantages, +which may serve in some measure to balance +their inconveniency. When destined for the +maintenance of the church, they are attended +with nothing but inconveniency.</p> + +<p>Taxes upon the produce of land may be +levied, either in kind, or, according to a certain +valuation in money.</p> + +<p>The person of a parish, or a gentleman of +small fortune who lives upon his estate, may +sometimes, perhaps find some advantage in +receiving, the one his tythe, and the other his +rent, in kind. The quantity to be collected, +and the district within which it is to be collected, +are so small, that they both can oversee, +with their own eyes, the collection and +disposal of every part of what is due to them. +A gentleman of great fortune, who lived in +the capital, would be in danger of suffering +much by the neglect, and more by the fraud, +of his factors and agents, if the rents of an +estate in a distant province were to be paid +to him in this manner. The loss of the sovereign, +from the abuse and depredation of +his tax-gatherers, would necessarily be much +greater. The servants of the most careless +private person are, perhaps, more under the +eye of their master than those of the most +careful prince; and a public revenue, which +was paid in kind, would suffer so much from +the mismanagement of the collectors, that a +very small part of what was levied upon the +people would ever arrive at the treasury of +the prince. Some part of the public revenue +of China, however, is said to be paid in this +manner. The mandarins and other tax-gatherers +will, no doubt, find their advantage in +continuing the practice of a payment, which +is so much more liable to abuse than any payment +in money.</p> + +<p>A tax upon the produce of land, which is +levied in money, may be levied, either according +to a valuation, which varies with all the +variations of the market price; or according +to a fixed valuation, a bushel of wheat, for +example, being always valued at one and the +same money price, whatever may be the state +of the market. The produce of a tax levied +in the former way will vary only according +to the variations in the real produce of the +land, according to the improvement or neglect +of cultivation. The produce of a tax +levied in the latter way will vary, not only +according to the variations in the produce of +the land, but according both to those in the +value of the precious metals, and those in the +quantity of those metals, which is at different +times contained in coin of the same denomination. +The produce of the former will always +bear the same proportion to the value +of the real produce of the land. The produce +of the latter may, at different times, +bear very different proportions to that value.</p> + +<p>When, instead either of a certain portion of +the produce of land, or of the price of a +certain portion, a certain sum of money is to +be paid in full compensation for all tax or +tythe; the tax becomes, in this case, exactly +of the same nature with the land tax of England. +It neither rises nor falls with the rent +of the land. It neither encourages nor discourages +improvement. The tythe in the +greater part of those parishes which pay what +is called a modus, in lieu of all other tythe<span class='pagenum'><a name="Page_354" id="Page_354">[Pg 354]</a></span>, +is a tax of this kind. During the Mahometan +government of Bengal, instead of the +payment in kind of the fifth part of the produce, +a modus, and, it is said, a very moderate +one, was established in the greater part +of the districts or zemindaries of the country. +Some of the servants of the East India company, +under pretence of restoring the public +revenue to its proper value, have, in some +provinces, exchanged this modus for a payment +in kind. Under their management, +this change is likely both to discourage cultivation, +and to give new opportunities for +abuse in the collection of the public revenue, +which has fallen very much below what it +was said to have been when it first fell under +the management of the company. The servants +of the company may, perhaps, have +profited by the change, but at the expense, it +is probable, both of their masters and of the +country.</p> + + +<h4><i>Taxes upon the Rent of Houses.</i></h4> + +<p>The rent of a house may be distinguished +into two parts, of which the one may very +properly be called the building-rent; the +other is commonly called the ground-rent.</p> + +<p>The building-rent is the interest or profit +of the capital expended in building the house. +In order to put the trade of a builder upon a +level with other trades, it is necessary that +this rent should be sufficient, first, to pay him +the same interest which he would have got +for his capital, if he had lent it upon good +security; and, secondly, to keep the house in +constant repair, or, what comes to the same +thing, to replace, within a certain term of +years, the capital which had been employed +in building it. The building-rent, or the +ordinary profit of building, is, therefore, +everywhere regulated by the ordinary interest +of money. Where the market rate of interest +is four per cent. the rent of a house, which, +over and above paying the ground-rent, affords +six or six and a-half per cent. upon the +whole expense of building, may, perhaps, +afford a sufficient profit to the builder. +Where the market rate of interest is five per +cent. it may perhaps require seven or seven +and a-half per cent. If, in proportion to the +interest of money, the trade of the builders +affords at any time much greater profit than +this, it will soon draw so much capital from +other trades as will reduce the profit to its +proper level. If it affords at any time much +less than this, other trades will soon draw so +much capital from it as will again raise that +profit.</p> + +<p>Whatever part of the whole rent of a house +is over and above what is sufficient for affording +this reasonable profit, naturally goes to +the ground-rent; and, where the owner of +the ground and the owner of the building are +two different persons, is, in most cases, completely +paid to the former. This surplus rent +is the price which the inhabitant of the house +pays for some real or supposed advantage of +the situation. In country houses, at a distance +from any great town, where there is +plenty of ground to chuse upon, the ground-rent +is scarce any thing, or no more than +what the ground which the house stands upon +would pay, if employed in agriculture. In +country villas, in the neighbourhood of some +great town, it is sometimes a good deal higher; +and the peculiar conveniency or beauty +of situation is there frequently very well paid +for. Ground-rents are generally highest in +the capital, and in those particular parts of it +where there happens to be the greatest demand +for houses, whatever be the reason of +that demand, whether for trade and business, +for pleasure and society, or for mere vanity +and fashion.</p> + +<p>A tax upon house-rent, payable by the tenant, +and proportioned to the whole rent of +each house, could not, for any considerable +time at least, affect the building-rent. If the +builder did not get his reasonable profit, he +would be obliged to quit the trade; which, +by raising the demand for building, would, +in a short time, bring back his profit to its proper +level with that of other trades. Neither +would such a tax fall altogether upon the +ground-rent; but it would divide itself in +such a manner, as to fall partly upon the inhabitant +of the house, and partly upon the +owner of the ground.</p> + +<p>Let us suppose, for example, that a particular +person judges that he can afford for +house-rent an expense of sixty pounds a-year; +and let us suppose, too, that a tax of four +shillings in the pound, or of one-fifth, payable +by the inhabitant, is laid upon house-rent. +A house of sixty pounds rent will, in that +case, cost him seventy-two pounds a-year, +which is twelve pounds more than he thinks +he can afford. He will, therefore, content +himself with a worse house, or a house of +fifty pounds rent, which, with the additional +ten pounds that he must pay for the tax, will +make up the sum of sixty pounds a-year, +the expense which he judges he can afford, +and, in order to pay the tax, he will give up +a part of the additional conveniency which he +might have had from a house of ten pounds +a-year more rent. He will give up, I say, a +part of this additional conveniency; for he +will seldom be obliged to give up the whole, +but will, in consequence of the tax, get a better +house for fifty pounds a-year, than he +could have got if there had been no tax. +For as a tax of this kind, by taking away +this particular competitor, must diminish the +competition for houses of sixty pounds rent, +so it must likewise diminish it for those of +fifty pounds rent, and in the same manner for +those of all other rents, except the lowest<span class='pagenum'><a name="Page_355" id="Page_355">[Pg 355]</a></span> +rent, for which it would for some time increase +the competition. But the rents of +every class of houses for which the competition +was diminished, would necessarily be +more or less reduced. As no part of this reduction, +however, could for any considerable +time at least, affect the building-rent, the +whole of it must, in the long-run, necessarily +fall upon the ground-rent. The final payment +of this tax, therefore, would fall partly +upon the inhabitant of the house, who, in order +to pay his share, would be obliged to give up +part of his conveniency; and partly upon the +owner of the ground, who, in order to pay +his share, would be obliged to give up a part +of his revenue. In what proportion this final +payment would be divided between them, it +is not, perhaps, very easy to ascertain. The +division would probably be very different in +different circumstances, and a tax of this kind +might, according to those different circumstances, +affect very unequally, both the inhabitant +of the house and the owner of the ground.</p> + +<p>The inequality with which a tax of this +kind might fall upon the owners of different +ground-rents, would arise altogether from the +accidental inequality of this division. But +the inequality with which it might fall upon +the inhabitants of different houses, would arise, +not only from this, but from another cause. +The proportion of the expense of house-rent +to the whole expense of living, is different in +the different degrees of fortune. It is, perhaps, +highest in the highest degree, and it +diminishes gradually through the inferior degrees, +so as in general to be lowest in the +lowest degree. The necessaries of life occasion +the great expense of the poor. They +find it difficult to get food, and the greater +part of their little revenue is spent in getting +it. The luxuries and vanities of life occasion +the principal expense of the rich; and a magnificent +house embellishes and sets off to the best +advantage all the other luxuries and vanities +which they possess. A tax upon house-rents, +therefore, would in general fall heaviest upon +the rich; and in this sort of inequality there +would not, perhaps, be any thing very unreasonable. +It is not very unreasonable that +the rich should contribute to the public expense, +not only in proportion to their revenue, +but something more than in that proportion.</p> + +<p>The rent of houses, though it in some respects +resembles the rent of land, is in one +respect essentially different from it. The +rent of land is paid for the use of a productive +subject. The land which pays it produces +it. The rent of houses is paid for the +use of an unproductive subject. Neither the +house, nor the ground which it stands upon, +produce any thing. The person who pays the +rent, therefore, must draw it from some other +source of revenue, distinct from and independent +of this subject. A tax upon the rent of +houses, so far as it falls upon the inhabitants, +must be drawn from the same source as the +rent itself, and must be paid from their revenue, +whether derived from the wages of +labour, the profits of stock, or the rent of +land. So far as it falls upon the inhabitants, +it is one of those taxes which fall, not upon +one only, but indifferently upon all the three +different sources of revenue; and is, in every +respect, of the same nature as a tax upon any +any other sort of consumable commodities. In +general, there is not perhaps, any one article +of expense or consumption by which the liberality +or narrowness of a man's whole expense +can be better judged of than by his +house-rent. A proportional tax upon this +particular article of expense might, perhaps, +produce a more considerable revenue than any +which has hitherto been drawn from it in any +part of Europe. If the tax, indeed, was very +high, the greater part of people would endeavour +to evade it as much as they could, by +contenting themselves with smaller houses, +and by turning the greater part of their expense +into some other channel.</p> + +<p>The rent of houses might easily be ascertained +with sufficient accuracy, by a policy of +the same kind with that which would be necessary +for ascertaining the ordinary rent of +land. Houses not inhabited ought to pay no +tax. A tax upon them would fall altogether +upon the proprietor, who would thus be taxed +for a subject which afforded him neither conveniency +nor revenue. Houses inhabited by +the proprietor ought to be rated, not according +to the expense which they might have cost +in building, but according to the rent which +an equitable arbitration might judge them +likely to bring if leased to a tenant. If rated +according to the expense which they might +have cost in building, a tax of three or four +shillings in the pound, joined with other taxes, +would ruin almost all the rich and great families +of this, and, I believe, of every other civilized +country. Whoever will examine with +attention the different town and country houses +of some of the richest and greatest families in +this country, will find that, at the rate of only +six and a-half, or seven per cent. upon the +original expense of building, their house-rent +is nearly equal to the whole neat rent of their +estates. It is the accumulated expense of several +successive generations, laid out upon objects +of great beauty and magnificence, indeed, +but, in proportion to what they cost, of +very small exchangeable value.<a name="FNanchor_58_58" id="FNanchor_58_58"></a><a href="#Footnote_58_58" class="fnanchor">[58]</a></p> + +<p>Ground-rents are a still more proper subject +of taxation than the rent of houses. A +tax upon ground-rents would not raise the +rent of houses; it would fall altogether upon +the owner of the ground-rent, who acts always +as a monopolist, and exacts the greatest rent +which can be got for the use of his ground.<span class='pagenum'><a name="Page_356" id="Page_356">[Pg 356]</a></span> +More or less can be got for it, according as +the competitors happen to be richer or poorer, +or can afford to gratify their fancy for a particular +spot of ground at a greater or smaller +expense. In every country, the greatest +number of rich competitors is in the capital, +and it is there accordingly that the highest +ground-rents are always to be found. As the +wealth of those competitors would in no respect +be increased by a tax upon ground-rents, +they would not probably be disposed to pay +more for the use of the ground. Whether the +tax was to be advanced by the inhabitant or +by the owner of the ground, would be of little +importance. The more the inhabitant was +obliged to pay for the tax, the less he would +incline to pay for the ground; so that the final +payment of the tax would fall altogether upon +the owner of the ground-rent. The ground-rents +of uninhabited houses ought to pay no tax.</p> + +<p>Both ground-rents, and the ordinary rent of +land, are a species of revenue which the owner, +in many cases, enjoys without any care or attention +of his own. Though a part of this +revenue should be taken from him in order to +defray the expenses of the state, no discouragement +will thereby be given to any sort of +industry. The annual produce of the land and +labour of the society, the real wealth and revenue +of the great body of the people, might +be the same after such a tax as before. +Ground-rents, and the ordinary rent of land, +are therefore, perhaps, the species of revenue +which can best bear to have a peculiar tax imposed +upon them.</p> + +<p>Ground-rents seem, in this respect, a more +proper subject of peculiar taxation, than even +the ordinary rent of land. The ordinary rent +of land is, in many cases, owing partly, at +least, to the attention and good management of +the landlord. A very heavy tax might discourage, +too much, this attention and good +management. Ground-rents, so far as they +exceed the ordinary rent of land, are altogether +owing to the good government of the sovereign, +which, by protecting the industry either +of the whole people or of the inhabitants of +some particular place, enables them to pay +so much more than its real value for the ground +which they build their houses upon; or to +make to its owner so much more than compensation +for the loss which he might sustain +by this use of it. Nothing can be more reasonable, +than that a fund, which owes its existence +to the good government of the state, +should be taxed peculiarly, or should contribute +something more than the greater part of +other funds, towards the support of that government.</p> + +<p>Though, in many different countries of +Europe, taxes have been imposed upon the +rent of houses, I do not know of any in +which ground-rents have been considered as +a separate subject of taxation. The contrivers +of taxes have, probably, found some difficulty +in ascertaining what part of the rent ought to +be considered as ground-rent, and what part +ought to be considered as building-rent. It +should not, however, seem very difficult to +distinguish those two parts of the rent from +one another.</p> + +<p>In Great Britain the rent of houses is supposed +to be taxed in the same proportion +as the rent of land, by what is called the annual +land tax. The valuation, according to +which each different parish and district is assessed +to this tax, is always the same. It was +originally extremely unequal, and it still continues +to be so. Through the greater part of +the kingdom this tax falls still more lightly +upon the rent of houses than upon that of +land. In some few districts only, which +were originally rated high, and in which the +rents of houses have fallen considerably, the +land tax of three or four shillings in the pound +is said to amount to an equal proportion of +the real rent of houses. Untenanted houses, +though by law subject to the tax, are, in most +districts, exempted from it by the favour of +assessors; and this exemption sometimes +occasions some little variation in the rate of +particular houses, though that of the district +is always the same. Improvements of rent, +by new buildings, repairs, &c. go to the discharge +of the district, which occasions still +further variations in the rate of particular +houses.</p> + +<p>In the province of Holland,<a name="FNanchor_59_59" id="FNanchor_59_59"></a><a href="#Footnote_59_59" class="fnanchor">[59]</a> every house +is taxed at two and a-half per cent. of its +value, without any regard, either to the rent +which it actually pays, or to the circumstance +of its being tenanted or untenanted. There +seems to be a hardship in obliging the proprietor +to pay a tax for an untenanted house, +from which he can derive no revenue, especially +so very heavy a tax. In Holland, +where the market rate of interest does not +exceed three per cent., two and a-half per +cent. upon the whole value of the house +must, in most cases, amount to more than a +third of the building-rent, perhaps of the +whole rent. The valuation, indeed, according +to which the houses are rated, though very +unequal, in said to be always below the real +value. When a house is rebuilt, improved, or +enlarged, there is a new valuation, and the +tax is rated accordingly.</p> + +<p>The contrivers of the several taxes which +in England have, at different times, been imposed +upon houses, seem to have imagined +that there was some great difficulty in ascertaining, +with tolerable exactness, what was the real +rent of every house. They have regulated +their taxes, therefore, according to some more +obvious circumstance, such as they had probably +imagined would, in most cases, bear some +proportion to the rent.</p> + +<p>The first tax of this kind was hearth-money;<span class='pagenum'><a name="Page_357" id="Page_357">[Pg 357]</a></span> +or a tax of two shillings upon every hearth. +In order to ascertain how many hearths were +in the house, it was necessary that the tax-gatherer +should enter every room in it. This +odious visit rendered the tax odious. Soon +after the Revolution, therefore, it was abolished +as a badge of slavery.</p> + +<p>The next tax of this kind was a tax of two +shillings upon every dwelling-house inhabited. +A house with ten windows to pay four shillings +more. A house with twenty windows +and upwards to pay eight shillings. This tax +was afterwards so far altered, that houses with +twenty windows, and with less than thirty, +were ordered to pay ten shillings, and those +with thirty windows and upwards to pay twenty +shillings. The number of windows can, in +most cases, be counted from the outside, and, +in all cases, without entering every room in +the house. The visit of the tax-gatherer, therefore, +was less offensive in this tax than in the +hearth-money.</p> + +<p>This tax was afterwards repealed, and in +the room of it was established the window-tax, +which has undergone two several alterations +and augmentations. The window tax, as it +stands at present (January 1775), over and +above the duty of three shillings upon every +house in England, and of one shilling upon +every house in Scotland, lays a duty upon +every window, which in England augments +gradually from twopence, the lowest rate upon +houses with not more than seven windows, to +two shillings, the highest rate upon houses +with twenty-five windows and upwards.</p> + +<p>The principal objection to all such taxes is +their inequality; an inequality of the worst +kind, as they must frequently fall much heavier +upon the poor than upon the rich. A +house of ten pounds rent in a country town, +may sometimes have more windows than a +house of five hundred pounds rent in London; +and though the inhabitant of the former +in likely to be a much poorer man than that of +the latter, yet, so far as his contribution is regulated +by the window tax, he must contribute +more to the support of the state. Such +taxes are, therefore, directly contrary to the +first of the four maxims above mentioned. +They do not seem to offend much against any +of the other three.</p> + +<p>The natural tendency of the window tax, +and of all other taxes upon houses, is to lower +rents. The more a man pays for the tax, the +less, it is evident, he can afford to pay for the +rent. Since the imposition of the window tax, +however, the rents of houses have, upon the +whole, risen more or less, in almost every +town and village of Great Britain, with which +I am acquainted. Such has been, almost +everywhere, the increase of the demand for +houses, that it has raised the rents more than +the window tax could sink them; one of the +many proofs of the great prosperity of the +country, and of the increasing revenue of its +inhabitants. Had it not been for the tax, +rents would probably have risen still higher.</p> + + +<h4><small>ART. II.</small>—<i>Taxes upon Profit, or upon the Revenue +arising from Stock.</i></h4> + +<p>The revenue or profit arising from stock +naturally divides itself into two parts; that +which pays the interest, and which belongs to +the owner of the stock; and that surplus part +which is over and above what is necessary for +paying the interest.</p> + +<p>This latter part of profit is evidently a subject +not taxable directly. It is the compensation, +and, in most cases, it is no more than a +very moderate compensation for the risk and +trouble of employing the stock. The employer +must have this compensation, otherwise he cannot, +consistently with his own interest, continue +the employment. If he was taxed directly, +therefore, in proportion to the whole +profit, he would be obliged either to raise the +rate of his profit, or to charge the tax upon +the interest of money; that is, to pay less interest. +If he raised the rate of his profit in +proportion to the tax, the whole tax, though +it might be advanced by him, would be finally +paid by one or other of two different sets +of people, according to the different ways in +which he might employ the stock of which he +had the management. If he employed it as +a farming stock, in the cultivation of land, +he could raise the rate of his profit only by retaining +a greater portion, or, what comes to +the same thing, the price of a greater portion, +of the produce of the land; and as this could +be done only by a reduction of rent, the final +payment of the tax would fall upon the landlord. +If he employed it as a mercantile or +manufacturing stock, he could raise the rate +of his profit only by raising the price of his +goods; in which case, the final payment of +the tax would fall altogether upon the consumers +of those goods. If he did not raise +the rate of his profit, he would be obliged to +charge the whole tax upon that part of it +which was allotted for the interest of money. +He could afford less interest for whatever +stock he borrowed, and the whole weight of +the tax would, in this case, fall ultimately upon +the interest of money. So far as he could +not relieve himself from the tax in the one +way, he would be obliged to relieve himself +in the other.</p> + +<p>The interest of money seems, at first sight, +a subject equally capable of being taxed directly +as the rent of land. Like the rent of +land, it is a neat produce, which remains, after +completely compensating the whole risk and +trouble of employing the stock. As a tax +upon the rent of land cannot raise rents, because +the neat produce which remains, after +replacing the stock of the farmer, together +with his reasonable profit, cannot be greater<span class='pagenum'><a name="Page_358" id="Page_358">[Pg 358]</a></span> +after the tax than before it, so, for the same +reason, a tax upon the interest of money could +not raise the rate of interest; the quantity of +stock or money in the country, like the quantity +of land, being supposed to remain the +same after the tax as before it. The ordinary +rate of profit, it has been shewn, in the +first book, is everywhere regulated by the +quantity of stock to be employed, in proportion +to the quantity of the employment, or of +the business which must be done by it. But +the quantity of the employment, or of the business +to be done by stock, could neither be +increased nor diminished by any tax upon the +interest of money. If the quantity of the +stock to be employed, therefore, was neither +increased nor diminished by it, the ordinary +rate of profit would necessarily remain the +same. But the portion of this profit, necessary +for compensating the risk and trouble of +the employer, would likewise remain the same; +that risk and trouble being in no respect altered. +The residue, therefore, that portion +which belongs to the owner of the stock, and +which pays the interest of money, would necessarily +remain the same too. At first sight, +therefore, the interest of money seems to be a +subject as fit to be taxed directly as the rent +of land.</p> + +<p>There are, however, two different circumstances, +which render the interest of money a +much less proper subject of direct taxation +than the rent of land.</p> + +<p>First, the quantity and value of the land +which any man possesses, can never be a secret, +and can always be ascertained with great +exactness. But the whole amount of the capital +stock which he possesses is almost always +a secret, and can scarce ever be ascertained +with tolerable exactness. It is liable, besides, +to almost continual variations. A year seldom +passes away, frequently not a month, +sometimes scarce a single day, in which it does +not rise or fall more or less. An inquisition +into every man's private circumstances, and +an inquisition which, in order to accommodate +the tax to them, watched over all the +fluctuations of his fortune, would be a source +of such continual and endless vexation as no +person could support.</p> + +<p>Secondly, land is a subject which cannot be +removed; whereas stock easily may. The +proprietor of land is necessarily a citizen of +the particular country in which his estate lies. +The proprietor of stock is properly a citizen +of the world, and is not necessarily attached +to any particular country. He would be apt +to abandon the country in which he was exposed +to a vexatious inquisition, in order to +be assessed to a burdensome tax; and would +remove his stock to some other country, where +he could either carry on his business, or enjoy +his fortune more at his ease. By removing +his stock, he would put an end to all the +industry which it had maintained in the country +which he left. Stock cultivates land; stock +employs labour. A tax which tended to drive +away stock from any particular country, would +so far tend to dry up every source of revenue, +both to the sovereign and to the society. +Not only the profits of stock, but the rent +of land, and the wages of labour, would necessarily +be more or less diminished by its removal.</p> + +<p>The nations, accordingly, who have attempted +to tax the revenue arising from +stock, instead of any severe inquisition of this +kind, have been obliged to content themselves +with some very loose, and, therefore, more or +less arbitrary estimation. The extreme inequality +and uncertainty of a tax assessed in +this manner, can be compensated only by its +extreme moderation; in consequence of +which, every man finds himself rated so very +much below his real revenue, that he gives +himself little disturbance though his neighbour +should be rated somewhat lower.</p> + +<p>By what is called the land tax in England, +it was intended that the stock should be taxed +in the same proportion as land. When the +tax upon land was at four shillings in the +pound, or at one-fifth of the supposed rent, +it was intended that stock should be taxed at +one-fifth of the supposed interest. When the +present annual land tax was first imposed, the +legal rate of interest was six per cent. Every +hundred pounds stock, accordingly, was supposed +to be taxed at twenty-four shillings, +the fifth part of six pounds. Since the legal +rate of interest has been reduced to five per +cent. every hundred pounds stock is supposed +to be taxed at twenty shillings only. The +sum to be raised, by what is called the land +tax, was divided between the country and the +principal towns. The greater part of it was +laid upon the country; and of what was laid +upon the towns, the greater part was assessed +upon the houses. What remained to be +assessed upon the stock or trade of the towns +(for the stock upon the land was not meant +to be taxed) was very much below the real +value of that stock or trade. Whatever inequalities, +therefore, there might be in the original +assessment, gave little disturbance. +Every parish and district still continues to be +rated for its land, its houses, and its stock, +according to the original assessment; and +the almost universal prosperity of the country, +which, in most places, has raised very much +the value of all these, has rendered those +inequalities of still less importance now. The +rate, too, upon each district, continuing always +the same, the uncertainty of this tax, +so far as it might be assessed upon the stock +of any individual, has been very much diminished, +as well as rendered of much less +consequence. If the greater part of the lands +of England are not rated to the land tax at +half their actual value, the greater part of the +stock of England is, perhaps, scarce rated at<span class='pagenum'><a name="Page_359" id="Page_359">[Pg 359]</a></span> +the fiftieth part of its actual value. In some +towns, the whole land tax is assessed upon +houses; as in Westminster, where stock and +trade are free. It is otherwise in London.</p> + +<p>In all countries, a severe inquisition into +the circumstances of private persons has been +carefully avoided.</p> + +<p>At Hamburg,<a name="FNanchor_60_60" id="FNanchor_60_60"></a><a href="#Footnote_60_60" class="fnanchor">[60]</a> every inhabitant is obliged +to pay to the state one fourth per cent. of all +that he possesses; and as the wealth of the +people of Hamburg consists principally in +stock, this tax may be considered as a tax +upon stock. Every man assesses himself, +and, in the presence of the magistrate, puts +annually into the public coffer a certain sum +of money, which he declares upon oath, to be +one fourth per cent. of all that he possesses, +but without declaring what it amounts to, or +being liable to any examination upon that +subject. This tax is generally supposed to +be paid with great fidelity. In a small republic, +where the people have entire confidence +in their magistrates, are convinced of +the necessity of the tax for the support of the +state, and believe that it will be faithfully applied +to that purpose, such conscientious and +voluntary payment may sometimes be expected. +It is not peculiar to the people of Hamburg.</p> + +<p>The canton of Underwald, in Switzerland, +is frequently ravaged by storms and inundations, +and it is thereby exposed to extraordinary +expenses. Upon such occasions the +people assemble, and every one is said to +declare with the greatest frankness what he is +worth, in order to be taxed accordingly. At +Zurich, the law orders, that in cases of necessity, +every one should be taxed in proportion +to his revenue; the amount of which he is +obliged to declare upon oath. They have no +suspicion, it is said, that any of their fellow-citizens +will deceive them. At Basil, the +principal revenue of the state arises from a +small custom upon goods exported. All the +citizens make oath, that they will pay every +three months all the taxes imposed by law. +All merchants, and even all inn-keepers, are +trusted with keeping themselves the account +of the goods which they sell, either within or +without the territory. At the end of every +three months, they send this account to the +treasurer, with the amount of the tax computed +at the bottom of it. It is not suspected +that the revenue suffers by this confidence.<a name="FNanchor_61_61" id="FNanchor_61_61"></a><a href="#Footnote_61_61" class="fnanchor">[61]</a></p> + +<p>To oblige every citizen to declare publicly +upon oath, the amount of his fortune, must +not, it seems, in those Swiss cantons, be reckoned +a hardship. At Hamburg it would +be reckoned the greatest. Merchants engaged +in the hazardous projects of trade, all +tremble at the thoughts of being obliged, at +all times, to expose the real state of their circumstances. +The ruin of their credit, and +the miscarriage of their projects, they foresee, +would too often be the consequence. +A sober and parsimonious people, who are +strangers to all such projects, do not feel that +they have occasion for any such concealment.</p> + +<p>In Holland, soon after the exaltation of +the late prince of Orange to the stadtholdership, +a tax of two per cent. or the fiftieth +penny, as it was called, was imposed upon the +whole substance of every citizen. Every citizen +assessed himself, and paid his tax, in the +same manner as at Hamburg, and it was in +general supposed to have been paid with +great fidelity. The people had at that time +the greatest affection for their new government, +which they had just established by a general +insurrection. The tax was to be paid but +once, in order to relieve the state in a particular +exigency. It was, indeed, too heavy +to be permanent. In a country where the +market rate of interest seldom exceeds three +per cent., a tax of two per cent. amounts to +thirteen shillings and four pence in the +pound, upon the highest neat revenue which +is commonly drawn from stock. It is a tax +which very few people could pay, without +encroaching more or less upon their capitals. +In a particular exigency, the people may, +from great public zeal, make a great effort, +and give up even a part of their capital, in +order to relieve the state. But it is impossible +that they should continue to do so for any +considerable time; and if they did, the tax +would soon ruin them so completely, as to +render them altogether incapable of supporting +the state.</p> + +<p>The tax upon stock, imposed by the land +tax bill in England, though it is proportioned +to the capital, is not intended to diminish or +take away any part of that capital. It is +meant only to be a tax upon the interest of +money, proportioned to that upon the rent of +land; so that when the latter is at four shillings +in the pound, the former may be at four +shillings in the pound too. The tax at Hamburg, +and the still more moderate taxes of +Underwald and Zurich, are meant, in the +same manner, to be taxes, not upon the capital, +but upon the interest or neat revenue of +stock. That of Holland was meant to be a +tax upon the capital.</p> + + +<h4><i>Taxes upon the Profit of particular Employments.</i></h4> + +<p>In some countries, extraordinary taxes are +imposed upon the profits of stock; sometimes +when employed in particular branches of +trade, and sometimes when employed in agriculture.</p> + +<p>Of the former kind, are in England, the<span class='pagenum'><a name="Page_360" id="Page_360">[Pg 360]</a></span> +tax upon hawkers and pedlars, that upon +hackney-coaches and chairs, and that which +the keepers of ale-houses pay for a licence to +retail ale and spiritous liquors. During the +late war, another tax of the same kind was +proposed upon shops. The war having been +undertaken, it was said, in defence of the +trade of the country, the merchants, who were +to profit by it, ought to contribute towards +the support of it.</p> + +<p>A tax, however, upon the profits of stock +employed in any particular branch of trade, +can never fall finally upon the dealers (who +must in all ordinary cases have their reasonable +profit, and, where the competition is free, +can seldom have more than that profit), but +always upon the consumers, who must be +obliged to pay in the price of the goods the +tax which the dealer advances; and generally +with some overcharge.</p> + +<p>A tax of this kind, when it is proportioned +to the trade of the dealer, is finally paid by +the consumer, and occasions no oppression to +the dealer. When it is not so proportioned, +but is the same upon all dealers, though in +this case, too, it is finally paid by the consumer, +yet it favours the great, and occasions +some oppression to the small dealer. The +tax of five shillings a-week upon every hackney +coach, and that of ten shillings a-year +upon every hackney chair, so far as it is +advanced by the different keepers of such +coaches and chairs, is exactly enough proportioned +to the extent of their respective dealings. +It neither favours the great, nor oppresses +the smaller dealer. The tax of +twenty shillings a-year for a licence to sell +ale; of forty shillings for a licence to sell +spiritous liquors; and of forty shillings more +for a licence to sell wine, being the same +upon all retailers, must necessarily give some +advantage to the great, and occasion some +oppression to the small dealers. The former +must find it more easy to get back the tax in +the price of their goods than the latter. +The moderation of the tax, however, renders +this inequality of less importance; and it +may to many people appear not improper to +give some discouragement to the multiplication +of little ale-houses. The tax upon +shops, it was intended, should be the same +upon all shops. It could not well have been +otherwise. It would have been impossible +to proportion, with tolerable exactness, the +tax upon a shop to the extent of the trade +carried on in it, without such an inquisition +as would have been altogether insupportable +in a free country. If the tax had been considerable, +it would have oppressed the small, +and forced almost the whole retail trade into +the hands of the great dealers. The competition +of the former being taken away, the +latter would have enjoyed a monopoly of the +trade; and, like all other monopolists, would +soon have combined to raise their profits +much beyond what was necessary for the payment +of the tax. The final payment, instead +of falling upon the shop-keeper, would have +fallen upon the consumer, with a considerable +overcharge to the profit of the shop-keeper. +For these reasons, the project of a tax upon +shops was laid aside, and in the room of it +was substituted the subsidy, 1759.</p> + +<p>What in France is called the personal taille, +is perhaps, the most important tax upon the +profits of stock employed in agriculture, that +is levied in any part of Europe.</p> + +<p>In the disorderly state of Europe, during +the prevalence of the feudal government, the +sovereign was obliged to content himself with +taxing those who were too weak to refuse to +pay taxes. The great lords, though willing +to assist him upon particular emergencies, +refused to subject themselves to any constant +tax, and he was not strong enough to force +them. The occupiers of land all over Europe +were, the greater part of them, originally +bond-men. Through the greater part of +Europe, they were gradually emancipated. +Some of them acquired the property of landed +estates, which they held by some base or +ignoble tenure, sometimes under the king, +and sometimes under some other great lord, +like the ancient copy-holders of England. +Others, without acquiring the property, obtained +leases for terms of years, of the lands +which they occupied under their lord, and +thus became less dependent upon him. The +great lords seem to have beheld the degree of +prosperity and independency, which this inferior +order of men had thus come to enjoy, +with a malignant and contemptuous indignation, +and willingly consented that the sovereign +should tax them. In some countries, +this tax was confined to the lands which were +held in property by an ignoble tenure; and, +in this case, the taille was said to be real. +The land tax established by the late king of +Sardinia, and the taille in the provinces of +Languedoc, Provence, Dauphine, and Brittany; +in the generality of Montauban, and +in the elections of Agen and Condom, as well +as in some other districts of France; are +taxes upon lands held in property by an ignoble +tenure. In other countries, the tax +was laid upon the supposed profits of all +those who held, in farm or lease, lands belonging +to other people, whatever might be +the tenure by which the proprietor held them; +and in this case, the taille was said to be personal. +In the greater part of those provinces +of France, which are called the countries of +elections, the taille is of this kind. The real +taille, as it is imposed only upon a part of the +lands of the country, is necessarily an unequal, +but it is not always an arbitrary tax, +though it is so upon some occasions. The +personal taille, as it is intended to be propor<span class='pagenum'><a name="Page_361" id="Page_361">[Pg 361]</a></span>tioned +to the profits of a certain class of people, +which can only be guessed at, is necessarily +both arbitrary and unequal.</p> + +<p>In France, the personal taille at present +(1775) annually imposed upon the twenty +generalities, called the countries of elections, +amounts to 40,107,239 livres, 16 sous.<a name="FNanchor_62_62" id="FNanchor_62_62"></a><a href="#Footnote_62_62" class="fnanchor">[62]</a> +The proportion in which this sum is assessed +upon those different provinces, varies from +year to year, according to the reports which +are made to the king's council concerning the +goodness or badness of the crops, as well as +other circumstances, which may either increase +or diminish their respective abilities to +pay. Each generality is divided into a certain +number of elections; and the proportion +in which the sum imposed upon the whole +generality is divided among those different +elections, varies likewise from year to year, +according to the reports made to the council +concerning their respective abilities. It +seems impossible, that the council, with the +best intentions, can ever proportion, with tolerable +exactness, either of these two assessments +to the real abilities of the province or +district upon which they are respectively laid. +Ignorance and misinformation must always, +more or less, mislead the most upright council. +The proportion which each parish ought +to support of what is assessed upon the whole +election, and that which each individual +ought to support of what is assessed upon his +particular parish, are both in the same manner +varied from year to year, according as +circumstances are supposed to require. These +circumstances are judged of, in the one case, +by the officers of the election, in the other, +by those of the parish; and both the one and +the other are, more or less, under the direction +and influence of the intendant. Not +only ignorance and misinformation, but +friendship, party animosity, and private resentment, +are said frequently to mislead such +assessors. No man subject to such a tax, it +is evident, can ever be certain, before he is +assessed, of what he is to pay. He cannot +even be certain after he is assessed. If any +person has been taxed who ought to have been +exempted, or if any person has been taxed +beyond his proportion, though both must pay +in the mean time, yet if they complain, and +make good their complaints, the whole parish +is reimposed next year, in order to reimburse +them. If any of the contributors become +bankrupt or insolvent, the collector is obliged +to advance his tax; and the whole parish is +reimposed next year, in order to reimburse +the collector. If the collector himself should +become bankrupt, the parish which elects him +must answer for his conduct to the receiver-general +of the election. But, as it might be +troublesome for the receiver to prosecute the +whole parish, he takes at his choice five or six +of the richest contributors, and obliges them +to make good what had been lost by the insolvency +of the collector. The parish is afterwards +reimposed, in order to reimburse +those five or six. Such reimpositions are always +over and above the taille of the particular +year in which they are laid on.</p> + +<p>When a tax is imposed upon the profits of +stock in a particular branch of trade, the +traders are all careful to bring no more goods +to market than what they can sell at a price +sufficient to reimburse them from advancing +the tax. Some of them withdraw a part of +their stocks from the trade, and the market is +more sparingly supplied than before. The +price of the goods rises, and the final payment +of the tax falls upon the consumer. But +when a tax is imposed upon the profits of +stock employed in agriculture, it is not the +interest of the farmers to withdraw any part +of their stock from that employment. Each +farmer occupies a certain quantity of land, for +which he pays rent. For the proper cultivation +of this land, a certain quantity of stock +is necessary; and by withdrawing any part +of this necessary quantity, the farmer is not +likely to be more able to pay either the rent +or the tax. In order to pay the tax, it can +never be his interest to diminish the quantity +of his produce, nor consequently to supply the +market more sparingly than before. The tax, +therefore, will never enable him to raise the +price of his produce, so as to reimburse himself, +by throwing the final payment upon the +consumer. The farmer, however, must have +his reasonable profit as well as every other +dealer, otherwise he must give up the trade. +After the imposition of a tax of this kind, he +can get this reasonable profit only by paying +less rent to the landlord. The more he is +obliged to pay in the way of tax, the less he +can afford to pay in the way of rent. A tax +of this kind, imposed during the currency of +a lease, may, no doubt, distress or ruin the +farmer. Upon the renewal of the lease, it +must always fall upon the landlord.</p> + +<p>In the 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 is, upon this +account, frequently afraid to have a good team +of horses or oxen, but endeavours to cultivate +with the meanest and most wretched instruments +of husbandry that he can. Such is his +distrust in the justice of his assessors, that he +counterfeits poverty, and wishes to appear +scarce able to pay any thing, for fear of being +obliged to pay too much. By this miserable +policy, he does not, perhaps, always consult +his own interest in the most effectual manner; +and he probably loses more by the diminution +of his produce, than he saves by that of his +tax. Though, in consequence of this wretched +cultivation, the market is, no doubt, somewhat +worse supplied; yet, the small rise of +price which this may occasion, as it is not +likely even to indemnify the farmer for the di<span class='pagenum'><a name="Page_362" id="Page_362">[Pg 362]</a></span>minution +of his produce, it is still less likely +to enable him to pay more rent to the landlord. +The public, the farmer, the landlord, +all suffer more or less by this degraded cultivation. +That the personal taille tends, in many +different ways, to discourage cultivation, and +consequently to dry up the principal source +of the wealth of every great country, I have +already had occasion to observe in the third +book of this Inquiry.</p> + +<p>What are called poll-taxes in the southern +provinces of North America, and the West +India islands, annual taxes of so much a-head +upon every negro, are properly taxes upon the +profits of a certain species of stock employed +in agriculture. As the planters, are the greater +part of them, both farmers and landlords, +the final payment of the tax falls upon them +in their quality of landlords, without any retribution.</p> + +<p>Taxes of so much a head upon the bondmen +employed in cultivation, seem anciently +to have been common all over Europe. There +subsists at present a tax of this kind in the +empire of Russia. It is probably upon this +account that poll-taxes of all kinds have often +been represented as badges of slavery. Every +tax, however, is to the person who pays it, a +badge, not of slavery, but of liberty. It denotes +that he is subject to government, indeed; +but that, as he has some property, he cannot +himself be the property of a master. A poll-tax +upon slaves is altogether different from a +poll-tax upon freemen. The latter is paid +by the persons upon whom it is imposed; +the former, by a different set of persons. +The latter is either altogether arbitrary, or +altogether unequal, and, in most cases, is +both the one and the other; the former, +though in some respects unequal, different +slaves being of different values, is in no respect +arbitrary. Every master, who knows +the number of his own slaves, knows exactly +what he has to pay. Those different taxes, +however, being called by the same name, have +been considered as of the same nature.</p> + +<p>The taxes which in Holland are imposed +upon men and maid servants, are taxes, not +upon stock, but upon expense; and so far +resemble the taxes upon consumable commodities. +The tax of a guinea a-head for +every man-servant, which has lately been imposed +in Great Britain, is of the same kind. +It falls heaviest upon the middling rank. A +man of two hundred a-year may keep a single +man-servant. A man of ten thousand a-year +will not keep fifty. It does not affect +the poor.</p> + +<p>Taxes upon the profits of stock, in particular +employments, can never affect the interest +of money. Nobody will lend his money for +less interest to those who exercise the taxed, +than to those who exercise the untaxed employments. +Taxes upon the revenue arising +from stock in all employments, where the +government attempts to levy them with any +degree of exactness, will, in many cases, fall +upon the interest of money. The vingtieme, +or twentieth penny, in France, is a tax of the +same kind with what is called the land tax in +England, and is assessed, in the same manner, +upon the revenue arising upon land, +houses, and stock. So far as it affects stock, +it is assessed, though not with great rigour, +yet with much more exactness than that part +of the land tax in England which is imposed +upon the same fund. It, in many cases, falls +altogether upon the interest of money. Money +is frequently sunk in France, upon what +are called contracts for the constitution of a +rent; that is, perpetual annuities, redeemable +at any time by the debtor, upon payment of +the sum originally advanced, but of which +this redemption is not exigible by the creditor +except in particular cases. The vingtieme +seems not to have raised the rate of +those annuities, though it is exactly levied +upon them all.</p> + + +<h4><small>APPENDIX TO ARTICLES I. AND II.</small>—<i>Taxes +upon the Capital Value of Lands, Houses, +and Stock.</i></h4> + +<p>While property remains in the possession +of the same person, whatever permanent taxes +may have been imposed upon it, they have +never been intended to diminish or take away +any part of its capital value, but only some +part of the revenue arising from it. But +when property changes hands, when it is +transmitted either from the dead to the living, +or from the living to the living, such taxes +have frequently been imposed upon it as necessarily +take away some part of its capital +value.</p> + +<p>The transference of all sorts of property +from the dead to the living, and that of immoveable +property of land and houses from +the living to the living, are transactions which +are in their nature either public and notorious, +or such as cannot be long concealed. +Such transactions, therefore, may be taxed +directly. The transference of stock or moveable +property, from the living to the living, +by the lending of money, is frequently a +secret transaction, and may always be made +so. It cannot easily, therefore, be taxed directly. +It has been taxed indirectly in two +different ways; first, by requiring that the +deed, containing the obligation to repay, +should be written upon paper or parchment +which had paid a certain stamp duty, otherwise +not to be valid; secondly, by requiring, +under the like penalty of invalidity, that it +should be recorded either in a public or secret +register, and by imposing certain duties +upon such registration. Stamp duties, and +duties of registration, have frequently been +imposed likewise upon the deeds transferring<span class='pagenum'><a name="Page_363" id="Page_363">[Pg 363]</a></span> +property of all kinds from the dead to the +living, and upon those transferring immoveable +property from the living to the living; +transactions which might easily have been +taxed directly.</p> + +<p>The vicesima hereditatum, or the twentieth +penny of inheritances, imposed by Augustus +upon the ancient Romans, was a tax upon +the transference of property from the dead to +the living. Dion Cassius,<a name="FNanchor_63_63" id="FNanchor_63_63"></a><a href="#Footnote_63_63" class="fnanchor">[63]</a> the author who +writes concerning it the least indistinctly, +says, that it was imposed upon all successions, +legacies and donations, in case of death, except +upon those to the nearest relations, and +to the poor.</p> + +<p>Of the same kind is the Dutch tax upon +successions.<a name="FNanchor_64_64" id="FNanchor_64_64"></a><a href="#Footnote_64_64" class="fnanchor">[64]</a> Collateral successions are taxed +according to the degree of relation, from +five to thirty per cent. upon the whole value +of the succession. Testamentary donations, +or legacies to collaterals, are subject to the +like duties. Those from husband to wife, or +from wife to husband, to the fiftieth penny. +The luctuosa hereditas, the mournful succession +of ascendants to descendants, to the +twentieth penny only. Direct successions, +or those of descendants to ascendants, pay no +tax. The death of a father, to such of his +children as live in the same house with him, +is seldom attended with any increase, and frequently +with a considerable diminution of +revenue; by the loss of his industry, of his +office, or of some life-rent estate, of which he +may have been in possession. That tax +would be cruel and oppressive, which aggravated +their loss, by taking from them any +part of his succession. It may, however, +sometimes be otherwise with those children, +who, in the language of the Roman law, are +said to be emancipated; in that of the Scotch +law, to be foris-familiated; that is, who have +received their portion, have got families of +their own, and are supported by funds separate +and independent of those of their father. +Whatever part of his succession might come +to such children, would be a real addition to +their fortune, and might, therefore, perhaps, +without more inconveniency than what attends +all duties of this kind, be liable to some +tax.</p> + +<p>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. In ancient times, they constituted, +in every part of Europe, one of the principal +branches of the revenue of the crown.</p> + +<p>The heir of every immediate vassal of the +crown paid a certain duty, generally a year's +rent, upon receiving the investiture of the +estate. If the heir was a minor, the whole +rents of the estate, during the continuance of +the minority, devolved to the superior, without +any other charge besides the maintenance of +the minor, and the payment of the widow's +dower, when there happened to be a dowage +upon the land. When the minor came to be +of age, another tax, called relief, was still due +to the superior, which generally amounted +likewise to a year's rent. A long minority, +which, in the present times, so frequently disburdens +a great estate of all its incumbrances, +and restores the family to their ancient splendour, +could in those times have no such effect. +The waste, and not the disincumbrance of +the estate, was the common effect of a long +minority.</p> + +<p>By a feudal law, the vassal could not alienate +without the consent of his superior, who +generally extorted a fine or composition on +granting it. This fine, which was at first arbitrary, +came, in many countries, to be regulated +at a certain portion of the price of the +land. In some countries, where the greater +part of the other feudal customs have gone +into disuse, this tax upon the alienation of +land still continues to make a very considerable +branch of the revenue of the sovereign. +In the canton of Berne it is so high as a sixth +part of the price of all noble fiefs, and a tenth +part of that of all ignoble ones.<a name="FNanchor_65_65" id="FNanchor_65_65"></a><a href="#Footnote_65_65" class="fnanchor">[65]</a> In the canton +of Lucern, the tax upon the sale of land is +not universal, and takes place only in certain +districts. But if any person sells his land in +order to remove out of the territory, he pays +ten per cent. upon the whole price of the +sale.<a name="FNanchor_66_66" id="FNanchor_66_66"></a><a href="#Footnote_66_66" class="fnanchor">[66]</a> Taxes of the same kind, upon the +sale either of all lands, or of lands held by +certain tenures, take place in many other +countries, and make a more or less considerable +branch of the revenue of the sovereign.</p> + +<p>Such transactions may be taxed indirectly, +by means either of stamp duties, or of duties +upon registration; and those duties either +may, or may not, be proportioned to the value +of the subject which is transferred.</p> + +<p>In Great Britain, the stamp duties are +higher or lower, not so much according to +the value of the property transferred (an +eighteen-penny or half-crown stamp being +sufficient upon a bond for the largest sum of +money), as according to the nature of the +deed. The highest do not exceed six pounds +upon every sheet of paper, or skin of parchment; +and these high duties fall chiefly upon +grants from the crown, and upon certain law +proceedings, without any regard to the value +of the subject. There are, in Great Britain, +no duties on the registration of deeds or writings, +except the fees of the officers who keep +the register; and these are seldom more than +a reasonable recompense for their labour. +The crown derives no revenue from them.<span class='pagenum'><a name="Page_364" id="Page_364">[Pg 364]</a></span></p> + +<p>In Holland<a name="FNanchor_67_67" id="FNanchor_67_67"></a><a href="#Footnote_67_67" class="fnanchor">[67]</a> there are both stamp duties +and duties upon registration; which in some +cases are, and in some are not, proportioned +to the value of the property transferred. All +testaments must be written upon stamped paper, +of which the price is proportioned to the +property disposed of; so that there are stamps +which cost from three pence or three stivers +a-sheet, to three hundred florins, equal to +about twenty-seven pounds ten shillings of +our money. If the stamp is of an inferior +price to what the testator ought to have made +use of, his succession is confiscated. This is +over and above all their other taxes on succession. +Except bills of exchange, and some +other mercantile bills, all other deeds, bonds, +and contracts, are subject to a stamp duty. +This duty, however, does not rise in proportion +to the value of the subject. All sales of +land and of houses, and all mortgages upon +either, must be registered, and, upon registration, +pay a duty to the state of two and a-half +per cent. upon the amount of the price +or of the mortgage. This duty is extended +to the sale of all ships and vessels of more +than two tons burden, whether decked or undecked. +These, it seems, are considered as a +sort of houses upon the water. The sale of +moveables, when it is ordered by a court of +justice, is subject to the like duty of two and +a-half per cent.</p> + +<p>In France, there are both stamp duties and +duties upon registration. The former are +considered as a branch of the aids of excise, +and, in the provinces where those duties take +place, are levied by the excise officers. The +latter are considered as a branch of the domain +of the crown, and are levied by a different +set of officers.</p> + +<p>Those modes of taxation by stamp duties +and by duties upon registration, are of very +modern invention. In the course of little +more than a century, however, stamp duties +have, in Europe, become almost universal, +and duties upon registration extremely common. +There is no art which one government +sooner learns of another, than that of draining +money from the pockets of the people.</p> + +<p>Taxes upon the transference of property +from the dead to the living, fall finally, as +well as immediately, upon the persons to +whom the property is transferred. Taxes +upon the sale of land fall altogether upon the +seller. The seller is almost always under +the necessity of selling, and must, therefore, +take such a price as he can get. The buyer +is scarce ever under the necessity of buying, +and will, therefore, only give such a price as +he likes. He considers what the land will +cost him, in tax and price together. The +more he is obliged to pay in the way of tax, +the less he will be disposed to give in the way +of price. Such taxes, therefore, fall almost +always upon a necessitous person, and must, +therefore, be frequently very cruel and oppressive. +Taxes upon the sale of new-built +houses, where the building is sold without the +ground, fall generally upon the buyer, because +the builder must generally have his +profit; otherwise he must give up the trade. +If he advances the tax, therefore, the buyer +must generally repay it to him. Taxes upon +the sale of old houses, for the same reason as +those upon the sale of land, fall generally +upon the seller; whom, in most cases, either +conveniency or necessity obliges to sell. The +number of new-built houses that are annually +brought to market, is more or less regulated +by the demand. Unless the demand is +such as to afford the builder his profit, after +paying all expenses, he will build no more +houses. The number of old houses which +happen at any time to come to market, is regulated +by accidents, of which the greater +part have no relation to the demand. Two or +three great bankruptcies in a mercantile town, +will bring many houses to sale, which must +be sold for what can be got for them. Taxes +upon the sale of ground-rents fall altogether +upon the seller, for the same reason as those +upon the sale of lands. Stamp duties, and +duties upon the registration of bonds and +contracts for borrowed money, fall altogether +upon the borrower, and, in fact, are always +paid by him. Duties of the same kind upon +law proceedings fall upon the suitors. They +reduce to both the capital value of the subject +in dispute. The more it costs to acquire any +property, the less must be the neat value of it +when acquired.</p> + +<p>All taxes upon the transference of property +of every kind, so far as they diminish the capital +value of that property, tend to diminish +the funds destined for the maintenance of +productive labour. They are all more or +less unthrifty taxes that increase the revenue +of the sovereign, which seldom maintains any +but unproductive labourers, at the expense of +the capital of the people, which maintains +none but productive.</p> + +<p>Such taxes, even when they are proportioned +to the value of the property transferred, +are still unequal; the frequency of transference +not being always equal in property of +equal value. When they are not proportioned +to this value, which is the case with +the greater part of the stamp duties and duties +of registration, they are still more so. +They are in no respect arbitrary, but are, or +may be, in all cases, perfectly clear and certain. +Though they sometimes fall upon the +person who is not very able to pay, the time +of payment is, in most cases, sufficiently convenient +for him. When the payment becomes +due, he must, in most cases, have the +money to pay. They are levied at very little +expense, and in general subject the contribu<span class='pagenum'><a name="Page_365" id="Page_365">[Pg 365]</a></span>tors +to no other inconveniency, besides always +the unavoidable one of paying the tax.</p> + +<p>In France, the stamp duties are not much +complained of. Those of registration, which +they call the Controle, are. They give occasion, +it is pretended, to much extortion in +the officers of the farmers-general who collect +the tax, which is in a great measure arbitrary +and uncertain. In the greater part of the +libels which have been written against the +present system of finances in France, the +abuses of the controle make a principal article. +Uncertainty, however, does not seem to +be necessarily inherent in the nature of such +taxes. If the popular complaints are well +founded, the abuse must arise, not so much +from the nature of the tax as from the want +of precision and distinctness in the words of +the edicts or laws which impose it.</p> + +<p>The registration of mortgages, and in general +of all rights upon immoveable property, +as it gives great security both to creditors and +purchasers, is extremely advantageous to the +public. That of the greater part of deeds of +other kinds, is frequently inconvenient and +even dangerous to individuals, without any +advantage to the public. All registers which, +it is acknowledged, ought to be kept secret, +ought certainly never to exist. The credit +of individuals ought certainly never to depend +upon so very slender a security, as the probity +and religion of the inferior officers of +revenue. But where the fees of registration +have been made a source of revenue to the +sovereign, register-offices have commonly +been multiplied without end, both for the +deeds which ought to be registered, and for +those which ought not. In France there are +several different sorts of secret registers. +This abuse, though not perhaps a necessary, +it must be acknowledged, is a very natural +effect of such taxes.</p> + +<p>Such stamp duties as those in England +upon cards and dice, upon newspapers and +periodical pamphlets, &c. are properly taxes +upon consumption; the final payment falls +upon the persons who use or consume such +commodities. Such stamp duties as those +upon licences to retail ale, wine, and spiritous +liquors, though intended, perhaps, to fall upon +the profits of the retailers, are likewise +finally paid by the consumers of those liquors. +Such taxes, though called by the same name, +and levied by the same officers, and in the +same manner with the stamp duties above +mentioned upon the transference of property, +are, however, of a quite different nature, and +fall upon quite different funds.</p> + + +<h4><small>ART. III.</small>—<i>Taxes upon the Wages of Labour.</i></h4> + +<p>The wages of the inferior classes of workmen, +I have endeavoured to show in the first +book are everywhere necessarily regulated by +two different circumstances; the demand for +labour, and the ordinary or average price +of provisions. The demand for labour, according +as it happens to be either increasing, +stationary or declining; or to require an increasing, +stationary, or declining population; +regulates the subsistence of the labourer, and +determines in what degree it shall be either +liberal, moderate, or scanty. The ordinary +average price of provisions determines the +quantity of money which must be paid to the +workman, in order to enable him, one year +with another, to purchase this liberal, moderate, +or scanty subsistence. While the demand +for the labour and the price of provisions, +therefore, remain the same, a direct tax upon +the wages of labour can have no other effect, +than to raise them somewhat higher than the +tax. Let us suppose, for example, that, in +particular place, the demand for labour and +the price of provisions were such as to render +ten shillings a-week the ordinary wages of labour; +and that a tax of one-fifth, or four shillings +in the pound, was imposed upon wages. +If the demand for labour and the price of +provisions remained the same, it would still +be necessary that the labourer should, in that +place, earn such a subsistence as could be +bought only for ten shillings a-week; or +that, after paying the tax, he should have ten +shillings a-week free wages. But, in order +to leave him such free wages, after paying +such a tax, the price of labour must, in that +place, soon rise, not to twelve shillings a-week +only, but to twelve and sixpence; that +is, in order to enable him to pay a tax of one-fifth, +his wages must necessarily soon rise, +not one-fifth part only, but one-fourth. +Whatever was the proportion of the tax, the +wages of labour must, in all cases rise, not +only in that proportion, but in a higher proportion. +If the tax for example, was one-tenth, +the wages of labour must necessarily +soon rise, not one-tenth part only, but one-eighth.</p> + +<p>A direct tax upon the wages of labour, +therefore, though the labourer might, perhaps, +pay it out of his hand, could not properly be +said to be even advanced by him; at least if +the demand for labour and the average price +of provisions remained the same after the tax +as before it. In all such cases, not only the +tax, but something more than the tax, would +in reality be advanced by the person who immediately +employed him. The final payment +would, in different cases, fall upon different +persons. The rise which such a tax might +occasion in the wages of manufacturing labour +would be advanced by the master manufacturer, +who would both be entitled and +obliged to charge it, with a profit, upon the +price of his goods. The final payment of this +rise of wages, therefore, together with the additional +profit of the master manufacturer, +would fall upon the consumer. The rise which<span class='pagenum'><a name="Page_366" id="Page_366">[Pg 366]</a></span> +such a tax might occasion in the wages of +country labour would be advanced by the farmer, +who, in order to maintain the name number +of labourers as before, would he obliged +to employ a greater capital. In order to get +back this greater capital, together with the +ordinary profits of stock, it would be necessary +that he should retain a larger portion, or, +what comes to the same thing, the price of a +larger portion, of the produce of the land, +and, consequently, that he should pay less +rent to the landlord. The final payment of +this rise of wages, therefore, would, in this +case, fall upon the landlord, together with the +additional profit of the farmer who had advanced +it. In all cases, a direct tax upon the +wages of labour must, in the long-run, occasion +both a greater reduction in the rent of +land, and a greater rise in the price of manufactured +goods than would have followed from +the proper assessment of a sum equal to the +produce of the tax, partly upon the rent of +land, and partly upon consumable commodities.</p> + +<p>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 of labour. The declension of industry, +the decrease of employment for the +poor, the diminution of the annual produce +of the land and labour of the country, have +generally been the effects of such taxes. In +consequence of them, however, the price of +labor must always be higher than it otherwise +would have been in the actual state of +the demand; and this enhancement of price, +together with the profit of those who advance +it, must always be finally paid by the landlords +and consumers.</p> + +<p>A tax upon the wages of country labour +does not raise the price of the rude produce +of land in proportion to the tax; for the +same reason that a tax upon the farmer's +profit does not raise that price in that proportion.</p> + +<p>Absurd and destructive as such taxes are, +however, they take place in many countries. +In France, that part of the taille which is +charged upon the industry of workmen and +day-labourers in country villages, is properly +a tax of this kind. Their wages are computed +according to the common rate of the +district in which they reside; and, that they +may be as little liable as possible to any overcharge, +their yearly gains are estimated at no +more than two hundred working days in the +year.<a name="FNanchor_68_68" id="FNanchor_68_68"></a><a href="#Footnote_68_68" class="fnanchor">[68]</a> The tax of each individual is varied +from year to year, according to different circumstances, +of which the collector or the commissary, +whom the intendant appoints to assist +him, are the judges. In Bohemia, in +consequence of the alteration in the system +of finances which was begun in 1748, a very +heavy tax is imposed upon the industry of artificers. +They are divided into four classes. +The highest class pay a hundred florins a-year, +which, at two-and-twenty pence half +penny a-florin, amounts to L.9 : 7 : 6. The +second class are taxed at seventy; the third at +fifty; and the fourth, comprehending artificers +in villages, and the lowest class of those in +towns, at twenty-five florins.<a name="FNanchor_69_69" id="FNanchor_69_69"></a><a href="#Footnote_69_69" class="fnanchor">[69]</a></p> + +<p>The recompence of ingenious artists, and +of men of liberal professions, I have endeavoured +to show in the first book, necessarily +keeps a certain proportion to the emoluments +of inferior trades. A tax upon this recompence, +therefore, could have no other effect +than to raise it somewhat higher than in proportion +to the tax. If it did not rise in this +manner, the ingenious arts and the liberal +professions, being no longer upon a level +with other trades, would be so much deserted, +that they would soon return to that level.</p> + +<p>The emoluments of offices are not, like +those of trades and professions, regulated by +the free competition of the market, and do +not, therefore, always bear a just proportion +to what the nature of the employment requires. +They are, perhaps, in most countries, higher +than it requires; the persons who have the +administration of government being generally +disposed to regard both themselves and their +immediate dependents, rather more than enough. +The emoluments offices, therefore, +can, in most cases, very well bear to be taxed. +The persons, besides, who enjoy public offices, +especially the more lucrative, are, in all +countries, the objects of general envy; and a +tax upon their emoluments, even though it +should be somewhat higher than upon any +other sort of revenue, is always a very popular +tax. In England, for example, when, by +the land-tax, every other sort of revenue was +supposed to be assessed at four shillings in +the pound, it was very popular to lay a real +tax of five shillings and sixpence in the pound +upon the salaries of offices which exceeded a +hundred pounds a-year; the pensions of the +younger branches of the royal family, the pay +of the officers of the army and navy, and a +few others less obnoxious to envy, excepted. +There are in England no other direct taxes +upon the wages of labour.</p> + + +<h4><small>ART. IV.</small>—<i>Taxes which it is intended should +fall indifferently upon every different Species of Revenue.</i></h4> + +<p>The taxes which it is intended should fall +indifferently upon every different species of +revenue, are capitation taxes, and taxes upon +consumable commodities. These must be paid +indifferently, from whatever revenue the +con<span class='pagenum'><a name="Page_367" id="Page_367">[Pg 367]</a></span>tributors may possess; from the rent of their +land, from the profits of their stock, or from +the wages of their labour.</p> + + +<h4><i>Capitation Taxes.</i></h4> + +<p>Capitation taxes, if it is attempted to proportion +them to the fortune or revenue of +each contributor, become altogether arbitrary. +The state of a man's fortune varies from day +to day; and, without an inquisition, more intolerable +than any tax, and renewed at least +once every year, can only be guessed at. His +assessment, therefore, must, in most cases, +depend upon the good or bad humour of his +assessors, and must, therefore, be altogether +arbitrary and uncertain.</p> + +<p>Capitation taxes, if they are proportioned, +not to the supposed fortune, but to the rank +of each contributor, become altogether unequal; +the degrees of fortune being frequently +unequal in the same degree of rank.</p> + +<p>Such taxes, therefore, if it is attempted to +render them equal, become altogether arbitrary +and uncertain; and if it is attempted to +render them certain and not arbitrary, become +altogether unequal. Let the tax be +light or heavy, uncertainty is always a great +grievance. In a light tax, a considerable degree +of inequality may be supported; in a +heavy one, it is altogether intolerable.</p> + +<p>In the different poll-taxes which took place +in England during the reign of William III. +the contributors were, the greater part of +them, assessed according to the degree of +their rank; as dukes, marquises, earls, viscounts, +barons, esquires, gentlemen, the eldest +and youngest sons of peers, &c. All +shop-keepers and tradesmen worth more than +three hundred pounds, that is, the better sort +of them, were subject to the same assessment, +how great soever might be the difference in +their fortunes. Their rank was more considered +than their fortune. Several of those +who, in the first poll-tax, were rated according +to their supposed fortune, were afterwards +rated according to their rank. Serjeants, attorneys, +and proctors at law, who, in the first +poll-tax, were assessed at three shillings in +the pound of their supposed income, were +afterwards assessed as gentlemen. In the assessment +of a tax which was not very heavy, +a considerable degree of inequality had been +found less insupportable than any degree of +uncertainty.</p> + +<p>In the capitation which has been levied in +France, without any interruption, since the +beginning of the present century, the highest +orders of people are rated according to their +rank, by an invariable tariff; the lower orders +of people, according to what is supposed to +be their fortune, by an assessment which varies +from year to year. The officers of the +king's court, the judges, and other officers in +the superior courts of justice, the officers of +the troops, &c. are assessed in the first manner. +The inferior ranks of people in the provinces +are assessed in the second. In France, +the great easily submit to a considerable degree +of inequality in a tax which, so far as it +affects them, is not a very heavy one; but +could not brook the arbitrary assessment of +an intendant.</p> + +<p>The inferior ranks of people must, in that +country, suffer patiently the usage which their +superiors think proper to give them.</p> + +<p>In England, the different poll-taxes never +produced the sum which had been expected +from them, or which it was supposed they +might have produced, had they been exactly +levied. In France, the capitation always produces +the sum expected from it. The mild +government of England, when it assessed the +different ranks of people to the poll-tax, contented +itself with what that assessment happened +to produce, and required no compensation +for the loss which the state might sustain, +either by those who could not pay, or +by those who would not pay (for there were +many such), and who, by the indulgent execution +of the law, were not forced to pay. +The more severe government of France assesses +upon each generality a certain sum, +which the intendant must find as he can. If +any province complains of being assessed too +high, it may, in the assessment of next year, +obtain an abatement proportioned to the overcharge +of the year before; but it must pay in +the mean time. The intendant, in order to +be sure of finding the sum assessed upon his +generality, was empowered to assess it in a +larger sum, that the failure or inability of some +of the contributors might be compensated by +the overcharge of the rest; and till 1765, the +fixation of this surplus assessment was left altogether +to his discretion. In that year, indeed, +the council assumed this power to itself. In +the capitation of the provinces, it is observed +by the perfectly well informed author of the +Memoirs upon the Impositions in France, the +proportion which falls upon the nobility, and +upon those whose privileges exempt them from +the taille, is the least considerable. The largest +falls upon those subject to the taille, who are +assessed to the capitation at so much a-pound +of what they pay to that other tax.</p> + +<p>Capitation taxes, so far as they are levied +upon the lower ranks of people, are direct +taxes upon the wages of labour, and are attended +with all the inconveniencies of such +taxes.</p> + +<p>Capitation taxes are levied at little expense; +and, where they are rigorously exacted, +afford a very sure revenue to the state. It is +upon this account that, in countries where the +ease, comfort, and security of the inferior +ranks of people are little attended to, capitation +taxes are very common. It is in general, +however, but a small part of the public reve<span class='pagenum'><a name="Page_368" id="Page_368">[Pg 368]</a></span>nue, +which, in a great empire, has ever been +drawn from such taxes; and the greatest sum +which they have ever afforded, might always +have been found in some other way much +more convenient to the people.</p> + + +<h4><i>Taxes upon Consumable Commodities.</i></h4> + +<p>The impossibility of taxing the people, in +proportion to their revenue, by any capitation, +seems to have given occasion to the invention +of taxes upon consumable commodities. The +state not knowing how to tax, directly and +proportionably, the revenue of its subjects, +endeavours to tax it indirectly by taxing their +expense, which, it is supposed, will, in most +cases, be nearly in proportion to their revenue. +Their expense is taxed, by taxing the +consumable commodities upon which it is laid +out.</p> + +<p>Consumable commodities are either necessaries +or luxuries.</p> + +<p>By necessaries I understand, not only the +commodities which are indispensibly necessary +for the support of life, but whatever the +custom of the country renders it indecent for +creditable people, even of the lowest order, to +be without. A linen shirt, for example, is, +strictly speaking, not a necessary of life. The +Greeks and Romans lived, I suppose, very +comfortably, though they had no linen. But +in the present times, through the greater part +of Europe, a creditable day-labourer would +be ashamed to appear in public without a linen +shirt, the want of which would be supposed +to denote that disgraceful degree of +poverty, which, it is presumed, nobody can +well fall into without extreme bad conduct. +Custom, in the same manner, has rendered +leather shoes a necessary of life in England. +The poorest creditable person, of either sex, +would be ashamed to appear in public without +them. In Scotland, custom has rendered +them a necessary of life to the lowest order +of men; but not to the same order of women, +who may, without any discredit, walk about +barefooted. In France, they are necessaries +neither to men nor to women; the lowest +rank of both sexes appearing there publicly, +without any discredit, sometimes in wooden +shoes, and sometimes barefooted. Under necessaries, +therefore, I comprehend, not only +those things which nature, but those things +which the established rules of decency have +rendered necessary to the lowest rank of people. +All other things I call luxuries, without +meaning, by this appellation, to throw the +smallest degree of reproach upon the temperate +use of them. Beer and ale, for example, +in Great Britain, and wine, even in the wine +countries, I call luxuries. A man of any +rank may, without any reproach, abstain totally +from tasting such liquors. Nature does +not render them necessary for the support of +life; and custom nowhere renders it indecent +to live without them.</p> + +<p>As the wages of labour are everywhere regulated, +partly by the demand for it, and +partly by the average price of the necessary +articles of subsistence; whatever raises this +average price must necessarily raise those +wages; so that the labourer may still be able +to purchase that quantity of those necessary +articles which the state of the demand for labour, +whether increasing, stationary, or declining, +requires that he should have.<a name="FNanchor_70_70" id="FNanchor_70_70"></a><a href="#Footnote_70_70" class="fnanchor">[70]</a> A tax +upon those articles necessarily raises their +price somewhat higher than the amount of +the tax, because the dealer, who advances the +tax, must generally get it back, with a profit. +Such a tax must, therefore, occasion a rise in +the wages of labour, proportionable to this +rise of price.</p> + +<p>It is thus that a tax upon the necessaries of +life operates exactly in the same manner as +a direct tax upon the wages of labour. The +labourer, though he may pay it out of his hand, +cannot, for any considerable time at least, be +properly said even to advance it. It must always, +in the long-run, be advanced to him by +his immediate employer, in the advanced state +of wages. His employer, if he is a manufacturer, +will charge upon the price of his goods +the rise of wages, together with a profit, +so that the final payment of the tax, together +with this overcharge, will fall upon the consumer. +If his employer is a farmer, the final +payment, together with a like overcharge, will +fall upon the rent of the landlord.</p> + +<p>It is otherwise with taxes upon what I call +luxuries, even upon those of the poor. The +rise in the price of the taxed commodities, will +not necessarily occasion any rise in the wages +of labour. A tax upon tobacco, for example, +though a luxury of the poor, as well as of +the rich, will not raise wages. Though it +is taxed in England at three times, and in +France at fifteen times its original price, those +high duties seem to have no effect upon the +wages of labour. The same thing may be +said of the taxes upon tea and sugar, which, +in England and Holland, have become luxuries +of the lowest ranks of people; and of +those upon chocolate, which, in Spain, is said +to have become so.</p> + +<p>The different taxes which, in Great Britain, +have, in the course of the present century, +been imposed upon spiritous liquors, are not +supposed to have had any effect upon the +wages of labour. The rise in the price of +porter, occasioned by an additional tax of three +shillings upon the barrel of strong beer, has +not raised the wages of common labour in +London. These were about eighteen pence or +twenty pence a-day before the tax, and they +are not more now.</p> + +<p>The high price of such commodities does<span class='pagenum'><a name="Page_369" id="Page_369">[Pg 369]</a></span> +not necessarily diminish the ability of the inferior +ranks of people to bring up families. +Upon the sober and industrious poor, taxes +upon such commodities act as sumptuary laws, +and dispose them either to moderate, or to +refrain altogether from the use of superfluities +which they can no longer easily afford. Their +ability to bring up families, in consequence +of this forced frugality, instead of being diminished, +is frequently, perhaps, increased by +the tax. It is the sober and industrious poor +who generally bring up the most numerous +families, and who principally supply the demand +for useful labour. All the poor, indeed, +are not sober and industrious; and the +dissolute and disorderly might continue to indulge +themselves in the use of such commodities, +after this rise of price, in the same manner +as before, without regarding the distress +which this indulgence might bring upon their +families. Such disorderly persons, however, +seldom rear up numerous families, their children +generally perishing from neglect, mismanagement, +and the scantiness or unwholesomeness +of their food. If, by the strength of +their constitution, they survive the hardships +to which the bad conduct of their parents exposes +them, yet the example of that bad conduct +commonly corrupts their morals; so that, +instead of being useful to society by their industry, +they become public nuisances by their +vices and disorders. Though the advanced +price of the luxuries of the poor, therefore, +might increase somewhat the distress of such +disorderly families, and thereby diminish somewhat +their ability to bring up children, it would +not probably diminish much the useful population +of the country.</p> + +<p>Any rise in the average price of necessaries, +unless it be compensated by a proportionable +rise in the wages of labour, must necessarily +diminish, more or less, the ability of the poor +to bring up numerous families, and, consequently, +to supply the demand for useful labour; +whatever may be the state of that demand, +whether increasing, stationary, or declining; +or such as requires an increasing, +stationary, or declining population.</p> + +<p>Taxes upon luxuries have no tendency to +raise the price of any other commodities, except +that of the commodities taxed. Taxes +upon necessaries, by raising the wages of labour, +necessarily tend to raise the price of all +manufactures, and consequently to diminish +the extent of their sale and consumption. +Taxes upon luxuries are finally paid by the +consumers of the commodities taxed, without +any retribution. They fall indifferently +upon every species of revenue, the wages of +labour, the profits of stock, and the rent of +land. Taxes upon necessaries, so far as they +affect the labouring poor, are finally paid, +partly by landlords, in the diminished rent of +their lands, and partly by rich consumers, +whether landlords or others, in the advanced +price of manufactured goods; and always +with a considerable overcharge. The advanced +price of such manufactures as are real +necessaries of life, and are destined for the +consumption of the poor, of coarse woollens, +for example, must be compensated to the +poor by a farther advancement of their wages. +The middling and superior ranks of people, +if they understood their own interest, ought +always to oppose all taxes upon the necessaries +of life, as well as all taxes upon the +wages of labour. The final payment of both +the one and the other falls altogether upon +themselves, and always with a considerable +overcharge. They fall heaviest upon the +landlords, who always pay in a double +capacity; in that of landlords, by the reduction, +of their rent; and in that of rich consumers, +by the increase of their expense. +The observation of Sir Matthew Decker, that +certain taxes are, in the price of certain goods, +sometimes repeated and accumulated four or +five times, is perfectly just with regard to +taxes upon the necessaries of life. In the +price of leather, for example, you must pay not +only for the tax upon the leather of your own +shoes, but for a part of that upon those of the +shoemaker and the tanner. You must pay, +too, for the tax upon the salt, upon the soap, +and upon the candles which those workmen +consume while employed in your service; and +for the tax upon the leather, which the salt-maker, +the soap-maker, and the candle-maker +consume, while employed in their service.</p> + +<p>In Great Britain, the principal taxes upon +the necessaries of life, are those upon the +four commodities just now mentioned, salt, +leather, soap, and candles.</p> + +<p>Salt is a very ancient and a very universal +subject of taxation. It was taxed among the +Romans, and it is so at present in, I believe, +every part of Europe. The quantity annually +consumed by any individual is so small, +and may be purchased so gradually, that nobody, +it seems to have been thought, could +feel very sensibly even a pretty heavy tax upon +it. It is in England taxed at three shillings +and fourpence a bushel; about three times +the original price of the commodity. In some +other countries, the tax is still higher. Leather +is a real necessary of life. The use of +linen renders soap such. In countries where +the winter nights are long, candles are a necessary +instrument of trade. Leather and +soap are in Great Britain taxed at three halfpence +a-pound; candles at a penny; taxes +which, upon the original price of leather, may +amount to about eight or ten per cent.; upon +that of soap, to about twenty or five-and-twenty +per cent.; and upon that of candles +to about fourteen or fifteen per cent.; taxes +which, though lighter than that upon salt, +are still very heavy. As all those four commodities +are real necessaries of life, such +heavy taxes upon them must increase some<span class='pagenum'><a name="Page_370" id="Page_370">[Pg 370]</a></span> +what the expense of the sober and industrious +poor, and must consequently raise more or +less the wages of their labour.</p> + +<p>In a country where the winters are so cold +as in Great Britain, fuel is, during that season, +in the strictest sense of the word, a necessary +of life, not only for the purpose of dressing +victuals, but for the comfortable subsistence +of many different sorts of workmen who +work within doors; and coals are the cheapest +of all fuel. The price of fuel has so important +an influence upon that of labour, that all +over Great Britain, manufactures have confined +themselves principally to the coal countries; +other parts of the country, on account +of the high price of this necessary article, not +being able to work so cheap. In some manufactures, +besides, coal is a necessary instrument +of trade; as in those of glass, iron, and +all other metals. If a bounty could in any case +be reasonable, it might perhaps be so upon +the transportation of coals from those parts of +the country in which they abound, to those in +which they are wanted. But the legislature, +instead of a bounty, has imposed a tax of three +shillings and threepence a-ton upon coals +carried coastways; which, upon most sorts +of coal, is more than sixty per cent. of the +original price at the coal pit. Coals carried, +either by land or by inland navigation, pay +no duty. Where they are naturally cheap, +they are consumed duty free; where they are +naturally dear, they are loaded with a heavy +duty.</p> + +<p>Such taxes, though they raise the price of +subsistence, and consequently the wages of +labour, yet they afford a considerable revenue +to government, which it might not be easy to +find in any other way. There may, therefore, +be good reasons for continuing them. The +bounty upon the exportation of corn, so far +as it tends, in the actual state of tillage, to +raise the price of that necessary article, produces +all the like bad effects; and instead of +affording any revenue, frequently occasions a +very great expense to government. The high +duties upon the importation of foreign corn, +which, in years of moderate plenty, amount +to a prohibition; and the absolute prohibition +of the importation, either of live cattle, or of +salt provisions, which takes place in the ordinary +state of the law, and which, on account +of the scarcity, is at present suspended for a +limited time with regard to Ireland and the +British plantations, have all had the bad effects +of taxes upon the necessaries of life, and produce +no revenue to government. Nothing +seems necessary for the repeal of such regulations, +but to convince the public of the futility +of that system in consequence of which they +have been established.</p> + +<p>Taxes upon the necessaries of life are much +higher in many other countries than in Great +Britain. Duties upon flour and meal when +ground at the mill, and upon bread when +baked at the oven, take place in many countries. +In Holland the money-price of the +bread consumed in towns is supposed to be +doubled by means of such taxes. In lieu of a +part of them, the people who live in the country, +pay every year so much a-head, according to +the sort of bread they are supposed to consume. +Those who consume wheaten bread pay three +guilders fifteen stivers; about six shillings +and ninepence halfpenny. These, and some +other taxes of the same kind, by raising the +price of labour, are said to have ruined the +greater part of the manufactures of Holland<a name="FNanchor_71_71" id="FNanchor_71_71"></a><a href="#Footnote_71_71" class="fnanchor">[71]</a>. +Similar taxes, though not quite so heavy, take +place in the Milanese, in the states of Genoa, +in the duchy of Modena, in the duchies of +Parma, Placentia, and Guastalla, and the Ecclesiastical +state. A French author<a name="FNanchor_72_72" id="FNanchor_72_72"></a><a href="#Footnote_72_72" class="fnanchor">[72]</a> of some +note, has proposed to reform the finances of +his country, by substituting in the room of the +greater part of other taxes, this most ruinous +of all taxes. There is nothing so absurd, says +Cicero, which has not sometimes been asserted +by some philosophers.</p> + +<p>Taxes upon butcher's meat are still more +common than those upon bread. It may indeed +be doubted, whether butcher's meat is +any where a necessary of life. Grain and +other vegetables, with the help of milk, cheese, +and butter, or oil, where butter is not to be +had, it is known from experience, can, without +any butcher's meat, afford the most plentiful, +the most wholesome, the most nourishing, +and the most invigorating diet. Decency +nowhere requires that any man should eat +butcher's meat, as it in most places requires +that he should wear a linen shirt or a pair of +leather shoes.</p> + +<p>Consumable commodities, whether necessaries +or luxuries, may be taxed in two different +ways. The consumer may either pay +an annual sum on account of his using or +consuming goods of a certain kind; or the +goods may be taxed while they remain in the +hands of the dealer, and before they are delivered +to the consumer. The consumable +goods which last a considerable time before +they are consumed altogether, are most properly +taxed in the one way; those of which +the consumption is either immediate or more +speedy, in the other. The coach-tax and plate-tax +are examples of the former method of imposing; +the greater part of the other duties of +excise and customs, of the latter.</p> + +<p>A coach may, with good management, last +ten or twelve years. It might be taxed, +once for all, before it comes out of the hands +of the coach-maker. But it is certainly more +convenient for the buyer to pay four pounds +a-year for the privilege of keeping a coach, +than to pay all at once forty or forty-eight +pounds additional price to the coach-maker;<span class='pagenum'><a name="Page_371" id="Page_371">[Pg 371]</a></span> +or a sum equivalent to what the tax is likely +to cost him during the time he uses the same +coach. A service of plate in the same manner, +may last more than a century. It is +certainly easier for the consumer to pay five +shillings a-year for every hundred ounces of +plate, near one per cent. of the value, than to +redeem this long annuity at five-and-twenty +of thirty years purchase, which would enhance +the price at least five-and-twenty or thirty per +cent. The different taxes which affect houses, +are certainly more conveniently paid by moderate +annual payments, than by a heavy tax +of equal value upon the first building or sale +of the house.</p> + +<p>It was the well-known proposal of Sir +Matthew Decker, that all commodities, even +those of which the consumption is either immediate +or speedy, should be taxed in this +manner; the dealer advancing nothing, but +the consumer paying a certain annual sum +for the licence to consume certain goods. The +object of his scheme was to promote all the +different branches of foreign trade, particularly +the carrying trade, by taking away all duties +upon importation and exportation, and thereby +enabling the merchant to employ his whole +capital and credit in the purchase of goods +and the freight of ships, no part of either being +diverted towards the advancing of taxes. +The project, however, of taxing, in this manner, +goods of immediate or speedy consumption, +seems liable to the four following very +important objections. First, the tax would +be more unequal, or not so well proportioned +to the expense and consumption of the different +contributors, as in the way in which it +is commonly imposed. The taxes upon ale, +wine, and spiritous liquors, which are advanced +by the dealers, are finally paid by the +different consumers, exactly in proportion to +their respective consumption. But if the tax +were to be paid by purchasing a licence to +drink those liquors, the sober would, in proportion +to his consumption, be taxed much +more heavily than the drunken consumer. A +family which exercised great hospitality, would +be taxed much more lightly than one who entertained +fewer guests. Secondly, this mode +of taxation, by paying for an annual, half-yearly, +or quarterly licence to consume certain +goods, would diminish very much one of the +principal conveniences of taxes upon goods +of speedy consumption; the piece-meal payment. +In the price of threepence halfpenny, +which is at present paid for a pot of porter, the +different taxes upon malt, hops, and beer, together +with the extraordinary profit which the +brewer charges for having advanced them, may +perhaps amount to about three halfpence. If +a workman can conveniently spare those three +halfpence, he buys a pot of porter. If he +cannot, he contents himself with a pint; and, +as a penny saved is a penny got, he thus gains +a farthing by his temperance. He pays the +tax piece-meal, as he can afford to pay it, +and when he can afford to pay it, and +every act of payment is perfectly voluntary, +and what he can avoid if he chuses to do so. +Thirdly, such taxes would operate less as +sumptuary laws. When the licence was once +purchased, whether the purchaser drunk much +or drunk little, his tax would he the same. +Fourthly, if a workman were to pay all at +once, by yearly, half-yearly, or quarterly payments, +a tax equal to what he at present pays, +with little or no inconveniency, upon all the +different pots and pints of porter which he +drinks in any such period of time, the sum +might frequently distress him very much. +This mode of taxation, therefore, it seems +evident, could never, without the most grievous +oppression, produce a revenue nearly +equal to what is derived from the present mode +without any oppression. In several countries, +however, commodities of an immediate or very +speedy consumption are taxed in this manner. +In Holland, people pay so much a-head for +a licence to drink tea. I have already mentioned +a tax upon bread, which, so far as it +is consumed in farm houses and country villages, +is there levied in the same manner.</p> + +<p>The duties of excise are imposed chiefly +upon goods of home produce, destined for +home consumption. They are imposed only +upon a few sorts of goods of the most general +use. There can never be any doubt, +either concerning the goods which are subject +to those duties, or concerning the particular +duty which each species of goods is +subject to. They fall almost altogether upon +what I call luxuries, excepting always the four +duties above mentioned, upon salt, soap, leather, +candles, and perhaps that upon green glass.</p> + +<p>The duties of customs are much more ancient +than those of excise. They seem to +have been called customs, as denoting customary +payments, which had been in use for +time immemorial. They appear to have been +originally considered as taxes upon the profits +of merchants. During the barbarous +times of feudal anarchy, merchants, like all +the other inhabitants of burghs, were considered +as little better than emancipated bondmen, +whose persons were despised, and whose +gains were envied. The great nobility, who +had consented that the king should tallage +the profits of their own tenants, were not +unwilling that he should tallage likewise those +of an order of men whom it was much less +their interest to protect. In those ignorant +times, it was not understood, that the profits +of merchants are a subject not taxable directly; +or that the final payment of all such taxes +must fall, with a considerable overcharge, upon +the consumers.</p> + +<p>The gains of alien merchants were looked +upon more unfavourably than those of English +merchants. It was natural, therefore, +that those of the former should be taxed more<span class='pagenum'><a name="Page_372" id="Page_372">[Pg 372]</a></span> +heavily than those of the latter. This distinction +between the duties upon aliens and +those upon English merchants, which was +begun from ignorance, has been continued +from the spirit of monopoly, or in order to +give our own merchants an advantage, both +in the home and in the foreign market.</p> + +<p>With this distinction, the ancient duties of +customs were imposed equally upon all sorts +of goods, necessaries as well as luxuries, +goods exported as well as goods imported. +Why should the dealers in one sort of goods, +it seems to have been thought, be more favoured +than those in another? or why should +the merchant exporter be more favoured than +the merchant importer?</p> + +<p>The ancient customs were divided into +three branches. The first, and, perhaps, the +most ancient of all those duties, was that upon +wool and leather. It seems to have been +chiefly or altogether an exportation duty. +When the woollen manufacture came to be +established in England, lest the king should +lose any part of his customs upon wool by +the exportation of woollen cloths, a like duty +was imposed upon them. The other two +branches were, first, a duty upon wine, which +being imposed at so much a-ton, was called a +tonnage; and, secondly, a duty upon all +other goods, which being imposed at so much +a-pound of their supposed value, was called +a poundage. In the forty-seventh year of +Edward III., a duty of sixpence in the pound +was imposed upon all goods exported and +imported, except wools, wool-felts, leather, +and wines which were subject to particular +duties. In the fourteenth of Richard II., +this duty was raised to one shilling in the +pound; but, three years afterwards, it was +again reduced to sixpence. It was raised to +eightpence in the second year of Henry +IV.; and, in the fourth of the same prince, +to one shilling. From this time to the ninth +year of William III., this duty continued at +one shilling in the pound. The duties of +tonnage and poundage were generally granted +to the king by one and the same act of +parliament, and were called the subsidy of +tonnage and poundage. The subsidy of +poundage having continued for so long a +time at one shilling in the pound, or at five +per cent., a subsidy came, in the language of +the customs, to denote a general duty of this +kind of five per cent. This subsidy, which is +now called the old subsidy, still continues to +be levied, according to the book of rates established +by the twelfth of Charles II. The +method of ascertaining, by a book of rates, +the value of goods subject to this duty, is +said to be older than the time of James I. +The new subsidy, imposed by the ninth and +tenth of William III., was an additional five +per cent. upon the greater part of goods. +The one-third and the two-third subsidy +made up between them another five per cent. +of which they were proportionable parts. +The subsidy of 1747 made a fourth five per +cent. upon the greater part of goods; and +that of 1759, a fifth upon some particular +sorts of goods. Besides those five subsidies, +a great variety of other duties have occasionally +been imposed upon particular sorts of +goods in order sometimes to relieve the exigencies +of the state, and sometimes to regulate +the trade of the country, according to +the principles of the mercantile system.</p> + +<p>That system has come gradually more and +more into fashion. The old subsidy was imposed +indifferently upon exportation, as well +as importation. The four subsequent subsidies, +as well as the other duties which have +since been occasionally imposed upon particular +sorts of goods, have, with a few exceptions, +been laid altogether upon importation. +The greater part of the ancient duties which +had been imposed upon the exportation of +the goods of home produce and manufacture, +have either been lightened or taken away altogether. +In most cases, they have been +taken away. Bounties have even been given +upon the exportation of some of them. Drawbacks, +too, sometimes of the whole, and, in +most cases, or a part of the duties which are +paid upon the importation of foreign goods, +have been granted upon their exportation. +Only half the duties imposed by the old subsidy +upon importation, are drawn back upon +exportation; but the whole of those imposed +by the latter subsidies and other imports are, +upon the greater parts of the goods, drawn +back in the same manner. This growing favour +of exportation, and discouragement of +importation, have suffered only a few exceptions, +which chiefly concern the materials of +some manufactures. These our merchants +and manufacturers are willing should come +as cheap as possible to themselves, and as +dear as possible to their rivals and competitors +in other countries. Foreign materials +are, upon this account, sometimes allowed to +be imported duty-free; Spanish wool, for +example, flax, and raw linen yarn. The exportation +of the materials of home produce, +and of those which are the particular produce +of our colonies, has sometimes been prohibited, +and sometimes subjected to higher duties. +The exportation of English wool has been +prohibited. That of beaver skins, of beaver +wool, and of gum-senega, has been subjected +to higher duties; Great Britain, by the conquests +of Canada and Senegal, having got +almost the monopoly of those commodities.</p> + +<p>That the mercantile system has not been +very favourable to the revenue of the great +body of the people, to the annual produce of +the land and labour of the country, I have +endeavoured to show in the fourth book of +this Inquiry. It seems not to have been more<span class='pagenum'><a name="Page_373" id="Page_373">[Pg 373]</a></span> +favourable to the revenue of the sovereign; +so far, at least, as that revenue depends upon +the duties of customs.</p> + +<p>In consequence of that system, the importation +of several sorts of goods has been prohibited +altogether. This prohibition has, in +some cases, entirely prevented, and in others +has very much diminished, the importation of +those commodities, by reducing the importers +to the necessity of smuggling. It has entirely +prevented the importation of foreign wollens; +and it has very much diminished that +of foreign silks and velvets. In both cases, +it has entirely annihilated the revenue of customs +which might have been levied upon such +importation.</p> + +<p>The high duties which have been imposed +upon the importation of many different sorts +of foreign goods in order to discourage their +consumption in Great Britain, have, in many +cases, served only to encourage smuggling, +and, in all cases, have reduced the revenues +of the customs below what more moderate +duties would have afforded. The saying of +Dr. Swift, that in the arithmetic of the customs, +two and two, instead of making four, +make sometimes only one, holds perfectly true +with regard to such heavy duties, which never +could have been imposed, had not the mercantile +system taught us, in many cases, to +employ taxation as an instrument, not of revenue, +but of monopoly.</p> + +<p>The bounties which are sometimes given +upon the exportation of home produce and +manufactures, and the drawbacks which are +paid upon the re-exportation of the greater +part of foreign goods, have given occasion to +many frauds, and to a species of smuggling, +more destructive of the public revenue than +any other. In order to obtain the bounty or +drawback, the goods, it is well known, are +sometimes shipped, and sent to sea, but soon +afterwards clandestinely re-landed in some +other part of the country. The defalcation of +the revenue of customs occasioned by bounties +and drawbacks, of which a great part are +obtained fraudulently, is very great. The +gross produce of the customs, in the year +which ended on the 5th of January 1755, amounted +to L.5,068,000. The bounties +which were paid out of this revenue, though +in that year there was no bounty upon corn, +amounted to L.167,800. The drawbacks +which were paid upon debentures and certificates, +to L.2,156,800. Bounties and drawbacks +together amounted to L.2,324,600. In +consequence of these deductions, the revenue +of the customs amounted only to L.2,743,400; +from which deducting L.287,900 for the expense +of management, in salaries and other +incidents, the neat revenue of the customs for +that year comes out to be L.2,455,500. The +expense of management, amounts, in this +manner, to between five and six per cent. +upon the gross revenue of the customs; and +to something more than ten per cent. upon +what remains of that revenue, after deducting +what is paid away in bounties and drawbacks.</p> + +<p>Heavy duties being imposed upon almost +all goods imported, our merchant importers +smuggle as much, and make entry of as little +as they can. Our merchant exporters, on +the contrary, make entry of more than they +export; sometimes out of vanity, and to pass +for great dealers in goods which pay no duty +and sometimes to gain a bounty or a drawback. +Our exports, in consequence of these +different frauds, appear upon the custom-house +books greatly to overbalance our imports, +to the unspeakable comfort of those +politicians, who measure the national prosperity +by what they call the balance of trade.</p> + +<p>All goods imported, unless particularly +exempted, and such exemptions are not very +numerous, are liable to some duties of customs. +If any goods are imported, not mentioned +in the book of rates, they are taxed at +4s. 9<sup>9</sup>⁄<sub>20</sub>d. for every twenty shillings value, +according to the oath of the importer, that is, +nearly at five subsidies, or five poundage +duties. The book of rates is extremely comprehensive, +and enumerates a great variety of +articles, many of them little used, and, therefore, +not well known. It is, upon this account, +frequently uncertain under what article +a particular sort of goods ought to be +classed, and, consequently what duty they +ought to pay. Mistakes with regard to this +sometimes ruin the custom-house officer, and +frequently occasion much trouble, expense, +and vexation to the importer. In point of +perspicuity, precision, and distinctness, therefore, +the duties of customs are much more inferior +to those of excise.</p> + +<p>In order that the greater part of the members +of any society should contribute to the +public revenue, in proportion to their respective +expense, it does not seem necessary that +every single article of that expense should be +taxed. The revenue which is levied by the +duties of excise is supposed to fall as equally +upon the contributors as that which is levied +by the duties of customs; and the duties of +excise are imposed upon a few articles only +of the most general use and consumption. +It has been the opinion of many people, that, +by proper management, the duties of customs +might likewise, without any loss to the public +revenue, and with great advantage to foreign +trade, be confined to a few articles only.</p> + +<p>The foreign articles, of the most general +use and consumption in Great Britain, seem +at present to consist chiefly in foreign wines +and brandies; in some of the productions of +America and the West Indies, sugar, rum, +tobacco, cocoa-nuts, &c. and in some of those +of the East Indies, tea, coffee, china-ware, +spiceries of all kinds, several sorts of piece-goods, +&c. These different articles afford,<span class='pagenum'><a name="Page_374" id="Page_374">[Pg 374]</a></span> +perhaps, at present, the greater part of the +revenue which is drawn from the duties of +customs. The taxes which at present subsist +upon foreign manufactures, if you except +those upon the few contained in the foregoing +enumeration, have, the greater part of them, +been imposed for the purpose, not of revenue, +but of monopoly, or to give our own merchants +an advantage in the home market. +By removing all prohibitions, and by subjecting +all foreign manufactures to such moderate +taxes, as it was found from experience, +afforded upon each article the greatest revenue +to the public, our own workmen might still +have a considerable advantage in the home +market; and many articles, some of which at +present afford no revenue to government, and +others a very inconsiderable one, might afford +a very great one.</p> + +<p>High taxes, sometimes by diminishing the +consumption of the taxed commodities, and +sometimes by encouraging smuggling, frequently +afford a smaller revenue to government +than what might be drawn from more +moderate taxes.</p> + +<p>When the diminution of revenue is the effect +of the diminution of consumption, there +can be but one remedy, and that is the lowering +of the tax.</p> + +<p>When the diminution of revenue is the effect +of the encouragement given to smuggling, +it may, perhaps, be remedied in two +ways; either by diminishing the temptation +to smuggle, or by increasing the difficulty of +smuggling. The temptation to smuggle can be +be diminished only by the lowering of the +tax; and the difficulty of smuggling can be +increased only by establishing that system of +administration which is most proper for preventing +it.</p> + +<p>The excise laws, it appears, I believe, from +experience, obstruct and embarrass the operations +of the smuggler much more effectually +than those of the customs. By introducing +into the customs a system of administration +as similar to that of the excise as the nature +of the different duties will admit, the difficulty +of smuggling might be very much increased. +This alteration, it has been supposed +by many people, might very easily be brought +about.</p> + +<p>The importer of commodities liable to any +duties of customs, it has been said, might, at +his option, he allowed either to carry them to +his own private warehouse; or to lodge them +in a warehouse, provided either at his own expense +or at that of the public, but under the +key of the custom-house officer, and never to +be opened but in his presence. If the merchant +carried them to his own private warehouse, +the duties to be immediately paid, and +never afterwards to be drawn back; and that +warehouse to be at all times subject to the +visit and examination of the custom-house officer, +in order to ascertain how far the quantity +contained in it corresponded with that for +which the duty had been paid. If he carried +them to the public warehouse, no duty to be +paid till they were taken out for home +consumption. If taken out for exportation, to +be duty-free; proper security being always +given that they should be so exported. The +dealers in those particular commodities, either +by wholesale or retail, to be at all times subject +to the visit and examination of the custom-house +officer; and to be obliged to justify, +by proper certificates, the payment of the +duty upon the whole quantity contained in +their shops or warehouses. What are called +the excise duties upon rum imported, are at +present levied in this manner; and the same +system of administration might, perhaps, be +extended to all duties upon goods imported; +provided always that those duties were, like +the duties of excise, confined to a few sorts of +goods of the most general use and consumption. +If they were extended to almost all +sorts of goods, as at present, public warehouses +of sufficient extent could not easily be +provided; and goods of a very delicate nature, +or of which the preservation required +much care and attention, could not safely be +trusted by the merchant in any warehouse but +his own.</p> + +<p>If, by such a system of administration, +smuggling to any considerable extent could +be prevented, even under pretty high duties; +if every duty was occasionally either +heightened or lowered according as it was +likely, either the one way or the other, +to afford the greatest revenue to the state; +taxation being always employed as an instrument +of revenue, and never of monopoly; it +seems not improbable that a revenue, at least +equal to the present neat revenue of the customs, +might be drawn from duties upon the +importation of only a few sorts of goods of +the most general use and consumption; and +that the duties of customs might thus be +brought to the same degree of simplicity, certainty, +and precision, as those of excise. +What the revenue at present loses by drawbacks +upon the re-exportation of foreign +goods, which are afterwards re-landed and +consumed at home, would, under this system, +be saved altogether. If to this saving, which +would alone be very considerable, were added +the abolition of all bounties upon the exportation +of home produce; in all cases in which +those bounties were not in reality drawbacks +of some duties of excise which had before been +advanced; it cannot well be doubted, but that +the neat revenue of customs might, after an +alteration of this kind, be fully equal to what +it had ever been before.</p> + +<p>If, by such a change of system, the public +revenue suffered no loss, the trade and manufactures +of the country would certainly gain +a very considerable advantage. The trade in +the commodities not taxed, by far the greatest<span class='pagenum'><a name="Page_375" id="Page_375">[Pg 375]</a></span> +number would be perfectly free, and might +be carried on to and from all parts of the +world with every possible advantage. Among +those commodities would be comprehended +all the necessaries of life, and all the materials +of manufacture. So far as the free importation +of the necessaries of life reduced their +average money price in the home market, it +would reduce the money price of labour, but +without reducing in any respect its real recompense. +The value of money is in proportion +to the quantity of the necessaries of life which +it will purchase. That of the necessaries of +life is altogether independent of the quantity +of money which can be had for them. The +reduction in the money price of labour would +necessarily be attended with a proportionable +one in that of all home manufactures, which +would thereby gain some advantage in all +foreign markets. The price of some manufactures +would be reduced, in a still greater +proportion, by the free importation of the raw +materials. If raw silk could be imported +from China and Indostan, duty-free, the silk +manufacturers in England could greatly undersell +those of both France and Italy. There +would be no occasion to prohibit the importation +of foreign silks and velvets. The cheapness +of their goods would secure to our own +workmen, not only the possession of a home, +but a very great command of the foreign +market. Even the trade in the commodities +taxed, would be carried on with much more +advantage than at present. If those commodities +were delivered out of the public warehouse +for foreign exportation, being in this +case exempted from all taxes, the trade in them +would be perfectly free. The carrying trade, +in all sorts of goods, would, under this system, +enjoy every possible advantage. If these +commodities were delivered out for home consumption, +the importer not being obliged to +advance the tax till he had an opportunity of +selling his goods, either to some dealer, or to +some consumer, he could always afford to sell +them cheaper than if he had been obliged to +advance it at the moment of importation. +Under the same taxes, the foreign trade of +consumption, even in the taxed commodities, +might in this manner be carried on with much +more advantage than it is at present.</p> + +<p>It was the object of the famous excise +scheme of Sir Robert Walpole, to establish, +with regard to wine and tobacco, a system +not very unlike that which is here proposed. +But though the bill which was then brought +into Parliament, comprehended those two +commodities only, it was generally supposed +to be meant as an introduction to a more extensive +scheme of the same kind. Faction, +combined with the interest of smuggling merchants, +raised so violent, though so unjust a +clamour, against that bill, that the minister +thought proper to drop it; and, from a dread +of exciting a clamour of the same kind, none +of his successors have dared to resume the +project.</p> + +<p>The duties upon foreign luxuries, imported +for home consumption, though they sometimes +fall upon the poor, fall principally upon +people of middling or more than middling +fortune. Such are, for example, the duties +upon foreign wines, upon coffee, chocolate, +tea, sugar, &c.</p> + +<p>The duties upon the cheaper luxuries of +home produce, destined for home consumption, +fall pretty equally upon people of all +ranks, in proportion to their respective expense. +The poor pay the duties upon malt, +hops, beer, and ale, upon their own consumption; +the rich, upon both their own consumption +and that of their servants.</p> + +<p>The whole consumption of the inferior +ranks of people, or of those below the middling +rank, it must be observed, is, in every +country, much greater, not only in quantity, +but in value, than that of the middling, and +of those above the middling rank. The whole +expense of the inferior is much greater than +that of the superior ranks. In the first place, +almost the whole capital of every country is +annually distributed among the inferior ranks +of people, as the wages of productive labour. +Secondly, a great part of the revenue, arising +from both the rent of land and the profits of +stock, is annually distributed among the same +rank, in the wages and maintenance of menial +servants, and other unproductive labourers. +Thirdly, some part of the profits of stock belongs +to the same rank, as a revenue arising +from the employment of their small capitals. +The amount of the profits annually made by +small shopkeepers, tradesmen, and retailers +of all kinds, is everywhere very considerable, +and makes a very considerable portion of the +annual produce. Fourthly and lastly, some +part even of the rent of land belongs to the +same rank; a considerable part to those who +are somewhat below the middling rank, and a +small part even to the lowest rank; common +labourers sometimes possessing in property an +acre or two of land. Though the expense of +those inferior ranks of people, therefore, taking +them individually, is very small, yet the +whole mass of it, taking them collectively, +amounts always to by much the largest portion +of the whole expense of the society; what +remains of the annual produce of the land and +labour of the country, for the consumption of +the superior ranks, being always much less, +not only in quantity, but in value. The taxes +upon expense, therefore, which fall chiefly upon +that of the superior ranks of people, upon +the smaller portion of the annual produce, are +likely to be much less productive than either +those which fall indifferently upon the expense +of all ranks, or even those which fall +chiefly upon that of the inferior ranks, than<span class='pagenum'><a name="Page_376" id="Page_376">[Pg 376]</a></span> +either those which fall indifferently upon the +whole annual produce, or those which fall +chiefly upon the larger portion of it. The +excise upon the materials and manufacture of +home-made fermented and spiritous liquors, +is, accordingly, of all the different taxes upon +expense, by far the most productive; and this +branch of the excise falls very much, perhaps +principally, upon the expense of the common +people. In the year which ended on the 5th +of July 1775, the gross produce of this branch +of the excise amounted to L.3,341,837 : 9 : 9.</p> + +<p>It must always be remembered, however, +that it is the luxuries, and not the necessary +expense of the inferior ranks of people, that +ought ever to be taxed. The final payment +of any tax upon their necessary expense, would +fall altogether upon the superior ranks of people; +upon the smaller portion of the annual +produce, and not upon the greater. Such a +tax must, in all cases, either raise the wages +of labour, or lessen the demand for it. It +could not raise the wages of labour, without +throwing the final payment of the tax upon +the superior ranks of people. It could not +lessen the demand for labour, without lessening +the annual produce of the land and labour +of the country, the fund upon which all +taxes must be finally paid. Whatever might +be the state to which a tax of this kind reduced +the demand for labour, it must always +raise wages higher than they otherwise would +be in that state; and the final payment of this +enhancement of wages must, in all cases, fall +upon the superior ranks of people.</p> + +<p>Fermented liquors brewed, and spiritous +liquors distilled, not for sale, but for private +use, are not in Great Britain liable to any duties +of excise. This exemption, of which the +object is to save private families from the +odious visit and examination of the tax-gatherer, +occasions the burden of those duties to +fall frequently much lighter upon the rich +than upon the poor. It is not, indeed, very +common to distil for private use, though it is +done sometimes. But in the country, many +middling, and almost all rich and great families, +brew their own beer. Their strong +beer, therefore, costs them eight shillings a-barrel +less than it costs the common brewer, +who must have his profit upon the tax, as well +as upon all the other expense which he advances. +Such families, therefore, must drink +their beer at least nine or ten shillings a-barrel +cheaper than any liquor of the same quality +can be drank by the common people, to +whom it is everywhere more convenient to buy +their beer, by little and little, from the brewery +or the alehouse. Malt, in the same manner, +that is made for the use of a private family, +is not liable to the visit or examination +of the tax-gatherer; but, in this case the family +must compound at seven shillings and +sixpence a-head for the tax. Seven shillings +and sixpence are equal to the excise upon ten +bushels of malt; a quantity fully equal to +what all the different members of any sober +family, men, women, and children, are, at an +average, likely to consume. But in rich and +great families, where country hospitality is +much practised, the malt liquors consumed by +the members of the family make but a small +part of the consumption of the house. Either +on account of this composition, however, or +for other reasons, it is not near so common to +malt as to brew for private use. It is difficult +to imagine any equitable reason, why those +who either brew or distil for private use should +not be subject to a composition of the same +kind.</p> + +<p>A greater revenue than what is at present +drawn from all the heavy taxes upon malt, +beer, and ale, might be raised, it has frequently +been said, by a much lighter tax upon +malt; the opportunities of defrauding the +revenue being much greater in a brewery than +in a malt-house; and those who brew for private +use being exempted from all duties or +composition for duties, which is not the case +with those who malt for private use.</p> + +<p>In the porter brewery of London, a quarter +of malt is commonly brewed into more than +two barrels and a-half, sometimes into three +barrels of porter. The different taxes upon +malt amount to six shillings a-quarter; those +upon strong ale and beer to eight shillings a-barrel. +In the porter brewery, therefore, the +different taxes upon malt, beer, and ale, amount +to between twenty-six and thirty shillings +upon the produce of a quarter of malt. +In the country brewery for common country +sale, a quarter of malt is seldom brewed into +less than two barrels of strong, and one barrel +of small beer; frequently into two barrels +and a-half of strong beer. The different taxes +upon small beer amount to one shilling and +fourpence a-barrel. In the country brewery, +therefore, the different taxes upon malt, beer, +and ale, seldom amount to less than twenty-three +shillings and fourpence, frequently to +twenty-six shillings, upon the produce of a +quarter of malt. Taking the whole kingdom +at an average, therefore, the whole amount of +the duties upon malt, beer, and ale, cannot be +estimated at less than twenty-four or twenty-five +shillings upon the produce of a quarter +of malt. But by taking off all the different +duties upon beer and ale, and by trebling the +malt tax, or by raising it from six to eighteen +shillings upon the quarter of malt, a greater +revenue, it is said, might be raised by this +single tax, than what is at present drawn from +all those heavier taxes.<span class='pagenum'><a name="Page_377" id="Page_377">[Pg 377]</a></span></p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary=""> +<tr><th></th><th>L.</th><th>s.</th><th>d.</th></tr> +<tr><td align='left'>In 1772, the old malt tax produced</td><td align='right'>722,023</td><td align='right'>11</td><td align='right'>11</td></tr> +<tr><td align='left'> The additional</td><td align='right'>356,776</td><td align='right'>7</td><td align='right'>9¾</td></tr> +<tr><td align='left'>In 1773, the old tax produced</td><td align='right'>561,627</td><td align='right'>3</td><td align='right'>7½</td></tr> +<tr><td align='left'> The additional</td><td align='right'>278,650</td><td align='right'>15</td><td align='right'>3¾</td></tr> +<tr><td align='left'>In 1774, the old tax produced</td><td align='right'>624,614</td><td align='right'>17</td><td align='right'>5¾</td></tr> +<tr><td align='left'> The additional</td><td align='right'>310,745</td><td align='right'>2</td><td align='right'>8½</td></tr> +<tr><td align='left'>In 1775, the old tax produced</td><td align='right'>657,357</td><td align='right'>0</td><td align='right'>8¼</td></tr> +<tr><td align='left'> The additional</td><td align='right'>323,785</td><td align='right'>12</td><td align='right'>6¼</td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'></td><td align='right'>4)3,835,580</td><td align='right'>12</td><td align='right'>0¾</td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'>Average of these four years</td><td align='right'>958,895</td><td align='right'>3</td><td align='right'>0<sup>3</sup>⁄<sub>16</sub></td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'>In 1772, the country excise produced</td><td align='right'>1,243,120</td><td align='right'>5</td><td align='right'>3</td></tr> +<tr><td align='left'> The London brewery</td><td align='right'>408,260</td><td align='right'>7</td><td align='right'>2¾</td></tr> +<tr><td align='left'>In 1773, the country excise</td><td align='right'>1,245,808</td><td align='right'>3</td><td align='right'>3</td></tr> +<tr><td align='left'> The London brewery</td><td align='right'>405,406</td><td align='right'>17</td><td align='right'>10½</td></tr> +<tr><td align='left'>In 1774, the country excise</td><td align='right'>1,246,373</td><td align='right'>14</td><td align='right'>5½</td></tr> +<tr><td align='left'> The London brewery</td><td align='right'>320,601</td><td align='right'>18</td><td align='right'>0¼</td></tr> +<tr><td align='left'>In 1775, the country excise</td><td align='right'>1,214,583</td><td align='right'>6</td><td align='right'>1¼</td></tr> +<tr><td align='left'> The London brewery</td><td align='right'>463,670</td><td align='right'>7</td><td align='right'>0¼</td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='right'></td><td align='right'>4)6,547,832</td><td align='right'>19</td><td align='right'>2¼</td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'>Average of these four years</td><td align='right'>1,636,958</td><td align='right'>4</td><td align='right'>9½</td></tr> +<tr><td align='left'>To which adding the average malt-tax, or</td><td align='right'>958,895</td><td align='right'>3</td><td align='right'>0<sup>3</sup>⁄<sub>16</sub></td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'>The whole amount of those different taxes comes out to be</td><td align='right'>2,595,853</td><td align='right'>7</td><td align='right'>9<sup>11</sup>⁄<sub>16</sub></td></tr> +<tr><td align='left'></td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='left'>But, by trebling the malt tax, or by raising it from six to eighteen shillings upon the quarter of malt, that single tax would produce</td><td align='right'>2,876,685</td><td align='right'>9</td><td align='right'>0<sup>9</sup>⁄<sub>16</sub></td></tr> +<tr><td align='left'>A sum which exceeds the foregoing by</td><td align='right'>280,832</td><td align='right'>1</td><td align='right'>2<sup>14</sup>⁄<sub>16</sub></td></tr> +</table></div> + + +<p>Under the old malt tax, indeed, is comprehended +a tax of four shillings upon the hogshead +of cyder, and another of ten shillings upon +the barrel of mum. In 1774, the tax upon +cyder produced only L.3083 : 6 : 8. It probably +fell somewhat short of its usual amount; +all the different taxes upon cyder, having, that +year, produced less than ordinary. The tax +upon mum, though much heavier, is still less +productive, on account of the smaller consumption +of that liquor. But to balance +whatever may be the ordinary amount of those +two taxes, there is comprehended under what +is called the country excise, first, the old excise +of six shillings and eightpence upon the +hogshead of cyder; secondly, a like tax of +six shillings and eightpence upon the +hogshead of verjuice; thirdly, another of eight +shillings and ninepence upon the hogshead of +vinegar; and, lastly, a fourth tax of elevenpence +upon the gallon of mead or metheglin. +The produce of those different taxes will probably +much more than counterbalance that of +the duties imposed, by what is called the annual +malt tax, upon cyder and mum.</p> + +<p>Malt is consumed, not only in the brewery +of beer and ale, but in the manufacture of +low wines and spirits. If the malt tax were +to be raised to eighteen shillings upon the +quarter, it might be necessary to make some +abatement in the different excises which are +imposed upon those particular sorts of low +wines and spirits, of which malt makes any +part of the materials. In what are called +malt spirits, it makes commonly but a third +part of the materials; the other two-thirds +being either raw barley, or one-third barley +and one-third wheat. In the distillery of +malt spirits, both the opportunity and the +temptation to smuggle are much greater than +either in a brewery or in a malt-house; the +opportunity, on account of the smaller bulk +and greater value of the commodity, and the +temptation, on account of the superior height +of the duties, which amounted to 3s. 10<sup>2</sup>⁄<sub>3</sub>d.<a name="FNanchor_73_73" id="FNanchor_73_73"></a><a href="#Footnote_73_73" class="fnanchor">[73]</a> +upon the gallon of spirits. By increasing the +duties upon malt, and reducing those upon +the distillery, both the opportunities and the +temptation to smuggle would be diminished, +which might occasion a still further augmentation +of revenue.</p> + +<p>It has for some time past been the policy +of Great Britain to discourage the consumption +of spirituous liquors, on account of their +supposed tendency to ruin the health and to +corrupt the morals of the common people. +According to this policy, the abatement of +the taxes upon the distillery ought not to be +so great as to reduce, in any respect, the price +of those liquors. Spirituous liquors might +remain as dear as ever; while, at the same +time, the wholesome and invigorating liquors +of beer and ale might be considerably reduced +in their price. The people might thus be in +part relieved from one of the burdens of which +they at present complain the most; while, at +the same time, the revenue might be considerably +augmented.</p> + +<p>The objections of Dr. Davenant to this alteration +in the present system of excise duties, +seem to be without foundation. Those objections +are, that the tax, instead of dividing +itself, as at present, pretty equally upon the +profit of the maltster, upon that of the brewer, +<span class='pagenum'><a name="Page_378" id="Page_378">[Pg 378]</a></span>and upon that of the retailer, would so far +as it affected profit, fall altogether upon +that of the maltster; that the maltster could +not so easily get back the amount of the tax +in the advanced price of his malt, as the brewer +and retailer in the advanced price of their +liquor; and that so heavy a tax upon malt +might reduce the rent and profit of barley +land.</p> + +<p>No tax can ever reduce, for any considerable +time, the rate of profit in any particular +trade, which must always keep its level with +other trades in the neighbourhood. The present +duties upon malt, beer, and ale, do not +affect the profits of the dealers in those commodities, +who all get back the tax with an +additional profit, in the enhanced price of +their goods. A tax, indeed, may render the +goods upon which it is imposed so dear, as to +diminish the consumption of them. But the +consumption of malt is in malt liquors; and +a tax of eighteen shillings upon the quarter +of malt could not well render those liquors +dearer than the different taxes, amounting to +twenty-four or twenty-five shillings, do at +present. Those liquors, on the contrary, +would probably become cheaper, and the +consumption of them would be more likely to +increase than to diminish.</p> + +<p>It is not very easy to understand why it +should 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 or twenty-five, +sometimes thirty shillings, in that of his liquor. +The maltster, indeed, instead of a tax +of six shillings, would be obliged to advance +one of eighteen shillings upon every quarter +of malt. But the brewer is at present obliged +to advance a tax of twenty-four or twenty-five, +sometimes thirty shillings, upon every +quarter of malt which he brews. It could +not be more inconvenient for the maltster to +advance a lighter tax, than it is at present for +the brewer to advance a heavier one. The +maltster does not always keep in his granaries +a stock of malt, which it will require a +longer time to dispose of than the stock of +beer and ale which the brewer frequently +keeps in his cellars. The former, therefore, +may frequently get the returns of his money +as soon as the latter. But whatever inconveniency +might arise to the maltster from +being obliged to advance a heavier tax, it +could easily be remedied, by granting him a +few months longer credit than is at present +commonly given to the brewer.</p> + +<p>Nothing could reduce the rent and profit +of barley land, which did not reduce the demand +for barley. But a change of system, +which reduced the duties upon a quarter of +malt brewed into beer and ale, from twenty-four +and twenty-five shillings to eighteen +shillings, would be more likely to increase +than diminish that demand. The rent and +profit of barley land, besides, must always be +nearly equal to those of other equally fertile +and equally well cultivated land. If they +were less, some part of the barley land would +soon be turned to some other purpose; and +if they were greater, more land would soon +be turned to the raising of barley. When +the ordinary price of any particular produce +of land is at what may be called a monopoly +price, a tax upon it necessarily reduces the +rent and profit of the land which grows it. +A tax upon the produce of those precious +vineyards, of which the wine falls so much +short of the effectual demand, that its price +is always above the natural proportion to that +of the produce of other equally fertile and +equally well cultivated land, would necessarily +reduce the rent and profit of those vineyards. +The price of the wines being already +the highest that could be got for the quantity +commonly sent to market, it could not be +raised higher without diminishing that quantity; +and the quantity could not be diminished +without still greater loss, because the +lands could not be turned to any other equally +valuable produce. The whole weight of +the tax, therefore, would fall upon the rent +and profit; properly upon the rent of the +vineyard. When it has been proposed to lay +any new tax upon sugar, our sugar planters +have frequently complained that the whole +weight of such taxes fell not upon the consumer, +but upon the producer; they never +having been able to raise the price of their +sugar after the tax higher than it was before. +The price had, it seems, before the tax, been +a monopoly price; and the arguments adduced +to show that sugar was an improper subject +of taxation, demonstrated perhaps that it +was a proper one; the gains of monopolists, +whenever they can be come at, being certainly +of all subjects the most proper. But the +ordinary price of barley has never been a monopoly +price; and the rent and profit of barley +land have never been above their natural +proportion to those of other equally fertile +and equally well cultivated land. The different +taxes which have been imposed upon +malt, beer, and ale, have never lowered the +price of barley; have never reduced the rent +and profit of barley land. The price of malt +to the brewer has constantly risen in proportion +to the taxes imposed upon it; and those +taxes, together with the different duties upon +beer and ale, have constantly either raised +the price, or, what comes to the same thing, +reduced the quality of those commodities to +the consumer. The final payment of those +taxes has fallen constantly upon the consumer, +and not upon the producer.</p> + +<p>The only people likely to suffer by the +change of system here proposed, are those who +brew for their own private use. But the +exemption, which this superior rank of people +at present enjoy, from very heavy taxes which<span class='pagenum'><a name="Page_379" id="Page_379">[Pg 379]</a></span> +are paid by the poor labourer and artificer, +is surely most unjust and unequal, and ought +to be taken away, even though this change +was never to take place. It has probably +been the interest of this superior order of +people, however, which has hitherto prevented +a change of system that could not well fail +both to increase the revenue and to relieve +the people.</p> + +<p>Besides such duties as those of customs +and excise above mentioned, there are several +others which affect the price of goods more +unequally and more indirectly. Of this kind +are the duties, which, in French, are called +peages, which in old Saxon times were called +the duties of passage, and which seem to have +been originally established for the same purpose +as our turnpike tolls, or the tolls upon +our canals and navigable rivers, for the maintenance +of the road or of the navigation. +Those duties, when applied to such purposes, +are most properly imposed according to the +bulk or weight of the goods. As they were +originally local and provincial duties, applicable +to local and provincial purposes, the +administration of them was, in most cases, +entrusted to the particular town, parish, or +lordship, in which they were levied; such +communities being, in some way or other, +supposed to be accountable for the application. +The sovereign, who is altogether unaccountable, +has in many countries assumed +to himself the administration of those duties; +and though he has in most cases enhanced +very much the duty, he has in many entirely +neglected the application. If the turnpike +tolls of Great Britain should ever become +one of the resources of government, we may +learn, by the example of many other nations, +what would probably be the consequence. +Such tolls, no doubt, are finally +paid by the consumer; but the consumer is +not taxed in proportion to his expense, when +he pays, not according to the value, but according +to the bulk or weight of what he +consumes. When such duties are imposed, +not according to the bulk or weight, but according +to the supposed value of the goods, +they become properly a sort of inland customs +or excise, which obstruct very much the +most important of all branches of commerce, +the interior commerce of the country.</p> + +<p>In some small states, duties similar to those +passage duties are imposed upon goods carried +across the territory, either by land or by +water, from one foreign country to another. +These are in some countries called transit-duties. +Some of the little Italian states +which are situated upon the Po, and the rivers +which run into it, derive some revenue +from duties of this kind, which are paid altogether +by foreigners, and which, perhaps, are +the only duties that one state can impose +upon the subjects of another, without obstructing, +in any respect, the industry or +commerce of its own. The most important +transit-duty in the world, is that levied by +the king of Denmark upon all merchant ships +which pass through the Sound.</p> + +<p>Such taxes upon luxuries, as the greater +part of the duties of customs and excise, +though they all fall indifferently upon every +different species of revenue, and are paid +finally, or without any retribution, by whoever +consumes the commodities upon which +they are imposed, yet they do not always fall +equally or proportionally upon the revenue of +every individual. As every man's humour +regulates the degree of his consumption, +every man contributes rather according to his +humour, than in proportion to his revenue: +the profuse contribute more, the parsimonious +less, than their proper proportion. During +the minority of a man of great fortune, he +contributes commonly very little, by his consumption, +towards the support of that state +from whose protection he derives a great revenue. +Those who live in another country, +contribute nothing by their consumption towards +the support of the government of that +country, in which is situated the source of +their revenue. If in this latter country there +should be no land tax, nor any considerable +duty upon the transference either of moveable +or immoveable property, as is the case in Ireland, +such absentees may derive a great revenue +from the protection of a government, +to the support of which they do not contribute +a single shilling. This inequality is likely +to be greatest in a country of which the +government is, in some respects, subordinate +and dependant upon that of some other. +The people who possess the most extensive +property in the dependant, will, in this case, +generally chuse to live in the governing country. +Ireland is precisely in this situation; +and we cannot therefore wonder, that the +proposal of a tax upon absentees should be +so very popular in that country. It might, +perhaps, be a little difficult to ascertain either +what sort, or what degree of absence, would +subject a man to be taxed as an absentee, or +at what precise time the tax should either +begin or end. If you except, however, this +very peculiar situation, any inequality in the +contribution of individuals which can arise +from such taxes, is much more than compensated +by the very circumstance which occasions +that inequality; the circumstance that +every man's contribution is altogether voluntary; +it being altogether in his power, either +to consume, or not to consume, the commodity +taxed. Where such taxes, therefore, +are properly assessed, and upon proper commodities, +they are paid with less grumbling +than any other. When they are advanced by +the merchant or manufacturer, the consumer, +who finally pays them, soon comes to confound +them with the price of the commodities, +and almost forgets that he pays any tax.<span class='pagenum'><a name="Page_380" id="Page_380">[Pg 380]</a></span></p> + +<p>Such taxes are, or may be, perfectly certain; +or may be assessed, so as to leave no +doubt concerning either what ought to be +paid, or when it ought to be paid; concerning +either the quantity or the time of payment. +Whatever uncertainty there may sometimes +be, either in the duties of customs in +Great Britain, or in other duties of the same +kind in other countries, it cannot arise from +the nature of those duties, but from the inaccurate +or unskilful manner in which the law +that imposes them is expressed.</p> + +<p>Taxes upon luxuries generally are, and always +may be, paid piece-meal, or in proportion +as the contributors have occasion to purchase +the goods upon which they are imposed. +In the time and mode of payment, they are, +or may be, of all taxes the most convenient. +Upon the whole, such taxes, therefore, are +perhaps as agreeable to the three first of the +four general maxims concerning taxation, as +any other. They offend in every respect +against the fourth.</p> + +<p>Such taxes, in proportion to what they +bring into the public treasury of the state, always +take out, or keep out, of the pockets of +the people, more than almost any other taxes. +They seem to do this in all the four different +ways in which it is possible to do it.</p> + +<p>First, the levying of such taxes, even when +imposed in the most judicious manner, requires +a great number of custom-house and +excise officers, whose salaries and perquisites +are a real tax upon the people, which brings +nothing into the treasury of the state. This +expense, however, it must be acknowledged, +is more moderate in Great Britain than in +most other countries. In the year which +ended on the 5th of July, 1775, the gross +produce of the different duties, under the management +of the commissioners of excise in +England, amounted to L.5,507,308 : 18 : 8¼, +which was levied at an expense of little more +than five and a-half per cent. From this +gross produce, however, there must be deducted +what was paid away in bounties and +drawbacks upon the exportation of exciseable +goods, which will reduce the neat produce +below five millions.<a name="FNanchor_74_74" id="FNanchor_74_74"></a><a href="#Footnote_74_74" class="fnanchor">[74]</a> The levying of the +salt duty, and excise duty, but under a different +management, is much more expensive. +The neat revenue of the customs does not +amount to two millions and a-half, which is +levied at an expense of more than ten per +cent., in the salaries of officers and other incidents. +But the perquisites of custom-house +officers are everywhere much greater than +their salaries; at some ports more than double +or triple those salaries. If the salaries of +officers, and other incidents, therefore, amount +to more than ten per cent. upon the +neat revenue of the customs, the whole expense +of levying that revenue may amount, +in salaries and perquisites together, to more +than twenty or thirty per cent. The officers of +excise receive few or no perquisites; and the +administration of that branch of the revenue +being of more recent establishment, is in general +less corrupted than that of the customs, +into which length of time has introduced and +authorized many abuses. By charging upon +malt the whole revenue which is at present +levied by the different duties upon malt and +malt liquors, a saving, it is supposed, of more +than L.50,000, might be made in the annual +expense of the excise. By confining the +duties of customs to a few sorts of goods, and +by levying those duties according to the excise +laws, a much greater saving might probably +be made in the annual expense of the +customs.</p> + +<p>Secondly, such taxes necessarily occasion +some obstruction or discouragement to certain +branches of industry. As they always +raise the price of the commodity taxed, they +so far discourage its consumption, and consequently +its production. If it is a commodity +of home growth or manufacture, less labour +comes to be employed in raising and producing +it. If it is a foreign commodity of which +the tax increases in this manner the price, the +commodities of the same kind which are +made at home may thereby, indeed, gain +some advantage in the home market, and a +greater quantity of domestic industry may +thereby be turned toward preparing them. +But though this rise of price in a foreign +commodity, may encourage domestic industry +in one particular branch, it necessarily discourages +that industry in almost every other. +The dearer the Birmingham manufacturer +buys his foreign wine, the cheaper he necessarily +sells that part of his hardware with +which, or, what comes to the same thing, +with the price of which, he buys it. That +part of his hardware, therefore, becomes of +less value to him, and he has less encouragement +to work at it. The dearer the consumers +in one country pay for the surplus produce +of another, the cheaper they necessarily +sell that part of their own surplus produce +with which, or, what comes to the same thing, +with the price of which, they buy it. That +part of their own surplus produce becomes +of less value to them, and they have less encouragement +to increase its quantity. All +taxes upon consumable commodities, therefore, +tend to reduce the quantity of productive +labour below what it otherwise would be, +either in preparing the commodities taxed, if +they are home commodities, or in preparing +these with which they are purchased, if they +are foreign commodities. Such taxes, too, always +alter, more or less, the natural direction +of national industry, and turn it into a chan<span class='pagenum'><a name="Page_381" id="Page_381">[Pg 381]</a></span>nel +always different from, and generally less +advantageous, than that in which is would +have run of its own accord.</p> + +<p>Thirdly, the hope of evading such taxes by +smuggling, gives frequent occasion to forfeitures +and other penalties, which entirely +ruin the smuggler; a person who, though no +doubt highly blameable for violating the laws +of his country, is frequently incapable of violating +those of natural justice, and would +have been, in every respect, an excellent citizen, +had not the laws of his country made +that a crime which nature never meant to be +so. In those corrupted governments, where +there is at least a general suspicion of much +unnecessary expense, and great misapplication +of the public revenue, the laws which +guard it are little respected. Not many people +are scrupulous about smuggling, when, +without perjury, they can find an easy and +safe opportunity of doing so. To pretend to +have any scruple about buying smuggled +goods, though a manifest encouragement to +the violation of the revenue laws, and to the +perjury which almost always attends it, would, +in most countries, be regarded as one of those +pedantic pieces of hypocrisy which, instead of +gaining credit with anybody, serve only to +expose the person who affects to practise them +to the suspicion of being a greater knave +than most of his neighbours. By this indulgence +of the public, the smuggler is often +encouraged to continue a trade, which he is +thus taught to consider as in some measure +innocent; and when the severity of the revenue +laws is ready to fall upon him, he is +frequently disposed to defend with violence, +what he has been accustomed to regard as his +just property. From being at first, perhaps, +rather imprudent than criminal, he at last too +often becomes one of the hardiest and most +determined violators of the laws of society. +By the ruin of the smuggler, his capital, +which had before been employed in maintaining +productive labour, is absorbed either +in the revenue of the state, or in that of the +revenue officer; and is employed in maintaining +unproductive, to the diminution of the +general capital of the society, and of the useful +industry which it might otherwise have +maintained.</p> + +<p>Fourthly, such taxes, by subjecting at least +the dealers in the taxed commodities, to the +frequent visits and odious examination of the +tax-gatherers, expose them sometimes, no +doubt, to some degree of oppression, and always +to much trouble and vexation; and +though vexation, as has already been said, is +not strictly speaking expense, it is certainly +equivalent to the expense at which every man +would be willing to redeem himself from it. +The laws of excise, though more effectual for +the purpose for which they were instituted, +are, in this respect, more vexatious than those +of the customs. When a merchant has imparted +goods subject to certain duties of customs; +when he has paid those duties, and +lodged the goods in his warehouse; he is not, +in most cases, liable to any further trouble or +vexation from the custom-house officer. It is +otherwise with goods subject to duties of excise. +The dealers have no respite from the +continual visits and examination of the excise +officers. The duties of excise are, upon this +account, more unpopular than those of the +customs; and so are the officers who levy +them. Those officers, it is pretended, though +in general, perhaps, they do their duty fully +as well as those of the customs; yet, as that +duty obliges them to be frequently very troublesome +to some of their neighbours, commonly +contract a certain hardness of character, +which the others frequently have not. +This observation, however, may very probably +be the mere suggestion of fraudulent dealers, +whose smuggling is either prevented or +detected by their diligence.</p> + +<p>The inconveniencies, however, which are, +perhaps, in some degree inseparable from +taxes upon consumable commodities, fall as +light upon the people of Great Britain as upon +those of any other country of which the +government is nearly as expensive. Our +state is not perfect, and might be mended; +but it is as good, or better, than that of most +of our neighbours.</p> + +<p>In consequence of the notion, that duties +upon consumable goods were taxes upon +the profits of merchants, those duties have, in +some countries, been repeated upon every successive +sale of the goods. If the profits of +the merchant-importer or merchant-manufacturer +were taxed, equality seemed to require +that those of all the middle buyers, who intervened +between either of them and the consumer, +should likewise be taxed. The famous +alcavala of Spain seems to have been established +upon this principle. It was at first a tax +of ten per cent, afterwards of fourteen per +cent. and it is at present only six per cent. +upon the sale of every sort of property, whether +moveable or immoveable; and it is repeated +every time the property is sold.<a name="FNanchor_75_75" id="FNanchor_75_75"></a><a href="#Footnote_75_75" class="fnanchor">[75]</a> The levying +of this tax requires a multitude of revenue +officers, sufficient to guard the transportation +of goods, not only from one province to +another, but from one shop to another. It +subjects, not only the dealers in some sorts of +goods, but those in all sorts, every farmer, +every manufacturer, every merchant and shopkeeper, +to the continual visit and examination +of the tax-gatherers. Through the greater +part of the country in which a tax of this kind +is established, nothing can be produced for +distant sale. The produce of every part of the +country must be proportioned to the consumption +of the neighbourhood. It is to the alcavala, +accordingly, that Ustaritz imputes the ruin +<span class='pagenum'><a name="Page_382" id="Page_382">[Pg 382]</a></span>of the manufactures of Spain. He might have +imputed to it, likewise, the declension of agriculture, +it being imposed not only upon manufactures, +but upon the rude produce of the land.</p> + +<p>In the kingdom of Naples, there is a similar +tax of three per cent. upon the value of +all contracts, and consequently upon that of +all contracts of sale. It is both lighter than +the Spanish tax, and the greater part of +towns and parishes are allowed to pay a composition +in lieu of it. They levy this composition +in what manner they please, generally +in a way that gives no interruption to the +interior commerce of the place. The Neapolitan +tax, therefore, is not near so ruinous +as the Spanish one.</p> + +<p>The uniform system of taxation, which, +with a few exceptions of no great consequence, +takes place in all the different parts of the +united kingdom of Great Britain, leaves the +interior commerce of the country, the inland +and coasting trade, almost entirely free. The +inland trade is almost perfectly free; and the +greater part of goods may be carried from one +end of the kingdom to the other, without requiring +any permit or let-pass, without being +subject to question, visit or examination, from +the revenue officers. There are a few exceptions, +but they are such as can give no interruption +to any important branch of inland +commerce of the country. Goods carried +coastwise, indeed, require certificates or coast-cockets. +If you except coals, however, the +rest are almost all duty-free. This freedom of +interior commerce, the effect of the uniformity +of the system of taxation, is perhaps one of the +principal causes of the prosperity of Great +Britain; every great country being necessarily +the best and most extensive market for the +greater part of the productions of its own industry. +If the same freedom in consequence +of the same uniformity, could be extended to +Ireland and the plantations, both the grandeur +of the state, and the prosperity of every part +of the empire, would probably be still greater +than at present.</p> + +<p>In France, the different revenue laws which +take place in the different provinces, require a +multitude of revenue officers to surround, not +only the frontiers of the kingdom, but those +of almost each particular province, in order +either to prevent the importation of certain +goods, or to subject it to the payment of certain +duties, to the no small interruption of +the interior commerce of the country. Some +provinces are allowed to compound for the +gabelle, or salt tax; others are exempted from +it altogether. Some provinces are exempted +from the exclusive sale of tobacco, which the +farmers-general enjoy through the greater part +of the kingdom. The aides, which correspond +to the excise in England, are very different in +different provinces. Some provinces are exempted +from them, and pay a composition or +equivalent. In those in which they take place, +and are in farm, there are many local duties +which do not extend beyond a particular town +or district. The traites, which correspond to +our customs, divide the kingdom into three +great parts; first, the provinces subject to the +tariff of 1664, which are called the provinces of +the five great farms, and under which are comprehended +Picardy, Normandy, and the greater +part of the interior provinces of the kingdom; +secondly, the provinces subject to the +tariff of 1667, which are called the provinces +reckoned foreign, and under which are comprehended +the greater part of the frontier provinces; +and, thirdly, those provinces which +are said to be treated as foreign, or which, +because they are allowed a free commerce with +foreign countries, are, in their commerce with +the other provinces of France, subjected to +the same duties as other foreign countries. +These are Alsace, the three bishoprics of Mentz, +Toul, and Verdun, and the three cities of +Dunkirk, Bayonne, and Marseilles. Both in +the provinces of the five great farms (called +so on account of an ancient division of the +duties of customs into five great branches, +each of which was originally the subject of a +particular farm, though they are now all +united into one), and in those which are +said to be reckoned foreign, there are many +local duties which do not extend beyond a +particular town or district. There are some +such even in the provinces which are said to +be treated as foreign, particularly in the city +of Marseilles. It is unnecessary to observe +how much both the restraints upon the interior +commerce of the country, and the number of +the revenue officers, must be multiplied, in +order to guard the frontiers of those different +provinces and districts which are subject to +such different systems of taxation.</p> + +<p>Over and above the general restraints arising +from this complicated system of revenue +laws, the commerce of wine (after corn, perhaps, +the most important production of France) +is, in the greater part of the provinces, subject +to particular restraints arising from the +favour which has been shown to the vineyards +of particular provinces and districts above those +of others. The provinces most famous for +their wines, it will be found, I believe, are +those in which the trade in that article is subject +to the fewest restraints of this kind. The +extensive market which such provinces enjoy, +encourages good management both in the +cultivation of their vineyards, and in the subsequent +preparation of their wines.</p> + +<p>Such various and complicated revenue laws +are not peculiar to France. The little duchy +of Milan is divided into six provinces, in each +of which there is a different system of taxation, +with regard to several different sorts of +consumable goods. The still smaller territories +of the duke of Parma are divided into +three or four, each of which has, in the same +manner, a system of its own. Under such +<span class='pagenum'><a name="Page_383" id="Page_383">[Pg 383]</a></span>absurd management, nothing but the great +fertility of the soil, and happiness of the climate, +could preserve such countries from soon +relapsing into the lowest state of poverty and +barbarism.</p> + +<p>Taxes upon consumable commodities may +either be levied by an administration, of which +the officers are appointed by government, and +immediately accountable to government, +of which the revenue must, in this case, vary +from year to year, according to the occasional +variations in the produce of the tax; or they +may be let in farm for a rent certain, the farmer +being allowed to appoint his own officers, +who, though obliged to levy the tax in the +manner directed by the law, are under his +immediate inspection, and are immediately +accountable to him. The best and most frugal +way of levying a tax can never be by +farm. Over and above what is necessary for +paying the stipulated rent, the salaries of the +officers, and the whole expense of administration, +the farmer must always draw from +the produce of the tax a certain profit, proportioned +at least 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 very complicated a +concern. Government, by establishing an administration +under their own immediate inspection, +of the same kind with that which the +farmer establishes, might at least save this +profit, which is almost always exorbitant. To +farm any considerable branch of the public revenue +requires either a great capital, or a great +credit; circumstances which would alone restrain +the competition for such an undertaking +to a very small number of people. Of the few +who have this capital or credit, a still smaller +number have the necessary knowledge or experience; +another circumstance which restrains +the competition still further. The very few +who are in condition to become competitors, +find it more for their interest to combine together; +to become copartners, instead of competitors; +and, when the farm is set up to +auction, to offer no rent but what is much below +the rent value. In countries where the +public revenues are in farm, the farmers are +generally the most opulent people. Their +wealth would alone excite the public indignation; +and the vanity which almost always +accompanies such upstart fortunes, the foolish +ostentation with which they commonly +display that wealth, excite that indignation +still more.</p> + +<p>The farmers of the public revenue never +find the laws too severe, which punish any attempt +to evade the payment of a tax. They +have no bowels for the contributors, who are +not their subjects, and whose universal bankruptcy, +if it should happen the day after the +farm is expired, would not much affect their +interest. In the greatest exigencies of the +state, when the anxiety of the sovereign for +the exact payment of his revenue is necessarily +the greatest, they seldom fail to complain, that +without laws more rigorous than those which +actually took place, it will be impossible for +them to pay even the usual rent. In those +moments of public distress, their commands +cannot be disputed. The revenue laws, therefore, +become gradually more and more severe. +The most sanguinary are always to be found +in countries where the greater part of the public +revenue is in farm; the mildest, in countries +where it is levied under the immediate +inspection of the sovereign. Even a bad sovereign +feels more compassion for his people +than can ever be expected from the farmers +of his revenue. He knows that the permanent +grandeur of his family depends upon +the prosperity of his people, and he will never +knowingly ruin that prosperity for the sake +of any momentary interest of his own. It +is otherwise with the farmers of his revenue, +whose grandeur may frequently be the effect +of the ruin, and not of the prosperity, of his +people.</p> + +<p>A tax is sometimes not only farmed for a +certain rent, but the farmer has, besides, the +monopoly of the commodity taxed. In France, +the duties upon tobacco and salt are levied in +this manner. In such cases, the farmer, instead +of one, levies two exorbitant profits upon +the people; the profit of the farmer, and +the still more exorbitant one of the monopolist. +Tobacco being a luxury, every man is +allowed to buy or not to buy as he chuses; +but salt being a necessary, every man is obligated +to buy of the farmer a certain quantity +of it; because, if he did not buy this quantity +of the farmer, he would, it is presumed, +buy it of some smuggler. The taxes upon +both commodities are exorbitant. The temptation +to smuggle, consequently, is to many +people irresistible; while, at the same time, +the rigour of the law, and the vigilance of +the farmer's officers, render the yielding to the +temptation almost certainly ruinous. The +smuggling of salt and tobacco sends every +year several hundred people to the galleys, +besides a very considerable number whom it +sends to the gibbet. Those taxes, levied in +this manner, yield a very considerable revenue +to government. In 1767, the farm +of tobacco was let for twenty-two millions +five hundred and forty-one thousand two +hundred and seventy-eight livres a-year; that +of salt for thirty-six millions four hundred +and ninety-two thousand four hundred and +four livres. The farm, in both cases, was to +commence in 1768, and to last for six +years. These who consider the blood of the +people as nothing, in comparison with the +revenue of the prince, may, perhaps, approve +of this method of levying taxes. Similar +taxes and monopolies of salt and tobacco have +been established in many other countries, particularly +in the Austrian and Prussian domi<span class='pagenum'><a name="Page_384" id="Page_384">[Pg 384]</a></span>nions, +and in the greater part of the states of +Italy.</p> + +<p>In France, the greater part of the actual +revenue of the crown is derived from eight +different sources; the taille, the capitation, +the two vingtiemes, the gabelles, the aides, +the traites, the domaine, and the farm of tobacco. +The five last are, in the greater part +of the provinces, under farm. The three first +are everywhere levied by an administration, +under the immediate inspection and direction +of government; and it is universally acknowledged, +that in proportion to what they take +out of the pockets of the people, they bring +more into the treasury of the prince than the +other five, of which the administration is much +more wasteful and expensive.</p> + +<p>The finances of France seem, in their present +state, to admit of three very obvious reformations. +First, by abolishing the taille and +the capitation, and by increasing the number of +the vingtiemes, so as to produce an additional +revenue equal to the amount of those other +taxes, the revenue of the crown might be preserved; +the expense of collection might be +much diminished; the vexation of the inferior +ranks of people, which the taille and capitation +occasion, might be entirely prevented; +and the superior ranks might not be more +burdened than the greater part of them are at +present. The vingtieme, I have already observed, +is a tax very nearly of the same kind +with what is called the land tax of England. +The burden of the taille, it is acknowledged, +falls finally upon the proprietors of land; and +as the greater part of the capitation is assessed +upon those who are subject to the taille, at so +much a-pound of that other tax, the final +payment of the greater part of it must likewise +fall upon the same order of people. +Though the number of the vingtiemes, therefore, +was increased, so as to produce an additional +revenue equal to the amount of both +those taxes, the superior ranks of people might +not be more burdened than they are at present; +many individuals, no doubt, would, on +account of the great inequalities with which +the taille is commonly assessed upon the estates +and tenants of different individuals. The +interest and opposition of such favoured subjects, +are the obstacles most likely to prevent +this, or any other reformation of the same +kind. Secondly, by rendering the gabelle, +the aides, the traites, the taxes upon tobacco, +all the different customs and excises, uniform +in all the different parts of the kingdom, those +taxes might be levied at much less expense, +and the interior commerce of the kingdom +might be rendered as free as that of England. +Thirdly, and lastly, by subjecting all those +taxes to an administration under the immediate +inspection and direction of government, +the exorbitant profits of the farmers-general +might be added to the revenue of the state. +The opposition arising from the private interest +of individuals, is likely to be as effectual +for preventing the two last as the first-mentioned +scheme of reformation.</p> + +<p>The French system of taxation seems, in +every respect, inferior to the British. In +Great Britain, ten millions sterling are annually +levied upon less than eight millions of +people, without its being possible to say that +any particular order is oppressed. From the +Collections of the Abbé Expilly, and the observations +of the author of the Essay upon +the Legislation and Commerce of Corn, it +appears probable that France, including the +provinces of Lorraine and Bar, contains about +twenty-three or twenty-four millions of people; +three times the number, perhaps, contained +in Great Britain. The soil and climate +of France are better than those of Great Britain. +The country has been much longer in a +state of improvement and cultivation, and is, +upon that account, better stocked with all those +things which it requires a long time to raise +up and accumulate; such as great towns, and +convenient and well-built houses, both in town +and country. With these advantages, it might +be expected, that in France a revenue of thirty +millions might be levied for the support of +the state, with as little inconvenience as a revenue +of ten millions is in Great Britain. In +1765 and 1766, the whole revenue paid into +the treasury of France, according to the best, +though, I acknowledge, very imperfect accounts +which I could get of it, usually run +between 308 and 325 millions of livres; that +is, it did not amount to fifteen millions sterling; +not the half of what might have been +expected, had the people contributed in the +same proportion to their numbers as the people +of Great Britain. The people of France, +however, it is generally acknowledged, are +much more oppressed by taxes than the people +of Great Britain. France, however, is certainly +the great empire in Europe, which, after that +of Great Britain, enjoys the mildest and most +indulgent government.</p> + +<p>In Holland, the heavy taxes upon the necessaries +of life have ruined, it is said, their +principal manufacturers, and are likely to discourage, +gradually, even their fisheries and +their trade in ship-building. The taxes upon +the necessaries of life are inconsiderable in +Great Britain, and no manufacture has hitherto +been ruined by them. The British taxes +which bear hardest on manufactures, are some +duties upon the importation of raw materials, +particularly upon that of raw silk. The revenue +of the States-General and of the different +cities, however, is said to amount to more +than five millions two hundred and fifty thousand +pounds sterling; and as the inhabitants +of the United Provinces cannot well be supposed +to amount to more than a third part +of those of Great Britain, they must, in proportion +to their number, be much more heavily +taxed.<span class='pagenum'><a name="Page_385" id="Page_385">[Pg 385]</a></span></p> + +<p>After all the proper subjects of taxation +have been exhausted, if the exigencies of the +state still continue to require new taxes, they +must be imposed upon improper ones. The +taxes upon the necessaries of life, therefore, +may be no impeachment of the wisdom of that +republic, which, in order to acquire and to +maintain its independency, has, in spite of +its great frugality, been involved in such expensive +wars as have obliged it to contract +great debts. The singular countries of Holland +and Zealand, besides, require a considerable +expense even to preserve their existence, +or to prevent their being swallowed up by the +sea, which must have contributed to increase +considerably the load of taxes in those two +provinces. The republican form of government +seems to be the principal support of the +present grandeur of Holland. The owners +of great capitals, the great mercantile families, +have generally either some direct share, or +some indirect influence, in the administration +of that government. For the sake of the respect +and authority which they derive from +this situation, they are willing to live in a +country where their capital, if they employ it +themselves, will bring them less profit, and if +they lend it to another, less interest; and +where the very moderate revenue which they +can draw from it will purchase less of the +necessaries and conveniencies of life than in +any other part of Europe. The residence of +such wealthy people necessarily keeps alive, +in spite of all disadvantages, a certain degree +of industry in the country. Any public calamity +which should destroy the republican +form of government, which should throw the +whole administration into the hands of nobles +and of soldiers, which should annihilate altogether +the importance of those wealthy merchants, +would soon render it disagreeable to +them to live in a country where they were no +longer likely to be much respected. They +would remove both their residence and their +capital to some other country, and the industry +and commerce of Holland would soon +follow the capitals which supported them.</p> + + + +<hr style="width: 15%;" /> +<h3>CHAP. III.</h3> + +<h4>OF PUBLIC DEBTS.</h4> + + +<p>In that rude state of society which precedes +the extension of commerce and the improvement +of manufactures; when those expensive +luxuries, which commerce and manufactures +can alone introduce, are altogether unknown; +the person who possesses a large revenue, I +have endeavoured to show in the third book +of this Inquiry, can spend or enjoy that revenue +in no other way than by maintaining +nearly as many people as it can maintain. A +large revenue may at all times be said to consist +in the command of a large quantity of +the necessaries of life. In that rude state of +things, it is commonly paid in a large quantity +of those necessaries, in the materials of +plain food and coarse clothing, in corn and +cattle, in wool and raw hides. When neither +commerce nor manufactures furnish any thing +for which the owner can exchange the greater +part of those materials which are over and +above his own consumption, he can do nothing +with the surplus, but feed and clothe +nearly as many people as it will feed and clothe. +A hospitality in which there is no luxury, and a +liberality in which there is no ostentation, +occasion, in this situation of things, the principal +expenses of the rich and the great. +But these I have likewise endeavoured to +show, in the same book, are expenses by which +people are not very apt to ruin themselves. +There is not, perhaps, any selfish pleasure so +frivolous, of which the pursuit has not sometimes +ruined even sensible men. A passion +for cock-fighting has ruined many. But the +instances, I believe, are not very numerous, of +people who have been ruined by a hospitality +or liberality of this kind; though the hospitality +of luxury, and the liberality of ostentation +have ruined many. Among our feudal +ancestors, the long time during which estates +used to continue in the same family, sufficiently +demonstrates the general disposition +of people to live within their income. Though +the rustic hospitality, constantly exercised by +the great landholders, may not, to us in the +present times, seem consistent with that order +which we are apt to consider as inseparably +connected with good economy; yet we +must certainly allow them to have been at +least so far frugal, as not commonly to have +spent their whole income. A part of their +wool and raw hides, they had generally an +opportunity of selling for money. Some part +of this money, perhaps, they spent in purchasing +the few objects of vanity and luxury, +with which the circumstances of the times +could furnish them; but some part of it they +seem commonly to have hoarded. They +could not well, indeed, do any thing else but +hoard whatever money they saved. To trade, +was disgraceful to a gentleman; and to lend +money at interest, which at that time was +considered as usury, and prohibited by law, +would have been still more so. In those +times of violence and disorder, besides, it +was convenient to have a hoard of money at +hand, that in case they should be driven from +their own home, they might have something +of known value to carry with them to some +place of safety. The same violence which +made it convenient to hoard, made it equally +convenient to conceal the hoard. The frequency +of treasure-trove, or of treasure found, +of which no owner was known, sufficiently +<span class='pagenum'><a name="Page_386" id="Page_386">[Pg 386]</a></span>demonstrates the frequency, in those times, +both of hoarding and of concealing the hoard. +Treasure-trove was then considered as an important +branch of the revenue of the sovereign. +All the treasure-trove of the kingdom +would scarce, perhaps, in the present +times, make an important branch of the revenue +of a private gentleman of a good +estate.</p> + +<p>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 already been observed in the +fourth book, is in a situation which naturally +disposes him to the parsimony requisite for +accumulation. In that situation, the expense, +even of a sovereign, cannot be directed by +that vanity which delights in the gaudy finery +of a court. The ignorance of the times affords +but few of the trinkets in which that +finery consists. Standing armies are not +then necessary; so that the expense, even of +a sovereign, like that of any other great lord, +can be employed in scarce any thing but +bounty to his tenants, and hospitality to his +retainers. But bounty and hospitality very +seldom lead to extravagance; though vanity +almost always does. All the ancient sovereigns +of Europe, accordingly, it has already +been observed, had treasures. Every Tartar +chief, in the present times, is said to have +one.</p> + +<p>In a commercial country, abounding with +every sort of expensive luxury, the sovereign, +in the same manner as almost all the great +proprietors in his dominions, naturally spends +a great part of his revenue in purchasing +those luxuries. His own and the neighbouring +countries supply him abundantly with all +the costly trinkets which compose the splendid, +but insignificant, pageantry of a court. +For the sake of an inferior pageantry of the +same kind, his nobles dismiss their retainers, +make their tenants independent, and become +gradually themselves as insignificant as the +greater part of the wealthy burghers in his +dominions. The same frivolous passions, +which influence their conduct, influence his. +How can it be supposed that he should be +the only rich man in his dominions who is insensible +to pleasures of this kind? If he does +not, what he is very likely to do, spend upon +those pleasures so great a part of his revenue +as to debilitate very much the defensive power +of the state, it cannot well be expected that +he should not spend upon them all that part +of it which is over and above what is necessary +for supporting that defensive power. +His ordinary expense becomes equal to his +ordinary revenue, and it is well if it does not +frequently exceed it. The amassing of treasure +can no longer be expected; and when +extraordinary exigencies require extraordinary +expenses, he must necessarily call upon his +subjects for an extraordinary aid. The present +and the late king of Prussia are the only +great princes of Europe, who, since the death +of Henry IV. of France, in 1610, are supposed +to have amassed any considerable treasure. +The parsimony which leads to accumulation +has become almost as rare in republican +as in monarchical governments. The +Italian republics, the United Provinces of the +Netherlands, are all in debt. The canton of +Berne is the single republic in Europe which +has amassed any considerable treasure. The +other Swiss republics have not. The taste for +some sort of pageantry, for splendid buildings, +at least, and other public ornaments, frequently +prevails as much in the apparently sober +senate-house of a little republic, as in the +dissipated court of the greatest king.</p> + +<p>The want of parsimony, in time of peace, +imposes the necessity of contracting debt in +time of war. When war comes, there is no +money in the treasury, but what is necessary +for carrying on the ordinary expense of the +peace establishment. In war, an establishment +of three or four times that expense becomes +necessary for the defence of the state; +and consequently, a revenue three or four +times greater than the peace revenue. Supposing +that the sovereign should have, what +he scarce ever has, the immediate means of +augmenting his revenue in proportion to the +augmentation of his expense; yet still the +produce of the taxes, from which this increase +of revenue must be drawn, will not begin to +come into the treasury, till perhaps ten or +twelve months after they are imposed. But +the moment in which war begins, or rather +the moment in which it appears likely to begin, +the army must be augmented, the fleet +must be fitted out, the garrisoned towns must +be put into a posture of defence; that army, +that fleet, those garrisoned towns, must be +furnished with arms, ammunition, and provisions. +An immediate and great expense +must be incurred in that moment of immediate +danger, which will not wait for the gradual +and slow returns of the new taxes. In +this exigency, government can have no other +resource but in borrowing.</p> + +<p>The same commercial state of society which, +by the operation of moral causes, brings government +in this manner into the necessity of +borrowing, produces in the subjects both an +ability and an inclination to lend. If it commonly +brings along with it the necessity of +borrowing, it likewise brings with it the facility +of doing so.</p> + +<p>A country abounding with merchants and +manufacturers, necessarily abounds with a set +of people through whose hands, not only their +own capitals, but the capitals of all those who +either lend them money, or trust them with +goods, pass as frequently, or more frequently, +than the revenue of a private man, who, +without trade or business, lives upon his in<span class='pagenum'><a name="Page_387" id="Page_387">[Pg 387]</a></span>come, +passes through his hands. The revenue +of such a man can regularly pass through +his hands only once in a year. But the whole +amount of the capital and credit of a merchant, +who deals in a trade of which the returns +are very quick, may sometimes pass +through his hands two, three, or four times in +a year. A country abounding with merchants +and manufacturers, therefore, necessarily abounds +with a set of people, who have it at +all times in their power to advance, if they +chuse to do so, a very large sum of money to +government. Hence the ability in the subjects +of a commercial state to lend.</p> + +<p>Commerce and manufactures can seldom +flourish long in any state which does not enjoy +a regular administration of justice; in +which the people do not feel themselves secure +in the possession of their property; in which +the faith of contracts is not supported by law; +and in which the authority of the state is not +supposed to be regularly employed in enforcing +the payment of debts from all those who +are able to pay. Commerce and manufactures, +in short, can seldom flourish in any +state, in which there is not a certain degree of +confidence in the justice of government. The +same confidence which disposes great merchants +and manufacturers 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. By +lending money to government, they do not +even for a moment diminish their ability to +carry on their trade and manufactures; on +the contrary, they commonly augment it. The +necessities of the state render government, +upon most occasions willing to borrow upon +terms extremely advantageous to the lender. +The security which it grants to the original +creditor, is made transferable to any other creditor; +and from the universal confidence in +the justice of the state, generally sells in the +market for more than was originally paid for +it. The merchant or monied man makes +money by lending money to government, and +instead of diminishing, increases his trading +capital. He generally considers it as a favour, +therefore, when the administration admits him +to a share in the first subscription for a new +loan. Hence the inclination or willingness +in the subjects of a commercial state to lend.</p> + +<p>The government of such a state is very apt +to repose itself upon this ability and willingness +of its subjects to lend it their money on +extraordinary occasions. It foresees the facility +of borrowing, and therefore dispenses itself +from the duty of saving.</p> + +<p>In a rude state of society, there are no great +mercantile or manufacturing capitals. The +individuals, who hoard whatever money they +can save, and who conceal their hoard, do so +from a distrust of the justice of government; +from a fear, that if it was known that they had +a hoard, and where that hoard was to be found, +they would quickly be plundered. In such a +state of things, few people would be able, and +nobody would be willing to lend their money +to government on extraordinary exigencies. +The sovereign feels that he must provide for +such exigencies by saving, because he foresees +the absolute impossibility of borrowing. This +foresight increases still further his natural disposition +to save.</p> + +<p>The progress of the enormous debts which +at present oppress, and will in the long-run +probably ruin, all the great nations of Europe, +has been pretty uniform. Nations, like private +men, have generally begun to borrow +upon what may be called personal credit, +without assigning or mortgaging any particular +fund for the payment of the debt; and +when this resource has failed them, they have +gone on to borrow upon assignments or mortgages +of particular funds.</p> + +<p>What is called the unfunded debt of Great +Britain, is contracted in the former of those +two ways. It consists partly in a debt which +bears, or is supposed to bear, no interest, and +which resembles the debts that a private man +contracts upon account; and partly in a debt +which bears interest, and which resembles +what a private man contracts upon his bill or +promissory-note. The debts which are due, +either for extraordinary services, or for services +either not provided for, or not paid at +the time when they are performed; part of +the extraordinaries of the army, navy, and ordnance, +the arrears of subsidies to foreign +princes, those of seamen's wages, &c. usually +constitute a debt of the first kind. Navy and +exchequer bills, which are issued sometimes +in payment of a part of such debts, and sometimes +for other purposes, constitutes a debt of +the second kind; exchequer bills bearing interest +from the day on which they are issued, +and navy bills six months after they are issued. +The bank of England, either by voluntarily +discounting those bills at their current +value, or by agreeing with government for +certain considerations to circulate exchequer +bills, that is, to receive them at par, paying +the interest which happens to be due upon +them, keeps up the value, and facilitates +their circulation, and thereby frequently enables +government to contract a very large debt +of this kind. In France, where there is no +bank, the state bills (billets d'etat<a name="FNanchor_76_76" id="FNanchor_76_76"></a><a href="#Footnote_76_76" class="fnanchor">[76]</a>) have +sometimes sold at sixty and seventy per cent. +discount. During the great recoinage in +king William's time, when the bank of England +thought proper to put a stop to its usual +transactions, exchequer bills and tallies are +said to have sold from twenty-five to sixty per +cent. discount; owing partly, no doubt, to +the supposed instability of the new govern<span class='pagenum'><a name="Page_388" id="Page_388">[Pg 388]</a></span>ment +established by the Revolution, but partly, +too, to the want of the support of the bank +of England.</p> + +<p>When this resource is exhausted, and it becomes +necessary, in order to raise money, to +assign or mortgage some particular branch of +the public revenue for the payment of the +debt, government has, upon different occasions, +done this in two different ways. Sometimes +it has made this assignment or mortgage +for a short period of time only, a year, or a +few years, for example; and sometimes for +perpetuity. In the one case, the fund was +supposed sufficient to pay, within the limited +time, both principal and interest of the money +borrowed. In the other, it was supposed sufficient +to pay the interest only, or a perpetual +annuity equivalent to the interest, government +being at liberty to redeem, at any time, this +annuity, upon paying back the principal sum +borrowed. When money was raised in the +one way, it was said to be raised by anticipation; +when in the other, by perpetual funding, +or, more shortly, by funding.</p> + +<p>In Great Britain, the annual land and malt +taxes are regularly anticipated every year, by +virtue of a borrowing clause constantly inserted +into the acts which impose them. The +bank of England generally advances at an +interest, which, since the Revolution, has varied +from eight to three per cent., the sums of +which those taxes are granted, and receives +payment as their produce gradually comes in. +If there is a deficiency, which there always is, +it is provided for in the supplies of the ensuing +year. The only considerable branch of +the public revenue which yet remains unmortgaged, +is thus regularly spent before it comes +in. Like an improvident spendthrift, whose +pressing occasions will not allow him to wait +for the regular payment of his revenue, the +state is in the constant practice of borrowing +of its own factors and agents, and of paying +interest for the use of its own money.</p> + +<p>In the reign of king William, and during +a great part of that of queen Anne, before +we had become so familiar as we are now +with the practice of perpetual funding, the +greater part of the new taxes were imposed +but for a short period of time (for four, five, +six, or seven years only), and a great part of +the grants of every year consisted in loans upon +anticipations of the produce of those taxes. +The produce being frequently insufficient for +paying, within the limited term, the principal +and interest of the money borrowed, deficiencies +arose; to make good which, it became +necessary to prolong the term.</p> + +<p>In 1697, by the 8th of William III., c. 20, +the deficiencies of several taxes were charged +upon what was then called the first general +mortgage or fund, consisting of a prolongation +to the first of August 1706, of several different +taxes, which would have expired within a +shorter term, and of which the produce was +accumulated into one general fund. The deficiencies +charged upon this prolonged term amounted +to L.5,160,459 : 14 : 9½.</p> + +<p>In 1701, those duties, with some others, +were still further prolonged, for the like purposes, +till the first of August 1710, and were +called the second general mortgage or fund. +The deficiencies charged upon it amounted to +L.2,055,999 : 7 : 11½.</p> + +<p>In 1707, those duties were still further prolonged, +as a fund for new loans, to the first of +August 1712, and were called the third general +mortgage or fund. The sum borrowed +upon it was L.983,254 : 11 : 9¼.</p> + +<p>In 1708, those duties were all (except the +old subsidy of tonnage and poundage, of +which one moiety only was made a part of this +fund, and a duty upon the importation of +Scotch linen, which had been taken off by the +articles of union) still further continued, as a +fund for new loans, to the first of August +1714, and were called the fourth general +mortgage or fund. The sum borrowed upon +it was L.925,176 : 9 : 2¼.</p> + +<p>In 1709, those duties were all (except the old +subsidy of tonnage and poundage, which was +now left out of this fund altogether) still further +continued, for the same purpose, to the first of +August 1716, and were called the fifth general +mortgage or fund. The sum borrowed +upon it was L.922,029 : 6s.</p> + +<p>In 1710, those duties were again prolonged +to the first of August 1720, and were called +the sixth general mortgage or fund. The sum +borrowed upon it was L.1,296,552 : 9 : 11¾.</p> + +<p>In 1711, the same duties (which at this +time were thus subject to four different anticipations), +together with several others, were +continued for ever, and made a fund for paying +the interest of the capital of the South-sea +company, which had that year advanced to +government, for paying debts, and making +good deficiencies, the sum of L.9,177,967 : 15 : 4, +the greatest loan which at that time +had ever been made.</p> + +<p>Before this period, the principal, so far as I +have been able to observe, the only taxes, which, +in order to pay the interest of a debt, had +been imposed for perpetuity, were these for +paying the interest of the money which had +been advanced to government by the bank and +East-India company, and of what it was expected +would be advanced, but which was +never advanced, by a projected land bank. +The bank fund at this time amounted to +L.3,375,027 : 17 : 10½, for which was paid an +annuity or interest of L.206,501 : 13 : 5. The +East-India fund amounted to L.3,200,000, +for which was paid an annuity or interest of +L.160,000; the bank fund being at six per +cent., the East-India fund at five per cent. +interest.</p> + +<p>In 1715, by the first of George I., c. 12, +the different taxes which had been mortgaged +for paying the bank annuity, together with<span class='pagenum'><a name="Page_389" id="Page_389">[Pg 389]</a></span> +several others, which, by this act, were likewise +rendered perpetual, were accumulated +into one common fund, called the aggregate +fund, which was charged not only with the +payment of the bank annuity, but with several +other annuities and burdens of different +kinds. This fund was afterwards augmented +by the third of George I., c. 8., and by the +fifth of George I., c. 3, and the different duties +which were then added to it were likewise +rendered perpetual.</p> + +<p>In 1717, by the third of George I., c. 7, +several other taxes were rendered perpetual, +and accumulated into another common fund, +called the general fund, for the payment of +certain annuities, amounting in the whole to +L.724,849 : 6 : 10½.</p> + +<p>In consequence of those different acts, the +greater part of the taxes, which before had +been anticipated only for a short term of years +were rendered perpetual, as a fund for paying, +not the capital, but the interest only, of the +money which had been borrowed upon them +by different successive anticipations.</p> + +<p>Had money never been raised but by anticipation, +the course of a few years would have +liberated the public revenue, without any +other attention of government besides that of +not overloading the fund, by charging it with +more debt than it could pay within the limited +term, and not of anticipating a second +time before the expiration of the first anticipation. +But the greater part of European +governments have been incapable of those attentions. +They have frequently overloaded +the fund, even upon the first anticipation; +and when this happened not to be the case, +they have generally taken care to overload it, +by anticipating a second and a third time, +before the expiration of the first anticipation. +The fund becoming in this manner altogether +insufficient for paying both principal and interest +of the money borrowed upon it, it became +necessary to charge it with the interest only, +or a perpetual annuity equal to the interest; +and such improvident anticipations necessarily +gave birth to the more ruinous practice of +perpetual funding. But though this practice +necessarily puts off the liberation of the public +revenue from a fixed period, to one so indefinite +that it is not very likely ever to arrive; +yet, as a greater sum can, in all cases, be +raised by this new practice than by the old +one of anticipation, the former, when men +have once become familiar with it, has, in the +great exigencies of the state, been universally +preferred to the latter. To relieve the present +exigency, is always the object which principally +interests those immediately concerned in +the administration of public affairs. The future +liberation of the public revenue they leave to +the care of posterity.</p> + +<p>During the reign of queen Anne, the market +rate of interest had fallen from six to five +per cent.; and, in the twelfth year of her +reign, 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 +of Great Britain had been rendered perpetual, +and distributed into the aggregate, South-sea, +and general funds, the creditors of the public, +like those of private persons, were induced to +accept of five per cent. for the interest of their +money, which occasioned a saving of one per +cent. upon the capital of the greater part of +the debts which had been thus funded for perpetuity, +or of one-sixth of the greater part of +the annuities which were paid out of the three +great funds above mentioned. This saving +left a considerable surplus in the produce of +the different taxes which had been accumulated +into those funds, over and above what +was necessary for paying the annuities which +were now charged upon them, and laid the +foundation of what has since been called the +sinking fund. In 1717, it amounted to +L.323,434 : 7 : 7½. In 1727, the interest of +the greater part of the public debts was still +further reduced to four per cent.; and, in +1753 and 1757, to three and a-half, and three +per cent., which reductions still further augmented +the sinking fund.</p> + +<p>A sinking fund, though instituted for the +payment of old, facilitates very much the contracting +of new debts. It is a subsidiary fund, +always at hand, to be mortgaged in aid of any +other doubtful fund, upon which money is +proposed to be raised in any exigency of the +state. Whether the sinking fund of Great +Britain has been more frequently applied to the +one or to other of those two purposes, will +sufficiently appear by and by.</p> + +<p>Besides these two methods of borrowing, +by anticipations and by a perpetual funding, +there are two other methods, which hold a +sort of middle place between them; these are, +that of borrowing upon annuities for terms of +years, and that of borrowing upon annuities +for lives.</p> + +<p>During the reigns of king William and +queen Anne, large sums were frequently +borrowed upon annuities for terms of years, +which were sometimes longer and sometimes +shorter. In 1693, an act was passed for +borrowing one million upon an annuity of +fourteen per cent., or L.140,000 a-year, for +sixteen years. In 1691, an act was passed +for borrowing a million upon annuities for +lives, upon terms which, in the present times, +would appear very advantageous; but the +subscription was not filled up. In the following +year, the deficiency was made good, by +borrowing upon annuities for lives, at fourteen +per cent. or a little more than seven years +purchase. In 1695, the persons who had +purchased those annuities were allowed to exchange +them for others of ninety-six years, +upon paying into the exchequer sixty-three +pounds in the hundred; that is, the difference<span class='pagenum'><a name="Page_390" id="Page_390">[Pg 390]</a></span> +between fourteen per cent. for life, and fourteen +per cent. for ninety-six years, was sold for +sixty-three pounds, or for four and a-half years +purchase. Such was the supposed instability +of government, that even these terms procured +few purchasers. In the reign of queen Anne, +money was, upon different occasions, borrowed +both upon annuities for lives, and upon annuities +for terms of thirty-two, of eighty-nine, +of ninety-eight, and of ninety-nine years. In +1719, the proprietors of the annuities for +thirty-two years were induced to accept, in +lieu of them, South-sea stock to the amount +of eleven and a-half years purchase of the annuities, +together with an additional quantity +of stock, equal to the arrears which happened +then to be due upon them. In 1720, the +greater part of the other annuities for terms +of years, both long and short, were subscribed +into the same fund. The long annuities, +at that time, amounted to L.666,821 : +8 : 3½ a-year. On the 5th of January 1775, +the remainder of them, or what was not subscribed +at that time, amounted only to +L.136,453 : 12 : 8.</p> + +<p>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. An annuity for ninety-eight +or ninety-nine years, however, is worth nearly +as much as a perpetuity, and should therefore, +one might think, be a fund for borrowing +nearly as much. But those who, in order to +make family settlements, and to provide for +remote futurity, buy into the public stocks, +would not care to purchase into one of which +the value was continually diminishing; and such +people make a very considerable proportion, +both of the proprietors and purchasers of stock. +An annuity for a long term of years, therefore, +though its intrinsic value may be very +nearly the same with that of a perpetual annuity, +will not find nearly the same number +of purchasers. The subscribers to a new loan, +who mean generally to sell their subscription +as soon as possible, prefer greatly a perpetual +annuity, redeemable by parliament, to an irredeemable +annuity, for a long term of years, +of only equal amount. The value of the former +may be supposed always the same, or +very nearly the same; and it makes, therefore, +a more convenient transferable stock than +the latter.</p> + +<p>During the two last-mentioned wars, annuities, +either for terms of years or for lives, +were seldom granted, but as premiums to the +subscribers of a new loan, over and above the +redeemable annuity or interest, upon the credit +of which the loan was supposed to be made. +They were granted, not as the proper fund +upon which the money was borrowed, but as +an additional encouragement to the lender.</p> + +<p>Annuities for lives have occasionally been +granted in two different ways; either upon separate +lives, or upon lots of lives, which, in +French, are called tontines, from the name of +their inventor. When annuities are granted +upon separate lives, the death of every individual +annuitant disburdens the public revenue, +so far as it was affected by his annuity. +When annuities are granted upon tontines, the +liberation of the public revenue does not +commence till the death of all the annuitants +comprehended in one lot, which may, sometimes +consist of twenty or thirty persons, +of whom the survivors succeed to the annuities +of all those who die before them; +the last survivor succeeding to the annuities of +the whole lot. Upon the same revenue, more +money can always be raised by tontines than +by annuities for separate lives. An annuity, +with a right of survivorship, is really worth +more than an equal annuity for a separate life; +and, from the confidence which every man +naturally has in his own good fortune, the +principle upon which is founded the success +of all lotteries, such an annuity generally sells +for something more than it is worth. In +countries where it is usual for government to +raise money by granting annuities, tontines +are, upon this account, generally preferred to +annuities for separate lives. The expedient +which will raise most money, is almost always +preferred to that which is likely to bring about, +in the speediest manner, the liberation of the +public revenue.</p> + +<p>In France, a much greater proportion of the +public debts consists in annuities for lives +than in England. According to a memoir +presented by the parliament of Bourdeaux to +the king, in 1764, the whole public debt of +France is estimated at twenty-four hundred +millions of livres; of which the capital, for +which annuities for lives had been granted, is +supposed to amount to three hundred millions, +the eighth part of the whole public +debt. The annuities themselves are computed +to amount to thirty millions a-year, the fourth +part of one hundred and twenty millions, the +supposed interest of that whole debt. These +estimations, I know very well, are not exact; +but having been presented by so very respectable +a body as approximations to the truth, +they may, I apprehend, be considered as such. +It is not the different degrees of anxiety in +the two governments of France and England +for the liberation of the public revenue, +which occasions this difference in their respective +modes of borrowing; it arises altogether +from the different views and interests of the +lenders.</p> + +<p>In England, the seat of government being +in the greatest mercantile city in the world, +the merchants are generally the people who +advance money to government. By advancing +it, they do not mean to diminish, but, +on the contrary, to increase their mercantile +capitals; and unless they expected to sell, +with some profit, their share in the subscription +for a new loan, they never would sub<span class='pagenum'><a name="Page_391" id="Page_391">[Pg 391]</a></span>scribe. +But if, by advancing their money, +they were to purchase, instead of perpetual annuities, +annuities for lives only, whether their +own or those of other people, they would not +always be so likely to sell them with a profit. +Annuities upon their own lives they would +always sell with loss; because no man will +give for an annuity upon the life of another, +whose age and state of health are nearly the +same with his own, the same price which he +would give for one upon his own. An annuity +upon the life of a third person, indeed, +is, no doubt, of equal value to the buyer and +the seller; but its real value begins to diminish +from the moment it is granted, and continues +to do so, more and more, as long as it +subsists. It can never, therefore, make so +convenient a transferable stock as a perpetual +annuity, of which the real value may be +supposed always the same, or very nearly the +same.</p> + +<p>In France, the seat of government not being +in a great mercantile city, merchants do +not make so great a proportion of the people +who advance money to government. The +people concerned in the finances, the farmers-general, +the receivers of the taxes which are +not in farm, the court-bankers, &c. make the +greater part of those who advance their money +in all public exigencies. Such people are +commonly men of mean birth, but of great +wealth, and frequently of great pride. They +are too proud to marry their equals, and women +of quality disdain to marry them. They +frequently resolve, therefore, to live bachelors; +and having neither any families of their +own, nor much regard for those of their relations, +whom they are not always very fond of +acknowledging, they desire only to live in +splendour during their own time, and are not +unwilling that their fortune should end with +themselves. The number of rich people, besides, +who are either averse to marry, or whose +condition of life renders it either improper or +inconvenient for them to do so, is much greater +in France than in England. To such people, +who have little or no care for posterity, +nothing can be more convenient than to exchange +their capital for a revenue, which is to +last just as long, and no longer, than they +wish it to do.</p> + +<p>The ordinary expense 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 expense. +They are unwilling, for fear of offending the +people, who, by so great and so sudden an +increase of taxes, would soon be disgusted +with the war; and they are unable, from not +well knowing what taxes would be sufficient +to produce the revenue wanted. The facility +of borrowing delivers them from the embarrassment +which this fear and inability would +otherwise occasion. By means of borrowing, +they are enabled, with a very moderate increase +of taxes, to raise, from year to year, +money sufficient for carrying on the war; +and by the practice of perpetual funding, they +are enabled, with the smallest possible increase +of taxes, to raise annually the largest possible +sum of money. In great empires, the people +who live in the capital, and in the provinces +remote from the scene of action, feel, many +of them, scarce any inconveniency from the +war, but enjoy, at their ease, the amusement +of reading in the newspapers the exploits of +their own fleets and armies. To them this +amusement compensates the small difference +between the taxes which they pay on account +of the war, and those which they had been +accustomed to pay in time of peace. They +are commonly dissatisfied with the return of +peace, which puts an end to their amusement, +and to a thousand visionary hopes of +conquest and national glory, from a longer +continuance of the war.</p> + +<p>The return of peace, indeed, seldom relieves +them from the greater part of the taxes imposed +during the war. These are mortgaged +for the interest of the debt contracted, in order +to carry it on. If, over and above paying +the interest of this debt, and defraying the +ordinary expense of government, the old revenue, +together with the new taxes, produce +some surplus revenue, it may, perhaps, be +converted into a sinking fund for paying off +the debt. But, in the first place, this sinking +fund, even supposing it should be applied to +no other purpose, is generally altogether inadequate +for paying, in the course of any period +during which it can reasonably be expected +that peace should continue, the whole +debt contracted during the war; and, in the +second place, this fund is almost always applied +to other purposes.</p> + +<p>The new taxes were imposed for the sole +purpose of paying the interest of the money +borrowed upon them. If they produce more, +it is generally something which was neither +intended nor expected, and is, therefore, seldom +very considerable. Sinking funds have +generally arisen, not so much from any surplus +of the taxes which was over and above +what was necessary for paying the interest or +annuity originally charged upon them, as +from a subsequent reduction of that interest; +that of Holland in 1655, and that of the ecclesiastical +state in 1685, were both formed in +this manner. Hence the usual insufficiency +of such funds.</p> + +<p>During the most profound peace, various +events occur, which require an extraordinary +expense; and government finds it always more +convenient to defray this expense by misapplying +the sinking fund, than by imposing a +new tax. Every new tax is immediately felt +more or less by the people. It occasions always +some murmur, and meets with some<span class='pagenum'><a name="Page_392" id="Page_392">[Pg 392]</a></span> +opposition. The more taxes may have been +multiplied, the higher they may have been +raised upon every different subject of taxation; +the more loudly the people complain +of every new tax, the more difficult it becomes, +too, either to find out new subjects of +taxation, or to raise much higher the taxes already +imposed upon the old. A momentary +suspension of the payment of debt is not immediately +felt by the people, and occasions +neither murmur nor complaint. To borrow +of the sinking fund is always an obvious and +easy expedient for getting out of the present +difficulty. The more the public debts may +have been accumulated, the more necessary it +may have become to study to reduce them; +the more dangerous, the more ruinous it may +be to missapply any part of the sinking fund; +the less likely is the public debt to be reduced +to any considerable degree, the more likely, +the more certainly, is the sinking fund to be +misapplied towards defraying all the extraordinary +expenses which occur in time of peace. +When a nation is already overburdened with +taxes, nothing but the necessities of a new +war, nothing but either the animosity of national +vengeance, or the anxiety for national +security, can induce the people to submit, +with tolerable patience, to a new tax. Hence +the usual misapplication of the sinking fund.</p> + +<p>In Great Britain, from the time that we +had first recourse 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. It was in the war which began in 1668, +and was concluded by the treaty of Ryswick, +in 1697, that the foundation of the present +enormous debt of Great Britain was first +laid.</p> + +<p>On the 31st of December 1697, the public +debts of Great Britain, funded and unfunded, +amounted to L.21,515,742 : 13 : 8½. +A great part of those debts had been contracted +upon short anticipations, and some +part upon annuities for lives; so that, before +the 31st of December 1701, in less than four +years, there had partly been paid off, and +partly reverted to the public, the sum of +L.5,121,041 : 12 : 0¾; a greater reduction +of the public debt than has ever since been +brought about in so short a period of time. +The remaining debt, therefore, amounted only +to L.16,394,701 : 1 : 7¼.</p> + +<p>In the war which began in 1702, and which +was concluded by the treaty of Utrecht, the +public debts were still more accumulated. On +the 31st of December 1714, they amounted to +L.53,681,076 : 5 : 6<sup>1</sup>⁄<sub>12</sub>. The subscription into +the South-sea fund, of the short and long +annuities, increased the capital of the public +debt; so that, on the 31st of December 1722, +it amounted to L.55,282,978 : 1 : 3<sup>5</sup>⁄<sub>6</sub>. The reduction +of the debt began in 1723, and went +on so slowly, that, on the 31st of December +1739, during seventeen years of profound +peace, the whole sum paid off was no more +than L.8,328,354 : 17 : 11<sup>3</sup>⁄<sub>12</sub>, the capital of +the public debt, at that time, amounting to +L.46,954,623 : 3 : 4<sup>7</sup>⁄<sub>12</sub>.</p> + +<p>The Spanish war, which began in 1739, and +the French war which soon followed it, occasioned +a further increase of the debt, which, +on the 31st of December 1748, after the war +had been concluded by the treaty of Aix-la-Chapelle, +amounted to L.78,293,313 : 1 : 10¾. +The most profound peace of 17 years continuance, +had taken no more than L.8,328,354 : 17 : 11¼ from it. +A war, of less than nine +years continuance, added L.31,338,689 : 18 : 6<sup>1</sup>⁄<sub>6</sub> to it.<a name="FNanchor_77_77" id="FNanchor_77_77"></a><a href="#Footnote_77_77" class="fnanchor">[77]</a></p> + +<p>During the administration of Mr. Pelham, +the interest of the public debt was reduced, or +at least measures were taken for reducing it, +from four to three per cent.; the sinking +fund was increased, and some part of the public +debt was paid off. In 1755, before the +breaking out of the late war, the funded debt +of Great Britain amounted to L.72,289,673. +On the 5th of January 1763, at the conclusion +of the peace, the funded debt amounted +to L.122,603,336 : 8 : 2¼. The unfunded +debt has been stated at L.13,927,589 : 2 : 2. +But the expense occasioned by the war did +not end with the conclusion of the peace; so +that, though on the 5th of January 1764, the +funded debt was increased (partly by a new +loan, and partly by funding a part of the +unfunded debt) to L.129,586,789 : 10 : 1¾, +there still remained (according to the very +well informed author of Considerations on the +Trade and Finances of Great Britain) an unfunded +debt, which was brought to account in +that and the following year, of L.9,975,017, 12s. 2<sup>15</sup>⁄<sub>44</sub>d. +In 1764, therefore, the public +debt of Great Britain, funded and unfunded +together, amounted, according to this author, +to L.139,561,807 : 2 : 4. The annuities for +lives, too, which had been granted as premiums +to the subscribers to the new loans in +1757, estimated at fourteen-years purchase, +were valued at L.472,500; and the annuities +for long terms of years, granted as premiums +likewise, in 1761 and 1762, estimated at +twenty-seven years and a-half purchase, were +valued at L.6,826,875. During a peace of +about seven years continuance, the prudent +and truly patriotic administration of Mr. Pelham +was not able to pay off an old debt of six +millions. During a war of nearly the same +continuance, a new debt of more than seventy-five +millions was contracted.</p> + +<p>On the 5th of January 1775, the funded debt +of Great Britain amounted to L.124,996,086, +1s. 6¼d. The unfunded, exclusive of a large +civil-list debt, to L.4,150,236 : 3 : 11<sup>7</sup>⁄<sub>8</sub>. Both +together, to L.129,146,322 : 5 : 6. According<span class='pagenum'><a name="Page_393" id="Page_393">[Pg 393]</a></span> +to this account, the whole debt paid off, during +eleven years of profound peace, amounted +only to L.10,415,476 : 16 : 9<sup>7</sup>⁄<sub>8</sub>. Even this +small reduction of debt, however, has not +been all made from the savings out of the ordinary +revenue of the state. Several extraneous +sums, altogether independent of that +ordinary revenue, have contributed towards +it. Amongst these we may reckon an additional +shilling in the pound land tax, for three +years; the two millions received from the +East-India company, as indemnification for +their territorial acquisitions; and the one hundred +and ten thousand pounds received from +the bank for the renewal of their charter. To +these must be added several other sums, which, +as they arose out of the late war, ought perhaps +to be considered as deductions from the +expenses of it. The principal are,</p> + + +<div class='center'> +<table border="0" cellpadding="4" cellspacing="0" summary=""> +<tr><td align='left'>The produce of French prizes</td><td align='right'>L.690,449</td><td align='right'>18</td><td align='right'>9</td></tr> +<tr><td align='left'>Composition for French prisoners</td><td align='right'>670,000</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='left'>What has been received from the sale of the ceded islands</td><td align='right'>95,500</td><td align='right'>0</td><td align='right'>0</td></tr> +<tr><td align='right'> </td><td align='right' colspan='3'>——————————</td></tr> +<tr><td align='center'>Total,</td><td align='right'>L.1,455,949</td><td align='right'>18</td><td align='right'>9</td></tr> +</table></div> + +<p>If we add to this sum the balance of the earl +of Chatham's and Mr. Calcraft's accounts, +and other army savings of the same kind, together +with what has been received from the +bank, the East-India company, and the additional +shilling in the pound land tax, the +whole must be a good deal more than five +millions. The debt, therefore, which, since +the peace, has been paid out of the savings +from the ordinary revenue of the state, has +not, one year with another, amounted to half +a million a-year. The sinking fund has, no +doubt, been considerably augmented since the +peace, by the debt which had been paid off, +by the reduction of the redeemable four per +cents to three per cents, and by the annuities +for lives which have fallen in; and, if +peace were to continue, a million, perhaps, +might now be annually spared out of it towards +the discharge of the debt. Another +million, accordingly, was paid in the course +of last year; but at the same time, a large civil-list +debt was left unpaid, and we are now +involved in a new war, which, in its progress, +may prove as expensive as any of our former +wars.<a name="FNanchor_78_78" id="FNanchor_78_78"></a><a href="#Footnote_78_78" class="fnanchor">[78]</a> The new debt which will probably be +contracted before the end of the next campaign, +may, perhaps, be nearly equal to all the +old debt which has been paid off from the savings +out of the ordinary revenue of the state. +It would be altogether chimerical, therefore, +to expect that the public debt should ever be +completely discharged, by any savings which +are likely to be made from that ordinary revenue +as it stands at present.</p> + +<p>The public funds of the different indebted +nations of Europe, particularly those of England, +have, by one author, been represented +as the accumulation of a great capital, superadded +to the other capital of the country, by +means of which its trade is extended, its +manufactures are multiplied, and its lands +cultivated and improved, much beyond what +they could have been by means of that other +capital only. He does not consider that the +capital which the first creditors of the public +advanced to government, was, from the moment +in which he advanced it, a certain portion +of the annual produce, turned away from +serving in the function of a capital, to serve +in that of a revenue; from maintaining productive +labourers, to maintain unproductive +ones, and to be spent and wasted, generally in +the course of the year, without even the hope +of any future reproduction. In return for +the capital which they advanced, they obtained, +indeed, an annuity of the public funds, in +most cases, of more than equal value. This +annuity, no doubt, replaced to them their capital, +and enabled them to carry on their trade +and business to the same, or, perhaps, to a +greater extent than before; that is, they were +enabled, either to borrow of other people a +new capital, upon the credit of this annuity +or, by selling it, to get from other people a +new capital of their own, equal, or superior, to +that which they had advanced to government. +This new capital, however, which they in this +manner either bought or borrowed of other +people, must have existed in the country before, +and must have been employed, as all capitals +are, in maintaining productive labour. +When it came into the hands of those who +had advanced their money to government, +though it was, in some respects, a new capital +to them, it was not so to the country, but was +only a capital withdrawn from certain employments, +in order to be turned towards +others. Though it replaced to them what +they had advanced to government, it did not +replace it to the country. Had they not advanced +this capital to government, there would +have been in the country two capitals, two +portions of the annual produce, instead of +one, employed in maintaining productive labour.</p> + +<p>When, for defraying the expense 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 only turned away from maintaining +one species of unproductive labour, +towards maintaining another. Some part of<span class='pagenum'><a name="Page_394" id="Page_394">[Pg 394]</a></span> +what they pay in those taxes, might, no doubt, +have been accumulated into capital, and consequently +employed in maintaining productive +labour; but the greater part would probably +have been spent, and consequently employed +in maintaining unproductive labour. +The public expense, however, when defrayed +in this manner, no doubt hinders, more or less, +the further accumulation of new capital; but +it does not necessarily occasion the destruction +of any actually-existing capital.</p> + +<p>When the public expense is defrayed by +funding, it is defrayed by the annual destruction +of some capital which had before existed +in the country; by the perversion of some +portion of the annual produce which had before +been destined for the maintenance of productive +labour, towards that of unproductive +labour. As in this case, however, the taxes +are lighter than they would have been, had a +revenue sufficient for defraying the same expense +been raised within the year; the private +revenue of individuals is necessarily less burdened, +and consequently their ability to save +and accumulate some part of that revenue into +capital, is a good deal less impaired. If the +method of funding destroys more old capital, +it, at the same time, hinders less the accumulation +or acquisition of new capital, than that +of defraying the public expense by a revenue +raised within the year. Under the system of +funding, the frugality and industry of private +people can more easily repair the breaches +which the waste and extravagance of government +may occasionally make in the general +capital of the society.</p> + +<p>It is only during the continuance of war, +however, that the system of funding has this +advantage over the other system. Were the +expense of war to be defrayed always by a revenue +raised within the year, the taxes from +which that extraordinary revenue was drawn +would last no longer than the war. The ability +of private people to accumulate, though +less during the war, would have been greater +during the peace, than under the system of +funding. War would not necessarily have +occasioned the destruction of any old capitals, +and peace would have occasioned the accumulation +of many more new. Wars would, +in general, be more speedily concluded, and +less wantonly undertaken. The people feeling, +during continuance of war, the complete +burden of it, would soon grow weary of it; +and government, in order to humour them, +would not be under the necessity of carrying +it on longer than it was necessary to do so. +The foresight of the heavy and unavoidable +burdens of war would hinder the people from +wantonly calling for it when there was no +real or solid interest to fight for. The seasons +during which the ability of private people +to accumulate was somewhat impaired, +would occur more rarely, and be of shorter +continuance. Those, on the contrary, during +which that ability was in the highest vigour, +would be of much longer duration than they +can well be under the system of funding.</p> + +<p>When funding, besides, has made a certain +progress, the multiplication of taxes which it +brings along with it, sometimes impairs as +much the ability of private people to accumulate, +even in time of peace, as the other system +would in time of war. The peace revenue +of Great Britain amounts at present to +more than ten millions a year. If free and +unmortgaged, it might be sufficient, with proper +management, and without contracting a +shilling of new debt, to carry on the most vigorous +war. The private revenue of the inhabitants +of Great Britain is at present as +much incumbered in time of peace, their ability +to accumulate is as much impaired, as it +would have been in the time of the most expensive +war, had the pernicious system of +funding never been adopted.</p> + +<p>In the payment of the interest of the public +debt, it has been said, it is the right hand +which pays the left. The money does not go +out of the country. It is only a part of the +revenue of one set of the inhabitants which is +transferred to another; and the nation is not +a farthing the poorer. This apology is founded +altogether in the sophistry of the mercantile +system; and, after the long examinatior, +which I have already bestowed upon that system, +it may, perhaps, be unnecessary to say +any thing further about it. It supposes, besides, +that the whole public debt is owing to +the inhabitants of the country, which happens +not to be true; the Dutch, as well as several +other foreign nations, having a very considerable +share in our public funds. But though +the whole debt were owing to the inhabitants +of the country, it would not, upon that account, +be less pernicious.</p> + +<p>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 employed in agriculture, +manufactures, or commerce. The management +of those two original sources of revenue +belongs to two different sets of people; the +proprietors of land, and the owners or employers +of capital stock.</p> + +<p>The proprietor of land is interested, for the +sake of his own revenue, to keep his estate in +as good condition as he can, by building and +repairing his tenants houses, by making and +maintaining the necessary drains and inclosures, +and all those other expensive improvements +which it properly belongs to the landlord +to make and maintain. But, by different +land taxes, the revenue of the landlord may +be so much diminished, and, by different duties +upon the necessaries and conveniencies of +life, that diminished revenue maybe rendered +of so little real value, that he may find himself +altogether unable to make or maintain +those expensive improvements. When the<span class='pagenum'><a name="Page_395" id="Page_395">[Pg 395]</a></span> +landlord, however, ceases to do his part, it is +altogether impossible that the tenant should +continue to do his. As the distress of the landlord +increases, the agriculture of the country +must necessarily decline.</p> + +<p>When, by different taxes upon the necessaries +and conveniencies of life, the owners +and employers of capital stock find, that whatever +revenue they derive from it, will not, in a +particular country, purchase the same quantity +of those necessaries and conveniencies +which an equal revenue would in almost any +other, they will be disposed to remove to some +other. And when, in order to raise those +taxes, all or the greater part of merchants and +manufacturers, that is, all or the greater part +of the employers of great capitals, come to +be continually exposed to the mortifying and +vexatious visits of the tax-gatherers, this disposition +to remove will soon be changed into an +actual removing. The industry of the country +will necessarily fall with the removal of +the capital which supported it, and the ruin of +trade and manufactures will follow the declension +of agriculture.</p> + +<p>To transfer from the owners of those two +great sources of revenue, land, and capital +stock, from the persons immediately interested +in the good condition of every particular +portion of land, and in the good management +of every particular portion of capital stock, to +another set of persons (the creditors of the +public, who have no such particular interest), the +greater part of the revenue arising from either, +must, in the long-run, occasion both the neglect +of land, and the waste or removal of +capital stock. A creditor of the public has, +no doubt, a general interest in the prosperity +of the agriculture, manufactures, and commerce +of the country; and consequently in the good +condition of its land, and in the good management +of its capital stock. Should there +be any general failure or declension in any of +these things, the produce of the different taxes +might no longer be sufficient to pay him the +annuity or interest which is due to him. But +a creditor of the public, considered merely +as such, has no interest in the good condition +of any particular portion of land, or in +the good management of any particular portion +of capital stock. As a creditor of the +public, he has no knowledge of any such particular +portion. He has no inspection of it. +He can have no care about it. Its ruin may +in some cases be unknown to him, and cannot +directly affect him.</p> + +<p>The practice of funding has gradually enfeebled +every state which has adopted it. The +Italian republics seem to have begun it. Genoa +and Venice, the only two remaining which +can pretend to an independent existence, have +both been enfeebled by it. Spain seems to +have learned the practice from the Italian republics, +and (its taxes being probably less +judicious than theirs) it has, in proportion to +its natural strength, been still more enfeebled. +The debts of Spain are of very old standing. +It was deeply in debt before the end of the +sixteenth century, about a hundred years before +England owed a shilling. France, notwithstanding +all its natural resources, languishes +under an oppressive load of the same +kind. The republic of the United Provinces +is as much enfeebled by its debts as either +Genoa or Venice. Is it likely that, in Great +Britain alone, a practice, which has brought +either weakness or dissolution into every other +country, should prove altogether innocent?</p> + +<p>The system of taxation established in those +different countries, it may be said, is inferior +to that of England. I believe it is so. But it +ought to be remembered, that when the wisest +government has exhausted all the proper subjects +of taxation, it must, in cases of urgent +necessity, have recourse to improper ones. +The wise republic of Holland has, upon some +occasions, been obliged to have recourse to taxes +as inconvenient as the greater part of those of +Spain. Another war, begun before any considerable +liberation of the public revenue had +been brought about, and growing in its progress +as expensive as the last war, may, from +irresistible necessity, render the British system +of taxation as oppressive as that of Holland, +or even as that of Spain. To the +honour of our present system of taxation, indeed, +it has hitherto given so little embarrassment +to industry, that, during the course even +of the most expensive wars, the frugality and +good conduct of individuals seem to have +been able, by saving and accumulation, to repair +all the breaches which the waste and extravagance +of government had made in the general +capital of the society. At the conclusion +of the late war, the most expensive that Great +Britain ever waged, her agriculture was as +flourishing, her manufacturers as numerous +and as fully employed, and her commerce as +extensive, as they had ever been before. The +capital, therefore, which supported all those +different branches of industry, must have been +equal to what it had ever been before. Since +the peace, agriculture has been still further +improved; the rents of houses have risen in +every town and village of the country, a proof +of the increasing wealth and revenue of the +people; and the annual amount of the greater +part of the old taxes, of the principal branches +of the excise and customs, in particular, has +been continually increasing, an equally clear +proof of an increasing consumption, and consequently +of an increasing produce, which +could alone support that consumption. Great +Britain seems to support with ease, a burden +which, half a century ago, nobody believed her +capable of supporting. Let us not, however, +upon this account, rashly conclude that she is +capable of supporting any burden; not even<span class='pagenum'><a name="Page_396" id="Page_396">[Pg 396]</a></span> +be too confident that she could support, without +great distress, a burden a little greater +than what has already been laid upon her.</p> + +<p>When national debts have once been accumulated +to a certain degree, there is scarce, I +believe, a single instance of their having been +fairly and completely paid. The liberation +of the public revenue, if it has ever been +brought about at all, has always been brought +about by a bankruptcy; sometimes by an avowed +one, though frequently by a pretended +payment.</p> + +<p>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. +If a sixpence, for example, should, either +by act of parliament or royal proclamation, +be raised to the denomination of a shilling, +and twenty sixpences to that of a pound sterling; +the person who, under the old denomination, +had borrowed twenty shillings, or near +four ounces of silver, would, under the new, +pay with twenty sixpences, or with something +less than two ounces. A national debt of +about a hundred and twenty-eight millions, +near the capital of the funded and unfunded +debt of Great Britain, might, in this manner, +be paid with about sixty-four millions +of our present money. It would, indeed, be +a pretended payment only, and the creditors +of the public would really be defrauded of ten +shillings in the pound of what was due to +them. The calamity, too, would extend much +further than to the creditors of the public, +and those of every private person would suffer +a proportionable loss; and this without +any advantage, but in most cases with a great +additional loss, to the creditors of the public. +If the creditors of the public, indeed, were +generally much in debt to other people, they +might in some measure compensate their loss +by paying their creditors in the same coin in +which the public had paid them. But in most +countries, the creditors of the public are, the +greater part of them, wealthy people, who stand +more in the relation of creditors than in that +of debtors, towards the rest of their fellow-citizens. +A pretended payment of this kind, +therefore, instead of alleviating, aggravates, in +most cases, the loss of the creditors of the +public; and, without any advantage to the +public, extends the calamity to a great number +of other innocent people. It occasions a +general and most pernicious subversion of the +fortunes of private people; enriching, in +most cases, the idle and profuse debtor, at +the expense of the industrious and frugal +creditor; and transporting a great part of the +national capital from the hands which were +likely to increase and improve it, to those who +are likely to dissipate and destroy it. When +it becomes necessary for a state to declare itself +bankrupt, in the same manner as when it +becomes necessary for an individual to do so, +a fair, open, and avowed bankruptcy, is always +the measure which is both least dishonourable +to the debtor, and least hurtful to the +creditor. The honour of a state is surely +very poorly provided for, when, in order to +cover the disgrace of a real bankruptcy, it +has recourse to a juggling trick of this kind, +so easily seen through, and at the same time +so extremely pernicious.</p> + +<p>Almost all states, however, ancient as well +as modern, when reduced to this necessity, +have, upon some occasions, played this very +juggling trick. The Romans, at the end of +the first Punic war, reduced the As, the coin +or denomination by which they computed the +value of all their other coins, from containing +twelve ounces of copper, to contain only two +ounces; that is, they raised two ounces of +copper to a denomination which had always +before expressed the value of twelve ounces. +The republic was, in this manner, enabled to +pay the great debts which it had contracted +with the sixth part of what it really owed. +So sudden and so great a bankruptcy, we +should in the present times be apt to imagine, +must have occasioned a very violent popular +clamour. It does not appear to have occasioned +any. The law which enacted it was, +like all other laws relating to the coin, introduced +and carried through the assembly of the +people by a tribune, and was probably a very +popular law. In Rome, as in all other ancient +republics, the poor people were constantly +in debt to the rich and the great, who, in +order to secure their votes at the annual elections, +used to lend them money at exorbitant +interest, which, being never paid, soon accumulated +into a sum too great for the debtor +to pay, or for any body else to pay for him. +The debtor, for fear of a very severe execution, +was obliged, without any further gratuity, to +vote for the candidate whom the creditor recommended. +In spite of all the laws against +bribery and corruption, the bounty of the candidates, +together with the occasional distributions +of coin which were ordered by the senate, +were the principal funds from which, during +the latter times of the Roman republic, the +poorer citizens derived their subsistence. To +deliver themselves from this subjection to +their creditors, the poorer citizens were continually +calling out, either for an entire abolition +of debts, or for what they called new +tables; that is, for a law which should entitle +them to a complete acquittance, upon paying +only a certain proportion of their accumulated +debts. The law which reduced the coin +of all denominations to a sixth part of its former +value, as it enabled them to pay their +debts with a sixth part of what they really +owed, was equivalent to the most advantageous +new tables. In order to satisfy the people, +the rich and the great were, upon several +different occasions, obliged to consent to laws, +both for abolishing debts, and for introducing +new tables; and they probably were induced +to consent to this law, partly for the same<span class='pagenum'><a name="Page_397" id="Page_397">[Pg 397]</a></span> +reason, and partly that, by liberating the public +revenue, they might restore vigour to that +government, of which they themselves had +the principal direction. An operation of +this kind would at once reduce a debt of +L.128,000,000 to L.21,333,333 : 6 : 8. In +the course of the second Punic war, the As +was still further reduced, first, from two +ounces of copper to one ounce, and afterwards +from one ounce to half an ounce; that +is, to the twenty-fourth part of its original +value. By combining the three Roman operations +into one, a debt of a hundred and +twenty-eight millions of our present money, +might in this manner be reduced all at once +to a debt of L.5,333,333 : 6 : 8. Even the +enormous debt of Great Britain might in this +manner soon be paid.</p> + +<p>By means of such expedients, the coin of, +I believe, all nations, has been gradually reduced +more and more below its original value, +and the same nominal sum has been gradually +brought to contain a smaller and a smaller +quantity of silver.</p> + +<p>Nations have sometimes, for the same purpose, +adulterated the standard of their coin; +that is, have mixed a greater quantity of alloy +in it. If in the pound weight of our silver +coin, for example, instead of eighteen penny-weight, +according to the present standard, +there were mixed eight ounces of alloy; a +pound sterling, or twenty shillings of such +coin, would be worth little more than six shillings +and eightpence of our present money. +The quantity of silver contained in six shillings +and eightpence of our present money, +would thus be raised very nearly to the denomination +of a pound sterling. The adulteration +of the standard has exactly the same effect +with what the French call an augmentation, +or a direct raising of the denomination of the +coin.</p> + +<p>An augmentation, or a direct raising of the +denomination of the coin, always is, and from +its nature must be, an open and avowed operation. +By means of it, pieces of a smaller +weight and bulk are called by the same name, +which had before been given to pieces of a +greater weight and bulk. The adulteration +of the standard, on the contrary, has generally +been a concealed operation. By means of it, +pieces are issued from the mint, of the same +denomination, and, as nearly as could be contrived, +of the same weight, bulk, and appearance, +with pieces which had been current before +of much greater value. When king John +of France,<a name="FNanchor_79_79" id="FNanchor_79_79"></a><a href="#Footnote_79_79" class="fnanchor">[79]</a> in order to pay his debts, adulterated +his coin, all the officers of his mint +were sworn to secrecy. Both operations are +unjust. But a simple augmentation is an injustice +of open violence; whereas an adulteration +is an injustice of treacherous fraud. +This latter operation, therefore, as soon as it +has been discovered, and it could never be +concealed very long, has always excited much +greater indignation than the former. The +coin, after any considerable augmentation, has +very seldom been brought back to its former +weight; but after the greatest adulterations, it +has almost always been brought back to its +former fineness. It has scarce ever happened, +that the fury and indignation of the people +could otherwise be appeased.</p> + +<p>In the end of the reign of Henry VIII., +and in the beginning of that of Edward VI., +the English coin was not only raised in its +denomination, but adulterated in its standard. +The like frauds were practised in Scotland +during the minority of James VI. They +have occasionally been practised in most other +countries.</p> + +<p>That the public revenue of Great Britain +can never be completely liberated, or even +that any considerable progress can ever be +made towards that liberation, while the surplus +of that revenue, or what is over and above +defraying the annual expense of the peace +establishment, is so very small, it seems altogether +in vain to expect. That liberation, it +is evident, can never be brought about, without +either some very considerable augmentation +of the public revenue, or some equally +considerable reduction of the public expense.</p> + +<p>A more equal land tax, a more equal tax +upon the rent of houses, and such alterations +in the present system of customs and excise +as those which have been mentioned in the +foregoing chapter, might, perhaps, without +increasing the burden of the greater part of +the people, but only distributing the weight +of it more equally upon the whole, produce a +considerable augmentation of revenue. The +most sanguine projector, however, could scarce +flatter himself, that any augmentation of this +kind would be such as could give any reasonable +hopes, either of liberating the public revenue +altogether, or even of making such progress +towards that liberation in time of peace, +as either to prevent or to compensate the further +accumulation of the public debt in the +next war.</p> + +<p>By extending the British system of taxation +to all the different provinces of the empire, inhabited +by people either of British or European +extraction, a much greater augmentation +of revenue might be expected. This, however, +could scarce, perhaps, be done, consistently +with the principles of the British constitution, +without admitting into the British +parliament, or, if you will, into the states-general +of the British empire, a fair and equal +representation of all those different provinces; +that of each province bearing the same proportion +to the produce of its taxes, as the representation +of Great Britain might bear to +the produce of the taxes levied upon Great +Britain. The private interest of many power<span class='pagenum'><a name="Page_398" id="Page_398">[Pg 398]</a></span>ful +individuals, the confirmed prejudices of +great bodies of people, seem, indeed, at present, +to oppose to so great a change, such obstacles +as it may be very difficult, perhaps altogether +impossible, to surmount. Without, +however, pretending to determine whether +such a union be practicable or impracticable, +it may not, perhaps, be improper, in a speculative +work of this kind, to consider how far +the British system of taxation might be applicable +to all the different provinces of the empire; +what revenue might be expected from +it, if so applied; and in what manner a general +union of this kind might be likely to affect +the happiness and prosperity of the different +provinces comprehended within it. Such +a speculation, can, at worst, be regarded but +as a new Utopia, less amusing, certainly, but +no more useless and chimerical than the old +one.</p> + +<p>The land tax, the stamp duties, and the +different duties of customs and excise, constitute +the four principal branches of the British +taxes.</p> + +<p>Ireland is certainly as able, and our American +and West India plantations more able, +to pay a land tax, than Great Britain. Where +the landlord is subject neither to tythe nor +poor's rate, he must certainly be more able to +pay such a tax, than where he is subject to +both those other burdens. The tythe, where +there is no modus, and where it is levied in +kind, diminishes more what would otherwise +be the rent of the landlord, than a land tax +which really amounted to five shillings in the +pound. Such a tythe will be found, in most +cases, to amount to more than a fourth part +of the real rent of the land, or of what remains +after replacing completely the capital of the +farmer, together with his reasonable profit. If +all moduses and all impropriations were taken +away, the complete church tythe of Great Britain +and Ireland could not well be estimated +at less than six or seven millions. If there +was no tythe either in Great Britain or Ireland, +the landlords could afford to pay six or +seven millions additional land tax, without +being more burdened than a very great part +of them are at present. America pays no +tythe, and could, therefore, very well afford +to pay a land tax. The lands in America +and the West Indies, indeed, are, in general, +not tenanted nor leased out to farmers. They +could not, therefore, be assessed according to +any rent roll. But neither were the lands of +Great Britain, in the 4th of William and +Mary, assessed according to any rent roll, but +according to a very loose and inaccurate estimation. +The lands in America might be assessed +either in the same manner, or in according +to an equitable valuation, in consequence +of an accurate survey, like that which was +lately made in the Milanese, and in the dominions +of Austria, Prussia, and Sardinia.</p> + +<p>Stamp duties, it is evident, might be levied +without any variation, in all countries where +the forms of law process, and the deeds by +which property, both real and personal, is +transferred, are the same, or nearly the same.</p> + +<p>The extension of the custom-house laws of +Great Britain to Ireland and the plantations, +provided it was accompanied, as in justice it +ought to be, with an extension of the freedom +of trade, would be in the highest degree +advantageous to both. All the invidious restraints +which at present oppress the trade of +Ireland, the distinction between the enumerated +and non-enumerated commodities of America, +would be entirely at an end. The +countries north of Cape Finisterre would be +as open to every part of the produce of America, +as those south of that cape are to some +parts of that produce at present. The trade +between all the different parts of the British +empire would, in consequence of this uniformity +in the customs-house laws, be as free as +the coasting trade of Great Britain is at present. +The British empire would thus afford, +within itself, an immense internal market for +every part of the produce of all its different +provinces. So great an extension of market +would soon compensate, both to Ireland and +the plantations, all that they could suffer from +the increase of the duties of customs.</p> + +<p>The excise is the only part of the British +system of taxation, which would require to +be varied in any respect, according as it was +applied to the different provinces of the empire. +It might be applied to Ireland without +any variation; the produce and consumption +of that kingdom being exactly of the +same nature with those of Great Britain. In +its application to America and the West Indies, +of which the produce and consumption +are so very different from those of Great Britain, +some modification might be necessary, +in the same manner as in its application to +the cyder and beer counties of England.</p> + +<p>A fermented liquor, for example, which is +called beer, but which, as it is made of molasses, +bears very little resemblance to our +beer, makes a considerable part of the common +drink of the people in America. This +liquor, as it can be kept only for a few days, +cannot, like our beer, be prepared and stored +up for sale in great breweries, but every private +family must brew it for their own use, +in the same manner as they cook their victuals. +But to subject every private family to +the odious visits and examination of the tax-gatherers, +in the same manner as we subject +the keepers of alehouses and the brewers for +public sale, would be altogether inconsistent +with liberty. If, for the sake of equality, it +was thought necessary to lay a tax upon this +liquor, it might be taxed by taxing the material +of which it is made, either at the place of +manufacture, or, if the circumstances of the +trade rendered such an excise improper, by +laying a duty upon its importation into the<span class='pagenum'><a name="Page_399" id="Page_399">[Pg 399]</a></span> +colony in which it was to be consumed. Besides +the duty of one penny a-gallon imposed +by the British parliament upon the importation +of molasses into America, there is a provincial +tax of this kind upon their importation +into Massachusetts Bay, in ships belonging +to any other colony, of eightpence the hogshead; +and another upon their importation +from the northern colonies into South Carolina, +of fivepence the gallon. Or, if neither +of these methods was found convenient, each +family might compound for its consumption +of this liquor, either according to the number +of persons of which it consisted, in the same +manner as private families compound for the +malt tax in England; or according to the +different ages and sexes of those persons, in +the same manner as several different taxes are +levied in Holland; or, nearly as Sir Matthew +Decker proposes, that all taxes upon consumable +commodities should be levied in England. +This mode of taxation, it has already +been observed, when applied to objects of a +speedy consumption, is not a very convenient +one. It might be adopted, however, in cases +where no better could be done.</p> + +<p>Sugar, rum, and tobacco, are commodities +which are nowhere necessaries of life, which +are become objects of almost universal consumption, +and which are, therefore, extremely +proper subjects of taxation. If a union with +the colonies were to take place, those commodities +might be taxed, either before they +go out of the hands of the manufacturer or +grower; or, if this mode of taxation did not +suit the circumstances of those persons, they +might be deposited in public warehouses, both +at the place of manufacture, and at all the +different ports of the empire, to which they +might afterwards be transported, to remain +there, under the joint custody of the owner +and the revenue officer, till such time as they +should be delivered out, either to the consumer, +to the merchant-retailer for home consumption, +or to the merchant-exporter; the +tax not to be advanced till such delivery. +When delivered out for exportation, to go +duty-free, upon proper security being given, +that they should really be exported out of the +empire. These are, perhaps, the principal +commodities, with regard to which the union +with the colonies might require some considerable +change in the present system of British +taxation.</p> + +<p>What might be the amount of the revenue +which this system of taxation, extended to all +the different provinces of the empire, might +produce, it must, no doubt, be altogether impossible +to ascertain with tolerable exactness. +By means of this system, there is annually +levied in Great Britain, upon less than eight +millions of people, more than ten millions of +revenue. Ireland contains more than two +millions of people, and, according to the accounts +laid before the congress, the twelve +associated provinces of America contain more +than three. Those accounts, however, may +have been exaggerated, in order, perhaps, either +to encourage their own people, or to intimidate +those of this country; and we shall +suppose, therefore, that our North American +and West Indian colonies, taken together, contain +no more than three millions; or that the +whole British empire, in Europe and America, +contains no more than thirteen millions +of inhabitants. If, upon less than eight millions +of inhabitants, this system of taxation +raises a revenue of more than ten millions +sterling; it ought, upon thirteen millions of +inhabitants, to raise a revenue of more than +sixteen millions two hundred and fifty thousand +pounds sterling. From this revenue, +supposing that this system could produce it, +must be deducted the revenue usually raised +in Ireland and the plantations, for defraying +the expense of the respective civil governments. +The expense of the civil and +military establishment of Ireland, together +with the interest of the public debt, amounts, +at a medium of the two years which ended +March 1775, to something less than seven +hundred and fifty thousand pounds a-year. +By a very exact account of the revenue +of the principal colonies of America and +the West Indies, it amounted, before the +commencement of the present disturbances, +to a hundred and forty-one thousand eight +hundred pounds. In this account, however, +the revenue of Maryland, of North Carolina, +and of all our late acquisitions, both upon +the continent, and in the islands, is omitted; +which may, perhaps, make a difference +of thirty or forty thousand pounds. For the +sake of even numbers, therefore, let us suppose +that the revenue necessary for supporting +the civil government of Ireland and the +plantations may amount to a million. There +would remain, consequently, a revenue of fifteen +millions two hundred and fifty thousand +pounds, to be applied towards defraying the +general expense of the empire, and towards +paying the public debt. But if, from the present +revenue of Great Britain, a million could, +in peaceable times, be spared towards the payment +of that debt, six millions two hundred +and fifty thousand pounds could very well be +spared from this improved revenue. This great +sinking fund, too, might be augmented every +year by the interest of the debt which had +been discharged the year before; and might, +in this manner, increase so very rapidly, as to +be sufficient in a few years to discharge the +whole debt, and thus to restore completely +the at-present debilitated and languishing vigour +of the empire. In the mean time, the +people might be relieved from some of the +most burdensome taxes; from those which +are imposed either upon the necessaries of life, +or upon the materials of manufacture. The +labouring poor would thus be enabled to live<span class='pagenum'><a name="Page_400" id="Page_400">[Pg 400]</a></span> +better, to work cheaper, and to send their +goods cheaper to market. The cheapness of +their goods would increase the demand for +them, and consequently for the labour of those +who produced them. This increase in the +demand for labour would both increase the +numbers, and improve the circumstances of +the labouring poor. Their consumption would +increase, and, together with it, the revenue +arising from all those articles of their consumption +upon which the taxes might be allowed +to remain.</p> + +<p>The revenue arising from this system of +taxation, however, might not immediately increase +in proportion to the number of people +who were subjected to it. Great indulgence +would for some time be due to those provinces +of the empire which were thus subjected +to burdens to which they had not before +been accustomed; and even when the +same taxes came to be levied everywhere as +exactly as possible, they would not everywhere +produce a revenue proportioned to the +numbers of the people. In a poor country, +the consumption of the principal commodities +subject to the duties of customs and excise, is +very small; and in a thinly inhabited country, +the opportunities of smuggling are very +great. The consumption of malt liquors among +the inferior ranks of people in Scotland +is very small; and the excise upon malt, beer, +and ale, produces less there than in England, +in proportion to the numbers of the people +and the rate of the duties, which upon malt +is different, on account of a supposed difference +of quality. In these particular branches +of the excise, there is not, I apprehend, much +more smuggling in the one country than in +the other. The duties upon the distillery, and +the greater part of the duties of customs, in +proportion to the numbers of people in the +respective countries, produce less in Scotland +than in England, not only on account of the +smaller consumption of the taxed commodities, +but of the much greater facility of smuggling. +In Ireland, the inferior ranks of people +are still poorer than in Scotland, and +many parts of the country are almost as thinly +inhabited. In Ireland, therefore, the consumption +of the taxed commodities might, in +proportion to the number of the people, be +still less than in Scotland, and the facility of +smuggling nearly the same. In America and +the West Indies, the white people, even of the +lowest rank, are in much better circumstances +than those of the same rank in England; and +their consumption of all the luxuries in which +they usually indulge themselves, is probably +much greater. The blacks, indeed, who make +the greater part of the inhabitants, both of the +southern colonies upon the continent and of +the West India islands, as they are in a state +of slavery, are, no doubt, in a worse condition +than the poorest people either in Scotland +or Ireland. We must not, however, upon +that account, imagine that they are worse +fed, or that their consumption of articles which +might be subjected to moderate duties, is less +than that even of the lower ranks of people +in England. In order that they may work +well, it is the interest of their master that +they should be fed well, and kept in good +heart, in the same manner as it is his interest +that his working cattle should be so. The +blacks, accordingly, have almost everywhere +their allowance of rum, and of molasses or +spruce-beer, in the same manner as the white +servants; and this allowance would not probably +be withdrawn, though those articles +should be subjected to moderate duties. The +consumption of the taxed commodities, therefore, +in proportion to the number of inhabitants, +would probably be as great in America +and the West Indies as in any part of the British +empire. The opportunities of smuggling, +indeed, would be much greater; America, in +proportion to the extent of the country, being +much more thinly inhabited than either +Scotland or Ireland. If the revenue, however, +which is at present raised by the different +duties upon malt and malt liquors, were +to be levied by a single duty upon malt, the +opportunity of smuggling in the most important +branch of the excise would be almost +entirely taken away; and if the duties of customs, +instead of being imposed upon almost +all the different articles of importation, were +confined to a few of the most general use and +consumption, and if the levying of those duties +were subjected to the excise laws, the +opportunity of smuggling, though not so entirely +taken away, would be very much diminished. +In consequence of those two apparently +very simple and easy alterations, the +duties of customs and excise might probably +produce a revenue as great, in proportion to +the consumption of the most thinly inhabited +province, as they do at present, in proportion +to that of the most populous.</p> + +<p>The Americans, it has been said, indeed, +have no gold or silver money, the interior +commerce of the country being carried on by +a paper currency; and the gold and silver, +which occasionally come among them, being +all sent to Great Britain, in return for the +commodities which they receive from us. But +without gold and silver, it is added, there is +no possibility of paying taxes. We already +get all the gold and silver which they have. +How is it possible to draw from them what +they have not?</p> + +<p>The present scarcity of gold and silver money +in America, is not the effect of the poverty +of that country, or of the inability of the people +there to purchase those metals. In a +country where the wages of labour are so much +higher, and the price of provisions so much +lower than in England, the greater part of +the people must surely have wherewithal to +purchase a greater quantity, if it were either<span class='pagenum'><a name="Page_401" id="Page_401">[Pg 401]</a></span> +necessary or convenient for them to do so. +The scarcity of those metals, therefore, must +be the effect of choice, and not of necessity.</p> + +<p>It is for transacting either domestic or foreign +business, that gold or silver money is +either necessary or convenient.</p> + +<p>The domestic business of every country, it +has been shewn in the second book of this Inquiry, +may, at least in peaceable times, be +transacted by means of a paper currency, with +nearly the same degree of conveniency as by +gold and silver money. It is convenient for +the Americans, who could always employ with +profit, in the improvement of their lands, a +greater stock than they can easily get, to save +as much as possible the expense of so costly +an instrument of commerce as gold and silver; +and rather to employ that part of their +surplus produce which would be necessary for +purchasing those metals, in purchasing the instruments +of trade, the materials of clothing, +several parts of household furniture, and the +iron work necessary for building and extending +their settlements and plantations; in purchasing +not dead stock, but active and productive +stock. The colony governments find +it for their interest to supply the people with +such a quantity of paper money as is fully +sufficient, and generally more than sufficient, +for transacting their domestic business. Some +of those governments, that of Pennsylvania, +particularly, derive a revenue from lending +this paper money to their subjects, at an interest +of so much per cent. Others, like that +of Massachusetts Bay, advance, upon extraordinary +emergencies, a paper money of this +kind for defraying the public expense; and +afterwards, when it suits the conveniency of +the colony, redeem it at the depreciated value +to which it gradually falls. In 1747,<a name="FNanchor_80_80" id="FNanchor_80_80"></a><a href="#Footnote_80_80" class="fnanchor">[80]</a> that +colony paid in this manner the greater part of +its public debts, with the tenth part of the +money for which its bills had been granted. +It suits the conveniency of the planters, to +save the expense of employing gold and silver +money in their domestic transactions; and it +suits the conveniency of the colony governments, +to supply them with a medium, which, +though attended with some very considerable +disadvantages, enables them to save that expense. +The redundancy of paper money necessarily +banishes gold and silver from the +domestic transactions of the colonies, for the +same reason that it has banished those metals +from the greater part of the domestic transactions +in Scotland; and in both countries, it is +not the poverty, but the enterprizing and projecting +spirit of the people, their desire of +employing all the stock which they can get, +as active and productive stock, which has occasioned +this redundancy of paper money.</p> + +<p>In the exterior commerce which the different +colonies carry on with Great Britain, gold +and silver are more or less employed, exactly +in proportion as they are more or less necessary. +Where those metals are not necessary, +they seldom appear. Where they are necessary, +they are generally found.</p> + +<p>In the commerce between Great Britain and +the tobacco colonies, the British goods are +generally advanced to the colonists at a pretty +long credit, and are afterwards paid for in tobacco, +rated at a certain price. It is more +convenient for the colonists to pay in tobacco +than in gold and silver. It would be more +convenient for any merchant to pay for the +goods which his correspondents had sold to +him, in some other sort of goods which he +might happen to deal in, than in money. Such +a merchant would have no occasion to keep +any part of his stock by him unemployed, and +in ready money, for answering occasional demands. +He could have, at all times, a larger +quantity of goods in his shop or warehouse, +and he could deal to a greater extent. But +it seldom happens to be convenient for all the +correspondents of a merchant to receive payment +for the goods which they sell to him, in +goods of some other kind which he happens +to deal in. The British merchants who trade +to Virginia and Maryland, happen to be a +particular set of correspondents, to whom it is +more convenient to receive payment for the +goods which they sell to those colonies in tobacco, +than in gold and silver. They expect to +make a profit by the sale of the tobacco; they +could make none by that of the gold and silver. +Gold and silver, therefore, very seldom +appear in the commerce between Great Britain +and the tobacco colonies. Maryland and +Virginia have as little occasion for those metals +in their foreign, as in their domestic commerce. +They are said, accordingly, to have +less gold and silver money than any other colonies +in America. They are reckoned, however, +as thriving, and consequently as rich, as +any of their neighbours.</p> + +<p>In the northern colonies, Pennsylvania, New +York, New Jersey, the four governments of +New England, &c. the value of their own +produce which they export to Great Britain +is not equal to that of the manufactures which +they import for their own use, and for that of +some of the other colonies, to which they are +the carriers. A balance, therefore, must be +paid to the mother-country in gold and silver, +and this balance they generally find.</p> + +<p>In the sugar colonies, the value of the produce +annually exported to Great Britain is +much greater than that of all the goods imported +from thence. If the sugar and rum +annually sent to the mother-country were paid +for in those colonies, Great Britain would be +obliged to send out, every year, a very large +balance in money; and the trade to the West +Indies would, by a certain species of politicians, +be considered as extremely disadvanta<span class='pagenum'><a name="Page_402" id="Page_402">[Pg 402]</a></span>geous. +But it so happens, that many of the +principal proprietors of the sugar plantations +reside in Great Britain. Their rents are remitted +to them in sugar and rum, the produce +of their estates. The sugar and rum which +the West India merchants purchase in those +colonies upon their own account, are not equal +in value to the goods which they annually sell +there. A balance, therefore, must necessarily +he paid to them in gold and silver, and this +balance, too, is generally found.</p> + +<p>The difficulty and irregularity of payment +from the different colonies to Great Britain, +have not been at all in proportion to the greatness +or smallness of the balances which were +respectively due from them. Payments have, +in general, been more regular from the northern +than from the tobacco colonies, though +the former have generally paid a pretty large +balance in money, while the latter have either +paid no balance, or a much smaller one. The +difficulty of getting payment from our different +sugar colonies has been greater or less +in proportion, not so much to the extent of +the balances respectively due from them, as to +the quantity of uncultivated land which they +contained; that is, to the greater or smaller +temptation which the planters have been under +of over-trading, or of undertaking the +settlement and plantation of greater quantities +of waste land than suited the extent of their +capitals. The returns from the great island +of Jamaica, where there is still much uncultivated +land, have, upon this account, been, in +general, more irregular and uncertain than +those from the smaller islands of Barbadoes, +Antigua, and St. Christopher's, which have, +for these many years, been completely cultivated, +and have, upon that account, afforded +less field for the speculations of the planter. +The new acquisitions of Grenada, Tobago, +St. Vincent's, and Dominica, have opened a +new field for speculations of this kind; and +the returns from those islands have of late been +as irregular and uncertain as those from the +great island of Jamaica.</p> + +<p>It is not, therefore, the poverty of the colonies +which occasions, in the greater part of +them, the present scarcity of gold and silver +money. Their great demand for active and +productive stock makes it convenient for them +to have as little dead stock as possible, and +disposes them, upon that account, to content +themselves with a cheaper, though less commodious +instrument of commerce, than gold +and silver. They are thereby enabled to convert +the value of that gold and silver into the +instruments of trade, into the materials of clothing, +into household furniture, and into the +iron work necessary for building and extending +their settlements and plantations. In +those branches of business which cannot be +transacted without gold and silver money, it +appears, that they can always find the necessary +quantity of those metals; and if they +frequently do not find it, their failure is generally +the effect, not of their necessary poverty, +but of their unnecessary and excessive +enterprise. It is not because they are poor +that their payments are irregular and uncertain, +but because they are too eager to become +excessively rich. Though all that part of the +produce of the colony taxes, which was over +and above what was necessary for defraying +the expense of their own civil and military +establishments, were to be remitted to Great +Britain in gold and silver, the colonies have +abundantly wherewithal to purchase the requisite +quantity of those metals. They would +in this case be obliged, indeed, to exchange a +part of their surplus produce, with which they +now purchase active and productive stock, for +dead stock. In transacting their domestic +business, they would be obliged to employ a +costly, instead of a cheap instrument of commerce; +and the expense of purchasing this +costly instrument might damp somewhat the +vivacity and ardour of their excessive enterprise +in the improvement of land. It might +not, however, be necessary to remit any part +of the American revenue in gold and silver. +It might be remitted in bills drawn upon, and +accepted by, particular merchants or companies +in Great Britain, to whom a part of the +surplus produce of America had been consigned, +who would pay into the treasury the +American revenue in money, after having +themselves received the value of it in goods; +and the whole business might frequently be +transacted without exporting a single ounce +of gold or silver from America.</p> + +<p>It is not contrary to justice, that both Ireland +and America should contribute towards +the discharge of the public debt of Great Britain. +That debt has been contracted in support +of the government established by the Revolution; +a government to which the protestants +of Ireland owe, not only the whole authority +which they at present enjoy in their +own country, but every security which they +possess for their liberty, their property, and +their religion; a government to which several +of the colonies of America owe their present +charters, and consequently their present constitution; +and to which all the colonies of +America owe the liberty, security, and property, +which they have ever since enjoyed. +That public debt has been contracted in the +defence, not of Great Britain alone, but of +all the different provinces of the empire. The +immense debt contracted in the late war in +particular, and a great part of that contracted +in the war before, were both properly contracted +in defence of America.</p> + +<p>By a union with Great Britain, Ireland +would gain, besides the freedom of trade, +other advantages much more important, and +which would much more than compensate any +increase of taxes that might accompany that +union. By the union with England, the<span class='pagenum'><a name="Page_403" id="Page_403">[Pg 403]</a></span> +middling and inferior ranks of people in Scotland +gained a complete deliverance from the +power of an aristocracy, which had always before +oppressed them. By a union with Great +Britain, the greater part of people of all ranks +in Ireland would gain an equally complete +deliverance from a much more oppressive aristocracy; +an aristocracy not founded, like that +of Scotland, in the natural and respectable distinctions +of birth and fortune, but in the most +odious of all distinctions, those of religious and +political prejudices; distinctions which, more +than any other, animate both the insolence of +the oppressors, and the hatred and indignation +of the oppressed, and which commonly render +the inhabitants of the same country more hostile +to one another than those of different +countries ever are. Without a union with +Great Britain, the inhabitants of Ireland are +not likely, for many ages, to consider themselves +as one people.</p> + +<p>No oppressive aristocracy has ever prevailed +in the colonies. Even they, however, would, +in point of happiness and tranquillity, gain +considerably by a union with Great Britain. +It would, at least, deliver them from those +rancourous and virulent factions which are +inseparable from small democracies, and which +have so frequently divided the affections of +their people, and disturbed the tranquillity of +their governments, in their form so nearly +democratical. In the case of a total separation +from Great Britain, which, unless prevented +by a union of this kind, seems very +likely to take place, those factions would be +ten times more virulent than ever. Before +the commencement of the present disturbances, +the coercive power of the mother-country had +always been able to restrain those factions +from breaking out into any thing worse than +gross brutality and insult. If that coercive +power were entirely taken away, they would +probably soon break out into open violence +and bloodshed. In all great countries which +are united under one uniform government, the +spirit of party commonly prevails less in the +remote provinces than in the centre of the empire. +The distance of those provinces from +the capital, from the principal seat of the great +scramble of faction and ambition, makes them +enter less into the views of any of the contending +parties, and renders them more indifferent +and impartial spectators of the conduct of all. +The spirit of party prevails less in Scotland than +in England. In the case of a union, it would +probably prevail less in Ireland than in Scotland; +and the colonies would probably soon +enjoy a degree of concord and unanimity, at +present unknown in any part of the British +empire. Both Ireland and the colonies, indeed, +would be subjected to heavier taxes than +any which they at present pay. In consequence, +however, of a diligent and faithful +application of the public revenue towards the +discharge of the national debt, the greater +part of those taxes might not be of long continuance, +and the public revenue of Great +Britain might soon be reduced to what was +necessary for maintaining a moderate peace-establishment.</p> + +<p>The territorial acquisitions of the East-India +Company, the undoubted right of the +Crown, that is, of the state and people of +Great Britain, might be rendered another +source of revenue, more abundant, perhaps, +than all those already mentioned. Those +countries are represented as more fertile, more +extensive, and, in proportion to their extent, +much richer and more populous than Great +Britain. In order to draw a great revenue +from them, it would not probably be necessary +to introduce any new system of taxation +into countries which are already sufficiently, +and more than sufficiently, taxed. It might, +perhaps, be more proper to lighten than to aggravate +the burden of those unfortunate countries, +and to endeavour to draw a revenue from +them, not by imposing new taxes, but by preventing +the embezzlement and misapplication +of the greater part of those which they already +pay.</p> + +<p>If it should be found impracticable for +Great Britain to draw any considerable augmentation +of revenue from any of the resources +above mentioned, the only resource which +can remain to her, is a diminution of her expense. +In the mode of collecting and in that +of expending the public revenue, though in +both there may be still room for improvement, +Great Britain seems to be at least as economical +as any of her neighbours. The military +establishment which she maintains for her +own defence in time of peace, is more moderate +than that of any European state, which +can pretend to rival her either in wealth +or in power. None of those articles, therefore, +seem to admit of any considerable reduction +of expense. The expense of the +peace-establishment of the colonies was, before +the commencement of the present disturbances, +very considerable, and is an expense which +may, and, if no revenue can be drawn from +them, ought certainly to be saved altogether. +This constant expense in time of peace, though +very great, is insignificant in comparison with +what the defence of the colonies has cost us +in time of war. The last war, which was undertaken +altogether on account of the colonies, +cost Great Britain, it has already been observed, +upwards of ninety millions. The Spanish +war of 1739 was principally undertaken on +their account; in which, and in the French +war that was the consequence of it, Great Britain, +spent upwards of forty millions; a great +part of which ought justly to be charged to +the colonies. In those two wars, the colonies +cost Great Britain much more than double the +sum which the national debt amounted to before +the commencement of the first of them. +Had it not been for those wars, that debt<span class='pagenum'><a name="Page_404" id="Page_404">[Pg 404]</a></span> +might, and probably would by this time, have +been completely paid; and had it not been +for the colonies, the former of those wars +might not, and the latter certainly would not, +have been undertaken. It was because the +colonies were supposed to be provinces of the +British Empire, that this expense was laid out +upon them. But countries which contribute +neither revenue nor military force towards the +support of the empire, cannot be considered as +provinces. They may, perhaps, be considered +as appendages, as a sort of splendid and +shewy equipage of the empire. But if the +empire can no longer support the expense of +keeping up this equipage, it ought certainly to +lay it down; and if it cannot raise its revenue +in proportion to its expense, it ought at least +to accommodate its expense to its revenue. If +the colonies, notwithstanding their refusal to +submit to British taxes, are still to be considered +as provinces of the British empire, +their defence, in some future war, may cost +Great Britain as great an expense as it ever +has done in any former war. The rulers of +Great Britain have, for more than a century +past, amused the people with the imagination +that they possessed a great empire on the west +side of the Atlantic. This empire, however, +has hitherto existed in imagination only. It +has hitherto been, not an empire, but the project +of an empire; not a gold mine, but the +project of a gold mine; a project which has +cost, which continues to cost, and which, if pursued +in the same way as it has been hitherto, is +likely to cost, immense expense, without being +likely to bring any profit; for the effects of the +monopoly of the colony trade, it has been shewn, +are to the great body of the people, mere loss +instead of profit. It is surely now time that +our rulers should either realize this golden +dream, in which they have been indulging +themselves, perhaps, as well as the people; or +that they should awake from it themselves, +and endeavour to awaken the people. If the +project cannot be completed, it ought to be +given up. If any of the provinces of the +British empire cannot be made to contribute +towards the support of the whole empire, it is +surely time that Great Britain should free +herself from the expense of defending those +provinces in time of war, and of supporting +any part of their civil or military establishments +in time of peace; and endeavour to accommodate +her future views and designs to +the real mediocrity of her circumstances.</p> + +<hr style="width: 100%;" /> +<h2>FOOTNOTES:</h2> + +<div class="footnote"><p><a name="Footnote_1_1" id="Footnote_1_1"></a><a href="#FNanchor_1_1"><span class="label">[1]</span></a> It is mentioned, that when about three years old, he was stolen from the door of his +uncle, Mr. Douglas, in Strathenry, where his mother had been on a visit, by some tinkers, +or gypsies. He was rescued in Leslie wood by his uncle, who was thus the happy instrument, +Mr. Stewart observes, of preserving to the world, a genius, which was destined, not +only to extend the boundaries of science, but to enlighten and reform the commercial policy +of Europe.</p></div> + +<div class="footnote"><p><a name="Footnote_2_2" id="Footnote_2_2"></a><a href="#FNanchor_2_2"><span class="label">[2]</span></a> Boswell's Life of Johnson, vol. iv. p. 17</p></div> + +<div class="footnote"><p><a name="Footnote_3_3" id="Footnote_3_3"></a><a href="#FNanchor_3_3"><span class="label">[3]</span></a> Edinburgh Review, vol. i. p. 432.</p></div> + +<div class="footnote"><p><a name="Footnote_4_4" id="Footnote_4_4"></a><a href="#FNanchor_4_4"><span class="label">[4]</span></a> It may not be uninteresting to mention what has been said of the manner in which the +writings of Mr. Smith were composed.—'Mr. Smith observed to me, not long before his +death,' says Mr. Stewart, 'that after all his practice in writing, he composed as slowly, and +with as great difficulty as at first.' He added, at the same time, that Mr. Hume had acquired +so great a facility in this respect, that the last volume of his History was printed from +the original copy, with a few marginal corrections. Mr. Smith, when be was employed in +composition, generally walked up and down his apartment, dictating to a secretary. All +Mr. Hume's works, it has been said, were written with his own hand.</p></div> + +<div class="footnote"><p><a name="Footnote_5_5" id="Footnote_5_5"></a><a href="#FNanchor_5_5"><span class="label">[5]</span></a> This observation, as may easily be perceived, cannot apply in certain indirect imposts, +such as those for the support of the roads; which, as they cannot be confounded with the +price of any consumable commodity, combine all the inconveniencies of indirect, with those +of direct imposts.</p></div> + +<div class="footnote"><p><a name="Footnote_6_6" id="Footnote_6_6"></a><a href="#FNanchor_6_6"><span class="label">[6]</span></a> Plin. Hist. Nat. lib. 33, cap. 3.</p></div> + +<div class="footnote"><p><a name="Footnote_7_7" id="Footnote_7_7"></a><a href="#FNanchor_7_7"><span class="label">[7]</span></a> Pliny, lib. xxxiii. cap. 3.</p></div> + +<div class="footnote"><p><a name="Footnote_8_8" id="Footnote_8_8"></a><a href="#FNanchor_8_8"><span class="label">[8]</span></a> This was written in 1773, before the commencement +of the late disturbances.</p></div> + +<div class="footnote"><p><a name="Footnote_9_9" id="Footnote_9_9"></a><a href="#FNanchor_9_9"><span class="label">[9]</span></a> See his scheme for the maintenance of the poor, in +Burn's History of the Poor Laws.</p></div> + +<div class="footnote"><p><a name="Footnote_10_10" id="Footnote_10_10"></a><a href="#FNanchor_10_10"><span class="label">[10]</span></a> See Denisart, Article Taux des Interests, tom. iii, +p. 18.</p></div> + +<div class="footnote"><p><a name="Footnote_11_11" id="Footnote_11_11"></a><a href="#FNanchor_11_11"><span class="label">[11]</span></a> See Idyllium xxi.</p></div> + +<div class="footnote"><p><a name="Footnote_12_12" id="Footnote_12_12"></a><a href="#FNanchor_12_12"><span class="label">[12]</span></a> See Madox Firma Burgi p. 26 &c.</p></div> + +<div class="footnote"><p><a name="Footnote_13_13" id="Footnote_13_13"></a><a href="#FNanchor_13_13"><span class="label">[13]</span></a> See the Statute of Labourers, 25, Ed. III.</p></div> + +<div class="footnote"><p><a name="Footnote_14_14" id="Footnote_14_14"></a><a href="#FNanchor_14_14"><span class="label">[14]</span></a> Voyages d'un Philosophe.</p></div> + +<div class="footnote"><p><a name="Footnote_15_15" id="Footnote_15_15"></a><a href="#FNanchor_15_15"><span class="label">[15]</span></a> Douglas's Summary, vol. ii, p. 372, 373.</p></div> + +<div class="footnote"><p><a name="Footnote_16_16" id="Footnote_16_16"></a><a href="#FNanchor_16_16"><span class="label">[16]</span></a> See his Preface to Anderson's Diplomata Scotiæ.</p></div> + +<div class="footnote"><p><a name="Footnote_17_17" id="Footnote_17_17"></a><a href="#FNanchor_17_17"><span class="label">[17]</span></a> Lowndes's Essay on the Silver Coin, 68.</p></div> + +<div class="footnote"><p><a name="Footnote_18_18" id="Footnote_18_18"></a><a href="#FNanchor_18_18"><span class="label">[18]</span></a> See Tracts on the Corn Trade, Tract 3.</p></div> + +<div class="footnote"><p><a name="Footnote_19_19" id="Footnote_19_19"></a><a href="#FNanchor_19_19"><span class="label">[19]</span></a> Solorzano, vol. ii.</p></div> + +<div class="footnote"><p><a name="Footnote_20_20" id="Footnote_20_20"></a><a href="#FNanchor_20_20"><span class="label">[20]</span></a> Postscript to the Universal Merchant, p. 15 and 16. +This postscript was not printed till 1756, three years after +the publication of the book, which has never had a +second edition. The postscript is, therefore, to be found +in few copies; it corrects several error in the book.</p></div> + +<div class="footnote"><p><a name="Footnote_21_21" id="Footnote_21_21"></a><a href="#FNanchor_21_21"><span class="label">[21]</span></a> See Ruddiman's Preface to Anderson's Diplomata, +&c. Scotiæ.</p></div> + +<div class="footnote"><p><a name="Footnote_22_22" id="Footnote_22_22"></a><a href="#FNanchor_22_22"><span class="label">[22]</span></a> Lib. x, c. 29.</p></div> + +<div class="footnote"><p><a name="Footnote_23_23" id="Footnote_23_23"></a><a href="#FNanchor_23_23"><span class="label">[23]</span></a> Lib. ix, c. 17.</p></div> + +<div class="footnote"><p><a name="Footnote_24_24" id="Footnote_24_24"></a><a href="#FNanchor_24_24"><span class="label">[24]</span></a> Kalm's Travels, vol. i, p. 343, 344.</p></div> + +<div class="footnote"><p><a name="Footnote_25_25" id="Footnote_25_25"></a><a href="#FNanchor_25_25"><span class="label">[25]</span></a> See Smith's Memoirs of Wool, vol. i. c. 5, 6, 7. also +vol. ii.</p></div> + +<div class="footnote"><p><a name="Footnote_26_26" id="Footnote_26_26"></a><a href="#FNanchor_26_26"><span class="label">[26]</span></a> Wanting in the account. The year 1646 supplied by Bishop Fleetwood.</p></div> + +<div class="footnote"><p><a name="Footnote_27_27" id="Footnote_27_27"></a><a href="#FNanchor_27_27"><span class="label">[27]</span></a> See Ruddiman's Preface to Anderson's Diplomata, &c. Scotiæ.</p></div> + +<div class="footnote"><p><a name="Footnote_28_28" id="Footnote_28_28"></a><a href="#FNanchor_28_28"><span class="label">[28]</span></a> The method described in the text was by no means +either the must common or the most expensive one in +which those adventurers sometimes raised money by +circulation. It frequently happened, that A in Edinburgh +would enable B in London to pay the first bill of +exchange, by drawing, a few days before it became due, +a second bill at three months date upon the same B in +London. This bill, being payable to his own order, A +sold in Edinburgh at par; and with its contents purchased +bills upon London, payable at sight to the order of B, to +whom he sent them by the post. Towards the end of the +late war, the exchange between Edinburgh and London +was frequently three per cent. against Edinburgh, and +those bills at sight must frequently have cost A that premium. +This transaction, therefore, being repeated at +least four times in the year, and being loaded with a +commission of at least one half per cent, upon each repetition, +must at that period have cost A, at least, fourteen +per cent. in the year. At other times A would enable +B to discharge the first bill of exchange, by drawing, +a few days before it became due, a second bill at +two months date, not upon B, but upon some third +person, C, for example, in London. This other bill was +made payable to the order of B, who, upon its being accepted +by C, discounted it with some banker in London; +and A enabled C to discharge it, by drawing, a few days +before it became due, a third bill likewise at two months +date, sometimes upon his first correspondent B and +sometimes upon some fourth or fifth person, D or E, +for example. This third bill was made payable to the +order of C, who, as soon as it was accepted, discounted it +in the same manner with some banker in London. +Such operations being repeated at least six times in the +year, and being loaded with a commission of at least one +half per cent. upon each repetition, together with +legal interest of five per cent. this method of raising money, +in the same manner as described in the text, +must have cost A something more than eight per cent. +By saving, however, the exchange between Edinburgh +and London, it was less expensive than that mentioned +in the foregoing part of this note; but then it required +an established credit with more houses than one in London, +an advantage which many of these adventurers +could not always find it easy to procure.</p></div> + +<div class="footnote"><p><a name="Footnote_29_29" id="Footnote_29_29"></a><a href="#FNanchor_29_29"><span class="label">[29]</span></a> James Postlethwaite's History of the Public Revenue, p. 301</p></div> + +<div class="footnote"><p><a name="Footnote_30_30" id="Footnote_30_30"></a><a href="#FNanchor_30_30"><span class="label">[30]</span></a> Some French authors of great learning and ingenuity +have used those words in a different sense. In +the last chapter of the fourth book, I shall endeavour to +shew that their sense is an improper one.</p></div> + +<div class="footnote"><p><a name="Footnote_31_31" id="Footnote_31_31"></a><a href="#FNanchor_31_31"><span class="label">[31]</span></a> See Brady's Historical Treatise of Cities and Boroughs, +p. 3. &c.</p></div> + +<div class="footnote"><p><a name="Footnote_32_32" id="Footnote_32_32"></a><a href="#FNanchor_32_32"><span class="label">[32]</span></a> See Madox, Firma Burgi, p. 18; also History of the +Exchequer, chap. 10, sect. v, p. 223, first edition.</p></div> + +<div class="footnote"><p><a name="Footnote_33_33" id="Footnote_33_33"></a><a href="#FNanchor_33_33"><span class="label">[33]</span></a> See Madox, Firma Burgi. See also Pfeffel in the +Remarkable events under Frederick II. and his Successors +of the House of Suabia.</p></div> + +<div class="footnote"><p><a name="Footnote_34_34" id="Footnote_34_34"></a><a href="#FNanchor_34_34"><span class="label">[34]</span></a> See Madox</p></div> + +<div class="footnote"><p><a name="Footnote_35_35" id="Footnote_35_35"></a><a href="#FNanchor_35_35"><span class="label">[35]</span></a> See Pfeffel</p></div> + +<div class="footnote"><p><a name="Footnote_36_36" id="Footnote_36_36"></a><a href="#FNanchor_36_36"><span class="label">[36]</span></a> See Sandi Istoria civile de Vinezia, part 2, vol. i, +page 247 and 256.</p></div> + +<div class="footnote"><p><a name="Footnote_37_37" id="Footnote_37_37"></a><a href="#FNanchor_37_37"><span class="label">[37]</span></a> The following are the prices at which the bank of +Amsterdam at present (September 1775) receives bullion +and coin of different kinds:</p> + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><td align='center'>SILVER.</td></tr> +<tr><td align='left'>Mexico dollars</td><td align='left' rowspan='3'><span class="ft30">}</span> Guilders. B—22 per mark.</td></tr> +<tr><td align='left'>French crowns</td></tr> +<tr><td align='left'>English silver coin</td></tr> +<tr><td align='left'>Mexico dollars, new coin </td><td align='right'>21 10</td></tr> +<tr><td align='left'>Ducatoons</td><td align='right'>3 0</td></tr> +<tr><td align='left'>Rix-dollars</td><td align='right'>2 8</td></tr> +</table></div> + +<p>Bar silver, containing 11-12ths fine silver, 21 per mark, +and in this proportion down to 1-4th fine, on which 5 +guilders are given.</p> + +<p>Fine bars, 28 per mark.</p> + + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><td align='center'>GOLD.</td></tr> +<tr><td align='left'>Portugal coin</td><td align='left' rowspan='3'><span class="ft30">}</span> B—310 per mark.</td></tr> +<tr><td align='left'>Guineas</td></tr> +<tr><td align='left'>Louis d'ors, new</td></tr> +<tr><td align='left'>Ditto old</td><td align='left'>300</td></tr> +<tr><td align='left'>New ducats</td><td align='left'> 4 19 8 per ducat.</td></tr> +</table></div> + +<p>Bar or ingot gold is received in proportion to its fineness, +compared with the above foreign gold coin. Upon +fine bars the bank gives 340 per mark. In general, however, +something more is given upon coin of a known +fineness, than upon gold and silver bars, of which the +fineness cannot be ascertained but by a process of melting +and assaying.</p></div> + +<div class="footnote"><p><a name="Footnote_38_38" id="Footnote_38_38"></a><a href="#FNanchor_38_38"><span class="label">[38]</span></a> This paragraph was written in the year 1775.</p></div> + +<div class="footnote"><p><a name="Footnote_39_39" id="Footnote_39_39"></a><a href="#FNanchor_39_39"><span class="label">[39]</span></a> See the accounts at the end of this Book.</p></div> + +<div class="footnote"><p><a name="Footnote_40_40" id="Footnote_40_40"></a><a href="#FNanchor_40_40"><span class="label">[40]</span></a> Before the 13th of the present king, the following were the duties payable upon the importation of the different +sorts of grain:</p> + + +<div class='center'> +<table border="0" cellpadding="1" cellspacing="0" summary=""> +<tr><th><i>Grain.</i></th><th><i>Duties.</i></th><th><i>Duties.</i></th><th><i>Duties.</i></th></tr> +<tr><td align='left'>Beans to 28s. per qr.</td><td align='left'>19s. 10d. after till 40s. </td><td align='left'>16s. 8d.</td><td align='right'>then 12d.</td></tr> +<tr><td align='left'>Barley to 28s.</td><td align='left'>19s. 10d. after till 32s.</td><td align='left'>16s.</td><td align='right'>12d.</td></tr> +<tr><td align='left' colspan='2'>Malt is prohibited by the annual malt-tax bill.</td></tr> +<tr><td align='left'>Oats to 16s.</td><td align='left'>5s. 10d. after</td><td align='left'></td><td align='right'>9½d.</td></tr> +<tr><td align='left'>Pease to 40s.</td><td align='left'>16s. 0d. after</td><td align='left'></td><td align='right'>9¾d.</td></tr> +<tr><td align='left'>Rye to 36s.</td><td align='left'>19s. 10d. till 40s.</td><td align='left'>16s. 8d. </td><td align='right'>then 12d.</td></tr> +<tr><td align='left'>Wheat to 44s.</td><td align='left'>21s. 9d. till 53s. 4d.</td><td align='left'>17s.</td><td align='right'>then 8s.</td></tr> +<tr><td align='left'> till L.4, and after that about 1s. 4d.</td></tr> +<tr><td align='left'>Buck-wheat to 32s. per qr. to pay 16s.</td></tr> +</table></div> + +<p>These different duties were imposed, partly by the 22d of Charles II. in place of the old subsidy, partly by the +new subsidy, by the one-third and two-thirds subsidy, and by the subsidy 1747.</p></div> + +<div class="footnote"><p><a name="Footnote_41_41" id="Footnote_41_41"></a><a href="#FNanchor_41_41"><span class="label">[41]</span></a> See Dictionnaire des Monnoies, tom. ii. article +Seigneurage, p. 489, par M. Abbot de Baringhen, Conseiller-Commissaire +en la Cour des Monnoies à Paris.</p></div> + +<div class="footnote"><p><a name="Footnote_42_42" id="Footnote_42_42"></a><a href="#FNanchor_42_42"><span class="label">[42]</span></a> The interest of every proprietor of India stock, however, +is by no means the same with that of the country +in the government of which his vote gives him some +influence.—See book v, chap. i, part ii.</p></div> + +<div class="footnote"><p><a name="Footnote_43_43" id="Footnote_43_43"></a><a href="#FNanchor_43_43"><span class="label">[43]</span></a> See book I chap. I</p></div> + +<div class="footnote"><p><a name="Footnote_44_44" id="Footnote_44_44"></a><a href="#FNanchor_44_44"><span class="label">[44]</span></a> See the Journal of Mr. De Lange, in Bell's Travels, +vol. ii. p. 258, 276, 293.</p></div> + +<div class="footnote"><p><a name="Footnote_45_45" id="Footnote_45_45"></a><a href="#FNanchor_45_45"><span class="label">[45]</span></a> Plin. 1. ix. c. 30.</p></div> + +<div class="footnote"><p><a name="Footnote_46_46" id="Footnote_46_46"></a><a href="#FNanchor_46_46"><span class="label">[46]</span></a> Plin. 1. viii. c. 48.</p></div> + +<div class="footnote"><p><a name="Footnote_47_47" id="Footnote_47_47"></a><a href="#FNanchor_47_47"><span class="label">[47]</span></a> They are to be found in Tyrol's History of England.</p></div> + +<div class="footnote"><p><a name="Footnote_48_48" id="Footnote_48_48"></a><a href="#FNanchor_48_48"><span class="label">[48]</span></a> Since publishing the first two editions of this book, +I have got good reasons to believe that all the turnpike +tolls levied in Great Britain do not produce a neat revenue +that amounts to half a million; a sum which, +under the management of government, would not be +sufficient to keep in repair five of the principal roads in +the kingdom.</p></div> + +<div class="footnote"><p><a name="Footnote_49_49" id="Footnote_49_49"></a><a href="#FNanchor_49_49"><span class="label">[49]</span></a> I have now good reason to believe that all those +conjectural sums are by much too large.</p></div> + +<div class="footnote"><p><a name="Footnote_50_50" id="Footnote_50_50"></a><a href="#FNanchor_50_50"><span class="label">[50]</span></a> See Memoires concernant les Droits et Impositions +en Europe, tome i. page 73. This work was compiled +by the order of the court, for the use of a commission +employed for some years past in considering the proper +means for reforming the finances of France. The account +of the French taxes, which takes up three volumes +in quarto, may be regarded as perfectly authentic. +That of those of other European nations was compiled +from such information as the French ministers at the +different courts could procure. It is much shorter, and +probably not quite so exact as that of the French taxes.</p></div> + +<div class="footnote"><p><a name="Footnote_51_51" id="Footnote_51_51"></a><a href="#FNanchor_51_51"><span class="label">[51]</span></a> See Memoires concernant les Droits et Impositions +en Europe tome i. p. 73.</p></div> + +<div class="footnote"><p><a name="Footnote_52_52" id="Footnote_52_52"></a><a href="#FNanchor_52_52"><span class="label">[52]</span></a> See Sketches of the History of Man page 474, and +Seq.</p></div> + +<div class="footnote"><p><a name="Footnote_53_53" id="Footnote_53_53"></a><a href="#FNanchor_53_53"><span class="label">[53]</span></a> Memoires concernant les Droits, p. 240, 241.</p></div> + +<div class="footnote"><p><a name="Footnote_54_54" id="Footnote_54_54"></a><a href="#FNanchor_54_54"><span class="label">[54]</span></a> Memoires concernant les Droits, &c. tom. i. p. 114, +115, 116, &c.</p></div> + +<div class="footnote"><p><a name="Footnote_55_55" id="Footnote_55_55"></a><a href="#FNanchor_55_55"><span class="label">[55]</span></a> Id. tom. i. p. 83, 84.</p></div> + +<div class="footnote"><p><a name="Footnote_56_56" id="Footnote_56_56"></a><a href="#FNanchor_56_56"><span class="label">[56]</span></a> Id. p. 280, &c.; also p. 287, &c. to 316.</p></div> + +<div class="footnote"><p><a name="Footnote_57_57" id="Footnote_57_57"></a><a href="#FNanchor_57_57"><span class="label">[57]</span></a> Memoires concernant les Droits, &c. tom. ii. p. 139, &c.</p></div> + +<div class="footnote"><p><a name="Footnote_58_58" id="Footnote_58_58"></a><a href="#FNanchor_58_58"><span class="label">[58]</span></a> Since the first publication of this book, a tax nearly +upon the above-mentioned principles has been imposed.</p></div> + +<div class="footnote"><p><a name="Footnote_59_59" id="Footnote_59_59"></a><a href="#FNanchor_59_59"><span class="label">[59]</span></a> Memoires concernant les Droits, &c. p. 223.</p></div> + +<div class="footnote"><p><a name="Footnote_60_60" id="Footnote_60_60"></a><a href="#FNanchor_60_60"><span class="label">[60]</span></a> Memoires concernant les Droits, tom. i, p. 74.</p></div> + +<div class="footnote"><p><a name="Footnote_61_61" id="Footnote_61_61"></a><a href="#FNanchor_61_61"><span class="label">[61]</span></a> Memoires concernant les Droits, tom. i, p. 163, +167, 171.</p></div> + +<div class="footnote"><p><a name="Footnote_62_62" id="Footnote_62_62"></a><a href="#FNanchor_62_62"><span class="label">[62]</span></a> Memoires concernant les Droits, &c. tom. ii. p. 17.</p></div> + +<div class="footnote"><p><a name="Footnote_63_63" id="Footnote_63_63"></a><a href="#FNanchor_63_63"><span class="label">[63]</span></a> Lib. 55. See also Burman, de Vectigalibus Pop. +Rom. cap. xi. and Bouchaud de l'impot du vingtieme +sur les successions.</p></div> + +<div class="footnote"><p><a name="Footnote_64_64" id="Footnote_64_64"></a><a href="#FNanchor_64_64"><span class="label">[64]</span></a> See Memoires concernant les Droits, &c. tom. i. p. +225.</p></div> + +<div class="footnote"><p><a name="Footnote_65_65" id="Footnote_65_65"></a><a href="#FNanchor_65_65"><span class="label">[65]</span></a> Memoires concernant les Droits, &c. tom. i. p. 154.</p></div> + +<div class="footnote"><p><a name="Footnote_66_66" id="Footnote_66_66"></a><a href="#FNanchor_66_66"><span class="label">[66]</span></a> Id. p. 157.</p></div> + +<div class="footnote"><p><a name="Footnote_67_67" id="Footnote_67_67"></a><a href="#FNanchor_67_67"><span class="label">[67]</span></a> Memoires concernant les Droits, &c. tom. i. p. 223, +224, 225.</p></div> + +<div class="footnote"><p><a name="Footnote_68_68" id="Footnote_68_68"></a><a href="#FNanchor_68_68"><span class="label">[68]</span></a> Memoires concernant les Droits, &c. tom. ii. p. 108.</p></div> + +<div class="footnote"><p><a name="Footnote_69_69" id="Footnote_69_69"></a><a href="#FNanchor_69_69"><span class="label">[69]</span></a> Memoires concernant les Droits, &c. tom. iii. p. 87.</p></div> + +<div class="footnote"><p><a name="Footnote_70_70" id="Footnote_70_70"></a><a href="#FNanchor_70_70"><span class="label">[70]</span></a> See book i. chap. 8.</p></div> + +<div class="footnote"><p><a name="Footnote_71_71" id="Footnote_71_71"></a><a href="#FNanchor_71_71"><span class="label">[71]</span></a> Memoires concernant les Droits, &c., p. 210, 211.</p></div> + +<div class="footnote"><p><a name="Footnote_72_72" id="Footnote_72_72"></a><a href="#FNanchor_72_72"><span class="label">[72]</span></a> Le Reformateur</p></div> + +<div class="footnote"><p><a name="Footnote_73_73" id="Footnote_73_73"></a><a href="#FNanchor_73_73"><span class="label">[73]</span></a> Though the duties directly imposed upon proof +spirits amount only to 2s. 6d. per gallon, these, added +to the duties upon the low wines, from which they are +distilled, amount to 3s. 10<sup>2</sup>⁄<sub>3</sub>d. Both low wines and proof +spirits are, to prevent frauds, now rated according to +what they gauge in the wash.</p></div> + +<div class="footnote"><p><a name="Footnote_74_74" id="Footnote_74_74"></a><a href="#FNanchor_74_74"><span class="label">[74]</span></a> The neat production of that year, after deducting all expenses +and allowances, amounted to L.4,975,652 : 19 : 6.</p></div> + +<div class="footnote"><p><a name="Footnote_75_75" id="Footnote_75_75"></a><a href="#FNanchor_75_75"><span class="label">[75]</span></a> Memoires concernant les Droits, &c. tom. 1, p. 45</p></div> + +<div class="footnote"><p><a name="Footnote_76_76" id="Footnote_76_76"></a><a href="#FNanchor_76_76"><span class="label">[76]</span></a> See Examen des Reflections Politiques sut les Finances.</p></div> + +<div class="footnote"><p><a name="Footnote_77_77" id="Footnote_77_77"></a><a href="#FNanchor_77_77"><span class="label">[77]</span></a> See James Postlethwaite's History of the Public +Revenue.</p></div> + +<div class="footnote"><p><a name="Footnote_78_78" id="Footnote_78_78"></a><a href="#FNanchor_78_78"><span class="label">[78]</span></a> It has proved more expensive than any one of our +former wars, and has involved us in an additional debt +of more than one hundred millions. During a profound +peace of eleven years, little more than ten millions +of debt was paid; during a war of seven years, +more than one hundred millions was contracted.</p></div> + +<div class="footnote"><p><a name="Footnote_79_79" id="Footnote_79_79"></a><a href="#FNanchor_79_79"><span class="label">[79]</span></a> See Du Cange Glossary, voce Moneta; the Benedictine +Edition.</p></div> + +<div class="footnote"><p><a name="Footnote_80_80" id="Footnote_80_80"></a><a href="#FNanchor_80_80"><span class="label">[80]</span></a> See Hutchinson's History of Massachusetts Bay +vol. ii, page 436, et seq.</p></div> + + + + + +<hr style="width: 100%;" /> +<p><span class='pagenum'><a name="Page_405" id="Page_405">[Pg 405]</a></span></p> +<h2>INDEX.</h2> + + + +<p><br /> +A<br /> +<br /> +<i>Absentee</i> tax, the propriety of, considered with reference to Ireland, <a href="#Page_379">379</a>.<br /> +<br /> +<i>Accounts</i> of money, in modern Europe, all kept, and the value of goods computed, in silver, <a href="#Page_16">16</a>.<br /> +<br /> +<i>Actors</i>, public, paid for the contempt attending their profession, <a href="#Page_44">44</a>.<br /> +<br /> +<i>Africa</i>, cause assigned for the barbarous state of the interior parts of that continent, <a href="#Page_9">9</a>.<br /> +<br /> +<i>African company</i>, establishment and constitution of, <a href="#Page_309">309</a>.<br /> +<span style="margin-left: 1em;">Receive an annual allowance from parliament for forts and garrisons, <a href="#Page_310">310</a>.</span><br /> +<span style="margin-left: 1em;">The company not under sufficient controul, ib.</span><br /> +<span style="margin-left: 1em;">History of the Royal African company, <a href="#Page_311">311</a>.</span><br /> +<span style="margin-left: 1em;">Decline of, ib. Rise of the present company, ib.</span><br /> +<br /> +<i>Age</i>, the foundation of rank and precedency in rude as well as civilized societies, <a href="#Page_297">297</a>.<br /> +<br /> +<i>Aggregate fund</i>, in the British finances, explained, <a href="#Page_388">388</a>.<br /> +<br /> +<i>Agio</i> of the bank of Amsterdam explained, <a href="#Page_194">194</a>.<br /> +<span style="margin-left: 1em;">Of the bank of Hamburgh, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">The agio at Amsterdam, how kept at a medium rate, <a href="#Page_197">197</a>.</span><br /> +<br /> +<i>Agriculture</i>, the labour of, does not admit of such subdivisions as manufactures, <a href="#Page_3">3</a>.<br /> +<span style="margin-left: 1em;">This impossibility of separation prevents agriculture from improving equally with manufactures, ib.</span><br /> +<span style="margin-left: 1em;">Natural state of, in a new colony, <a href="#Page_38">38</a>.</span><br /> +<span style="margin-left: 1em;">Requires more knowledge and experience than most mechanical professions, and yet is carried on without any restrictions, <a href="#Page_53">53</a>.</span><br /> +<span style="margin-left: 1em;">The terms of rent, how adjusted between landlord and tenant, <a href="#Page_60">60</a>.</span><br /> +<span style="margin-left: 1em;">Is extended by good roads and navigable canals, <a href="#Page_62">62</a>.</span><br /> +<span style="margin-left: 1em;">Under what circumstances pasture land is more valuable than arable, <a href="#Page_63">63</a>.</span><br /> +<span style="margin-left: 1em;">Gardening not a very gainful employment, <a href="#Page_64">64</a>.</span><br /> +<span style="margin-left: 1em;">Vines the most profitable article of culture, <a href="#Page_65">65</a>.</span><br /> +<span style="margin-left: 1em;">Estimates of profit from projects very fallacious, ib.</span><br /> +<span style="margin-left: 1em;">Cattle and tillage mutually improve each other, <a href="#Page_93">93</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on that of Scotland, ib.</span><br /> +<span style="margin-left: 1em;">On that of North America, <a href="#Page_94">94</a>.</span><br /> +<span style="margin-left: 1em;">Poultry, a profitable article in husbandry, ib.</span><br /> +<span style="margin-left: 1em;">Hogs, <a href="#Page_95">95</a>.</span><br /> +<span style="margin-left: 1em;">Dairy, <a href="#Page_96">96</a>.</span><br /> +<span style="margin-left: 1em;">Evidences of land being completely improved, ib.</span><br /> +<span style="margin-left: 1em;">The extension of cultivation, as it raises the price of animal food, reduces that of vegetables, <a href="#Page_103">103</a>.</span><br /> +<span style="margin-left: 1em;">By whom and how practised under feudal government, <a href="#Page_137">137</a>.</span><br /> +<span style="margin-left: 1em;">Its operations not so much intended to increase, as to direct the fertility of nature, <a href="#Page_149">149</a>.</span><br /> +<span style="margin-left: 1em;">Has been the cause of the prosperity of the British colonies in America, <a href="#Page_150">150</a>.</span><br /> +<span style="margin-left: 1em;">The profits of, exaggerated by projectors, <a href="#Page_154">154</a>.</span><br /> +<span style="margin-left: 1em;">On equal terms, is naturally preferred to trade, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Artificers necessary to the carrying it on, ib.</span><br /> +<span style="margin-left: 1em;">Was not attended to by the northern destroyers of the Roman empire, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">The ancient policy of Europe unfavourable to, <a href="#Page_162">162</a>.</span><br /> +<span style="margin-left: 1em;">Was promoted by the commerce and manufactures of towns, <a href="#Page_170">170</a>.</span><br /> +<span style="margin-left: 1em;">The wealth arising from, more solid and durable than that which proceeds from commerce, <a href="#Page_172">172</a>.</span><br /> +<span style="margin-left: 1em;">Is not encouraged by the bounty on the exportation of corn, <a href="#Page_207">207</a>.</span><br /> +<span style="margin-left: 1em;">Why the proper business of new companies, <a href="#Page_251">251</a>.</span><br /> +<span style="margin-left: 1em;">The present agricultural system of political economy adopted in France, described, <a href="#Page_275">275</a>.</span><br /> +<span style="margin-left: 1em;">Is discouraged by restrictions and prohibitions in trade, <a href="#Page_279">279</a>.</span><br /> +<span style="margin-left: 1em;">Is favoured beyond manufactures in China, <a href="#Page_282">282</a>.</span><br /> +<span style="margin-left: 1em;">And in Indostan, <a href="#Page_283">283</a>.</span><br /> +<span style="margin-left: 1em;">Does not require so extensive a market as manufactures, <a href="#Page_284">284</a>.</span><br /> +<span style="margin-left: 1em;">To check manufactures in order to promote agriculture, false policy, <a href="#Page_285">285</a>.</span><br /> +<span style="margin-left: 1em;">Landlords ought to be encouraged to cultivate part of their own land, <a href="#Page_350">350</a>.</span><br /> +<br /> +<i>Alcavala</i>, the tax in Spain so called, explained and considered, <a href="#Page_381">381</a>.<br /> +<span style="margin-left: 1em;">The ruin of the Spanish manufactures attributed to this tax, ib.</span><br /> +<br /> +<i>Alehouses</i>, the number of, not the efficient cause of drunkenness, <a href="#Page_148">148</a>, <a href="#Page_200">200</a>.<br /> +<br /> +<i>Allodial rights</i>, mistaken for feudal rights, <a href="#Page_168">168</a>.<br /> +<span style="margin-left: 1em;">The introduction of the feudal law tended to moderate the authority of the allodial lords, ib.</span><br /> +<br /> +<i>Ambassadors</i>, the first motive of their appointment, <a href="#Page_307">307</a>.<br /> +<br /> +<i>America</i>, why labour is dearer in North America than in England, <a href="#Page_29">29</a>.<br /> +<span style="margin-left: 1em;">Great increase of population there, ib.</span><br /> +<span style="margin-left: 1em;">Common rate of interest there, <a href="#Page_38">38</a>.</span><br /> +<span style="margin-left: 1em;">Is a new market for the produce of its own silver mines, <a href="#Page_85">85</a>.</span><br /> +<span class='pagenum'><a name="Page_406" id="Page_406">[Pg 406]</a></span><span style="margin-left: 1em;">The first accounts of the two empires of Peru and Mexico greatly exaggerated, ib.</span><br /> +<span style="margin-left: 1em;">Improving state of the Spanish colonies there, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">Account of the paper currency of the British colonies, <a href="#Page_134">134</a>.</span><br /> +<span style="margin-left: 1em;">Cause of the rapid prosperity of the British colonies there, <a href="#Page_150">150</a>.</span><br /> +<span style="margin-left: 1em;">Why manufactures for distant sale have never been established there, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Its speedy improvement owing to assistance from foreign capitals, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">The purchase and improvement of uncultivated land the most profitable employment of capitals, <a href="#Page_171">171</a>.</span><br /> +<span style="margin-left: 1em;">Commercial alterations produced by the discovery of, <a href="#Page_181">181</a>.</span><br /> +<span style="margin-left: 1em;">But two civilized nations found on the whole continent, ib.</span><br /> +<span style="margin-left: 1em;">The wealth of the North American colonies increased, though the balance of trade continued against them, <a href="#Page_203">203</a>.</span><br /> +<span style="margin-left: 1em;">Madeira wine, how introduced there, <a href="#Page_204">204</a>.</span><br /> +<span style="margin-left: 1em;">Historical review of the European settlements in, <a href="#Page_229">229</a>.</span><br /> +<span style="margin-left: 1em;">Of Spain, <a href="#Page_232">232</a>, <a href="#Page_233">233</a>.</span><br /> +<span style="margin-left: 1em;">Of Holland, <a href="#Page_234">234</a>.</span><br /> +<span style="margin-left: 1em;">Of France, ib.</span><br /> +<span style="margin-left: 1em;">Of Britain, ib.</span><br /> +<span style="margin-left: 1em;">Ecclesiastical government in the several European colonies, <a href="#Page_235">235</a>.</span><br /> +<span style="margin-left: 1em;">Fish a principal article of trade from North America to Spain, Portugal, and the Mediterranean, <a href="#Page_237">237</a>.</span><br /> +<span style="margin-left: 1em;">Naval stores to Britain, <a href="#Page_238">238</a>.</span><br /> +<span style="margin-left: 1em;">Little credit due to the policy of Europe from the success of the colonies, <a href="#Page_242">242</a>.</span><br /> +<span style="margin-left: 1em;">The discovery and colonization of, how far advantageous to Europe, <a href="#Page_243">243</a>.</span><br /> +<span style="margin-left: 1em;">And to America, ib.</span><br /> +<span style="margin-left: 1em;">The colonies in, governed by a spirit of monopoly, <a href="#Page_261">261</a>.</span><br /> +<span style="margin-left: 1em;">The interest of the consumer in Britain sacrificed to that of the producer, by the system of colonization, <a href="#Page_274">274</a>.</span><br /> +<span style="margin-left: 1em;">Plan for extending the British system of taxation, over all the provinces of, <a href="#Page_397">397</a>, <a href="#Page_398">398</a>.</span><br /> +<span style="margin-left: 1em;">The question, how the Americans could pay taxes without specie, considered, <a href="#Page_402">402</a>.</span><br /> +<span style="margin-left: 1em;">Ought in justice to contribute to discharge the public debt in Britain, <a href="#Page_402">402</a>.</span><br /> +<span style="margin-left: 1em;">Expediency of their union with Britain, <a href="#Page_403">403</a>.</span><br /> +<span style="margin-left: 1em;">The British empire there a mere project, <a href="#Page_404">404</a>.</span><br /> +<br /> +<i>Amsterdam</i>, agio of the bank of, explained, <a href="#Page_194">194</a>.<br /> +<span style="margin-left: 1em;">Occasion of its establishment, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">Advantages attending payments there, ib.</span><br /> +<span style="margin-left: 1em;">Rate demanded for keeping money there, ib.</span><br /> +<span style="margin-left: 1em;">Prices at which bullion and coin are received, <a href="#Page_196">196</a>, <i>note</i>.</span><br /> +<span style="margin-left: 1em;">This bank the great warehouse of Europe for bullion, <a href="#Page_197">197</a>.</span><br /> +<span style="margin-left: 1em;">Demands upon, how made and answered, ib.</span><br /> +<span style="margin-left: 1em;">The agio, how kept at a medium rate, ib.</span><br /> +<span style="margin-left: 1em;">The treasure of, whether all preserved in its repositories, <a href="#Page_198">198</a>.</span><br /> +<span style="margin-left: 1em;">The amount of its treasure only to be conjectured, ib.</span><br /> +<span style="margin-left: 1em;">Fees paid to the bank for transacting business, ib.</span><br /> +<br /> +<i>Annuities</i>, for terms of years, and for lives, in the British finances, historical account of, <a href="#Page_389">389</a>.<br /> +<br /> +<i>Apothecaries</i>, the profit on their drugs, unjustly stigmatized as exorbitant, <a href="#Page_46">46</a>.<br /> +<br /> +<i>Apprenticeship</i>, the nature and intention of this bond of servitude, explained, <a href="#Page_42">42</a>.<br /> +<span style="margin-left: 1em;">The limitations imposed on various trades as to the number of apprentices, <a href="#Page_50">50</a>.</span><br /> +<span style="margin-left: 1em;">The statute of apprenticeship in England, ib.</span><br /> +<span style="margin-left: 1em;">Apprenticeships in France and Scotland, <a href="#Page_51">51</a>.</span><br /> +<span style="margin-left: 1em;">General remarks on the tendency and operation of long apprenticeships, ib.</span><br /> +<span style="margin-left: 1em;">The statute of, ought to be repealed, <a href="#Page_191">191</a>.</span><br /> +<br /> +<i>Arabs</i>, their manner of supporting war, <a href="#Page_289">289</a>.<br /> +<br /> +<i>Army</i>, three different ways by which a nation may maintain one in a distant country, <a href="#Page_178">178</a>.<br /> +<span style="margin-left: 1em;">Standing, distinction between and a militia, <a href="#Page_292">292</a>.</span><br /> +<span style="margin-left: 1em;">Historical review of, <a href="#Page_294">294</a>.</span><br /> +<span style="margin-left: 1em;">The Macedonian army, ib.</span><br /> +<span style="margin-left: 1em;">Carthaginian army, ib.</span><br /> +<span style="margin-left: 1em;">Roman army, ib.</span><br /> +<span style="margin-left: 1em;">Is alone able to perpetuate the civilization of a country, <a href="#Page_296">296</a>.</span><br /> +<span style="margin-left: 1em;">Is the speediest engine for civilizing a barbarous country, ib.</span><br /> +<span style="margin-left: 1em;">Under what circumstances dangerous to, and under what favourable to liberty, ib.</span><br /> +<br /> +<i>Artificers</i> prohibited by law from going to foreign countries, <a href="#Page_273">273</a>.<br /> +<span style="margin-left: 1em;">Residing abroad, and not returning on notice, exposed to outlawry, ib.</span><br /> +<span style="margin-left: 1em;">See <i>Manufactures</i>.</span><br /> +<br /> +<i>Asdrubal</i>, his army greatly improved by discipline, <a href="#Page_294">294</a>.<br /> +<span style="margin-left: 1em;">How defeated, ib.</span><br /> +<br /> +<i>Assembly</i>, houses of, in the British colonies, the constitutional freedom of, shewn, <a href="#Page_240">240</a>.<br /> +<br /> +<i>Assiento Contract</i>, <a href="#Page_312">312</a>.<br /> +<br /> +<i>Assize</i> of bread and ale, remarks on that statute, <a href="#Page_75">75</a>, <a href="#Page_77">77</a>.<br /> +<br /> +<i>Augustus</i>, emperor, emancipates the slaves of Vedius Pollio for his cruelty, <a href="#Page_241">241</a>.<br /> +<br /> +<br /> +B<br /> +<br /> +<i>Balance</i> of annual produce and consumption explained, <a href="#Page_203">203</a>.<br /> +<span style="margin-left: 1em;">May be in favour of a nation, when the balance of trade is against it, ib.</span><br /> +<br /> +<i>Balance</i> of trade, no certain criterion to determine on which side it turns between two countries, <a href="#Page_192">192</a>.<br /> +<span style="margin-left: 1em;">The current doctrine of, on which most regulations of trade are founded, absurd, <a href="#Page_199">199</a>.</span><br /> +<span style="margin-left: 1em;">If even, by the exchange of their native commodities, both sides may be gainers, ib.</span><br /> +<span style="margin-left: 1em;">How the balance would stand if native commodities on one side were paid with foreign commodities on the other, ib.</span><br /> +<span style="margin-left: 1em;">How the balance stands when commodities are purchased with gold and silver, ib., <a href="#Page_200">200</a>.</span><br /> +<span style="margin-left: 1em;">The ruin of countries often predicted from the doctrine of an unfavourable balance of trade, <a href="#Page_202">202</a>.</span><br /> +<br /> +<i>Banks</i>, great increase of trade in Scotland since the establishment of them in the principal towns, <a href="#Page_120">120</a>.<br /> +<span style="margin-left: 1em;">Their usual course of business, <a href="#Page_121">121</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of their issuing too much paper, <a href="#Page_122">122</a>.</span><br /> +<span style="margin-left: 1em;">Necessary caution for some time observed by them with regard to giving credit to their customers, <a href="#Page_124">124</a>.</span><br /> +<span style="margin-left: 1em;">Limits of the advances they may imprudently make to traders, <a href="#Page_125">125</a>.</span><br /> +<span style="margin-left: 1em;">How injured by the practice of drawing and redrawing bills, <a href="#Page_126">126</a>, <a href="#Page_127">127</a>.</span><br /> +<span style="margin-left: 1em;">History of the Ayr bank, <a href="#Page_128">128</a>.</span><br /> +<span style="margin-left: 1em;">History of the bank of England, <a href="#Page_130">130</a>.</span><br /> +<span style="margin-left: 1em;">The nature and public advantage of banks considered, <a href="#Page_131">131</a>.</span><br /> +<span style="margin-left: 1em;">Bankers might carry on their business with less paper, <a href="#Page_132">132</a>.</span><br /> +<span style="margin-left: 1em;">Effects of the optional clauses in the Scotch notes, <a href="#Page_133">133</a>.</span><br /> +<span style="margin-left: 1em;">Origin of their establishment, <a href="#Page_194">194</a>.</span><br /> +<span style="margin-left: 1em;">Bank money explained, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">Bank of England, the conduct of, in regard to the coinage, <a href="#Page_226">226</a>.</span><br /> +<span class='pagenum'><a name="Page_407" id="Page_407">[Pg 407]</a></span><span style="margin-left: 1em;">Joint stock companies, why well adapted to the trade of banking, <a href="#Page_317">317</a>, <a href="#Page_318">318</a>.</span><br /> +<span style="margin-left: 1em;">A doubtful question, whether the government of Great Britain is equal to the management of the bank to profit, <a href="#Page_344">344</a>.</span><br /> +<br /> +<i>Bankers</i>, the credit of their notes how established, <a href="#Page_118">118</a>.<br /> +<span style="margin-left: 1em;">The nature of the banking business explained, ib., <a href="#Page_121">121</a>.</span><br /> +<span style="margin-left: 1em;">The multiplication and competition of bankers, under proper regulations of service to public credit, <a href="#Page_135">135</a>.</span><br /> +<br /> +<i>Baretti</i>, Mr. his account of the quantity of Portugal gold sent weekly to England, <a href="#Page_225">225</a>.<br /> +<br /> +<i>Barons</i>, feudal, their power contracted by the grant of municipal privileges, <a href="#Page_163">163</a>.<br /> +<span style="margin-left: 1em;">Their extensive authority, <a href="#Page_168">168</a>.</span><br /> +<span style="margin-left: 1em;">How they lost their authority over their vassals, <a href="#Page_169">169</a>.</span><br /> +<span style="margin-left: 1em;">And the power to disturb their country, <a href="#Page_170">170</a>.</span><br /> +<br /> +<i>Barter</i>, the exchange of one commodity for another, the propensity to, of extensive operation, and peculiar to man, <a href="#Page_6">6</a>.<br /> +<span style="margin-left: 1em;">Is not sufficient to carry on the mutual intercourse of mankind, <a href="#Page_10">10</a>. See <i>Commerce</i>.</span><br /> +<br /> +<i>Batavia</i>, causes of the prosperity of the Dutch settlement there, <a href="#Page_263">263</a>.<br /> +<br /> +<i>Beaver skins</i>, review of the policy used in the trade for, <a href="#Page_273">273</a>.<br /> +<br /> +<i>Beef</i>, cheaper now in London than in the reign of James I., <a href="#Page_63">63</a>.<br /> +<span style="margin-left: 1em;">Compared with the prices of wheat at the corresponding times, <a href="#Page_64">64</a>.</span><br /> +<br /> +<i>Benefices</i>, ecclesiastical, the tenure of, why rendered secure, <a href="#Page_335">335</a>.<br /> +<span style="margin-left: 1em;">The power of collating to, how taken from the pope, in England and France, <a href="#Page_338">338</a>.</span><br /> +<span style="margin-left: 1em;">General equality of, among the presbyterians, <a href="#Page_340">340</a>.</span><br /> +<span style="margin-left: 1em;">Good effects of this equality, ib.</span><br /> +<br /> +<i>Bengal</i>, to what circumstances its early improvement in agriculture and manufactures was owing, <a href="#Page_9">9</a>.<br /> +<span style="margin-left: 1em;">Present miserable state of the country, <a href="#Page_30">30</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on the high rates of interest there, <a href="#Page_39">39</a>.</span><br /> +<span style="margin-left: 1em;">Oppressive conduct of the English there, to suit their trade in opium, <a href="#Page_263">263</a>.</span><br /> +<span style="margin-left: 1em;">Why more remarkable for the exportation of manufactures than of grain, <a href="#Page_284">284</a>.</span><br /> +<br /> +<i>Berne</i>, brief history of the republic of, <a href="#Page_164">164</a>.<br /> +<span style="margin-left: 1em;">Establishment of the reformation there, <a href="#Page_338">338</a>.</span><br /> +<span style="margin-left: 1em;">Application of the revenue of the catholic clergy, <a href="#Page_341">341</a>.</span><br /> +<span style="margin-left: 1em;">Derives a revenue from the interest of its treasure, <a href="#Page_344">344</a>.</span><br /> +<br /> +<i>Bills of Exchange</i>, punctuality in the payment of, how secured, <a href="#Page_126">126</a>.<br /> +<span style="margin-left: 1em;">The pernicious practice of drawing and redrawing explained, ib.</span><br /> +<span style="margin-left: 1em;">The arts made use of to disguise this mutual traffic in bills, <a href="#Page_127">127</a>.</span><br /> +<br /> +<i>Birth</i>, superiority of, how it confers respect and authority, <a href="#Page_298">298</a>.<br /> +<br /> +<i>Bishops</i>, the ancient mode of electing them, and how altered, <a href="#Page_335">335</a>, <a href="#Page_337">337</a>.<br /> +<br /> +<i>Body</i>, natural and political, analogy between, <a href="#Page_280">280</a>.<br /> +<br /> +<i>Bohemia</i>, account of the tax there on the industry of artificers, <a href="#Page_366">366</a>.<br /> +<br /> +<i>Bounty</i>, on the exportation of corn, the tendency of this measure examined, <a href="#Page_81">81</a>.<br /> +<br /> +<i>Bounties</i>, why given in commerce, <a href="#Page_183">183</a>.<br /> +<span style="margin-left: 1em;">On exportation, the policy of granting them considered, <a href="#Page_205">205</a>.</span><br /> +<span style="margin-left: 1em;">On the exportation of corn, <a href="#Page_206">206</a>.</span><br /> +<span style="margin-left: 1em;">This bounty imposes two taxes on the people, <a href="#Page_207">207</a>.</span><br /> +<span style="margin-left: 1em;">Evil tendency of this bounty, <a href="#Page_209">209</a>.</span><br /> +<span style="margin-left: 1em;">The bounty only beneficial to the exporter and importer, ib.</span><br /> +<span style="margin-left: 1em;">Motives of the country gentlemen in granting the bounty, <a href="#Page_210">210</a>.</span><br /> +<span style="margin-left: 1em;">A trade which requires a bounty, necessarily a losing trade, ib.</span><br /> +<span style="margin-left: 1em;">Tonnage bounties to the fisheries considered, <a href="#Page_211">211</a>.</span><br /> +<span style="margin-left: 1em;">Account of the white-herring fishery, <a href="#Page_212">212</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on other bounties, <a href="#Page_213">213</a>.</span><br /> +<span style="margin-left: 1em;">A review of the principles on which they are generally granted, <a href="#Page_267">267</a>.</span><br /> +<span style="margin-left: 1em;">Those granted on American produce founded on mistaken policy, <a href="#Page_268">268</a>.</span><br /> +<span style="margin-left: 1em;">How they affect the consumer, <a href="#Page_274">274</a>.</span><br /> +<br /> +<i>Bourdeaux</i>, why a town of great trade, <a href="#Page_138">138</a>.<br /> +<br /> +<i>Brazil</i> grew to be a powerful colony under neglect, <a href="#Page_233">233</a>.<br /> +<span style="margin-left: 1em;">The Dutch invaders expelled by the Portuguese colonists, ib.</span><br /> +<span style="margin-left: 1em;">Computed number of inhabitants there, ib.</span><br /> +<span style="margin-left: 1em;">The trade of the principal provinces oppressed by the Portuguese, <a href="#Page_236">236</a>.</span><br /> +<br /> +<i>Bread</i>, its relative value with butcher's meat compared, <a href="#Page_62">62</a>, <a href="#Page_63">63</a>.<br /> +<br /> +<i>Brewery</i>, reasons for transferring the taxes on to the malt, <a href="#Page_376">376</a>.<br /> +<br /> +<i>Bridges</i>, how to be erected and maintained, <a href="#Page_303">303</a>.<br /> +<br /> +<i>Britain</i>, Great, evidences that labour is sufficiently paid for there, <a href="#Page_30">30</a>.<br /> +<span style="margin-left: 1em;">The price of provisions nearly the same in most places, <a href="#Page_31">31</a>.</span><br /> +<span style="margin-left: 1em;">Great variations in the price of labour, ib.</span><br /> +<span style="margin-left: 1em;">Vegetables imported from Flanders in the last century, <a href="#Page_32">32</a>.</span><br /> +<span style="margin-left: 1em;">Historical account of the alterations interest of money has undergone, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">Double interest deemed a reasonable mercantile profit, <a href="#Page_40">40</a>.</span><br /> +<span style="margin-left: 1em;">In what respects the carrying trade is advantageous to, <a href="#Page_152">152</a>, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">Appears to enjoy more of the carrying trade of Europe than it really has, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">It is the only country of Europe in which the obligation of purveyance is abolished, <a href="#Page_161">161</a>.</span><br /> +<span style="margin-left: 1em;">Its funds for the support of foreign wars inquired into, <a href="#Page_178">178</a>, <a href="#Page_179">179</a>.</span><br /> +<span style="margin-left: 1em;">Why never likely to be much affected by the free importation of Irish cattle, <a href="#Page_186">186</a>.</span><br /> +<span style="margin-left: 1em;">Nor salt provisions, ib.</span><br /> +<span style="margin-left: 1em;">Could be little affected by the importation of foreign corn, <a href="#Page_187">187</a>.</span><br /> +<span style="margin-left: 1em;">The policy of the commercial restraints on the trade with France examined, <a href="#Page_192">192</a>.</span><br /> +<span style="margin-left: 1em;">The trade with France might be more advantageous to each country than that with any other, <a href="#Page_202">202</a>.</span><br /> +<span style="margin-left: 1em;">Why one of the richest countries in Europe, while Spain and Portugal are among the poorest, <a href="#Page_221">221</a>.</span><br /> +<span style="margin-left: 1em;">Review of her American colonies, <a href="#Page_234">234</a>.</span><br /> +<span style="margin-left: 1em;">The trade of her colonies, how regulated, <a href="#Page_236">236</a>.</span><br /> +<span style="margin-left: 1em;">Distinction between enumerated and non-enumerated commodities explained, <a href="#Page_237">237</a>.</span><br /> +<span style="margin-left: 1em;">Restrains manufactures in America, <a href="#Page_238">238</a>, <a href="#Page_239">239</a>.</span><br /> +<span style="margin-left: 1em;">Indulgences granted to the colonists, <a href="#Page_239">239</a>.</span><br /> +<span style="margin-left: 1em;">Constitutional freedom of her colony government, <a href="#Page_240">240</a>.</span><br /> +<span style="margin-left: 1em;">The sugar colonies of, worse governed than those of France, <a href="#Page_241">241</a>.</span><br /> +<span style="margin-left: 1em;">Disadvantages resulting from retaining the exclusive trade of tobacco with Maryland and Virginia, <a href="#Page_244">244</a>, <a href="#Page_245">245</a>.</span><br /> +<span class='pagenum'><a name="Page_408" id="Page_408">[Pg 408]</a></span><span style="margin-left: 1em;">The navigation act has increased the colony trade, at the expense of many other branches of foreign trade, <a href="#Page_245">245</a>.</span><br /> +<span style="margin-left: 1em;">The advantage of the colony trade estimated, <a href="#Page_247">247</a>.</span><br /> +<span style="margin-left: 1em;">A gradual relaxation of the exclusive trade recommended, <a href="#Page_250">250</a>.</span><br /> +<span style="margin-left: 1em;">Events which have concurred to prevent the ill effects of the loss of the colony trade, ib.</span><br /> +<span style="margin-left: 1em;">The natural good effects of the colony trade more than counterbalance the bad effects of the monopoly, <a href="#Page_251">251</a>.</span><br /> +<span style="margin-left: 1em;">To maintain a monopoly, the principal end of the dominion assumed over the colonies, <a href="#Page_254">254</a>.</span><br /> +<span style="margin-left: 1em;">Has derived nothing but loss from this dominion, ib.</span><br /> +<span style="margin-left: 1em;">Is perhaps the only state which has only increased its expenses by extending its empire, <a href="#Page_256">256</a>.</span><br /> +<span style="margin-left: 1em;">The constitution of, would have been completed by admitting of American representation, <a href="#Page_258">258</a>.</span><br /> +<span style="margin-left: 1em;">Review of the administration of the East India Company, <a href="#Page_264">264</a>, <a href="#Page_265">265</a>.</span><br /> +<span style="margin-left: 1em;">The interest of the consumer sacrificed to that of the producer in raising an empire in America, <a href="#Page_274">274</a>.</span><br /> +<span style="margin-left: 1em;">The annual revenue of, compared with its annual rents and interest of capital stock, <a href="#Page_345">345</a>, <a href="#Page_346">346</a>.</span><br /> +<span style="margin-left: 1em;">The land-tax of, considered, <a href="#Page_348">348</a>.</span><br /> +<span style="margin-left: 1em;">Tithes, <a href="#Page_352">352</a>.</span><br /> +<span style="margin-left: 1em;">Window-tax, <a href="#Page_357">357</a>.</span><br /> +<span style="margin-left: 1em;">Stamp-duties, <a href="#Page_363">363</a>, <a href="#Page_365">365</a>.</span><br /> +<span style="margin-left: 1em;">Poll-taxes in the reign of William III., <a href="#Page_367">367</a>.</span><br /> +<span style="margin-left: 1em;">The uniformity of taxation in, favourable to internal trade, <a href="#Page_382">382</a>.</span><br /> +<span style="margin-left: 1em;">The system of taxation in, compared with that in France, <a href="#Page_384">384</a>.</span><br /> +<span style="margin-left: 1em;">Account of the unfunded debt of, <a href="#Page_387">387</a>.</span><br /> +<span style="margin-left: 1em;">Funded debt, <a href="#Page_388">388</a>.</span><br /> +<span style="margin-left: 1em;">Aggregate and general funds, ib.</span><br /> +<span style="margin-left: 1em;">Sinking fund, <a href="#Page_389">389</a>.</span><br /> +<span style="margin-left: 1em;">Annuities for terms of years and for lives, ib.</span><br /> +<span style="margin-left: 1em;">Perpetual annuities the best transferable stock, <a href="#Page_391">391</a>.</span><br /> +<span style="margin-left: 1em;">The reduction of the public debts during peace bears no proportion to their accumulation during war, <a href="#Page_392">392</a>.</span><br /> +<span style="margin-left: 1em;">The trade with the tobacco colonies, how carried on, without the intervention of specie, <a href="#Page_401">401</a>.</span><br /> +<span style="margin-left: 1em;">The trade with the sugar colonies explained, ib.</span><br /> +<span style="margin-left: 1em;">Ireland and America ought in justice to contribute towards the discharge of her public debts, <a href="#Page_402">402</a>.</span><br /> +<span style="margin-left: 1em;">How the territorial acquisitions of the East India Company might be rendered a source of revenue, <a href="#Page_403">403</a>.</span><br /> +<span style="margin-left: 1em;">If no such assistance can be obtained, her only resource pointed out, ib.</span><br /> +<br /> +<i>Bullion</i>, the money of the great mercantile republic, <a href="#Page_179">179</a>. See <i>Gold</i> and <i>Silver</i>.<br /> +<br /> +<i>Burghs</i>, free, the origin of, <a href="#Page_163">163</a>.<br /> +<span style="margin-left: 1em;">To what circumstances they owed their corporate jurisdictions, ib.</span><br /> +<span style="margin-left: 1em;">Why admitted to send representatives to parliament, <a href="#Page_164">164</a>.</span><br /> +<span style="margin-left: 1em;">Are allowed to protect refugees from the country, <a href="#Page_165">165</a>.</span><br /> +<br /> +<i>Burn</i>, Dr. his observation on the laws relating to the settlements of the poor, <a href="#Page_58">58</a>, <a href="#Page_59">59</a>.<br /> +<br /> +<i>Butcher's meat</i>, nowhere a necessary of life, <a href="#Page_370">370</a>.<br /> +<br /> +<br /> +C<br /> +<br /> +<i>Calvinists</i>, origin of that sect, <a href="#Page_339">339</a>.<br /> +<span style="margin-left: 1em;">Their principles of church government, ib.</span><br /> +<br /> +<i>Cameron</i>, Mr. of Lochiel, exercised, within thirty years since, a criminal jurisdiction over his own tenants, <a href="#Page_168">168</a>.<br /> +<br /> +<i>Canada</i>, the French colony there, long under the government of an exclusive company, <a href="#Page_234">234</a>.<br /> +<span style="margin-left: 1em;">But improved speedily after the dissolution of the company, ib.</span><br /> +<br /> +<i>Canals</i>, navigable, the advantages of, <a href="#Page_62">62</a>.<br /> +<span style="margin-left: 1em;">How to be made and maintained, <a href="#Page_303">303</a>.</span><br /> +<span style="margin-left: 1em;">That of Languedoc, the support of, how secured, ib.</span><br /> +<span style="margin-left: 1em;">May be successfully managed by joint stock companies, <a href="#Page_317">317</a>.</span><br /> +<br /> +<i>Cantillon</i>, Mr. remarks on his account of the earnings of the labouring poor, <a href="#Page_28">28</a>.<br /> +<br /> +<i>Cape of Good Hope</i>, causes of the prosperity of the Dutch settlement there, <a href="#Page_263">263</a>.<br /> +<br /> +<i>Capital</i>, in trade, explained, and how employed, <a href="#Page_112">112</a>.<br /> +<span style="margin-left: 1em;">Distinguished into circulating and, fixed capitals, ib.</span><br /> +<span style="margin-left: 1em;">Characteristic of fixed capitals, <a href="#Page_113">113</a>.</span><br /> +<span style="margin-left: 1em;">The several kinds of fixed capitals specified, ib.</span><br /> +<span style="margin-left: 1em;">Characteristic of circulating capitals, and the several kinds of, <a href="#Page_114">114</a>.</span><br /> +<span style="margin-left: 1em;">Fixed capitals supported by those which are circulating, ib.</span><br /> +<span style="margin-left: 1em;">Circulating capitals how supported, ib.</span><br /> +<span style="margin-left: 1em;">Intention of a fixed capital, <a href="#Page_116">116</a>.</span><br /> +<span style="margin-left: 1em;">The expense of maintaining the fixed and circulating capitals illustrated, ib.</span><br /> +<span style="margin-left: 1em;">Money, as an article of circulating capital, considered, ib.</span><br /> +<span style="margin-left: 1em;">Money no measure of capital, <a href="#Page_118">118</a>.</span><br /> +<span style="margin-left: 1em;">What quantity of industry any capital can employ, <a href="#Page_120">120</a>.</span><br /> +<span style="margin-left: 1em;">Capitals, how far they may be extended by paper credit, <a href="#Page_125">125</a>.</span><br /> +<span style="margin-left: 1em;">Must always be replaced with profit by the annual produce of land and labour, <a href="#Page_136">136</a>.</span><br /> +<span style="margin-left: 1em;">The proportion between capital and revenue regulates the proportion between industry and idleness, <a href="#Page_138">138</a>.</span><br /> +<span style="margin-left: 1em;">How it is increased or diminished, ib.</span><br /> +<span style="margin-left: 1em;">National evidences of the increase of, <a href="#Page_141">141</a>.</span><br /> +<span style="margin-left: 1em;">In what instances private expenses contribute to enlarge the national capital, <a href="#Page_142">142</a>.</span><br /> +<span style="margin-left: 1em;">The increase of, reduces profits by competition, <a href="#Page_145">145</a>.</span><br /> +<span style="margin-left: 1em;">The different ways of employing a capital, <a href="#Page_147">147</a>.</span><br /> +<span style="margin-left: 1em;">How replaced to the different classes of traders, <a href="#Page_148">148</a>.</span><br /> +<span style="margin-left: 1em;">That employed in agriculture puts into motion a greater quantity of productive labour than any equal capital employed in manufacturers, <a href="#Page_149">149</a>.</span><br /> +<span style="margin-left: 1em;">That of a manufacturer should reside within the country, <a href="#Page_150">150</a>.</span><br /> +<span style="margin-left: 1em;">The operation of capitals employed in agriculture, manufactures, and foreign trade compared, ib.</span><br /> +<span style="margin-left: 1em;">The prosperity of a country depends on the due proportion of its capital applied to these three grand objects, <a href="#Page_151">151</a>.</span><br /> +<span style="margin-left: 1em;">Different returns of capitals employed in foreign trade, <a href="#Page_152">152</a>.</span><br /> +<span style="margin-left: 1em;">Is rather employed in agriculture than in trade and manufactures, on equal terms, <a href="#Page_155">155</a>, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Is rather employed in manufactures than in foreign trade, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">The natural progress of the employment of, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">Acquired by trade, is very precarious, until realized by the cultivation and improvement of land, <a href="#Page_172">172</a>.</span><br /> +<span style="margin-left: 1em;">The employment of, in the different species of trade, how determined, <a href="#Page_183">183</a>.</span><br /> +<br /> +<i>Capitation taxes</i>, the nature of, considered, <a href="#Page_367">367</a>.<br /> +<span style="margin-left: 1em;">In England, ib.</span><br /> +<span style="margin-left: 1em;">In France, ib.</span><br /> +<br /> +<i>Carriage</i>, land and water, compared, <a href="#Page_8">8</a>.<br /> +<span style="margin-left: 1em;">Water carriage contributes to improve arts and industry in all countries where it can be used, <a href="#Page_9">9</a>, <a href="#Page_62">62</a>, <a href="#Page_87">87</a>.</span><br /> +<span style="margin-left: 1em;">Land, how facilitated and reduced in price by public works, <a href="#Page_303">303</a>.</span><br /> +<span class='pagenum'><a name="Page_409" id="Page_409">[Pg 409]</a></span><br /> +<i>Carrying trade</i>, the nature and operation of, examined, <a href="#Page_152">152</a>.<br /> +<span style="margin-left: 1em;">Is the symptom, but not the cause of national wealth, and hence points out the two richest countries in Europe, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">Trades may appear to be carrying trades which are not so, ib.</span><br /> +<span style="margin-left: 1em;">The disadvantages of, to individuals, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">The Dutch, how excluded from being the carriers to Great Britain, <a href="#Page_187">187</a>, <a href="#Page_188">188</a>.</span><br /> +<span style="margin-left: 1em;">Drawbacks of duties originally granted for the encouragement of, <a href="#Page_205">205</a>.</span><br /> +<br /> +<i>Carthaginian army</i>, its superiority over the Roman army accounted for, <a href="#Page_294">294</a>.<br /> +<br /> +<i>Cattle</i> and <i>Corn</i>, their value compared, in the different stages of agriculture, <a href="#Page_62">62</a>.<br /> +<span style="margin-left: 1em;">The price of, reduced by artificial grasses, <a href="#Page_63">63</a>.</span><br /> +<span style="margin-left: 1em;">To what height the price of cattle may rise in an improving country, <a href="#Page_92">92</a>, <a href="#Page_93">93</a>.</span><br /> +<span style="margin-left: 1em;">The raising a stock of, necessary for the supply of manure to farms, <a href="#Page_93">93</a>.</span><br /> +<span style="margin-left: 1em;">Cattle must bear a good price to be well fed, ib.</span><br /> +<span style="margin-left: 1em;">The price of, rises in Scotland in consequence of the union with England ib.</span><br /> +<span style="margin-left: 1em;">Great multiplication of European cattle in America, <a href="#Page_94">94</a>.</span><br /> +<span style="margin-left: 1em;">Are killed in some countries merely for the sake of the hides and tallow, <a href="#Page_97">97</a>.</span><br /> +<span style="margin-left: 1em;">The market for these articles more extensive than for the carcase, ib.</span><br /> +<span style="margin-left: 1em;">This market sometimes brought nearer home by the establishment of manufactures, ib.</span><br /> +<span style="margin-left: 1em;">How the extension of cultivation raises the price of animal food, <a href="#Page_103">103</a>.</span><br /> +<span style="margin-left: 1em;">Is perhaps the only commodity more expensive to transport by sea than by land, <a href="#Page_186">186</a>.</span><br /> +<span style="margin-left: 1em;">Great Britain never likely to be much affected by the free importation of Irish cattle, ib.</span><br /> +<br /> +<i>Certificates</i>, parish, the laws relating to, with observations on them, <a href="#Page_58">58</a>.<br /> +<br /> +<i>Child</i>, Sir Josiah, his observation on trading companies, <a href="#Page_309">309</a>.<br /> +<br /> +<i>Children</i>, riches unfavourable to the production, and extreme poverty to the raising, of them, <a href="#Page_33">33</a>.<br /> +<span style="margin-left: 1em;">The mortality still greater among those maintained by charity, ib.</span><br /> +<br /> +<i>China</i>, to what the early improvement in arts and industry there was owing, <a href="#Page_9">9</a>.<br /> +<span style="margin-left: 1em;">Concurrent testimonies of the misery of the lower ranks of the Chinese, <a href="#Page_30">30</a>.</span><br /> +<span style="margin-left: 1em;">Is not, however, a declining country, ib.</span><br /> +<span style="margin-left: 1em;">High rate of interest of money there, <a href="#Page_40">40</a>.</span><br /> +<span style="margin-left: 1em;">Great state assumed by the grandees, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">The price of labour there lower than in the greater mpart of Europe, <a href="#Page_87">87</a>.</span><br /> +<span style="margin-left: 1em;">Silver the most profitable article to send thither, ib.</span><br /> +<span style="margin-left: 1em;">The proportional value of gold to silver, how rated there, <a href="#Page_89">89</a>.</span><br /> +<span style="margin-left: 1em;">The value of gold and silver much higher there than in any part of Europe, <a href="#Page_101">101</a>.</span><br /> +<span style="margin-left: 1em;">Agriculture favoured there beyond manufactures, <a href="#Page_282">282</a>.</span><br /> +<span style="margin-left: 1em;">Foreign trade not favoured there, <a href="#Page_283">283</a>.</span><br /> +<span style="margin-left: 1em;">Extension of the home market, ib.</span><br /> +<span style="margin-left: 1em;">Great attention paid to the roads there, <a href="#Page_305">305</a>, <a href="#Page_306">306</a>.</span><br /> +<span style="margin-left: 1em;">In what the principal revenue of the sovereign consists, <a href="#Page_353">353</a>.</span><br /> +<span style="margin-left: 1em;">The revenue of, partly raised in kind, ib.</span><br /> +<br /> +<i>Church</i>, the richer the church the poorer the state, <a href="#Page_341">341</a>.<br /> +<span style="margin-left: 1em;">Amount of the revenue of church of Scotland, <a href="#Page_342">342</a>.</span><br /> +<span style="margin-left: 1em;">The revenue of the church heavier taxed in Prussia than lay proprietors, <a href="#Page_351">351</a>.</span><br /> +<span style="margin-left: 1em;">The nature and effect of tithes considered, <a href="#Page_352">352</a>.</span><br /> +<br /> +<i>Circulation</i>, the dangerous practice of raising money by, explained, <a href="#Page_127">127</a>.<br /> +<span style="margin-left: 1em;">In traffic, the two different branches of, considered, <a href="#Page_132">132</a>.</span><br /> +<br /> +<i>Cities</i>, circumstances which contributed to their opulence, <a href="#Page_165">165</a>.<br /> +<span style="margin-left: 1em;">Those of Italy the first that rose to consequence, ib.</span><br /> +<span style="margin-left: 1em;">The commerce and manufactures of, have occasioned the improvement and cultivation of the country, <a href="#Page_170">170</a>.</span><br /> +<br /> +<i>Clergy</i>, a supply of, provided for, by public and private foundations for their education, <a href="#Page_55">55</a>.<br /> +<span style="margin-left: 1em;">Curates worse paid than many mechanics, ib.</span><br /> +<span style="margin-left: 1em;">Of an established religion, why unsuccessful against the teachers of a new religion, <a href="#Page_330">330</a>.</span><br /> +<span style="margin-left: 1em;">Why they persecute their adversaries, ib.</span><br /> +<span style="margin-left: 1em;">The zeal of the inferior clergy of the church of Rome, how kept alive, ib.</span><br /> +<span style="margin-left: 1em;">Utility of ecclesiastical establishments, <a href="#Page_331">331</a>.</span><br /> +<span style="margin-left: 1em;">How connected with the civil magistrate, ib., <a href="#Page_332">332</a>.</span><br /> +<span style="margin-left: 1em;">Unsafe for the civil magistrate to differ with them, <a href="#Page_334">334</a>.</span><br /> +<span style="margin-left: 1em;">Must be managed without violence, ib., <a href="#Page_335">335</a>.</span><br /> +<span style="margin-left: 1em;">Of the church of Rome, one great army cantoned over Europe, ib., <a href="#Page_336">336</a>.</span><br /> +<span style="margin-left: 1em;">Their power similar to that of the temporal barons during the feudal monkish ages, ib.</span><br /> +<span style="margin-left: 1em;">How the power of the Romish clergy declined, <a href="#Page_337">337</a>.</span><br /> +<span style="margin-left: 1em;">Evils attending allowing parishes to elect their own ministers, <a href="#Page_339">339</a>.</span><br /> +<br /> +<i>Clothing</i>, more plentiful than food in uncultivated countries, <a href="#Page_68">68</a>.<br /> +<span style="margin-left: 1em;">The materials for, the first articles rude nations have to offer, ib.</span><br /> +<br /> +<i>Coal</i> must generally be cheaper than wood to gain the preference for fuel, <a href="#Page_70">70</a>.<br /> +<span style="margin-left: 1em;">The price of, how reduced, ib.</span><br /> +<span style="margin-left: 1em;">The exportation of, subjected to a duty higher than the prime cost of, at the pit, <a href="#Page_273">273</a>.</span><br /> +<span style="margin-left: 1em;">The cheapest of all fuel, <a href="#Page_370">370</a>.</span><br /> +<span style="margin-left: 1em;">The tax on absurdly regulated, ib.</span><br /> +<br /> +<i>Coal mines</i>, their different degrees of fertility, <a href="#Page_70">70</a>.<br /> +<span style="margin-left: 1em;">When fertile, are sometimes unprofitable by situation, ib.</span><br /> +<span style="margin-left: 1em;">The proportion of rent generally paid for, ib., <a href="#Page_71">71</a>.</span><br /> +<span style="margin-left: 1em;">The machinery necessary to, expensive, <a href="#Page_112">112</a>.</span><br /> +<br /> +<i>Coal trade</i> from Newcastle to London employs more shipping than all the other carrying trade of England, <a href="#Page_153">153</a>.<br /> +<br /> +<i>Cochin China</i>, remarks on the principal article of cultivation there, <a href="#Page_66">66</a>.<br /> +<br /> +<i>Coin</i>, stamped, the origin and peculiar advantages of, in commerce, <a href="#Page_11">11</a>.<br /> +<span style="margin-left: 1em;">The different species of, in different ages and countries, ib.</span><br /> +<span style="margin-left: 1em;">Causes of the alterations in the value of, ib., <a href="#Page_12">12</a>, <a href="#Page_13">13</a>, <a href="#Page_14">14</a>.</span><br /> +<span style="margin-left: 1em;">How the standard coin of different nations came to be of different metals, <a href="#Page_16">16</a>.</span><br /> +<span style="margin-left: 1em;">A reform in the English coinage suggested, <a href="#Page_19">19</a>.</span><br /> +<span style="margin-left: 1em;">Silver, consequences attending the debasement of, <a href="#Page_82">82</a>.</span><br /> +<span style="margin-left: 1em;">Coinage of France and Britain examined, <a href="#Page_193">193</a>.</span><br /> +<span style="margin-left: 1em;">Why coin is privately melted down, <a href="#Page_225">225</a>.</span><br /> +<span style="margin-left: 1em;">The mint chiefly employed to keep up the quantity thus diminished, ib.</span><br /> +<span style="margin-left: 1em;">A duty to pay the coinage would preserve money from being melted or counterfeited, ib.</span><br /> +<span style="margin-left: 1em;">Standard of the gold coin in France, ib.</span><br /> +<span style="margin-left: 1em;">How a seignorage on coin would operate, <a href="#Page_226">226</a>.</span><br /> +<span class='pagenum'><a name="Page_410" id="Page_410">[Pg 410]</a></span><span style="margin-left: 1em;">A tax upon coinage is advanced by every body, and finally paid by nobody, ib.</span><br /> +<span style="margin-left: 1em;">A revenue lost by government defraying the expense of coinage, <a href="#Page_227">227</a>.</span><br /> +<span style="margin-left: 1em;">Amount of the annual coinage before the late reformation of the gold coin, ib.</span><br /> +<span style="margin-left: 1em;">The law for the encouragement of, founded on prejudice, ib.</span><br /> +<span style="margin-left: 1em;">Consequences of raising the denomination as an expedient to facilitate the payment of public debts, <a href="#Page_395">395</a>.</span><br /> +<span style="margin-left: 1em;">Adulteration of, <a href="#Page_397">397</a>.</span><br /> +<br /> +<i>Colbert</i>, M., the policy of his commercial regulations disputed, <a href="#Page_189">189</a>, <a href="#Page_275">275</a>.<br /> +<span style="margin-left: 1em;">His character, <a href="#Page_275">275</a>.</span><br /> +<br /> +<i>Colleges</i>, cause of the depreciation of their money rents inquired into, <a href="#Page_14">14</a>.<br /> +<span style="margin-left: 1em;">The endowments of, from whence they generally arise, <a href="#Page_318">318</a>.</span><br /> +<span style="margin-left: 1em;">Whether they have in general answered the purposes of their institution, ib.</span><br /> +<span style="margin-left: 1em;">These endowments have diminished the necessity of application in the teachers, <a href="#Page_319">319</a>.</span><br /> +<span style="margin-left: 1em;">The privileges of graduates by residence, and charitable foundation of scholarships, injurious to collegiate education, <a href="#Page_320">320</a>.</span><br /> +<span style="margin-left: 1em;">Discipline of, ib.</span><br /> +<br /> +<i>Colliers</i> and <i>Coal-heavers</i>, their high earnings accounted for, <a href="#Page_43">43</a>.<br /> +<br /> +<i>Colonies</i>, new, the natural progress of, <a href="#Page_38">38</a>.<br /> +<span style="margin-left: 1em;">Modern, the commercial advantages derived from them, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">Ancient, on what principles founded, <a href="#Page_227">227</a>, <a href="#Page_228">228</a>.</span><br /> +<span style="margin-left: 1em;">Ancient Grecian colonies not retained under subjection to the parent states, ib.</span><br /> +<span style="margin-left: 1em;">Distinction between the Roman and Greek colonies, <a href="#Page_228">228</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances that led to the establishment of European colonies in the East Indies and America, ib.</span><br /> +<span style="margin-left: 1em;">The East Indies discovered by Vasco de Gama, <a href="#Page_229">229</a>.</span><br /> +<span style="margin-left: 1em;">The West, Indies discovered by Columbus, ib.</span><br /> +<span style="margin-left: 1em;">Gold the object of the first Spanish enterprises there, <a href="#Page_230">230</a>.</span><br /> +<span style="margin-left: 1em;">And of all those of all other European nations, <a href="#Page_231">231</a>.</span><br /> +<span style="margin-left: 1em;">Causes of the prosperity of new colonies, ib.</span><br /> +<span style="margin-left: 1em;">Rapid progress of the ancient Greek colonies, <a href="#Page_232">232</a>.</span><br /> +<span style="margin-left: 1em;">The Roman colonies slow in improvement, ib.</span><br /> +<span style="margin-left: 1em;">The remoteness of America and the West Indies greatly in favour of the European colonies there, ib.</span><br /> +<span style="margin-left: 1em;">Review of the British American colonies, <a href="#Page_234">234</a>.</span><br /> +<span style="margin-left: 1em;">Expense of the civil establishments in British America, <a href="#Page_235">235</a>.</span><br /> +<span style="margin-left: 1em;">Ecclesiastical government, ib.</span><br /> +<span style="margin-left: 1em;">General view of the restraints laid upon the trade of the European colonies, <a href="#Page_236">236</a>.</span><br /> +<span style="margin-left: 1em;">The trade of the British colonies, how regulated, ib.</span><br /> +<span style="margin-left: 1em;">The different kinds of non-enumerated commodities specified, <a href="#Page_237">237</a>.</span><br /> +<span style="margin-left: 1em;">Enumerated commodities, <a href="#Page_238">238</a>.</span><br /> +<span style="margin-left: 1em;">Restraints upon their manufactures, ib.</span><br /> +<span style="margin-left: 1em;">Indulgences granted them by Britain, <a href="#Page_239">239</a>.</span><br /> +<span style="margin-left: 1em;">Were free in every other respect except as to their foreign trade, <a href="#Page_240">240</a>.</span><br /> +<span style="margin-left: 1em;">Little credit due to the policy of Europe from the success of the colonies, <a href="#Page_242">242</a>.</span><br /> +<span style="margin-left: 1em;">Throve by the disorder and injustice of the European governments, ib.</span><br /> +<span style="margin-left: 1em;">Have contributed to augment the industry of all the countries of Europe, <a href="#Page_243">243</a>.</span><br /> +<span style="margin-left: 1em;">Exclusive privileges of trade a dead weight upon all these exertions both in Europe and America, ib.</span><br /> +<span style="margin-left: 1em;">Have in general been a source of expense instead of revenue to their mother countries, <a href="#Page_244">244</a>.</span><br /> +<span style="margin-left: 1em;">Have only benefited their mother countries by the exclusive trade carried on with them, ib.</span><br /> +<span style="margin-left: 1em;">Consequences of the navigation act, <a href="#Page_245">245</a>.</span><br /> +<span style="margin-left: 1em;">The advantage of the colony trade to Britain estimated, <a href="#Page_247">247</a>.</span><br /> +<span style="margin-left: 1em;">A gradual relaxation of the exclusive commerce recommended, <a href="#Page_250">250</a>.</span><br /> +<span style="margin-left: 1em;">Events which have prevented Britain from sensibly feeling the loss of the colony trade, ib.</span><br /> +<span style="margin-left: 1em;">The effects of the colony trade, and the monopoly of that trade, distinguished, ib.</span><br /> +<span style="margin-left: 1em;">To maintain a monopoly, the principal end of the dominion Great Britain assumes over the colonies, <a href="#Page_254">254</a>.</span><br /> +<span style="margin-left: 1em;">Amount of the ordinary peace establishment of, ib.</span><br /> +<span style="margin-left: 1em;">The two late wars Britain sustained, colony wars, to support a monopoly, ib.</span><br /> +<span style="margin-left: 1em;">Two modes by which they might be taxed, <a href="#Page_255">255</a>.</span><br /> +<span style="margin-left: 1em;">Their assemblies not likely to tax them, ib.</span><br /> +<span style="margin-left: 1em;">Taxes by parliamentary requisition as little likely to be raised, <a href="#Page_256">256</a>.</span><br /> +<span style="margin-left: 1em;">Representatives of, might he seated into the British parliament with good effect, <a href="#Page_257">257</a>.</span><br /> +<span style="margin-left: 1em;">Answer to objections against American representation, <a href="#Page_258">258</a>.</span><br /> +<span style="margin-left: 1em;">The interest of the consumer in Britain sacrificed to that of the producer in raising an empire in America, <a href="#Page_274">274</a>.</span><br /> +<br /> +<i>Columbus</i>, the motive that led to his discovery of Americas, <a href="#Page_229">229</a>.<br /> +<span style="margin-left: 1em;">Why he gave the name of Indies to the islands he discovered, ib.</span><br /> +<span style="margin-left: 1em;">His triumphal exhibition of their productions, <a href="#Page_230">230</a>.</span><br /> +<br /> +<i>Columella</i>, his instructions for fencing a kitchen garden, <a href="#Page_64">64</a>.<br /> +<span style="margin-left: 1em;">Advises the planting of vineyards, <a href="#Page_65">65</a>.</span><br /> +<br /> +<i>Commerce</i>, the different common standards or mediums made use of to facilitate the exchange of commodities in the early stages of, <a href="#Page_10">10</a>.<br /> +<span style="margin-left: 1em;">Origin of money, ib.</span><br /> +<span style="margin-left: 1em;">Definition of the term value, <a href="#Page_12">12</a>.</span><br /> +<span style="margin-left: 1em;">Treaties of, though advantageous to the merchants and manufacturers of the favoured countries, necessarily, disadvantageous to those of the favouring country, <a href="#Page_222">222</a>.</span><br /> +<span style="margin-left: 1em;">Translation of the commercial treaty between England and Portugal, concluded in 1703, by Mr. Methuen, <a href="#Page_223">223</a>.</span><br /> +<span style="margin-left: 1em;">Restraints laid upon the European colonies in America, <a href="#Page_236">236</a>.</span><br /> +<span style="margin-left: 1em;">The present splendour of the mercantile system owing to the discovery and colonization of America, <a href="#Page_259">259</a>.</span><br /> +<span style="margin-left: 1em;">Review of the plan by which it proposes to enrich a country, <a href="#Page_266">266</a>.</span><br /> +<span style="margin-left: 1em;">The interest of the consumer constantly sacrificed to that of the producer, <a href="#Page_274">274</a>.</span><br /> +<span style="margin-left: 1em;">See <i>Agriculture</i>, <i>Banks</i>, <i>Capital</i>, <i>Manufactures</i>, <i>Merchant</i>, <i>Money</i>, <i>Stock</i>, <i>Trade</i>, &c.</span><br /> +<br /> +<i>Commodities</i>, the barter of, insufficient for the mutual supply of the wants of mankind, <a href="#Page_10">10</a>.<br /> +<span style="margin-left: 1em;">Metals found to be the best medium to facilitate the exchange of, ib.</span><br /> +<span style="margin-left: 1em;">Labour an invariable standard for the value of, <a href="#Page_14">14</a>.</span><br /> +<span style="margin-left: 1em;">Real and nominal prices of, distinguished, ib.</span><br /> +<span style="margin-left: 1em;">Component parts of the prices of, explained and illustrated, <a href="#Page_21">21</a>.</span><br /> +<span style="margin-left: 1em;">Natural and market prices of, distinguished and how regulated, <a href="#Page_23">23</a>.</span><br /> +<span class='pagenum'><a name="Page_411" id="Page_411">[Pg 411]</a></span><span style="margin-left: 1em;">The ordinary proportion between the value of two commodities, not necessarily the same as between the quantities of them commonly in the market, <a href="#Page_89">89</a>.</span><br /> +<span style="margin-left: 1em;">The price of rude produce, how affected by the advance of wealth and improvement, <a href="#Page_91">91</a>, <a href="#Page_92">92</a>.</span><br /> +<span style="margin-left: 1em;">Foreign are primarily purchased with the produce of domestic industry, <a href="#Page_151">151</a>.</span><br /> +<span style="margin-left: 1em;">When advantageously exported in a rude state, even by a foreign capital, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">The quantity of, in every country, naturally regulated by the demand, <a href="#Page_176">176</a>.</span><br /> +<span style="margin-left: 1em;">Wealth in goods, and in money, compared, <a href="#Page_177">177</a>.</span><br /> +<span style="margin-left: 1em;">Exportation of, to a proper market, always attended with more profit than that of gold and silver, <a href="#Page_179">179</a>.</span><br /> +<span style="margin-left: 1em;">The natural advantages of countries in particular productions sometimes not possible to struggle against, <a href="#Page_185">185</a>.</span><br /> +<br /> +<i>Company</i>, mercantile, incapable of consulting their true interests when they become sovereigns, <a href="#Page_264">264</a>.<br /> +<span style="margin-left: 1em;">An exclusive company a public nuisance, <a href="#Page_265">265</a>.</span><br /> +<span style="margin-left: 1em;">Trading, how first formed, <a href="#Page_307">307</a>.</span><br /> +<span style="margin-left: 1em;">Regulated and joint-stock companies distinguished, ib.</span><br /> +<span style="margin-left: 1em;">Regulated companies in Great Britain specified, ib., <a href="#Page_308">308</a>.</span><br /> +<span style="margin-left: 1em;">Are useless, <a href="#Page_308">308</a>.</span><br /> +<span style="margin-left: 1em;">Constant view of such companies, ib.</span><br /> +<span style="margin-left: 1em;">Forts and garrisons, why never maintained by regulated companies, <a href="#Page_309">309</a>.</span><br /> +<span style="margin-left: 1em;">The nature of joint-stock companies explained, <a href="#Page_310">310</a>, <a href="#Page_311">311</a>, <a href="#Page_316">316</a>.</span><br /> +<span style="margin-left: 1em;">A monopoly necessary to enable a joint-stock company to carry on a foreign trade, <a href="#Page_317">317</a>.</span><br /> +<span style="margin-left: 1em;">What kind of joint-stock companies need no exclusive privileges, ib.</span><br /> +<span style="margin-left: 1em;">Joint-stock companies, why well adapted to the trade of banking, ib.</span><br /> +<span style="margin-left: 1em;">The trade of insurance may be carried on successfully by a joint-stock company, ib.</span><br /> +<span style="margin-left: 1em;">Also, inland navigations, and the supply of water to a great city, ib.</span><br /> +<span style="margin-left: 1em;">Ill success of joint-stock companies in other undertakings, <a href="#Page_318">318</a>.</span><br /> +<br /> +<i>Competition</i>, the effect of, in the purchase of commodities, <a href="#Page_23">23</a>.<br /> +<span style="margin-left: 1em;">Among the venders, ib., <a href="#Page_37">37</a>.</span><br /> +<br /> +<i>Concordat</i> in France, its object, <a href="#Page_337">337</a>.<br /> +<br /> +<i>Congress</i>, American, its strength owing to the important characters it confers on the members of it, <a href="#Page_257">257</a>.<br /> +<br /> +<i>Conversion price</i>, in the payment of rents in Scotland, explained, <a href="#Page_76">76</a>, <a href="#Page_77">77</a>.<br /> +<br /> +<i>Copper</i>, the standard measure of value among the ancient Romans, <a href="#Page_16">16</a>.<br /> +<span style="margin-left: 1em;">Is no legal tender in England, ib.</span><br /> +<br /> +<i>Cori</i>, the largest quadruped on the island of St. Domingo, described, <a href="#Page_229">229</a>.<br /> +<br /> +<i>Corn</i>, the raising of, in different countries, not subject to the same degree of rivalship, as manufactures, <a href="#Page_3">3</a>, <a href="#Page_4">4</a>.<br /> +<span style="margin-left: 1em;">Is the best standard for reserved rents, <a href="#Page_14">14</a>.</span><br /> +<span style="margin-left: 1em;">The price of, how regulated, <a href="#Page_15">15</a>.</span><br /> +<span style="margin-left: 1em;">The price of, the best standard for comparing the different values of particular commodities at different times and places, <a href="#Page_16">16</a>.</span><br /> +<span style="margin-left: 1em;">The three component parts in the price of, <a href="#Page_21">21</a>.</span><br /> +<span style="margin-left: 1em;">Is dearer in Scotland than in England, <a href="#Page_31">31</a>.</span><br /> +<span style="margin-left: 1em;">Its value compared with that of butcher's meat, in the different periods of agriculture, <a href="#Page_62">62</a>.</span><br /> +<span style="margin-left: 1em;">Compared with silver, <a href="#Page_75">75</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances in a historical view of the prices of corn that have misled writers in treating of the value of silver at different periods, <a href="#Page_76">76</a>.</span><br /> +<span style="margin-left: 1em;">Is always a more accurate measure of value than any other commodity, <a href="#Page_79">79</a>.</span><br /> +<span style="margin-left: 1em;">Why dearer in great towns than in the country, <a href="#Page_80">80</a>.</span><br /> +<span style="margin-left: 1em;">Why dearer in some rich commercial countries, as Holland and Genoa, ib.</span><br /> +<span style="margin-left: 1em;">Rose in its nominal price on the discovery of the American mines, <a href="#Page_81">81</a>.</span><br /> +<span style="margin-left: 1em;">And in consequence of the civil war under king Charles I., ib.</span><br /> +<span style="margin-left: 1em;">And in consequence of the bounty on the exportation of, <a href="#Page_82">82</a>.</span><br /> +<span style="margin-left: 1em;">Tendency of the bounty examined, <a href="#Page_83">83</a>.</span><br /> +<span style="margin-left: 1em;">Chronological table of the prices of, <a href="#Page_108">108</a>.</span><br /> +<span style="margin-left: 1em;">The least profitable article of growth in the British West Indian colonies, <a href="#Page_159">159</a>.</span><br /> +<span style="margin-left: 1em;">The restraints formerly laid upon the trade of, unfavourable to the cultivation of land, <a href="#Page_162">162</a>.</span><br /> +<span style="margin-left: 1em;">The free importation of, could little affect the farmers of Great Britain, <a href="#Page_187">187</a>.</span><br /> +<span style="margin-left: 1em;">The policy of the bounty on the exportation of, examined, <a href="#Page_206">206</a>.</span><br /> +<span style="margin-left: 1em;">The reduction in the price of, not produced by the bounty, ib.</span><br /> +<span style="margin-left: 1em;">Tillage not encouraged by the bounty, ib.</span><br /> +<span style="margin-left: 1em;">The money price of, regulates that of all other home-made commodities, <a href="#Page_207">207</a>.</span><br /> +<span style="margin-left: 1em;">Illustration, <a href="#Page_208">208</a>.</span><br /> +<span style="margin-left: 1em;">Ill effects of the bounty, ib.</span><br /> +<span style="margin-left: 1em;">Motives of the country gentlemen in granting the bounty, <a href="#Page_209">209</a>.</span><br /> +<span style="margin-left: 1em;">The natural value of not to be altered by altering the money price, <a href="#Page_210">210</a>.</span><br /> +<span style="margin-left: 1em;">The four several branches of the corn trade specified, <a href="#Page_213">213</a>.</span><br /> +<span style="margin-left: 1em;">The inland dealer, for his own interest, will not raise the price of, higher than the scarcity of the season requires, ib.</span><br /> +<span style="margin-left: 1em;">Corn a commodity the least liable to be monopolised, <a href="#Page_214">214</a>.</span><br /> +<span style="margin-left: 1em;">The inland dealers too numerous and dispersed to form a general combination, ib.</span><br /> +<span style="margin-left: 1em;">Dearths, never artificial, but when government interferes improperly to prevent them, ib.</span><br /> +<span style="margin-left: 1em;">The freedom of the corn trade the best security against a famine, <a href="#Page_215">215</a>.</span><br /> +<span style="margin-left: 1em;">Old English statute to prohibit the corn trade, ib.</span><br /> +<span style="margin-left: 1em;">Consequences of farmers being forced to become corn dealers, ib.</span><br /> +<span style="margin-left: 1em;">The use of corn dealers to the farmers, <a href="#Page_216">216</a>.</span><br /> +<span style="margin-left: 1em;">The prohibitory statute against the corn trade softened, <a href="#Page_217">217</a>.</span><br /> +<span style="margin-left: 1em;">But still under the influence of popular prejudices, ib., <a href="#Page_218">218</a>.</span><br /> +<span style="margin-left: 1em;">The average quantity imported and exported compared with the consumption and annual produce, ib.</span><br /> +<span style="margin-left: 1em;">Tendency of a free importation of, <a href="#Page_219">219</a>.</span><br /> +<span style="margin-left: 1em;">The home-market the most important one for corn, ib.</span><br /> +<span style="margin-left: 1em;">Impropriety of the statute 22 Car. II. for regulating the importation of wheat, confessed by the suspension of its execution by temporary statutes, ib.</span><br /> +<span style="margin-left: 1em;">Duties payable on the importation of grain before 13 Geo. III. ib. <i>note</i>, ib.</span><br /> +<span style="margin-left: 1em;">The home-market indirectly supplied by the exportation of corn, ib.</span><br /> +<span style="margin-left: 1em;">How a liberal system of free exportation and importation and among all nations would operate, <a href="#Page_220">220</a>.</span><br /> +<span style="margin-left: 1em;">The laws concerning corn, similar to those relating to religion, <a href="#Page_221">221</a>.</span><br /> +<span style="margin-left: 1em;">The home-market supplied by the carrying trade, ib.</span><br /> +<span style="margin-left: 1em;">The system of laws connected with the establishment of the bounty, undeserving of praise, ib.</span><br /> +<span style="margin-left: 1em;">Remarks on the statute 13 Geo. III. ib.</span><br /> +<br /> +<span class='pagenum'><a name="Page_412" id="Page_412">[Pg 412]</a></span><i>Corporations</i>, tendency of the exclusive privileges of, on trade, <a href="#Page_26">26</a>.<br /> +<span style="margin-left: 1em;">By what authority erected, <a href="#Page_50">50</a>, <a href="#Page_52">52</a>.</span><br /> +<span style="margin-left: 1em;">The advantages they derive from the surrounding country, ib.</span><br /> +<span style="margin-left: 1em;">Check the operations of competition, <a href="#Page_54">54</a>.</span><br /> +<span style="margin-left: 1em;">Their internal regulations combinations against the public, ib.</span><br /> +<span style="margin-left: 1em;">Are injurious even to the members of them, ib.</span><br /> +<span style="margin-left: 1em;">The laws of, obstruct the free circulation of labour from one employment to another, <a href="#Page_57">57</a>.</span><br /> +<span style="margin-left: 1em;">Origin of, <a href="#Page_163">163</a>.</span><br /> +<span style="margin-left: 1em;">Are exempted by their privileges from the power of the feudal barons, <a href="#Page_164">164</a>.</span><br /> +<span style="margin-left: 1em;">The European East India companies disadvantageous to the eastern commerce, <a href="#Page_181">181</a>, <a href="#Page_182">182</a>.</span><br /> +<span style="margin-left: 1em;">The exclusive privileges of corporations ought to be destroyed, <a href="#Page_191">191</a>.</span><br /> +<br /> +<i>Cottagers</i>, in Scotland, their situation described, <a href="#Page_49">49</a>.<br /> +<span style="margin-left: 1em;">Are cheap manufacturers of stockings, ib.</span><br /> +<span style="margin-left: 1em;">The diminution of, in England, considered, <a href="#Page_95">95</a>.</span><br /> +<br /> +<i>Coward</i>, character of, <a href="#Page_329">329</a>.<br /> +<br /> +<i>Credit</i>. See <i>Paper Money</i>.<br /> +<br /> +<i>Crusades</i>, to the Holy land, favourable to the revival of commerce, <a href="#Page_165">165</a>.<br /> +<br /> +<i>Currency of states</i>, remarks on, <a href="#Page_194">194</a>.<br /> +<br /> +<i>Customs</i>, the motives and tendency of drawbacks from the duties of, <a href="#Page_203">203</a>.<br /> +<span style="margin-left: 1em;">The revenue of the customs increased by drawbacks, <a href="#Page_205">205</a>.</span><br /> +<span style="margin-left: 1em;">Occasion of first imposing the duties of, <a href="#Page_307">307</a>.</span><br /> +<span style="margin-left: 1em;">Origin of those duties, <a href="#Page_371">371</a>.</span><br /> +<span style="margin-left: 1em;">Three ancient branches of, <a href="#Page_372">372</a>.</span><br /> +<span style="margin-left: 1em;">Drawbacks of, ib.</span><br /> +<span style="margin-left: 1em;">Are regulated according to the mercantile system, ib., <a href="#Page_373">373</a>.</span><br /> +<span style="margin-left: 1em;">Frauds practised to obtain drawbacks and bounties, ib.</span><br /> +<span style="margin-left: 1em;">The duties of, in many instances uncertain, ib.</span><br /> +<span style="margin-left: 1em;">Improvement of, suggested, <a href="#Page_374">374</a>.</span><br /> +<span style="margin-left: 1em;">Computation of the expense of collecting them, <a href="#Page_380">380</a>.</span><br /> +<br /> +<br /> +D<br /> +<br /> +<i>Dairy</i>, the business of, generally carried on as a save-all, <a href="#Page_96">96</a>.<br /> +<span style="margin-left: 1em;">Circumstances which impede or promote the attention to it, ib.</span><br /> +<span style="margin-left: 1em;">English and Scotch dairies, ib.</span><br /> +<br /> +<i>Danube</i>, the navigation of that river, why of little use to the interior parts of the country from whence it flows, <a href="#Page_9">9</a>.<br /> +<br /> +<i>Davenant</i>, Dr. his objections to the transferring the duties on beer to the malt considered, <a href="#Page_377">377</a>.<br /> +<br /> +<i>Dearths</i>, never caused by combinations among the dealers in corn, but by some general calamity, <a href="#Page_214">214</a>.<br /> +<span style="margin-left: 1em;">The free exercise of the corn trade the best palliative against the inconveniencies of a dearth, <a href="#Page_217">217</a>.</span><br /> +<span style="margin-left: 1em;">Corn dealers the best friends to the people at such seasons, <a href="#Page_218">218</a>.</span><br /> +<br /> +<i>Debts</i>, public, the origin of, traced, <a href="#Page_386">386</a>.<br /> +<span style="margin-left: 1em;">Are accelerated by the expenses attending war, ib.</span><br /> +<span style="margin-left: 1em;">Account of the unfunded debt of Great Britain, <a href="#Page_387">387</a>.</span><br /> +<span style="margin-left: 1em;">The funded debt, <a href="#Page_388">388</a>.</span><br /> +<span style="margin-left: 1em;">Aggregate and general funds, <a href="#Page_389">389</a>.</span><br /> +<span style="margin-left: 1em;">Sinking fund, ib.</span><br /> +<span style="margin-left: 1em;">Annuities for terms of years and for lives, ib.</span><br /> +<span style="margin-left: 1em;">The reduction of, during peace, bears no proportion to its accumulation during war, <a href="#Page_391">391</a>.</span><br /> +<span style="margin-left: 1em;">The plea of the interest being no burden to the nation considered, <a href="#Page_394">394</a>.</span><br /> +<span style="margin-left: 1em;">Are seldom fairly paid when accumulated to a certain degree, <a href="#Page_396">396</a>.</span><br /> +<span style="margin-left: 1em;">Might easily be discharged, by extending the British system of taxation over all the provinces of the empire, <a href="#Page_397">397</a>.</span><br /> +<span style="margin-left: 1em;">Ireland and America ought to contribute to discharge the public debts of Britain, <a href="#Page_402">402</a>.</span><br /> +<br /> +<i>Decker</i>, Sir Matthew, his observations on the accumulation of taxes, <a href="#Page_369">369</a>.<br /> +<span style="margin-left: 1em;">His proposal for transferring all taxes to the consumer, by annual payments, considered, <a href="#Page_371">371</a>.</span><br /> +<br /> +<i>Demand</i>, though the increase of, may at first raise the price of goods, it never fails to reduce it afterwards, <a href="#Page_314">314</a>.<br /> +<br /> +<i>Denmark</i>, account of the settlements of, in the West Indies, <a href="#Page_234">234</a>.<br /> +<br /> +<i>Diamonds</i>, the mines of, not always worth working for, <a href="#Page_73">73</a>.<br /> +<br /> +<i>Discipline</i>, the great importance of, in war, <a href="#Page_293">293</a>.<br /> +<span style="margin-left: 1em;">Instances of, ib.</span><br /> +<br /> +<i>Diversions</i>, public, their political use, <a href="#Page_334">334</a>.<br /> +<br /> +<i>Domingo</i>, St. mistaken by Columbus for a part of the East Indies, <a href="#Page_229">229</a>.<br /> +<span style="margin-left: 1em;">Its principal productions, ib.</span><br /> +<span style="margin-left: 1em;">The natives soon stripped of all their gold, <a href="#Page_230">230</a>.</span><br /> +<span style="margin-left: 1em;">Historical view of the French colony there, <a href="#Page_234">234</a>.</span><br /> +<br /> +<i>Doomsday-book</i>, the intention of that compilation, <a href="#Page_351">351</a>.<br /> +<br /> +<i>Dorians</i>, ancient, where the colonies of, settled, <a href="#Page_227">227</a>.<br /> +<br /> +<i>Dramatic exhibitions</i>, the political use of, <a href="#Page_334">334</a>.<br /> +<br /> +<i>Drawbacks</i>, in commerce, explained, <a href="#Page_182">182</a>.<br /> +<span style="margin-left: 1em;">The motives to, and tendency of, explained, <a href="#Page_203">203</a>.</span><br /> +<span style="margin-left: 1em;">On wines, currants, and wrought silks, ib.</span><br /> +<span style="margin-left: 1em;">On tobacco and sugar, <a href="#Page_204">204</a>.</span><br /> +<span style="margin-left: 1em;">On wines, particularly considered, ib.</span><br /> +<span style="margin-left: 1em;">Were originally granted to encourage the carrying trade, <a href="#Page_205">205</a>.</span><br /> +<span style="margin-left: 1em;">The revenue of the customs increased by them, ib.</span><br /> +<span style="margin-left: 1em;">Drawbacks allowed in favour of the colonies, <a href="#Page_213">213</a>.</span><br /> +<br /> +<i>Drugs</i>, regulations of their importation and exportation, <a href="#Page_272">272</a>.<br /> +<br /> +<i>Drunkenness</i>, the motive to this vice inquired into, <a href="#Page_200">200</a>.<br /> +<br /> +<i>Dutch</i>, their settlements in America slow in in improvement, because under the government of an exclusive company, <a href="#Page_234">234</a>.<br /> +<span style="margin-left: 1em;">Their East India trade checked by monopoly, <a href="#Page_261">261</a>.</span><br /> +<span style="margin-left: 1em;">Measures taken by, to secure the monopoly of the spice trade. See <i>Holland</i>.</span><br /> +<br /> +<br /> +E<br /> +<br /> +<i>East Indies</i>, representation of the miserable state of the provinces of, under the English government there, <a href="#Page_30">30</a>.<br /> +<span style="margin-left: 1em;">Historical view of the European trade with those countries, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">Rice countries more populous and rich than corn countries, ib.</span><br /> +<span style="margin-left: 1em;">The real price of labour lower in China and Indostan than in the greater part of Europe, <a href="#Page_87">87</a>.</span><br /> +<span style="margin-left: 1em;">Gold and silver the most profitable commodities to carry thither, ib.</span><br /> +<span style="margin-left: 1em;">The proportional value of gold to silver, how rated there, <a href="#Page_89">89</a>.</span><br /> +<span style="margin-left: 1em;">Great extension of foreign commerce by the discovery of a passage to, round the Cape of Good Hope, <a href="#Page_181">181</a>.</span><br /> +<span style="margin-left: 1em;">Historical review of the intercourse with, ib., <a href="#Page_182">182</a>.</span><br /> +<span style="margin-left: 1em;">Effect of the annual exportation of silver to, from Europe, ib.</span><br /> +<span style="margin-left: 1em;">The trade with, chiefly carried on by exclusive companies, <a href="#Page_261">261</a>.</span><br /> +<span style="margin-left: 1em;">Tendency of their monopolies, ib.</span><br /> +<span class='pagenum'><a name="Page_413" id="Page_413">[Pg 413]</a></span><br /> +<i>East India company</i>, a monopoly against the very nation in which it is erected, <a href="#Page_261">261</a>.<br /> +<span style="margin-left: 1em;">The operation of such a company in a poor and in a rich country compared, ib.</span><br /> +<span style="margin-left: 1em;">That country whose capital is not large enough to extend to such a distant trade ought not to engage in it, <a href="#Page_262">262</a>.</span><br /> +<span style="margin-left: 1em;">The mercantile habits of trading companies render them incapable of consulting their true interests when they become sovereigns, <a href="#Page_264">264</a>.</span><br /> +<span style="margin-left: 1em;">The genius of the administration of the English company, ib.</span><br /> +<span style="margin-left: 1em;">Subordinate practices of their agents and clerks, <a href="#Page_265">265</a>.</span><br /> +<span style="margin-left: 1em;">The bad conduct of agents in India owing to their situation, ib.</span><br /> +<span style="margin-left: 1em;">Such an exclusive company a nuisance in every respect, <a href="#Page_266">266</a>.</span><br /> +<span style="margin-left: 1em;">Brief review of their history, <a href="#Page_313">313</a>.</span><br /> +<span style="margin-left: 1em;">Their privileges invaded, ib.</span><br /> +<span style="margin-left: 1em;">A rival company formed, ib.</span><br /> +<span style="margin-left: 1em;">The two companies united, <a href="#Page_314">314</a>.</span><br /> +<span style="margin-left: 1em;">Are infected by the spirit of war and conquest, ib.</span><br /> +<span style="margin-left: 1em;">Agreements between the company and government, ib.</span><br /> +<span style="margin-left: 1em;">Interference of government in their territorial administration, <a href="#Page_315">315</a>.</span><br /> +<span style="margin-left: 1em;">And in the direction at home, ib.</span><br /> +<span style="margin-left: 1em;">Why unfit to govern a great empire, ib.</span><br /> +<span style="margin-left: 1em;">Their sovereign and commercial characters incompatible, <a href="#Page_344">344</a>.</span><br /> +<span style="margin-left: 1em;">How the territorial acquisitions of, might be rendered a source of revenue, <a href="#Page_403">403</a>.</span><br /> +<br /> +<i>Economists</i>, sect of, in France, their political tenets, <a href="#Page_275">275</a>.<br /> +<br /> +<i>Edinburgh</i>, its present share of trade owing to the removal of the court and parliament, <a href="#Page_138">138</a>.<br /> +<br /> +<i>Education</i>, the principal cause of the various talents observable in different men, <a href="#Page_7">7</a>.<br /> +<span style="margin-left: 1em;">Those parts of, for which there are no public institutions, generally the best taught, <a href="#Page_320">320</a>.</span><br /> +<span style="margin-left: 1em;">In universities, a view of, <a href="#Page_323">323</a>.</span><br /> +<span style="margin-left: 1em;">Of travelling for, <a href="#Page_324">324</a>.</span><br /> +<span style="margin-left: 1em;">Course of, in the republics of ancient Greece, ib.</span><br /> +<span style="margin-left: 1em;">In ancient Rome, ib.</span><br /> +<span style="margin-left: 1em;">The ancient teachers superior to those in modern times, <a href="#Page_326">326</a>.</span><br /> +<span style="margin-left: 1em;">Public institutions injurious to good education, ib.</span><br /> +<span style="margin-left: 1em;">Inquiry how far the public ought to attend to the education of the people, <a href="#Page_327">327</a>.</span><br /> +<span style="margin-left: 1em;">The different opportunities of education in the different ranks of the people, <a href="#Page_328">328</a>.</span><br /> +<span style="margin-left: 1em;">The advantages of proper attention in the state to the education of the people, <a href="#Page_329">329</a>.</span><br /> +<br /> +<i>Egypt</i>, the first country in which agriculture and manufactures appear to have been cultivated, <a href="#Page_9">9</a>.<br /> +<span style="margin-left: 1em;">Agriculture was greatly favoured there, <a href="#Page_283">283</a>.</span><br /> +<span style="margin-left: 1em;">Was long the granary of the Roman empire, <a href="#Page_284">284</a>.</span><br /> +<br /> +<i>Ejectment</i>, action of, in England, when invented, and its operation, <a href="#Page_160">160</a>.<br /> +<br /> +<i>Employments</i>, the advantages and disadvantages of the different kinds of, in the same neighbourhood, continually tend to equality, <a href="#Page_41">41</a>.<br /> +<span style="margin-left: 1em;">The differences or inequalities among, specified, ib.</span><br /> +<span style="margin-left: 1em;">The constancy or precariousness of, influences the rate of wages, <a href="#Page_43">43</a>.</span><br /> +<br /> +<i>England</i>, the dates of its several species of coinage, silver, gold, and copper, <a href="#Page_16">16</a>.<br /> +<span style="margin-left: 1em;">Why labour is cheaper there than in North America, <a href="#Page_29">29</a>.</span><br /> +<span style="margin-left: 1em;">The rate of population in both countries compared, ib.</span><br /> +<span style="margin-left: 1em;">The produce and labour of, have gradually increased from the earliest accounts in history, while writers are representing the country as rapidly declining, <a href="#Page_141">141</a>.</span><br /> +<span style="margin-left: 1em;">Enumeration of obstructions and calamities which the prosperity of the country has surmounted, ib.</span><br /> +<span style="margin-left: 1em;">Circumstances that favour commerce and manufactures, <a href="#Page_171">171</a>.</span><br /> +<span style="margin-left: 1em;">Laws in favour of agriculture, ib.</span><br /> +<span style="margin-left: 1em;">Why formerly unable to carry on foreign wars of long duration, <a href="#Page_180">180</a>.</span><br /> +<span style="margin-left: 1em;">Why the commerce with France has been subjected to so many discouragements, <a href="#Page_202">202</a>.</span><br /> +<span style="margin-left: 1em;">Foundation of the enmity between these countries, ib.</span><br /> +<span style="margin-left: 1em;">Translation of the commercial treaty concluded in 1703 with Portugal, <a href="#Page_223">223</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the value of the trade with Portugal, ib., <a href="#Page_224">224</a>.</span><br /> +<span style="margin-left: 1em;">Might procure gold without the Portugal trade, ib.</span><br /> +<span style="margin-left: 1em;">Consequences of securing the colony trade by the navigation act, <a href="#Page_245">245</a>.</span><br /> +<br /> +<i>Engrossing</i>. See <i>Forstalling</i>.<br /> +<br /> +<i>Entails</i>, the law of, prevents the division of land by alienation, <a href="#Page_157">157</a>.<br /> +<span style="margin-left: 1em;">Intention of, <a href="#Page_158">158</a>.</span><br /> +<br /> +<i>Europe</i>, general review of the several nations of, as to their improvement since the discovery of America, <a href="#Page_85">85</a>.<br /> +<span style="margin-left: 1em;">The two richest countries in, enjoy the greatest shares of the carrying trade, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the advantages derived by, from the discovery and colonization of America, <a href="#Page_243">243</a>.</span><br /> +<span style="margin-left: 1em;">The particular advantages derived by each colonizing country, <a href="#Page_244">244</a>.</span><br /> +<span style="margin-left: 1em;">And by others which have no colonies, <a href="#Page_259">259</a>.</span><br /> +<br /> +<i>Exchange</i>, the operation of, in the commercial intercourse of different countries, <a href="#Page_174">174</a>.<br /> +<span style="margin-left: 1em;">The course of, an uncertain criterion of the balance of trade between two countries, <a href="#Page_192">192</a>, <a href="#Page_193">193</a>.</span><br /> +<span style="margin-left: 1em;">Is generally in favour of those countries which pay in bank money, against those which pay in common currency, <a href="#Page_198">198</a>.</span><br /> +<br /> +<i>Excise</i>, the principal objects of, <a href="#Page_371">371</a>.<br /> +<span style="margin-left: 1em;">The duties of, more clear and distinct than the customs, <a href="#Page_373">373</a>.</span><br /> +<span style="margin-left: 1em;">Affects only a few articles of the most general consumption, ib.</span><br /> +<span style="margin-left: 1em;">The scheme of Sir Robert Walpole defended, <a href="#Page_375">375</a>.</span><br /> +<span style="margin-left: 1em;">The excise upon home-made fermented and spiritous liquors the most productive, <a href="#Page_376">376</a>.</span><br /> +<span style="margin-left: 1em;">Expense of levying excise duties computed, <a href="#Page_380">380</a>.</span><br /> +<span style="margin-left: 1em;">The laws of, more vexatious than those of the customs, <a href="#Page_381">381</a>.</span><br /> +<br /> +<i>Exercise</i>, military, alteration in, produced by the invention of fire-arms, <a href="#Page_292">292</a>.<br /> +<br /> +<i>Expenses</i>, private, how they influence the national capital, <a href="#Page_33">33</a>.<br /> +<span style="margin-left: 1em;">Advantage of bestowing them on durable commodities, ib.</span><br /> +<br /> +<i>Export trade</i>, the principles of, explained, <a href="#Page_153">153</a>.<br /> +<span style="margin-left: 1em;">When rude produce may be advantageously exported, even by a foreign capital, <a href="#Page_156">156</a>, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">Why encouraged by European nations, <a href="#Page_182">182</a>, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">By what means promoted, ib.</span><br /> +<span style="margin-left: 1em;">The motives to, and tendency of, drawbacks of duties, <a href="#Page_203">203</a>.</span><br /> +<span style="margin-left: 1em;">The grants of bounties on, considered, <a href="#Page_205">205</a>.</span><br /> +<span style="margin-left: 1em;">Exportation of the materials of manufactures, review of the restraints and prohibitions of, <a href="#Page_268">268</a>.</span><br /> +<span class='pagenum'><a name="Page_414" id="Page_414">[Pg 414]</a></span><br /> +<br /> +F<br /> +<br /> +<i>Faith</i>, articles of, how regulated by the civil magistrate, <a href="#Page_354">354</a>.<br /> +<br /> +<i>Families</i> seldom remain on large estates many generations in commercial countries, <a href="#Page_170">170</a>.<br /> +<br /> +<i>Famine</i>. See <i>Dearth</i>.<br /> +<br /> +<i>Farmers of land</i>, the several articles that compose their gain distinguished, <a href="#Page_22">22</a>.<br /> +<span style="margin-left: 1em;">Require more knowledge and experience than the generality of manufacturers, <a href="#Page_53">53</a>.</span><br /> +<span style="margin-left: 1em;">In what their capitals consist, <a href="#Page_112">112</a>.</span><br /> +<span style="margin-left: 1em;">The great quantity of productive labour put into motion by their capitals, <a href="#Page_149">149</a>.</span><br /> +<span style="margin-left: 1em;">Artificers necessary to them, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Their situation better in England than in any other part of Europe, <a href="#Page_160">160</a>.</span><br /> +<span style="margin-left: 1em;">Labour under great disadvantages everywhere, <a href="#Page_161">161</a>.</span><br /> +<span style="margin-left: 1em;">Origin of long leases of farms, <a href="#Page_170">170</a>.</span><br /> +<span style="margin-left: 1em;">Are a class of men least subject to the wretched spirit of monopoly, <a href="#Page_187">187</a>.</span><br /> +<span style="margin-left: 1em;">Were forced by old statutes to become the only dealers in corn, <a href="#Page_215">215</a>.</span><br /> +<span style="margin-left: 1em;">Could not sell corn cheaper than any other corn merchant, <a href="#Page_216">216</a>.</span><br /> +<span style="margin-left: 1em;">Could seldom sell it so cheap, ib.</span><br /> +<span style="margin-left: 1em;">The culture of land obstructed by this division of their capitals, <a href="#Page_217">217</a>.</span><br /> +<span style="margin-left: 1em;">The use of corn-dealers to the farmers, ib.</span><br /> +<span style="margin-left: 1em;">How they contribute to the annual production of the land, according to the French agricultural system of political economy, <a href="#Page_275">275</a>.</span><br /> +<br /> +<i>Farmers</i> of the public revenue, their character, <a href="#Page_383">383</a>, <a href="#Page_391">391</a>.<br /> +<br /> +<i>Feudal government</i>, miserable state of the occupiers of land under, <a href="#Page_137">137</a>.<br /> +<span style="margin-left: 1em;">Trade and interest of money under, ib.</span><br /> +<span style="margin-left: 1em;">Chiefs, their power, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">Slaves, their situation, <a href="#Page_159">159</a>.</span><br /> +<span style="margin-left: 1em;">Tenures of land, ib.</span><br /> +<span style="margin-left: 1em;">Taxation, <a href="#Page_161">161</a>.</span><br /> +<span style="margin-left: 1em;">Original poverty and servile state of the tradesmen in towns, <a href="#Page_162">162</a>.</span><br /> +<span style="margin-left: 1em;">Immunities seldom granted but for valuable considerations, <a href="#Page_163">163</a>.</span><br /> +<span style="margin-left: 1em;">Origin of free burghs, ib.</span><br /> +<span style="margin-left: 1em;">The power of the barons reduced by municipal privileges, ib.</span><br /> +<span style="margin-left: 1em;">The cause and effect of ancient hospitality, <a href="#Page_167">167</a>.</span><br /> +<span style="margin-left: 1em;">Extensive power of the ancient barons, <a href="#Page_168">168</a>.</span><br /> +<span style="margin-left: 1em;">Was not established in England until the Norman conquest, ib.</span><br /> +<span style="margin-left: 1em;">Was silently subverted by manufactures and commerce, <a href="#Page_169">169</a>.</span><br /> +<br /> +<i>Feudal wars</i>, how supported, <a href="#Page_290">290</a>.<br /> +<span style="margin-left: 1em;">Military exercises not well attended to, under, <a href="#Page_291">291</a>.</span><br /> +<span style="margin-left: 1em;">Standing armies gradually introduced to supply the place of the feudal militia, <a href="#Page_295">295</a>.</span><br /> +<span style="margin-left: 1em;">Account of the casualties or taxes under, <a href="#Page_363">363</a>.</span><br /> +<span style="margin-left: 1em;">Revenues under, how enjoyed by the great landholders, <a href="#Page_385">385</a>.</span><br /> +<br /> +<i>Fairs</i>, public, in Scotland, the nature of the institution, explained, <a href="#Page_76">76</a>, <a href="#Page_77">77</a>.<br /> +<br /> +<i>Fines</i> for the renewal of leases, the motive for exacting them, and their tendency, <a href="#Page_349">349</a>.<br /> +<br /> +<i>Fire-arms</i>, alteration in the art of war effected by the invention of, <a href="#Page_292">292</a>, <a href="#Page_295">295</a>.<br /> +<span style="margin-left: 1em;">The invention of, favourable to the extension of civilisation, <a href="#Page_296">296</a>.</span><br /> +<br /> +<i>Fish</i>, the component parts of the price of, explained, <a href="#Page_21">21</a>.<br /> +<span style="margin-left: 1em;">The multiplication of, at market, by human industry, both limited and uncertain, <a href="#Page_99">99</a>.</span><br /> +<span style="margin-left: 1em;">How an increase of demand raises the price of fish, <a href="#Page_100">100</a>.</span><br /> +<br /> +<i>Fisheries</i>, observations on the tonnage bounties granted to, <a href="#Page_211">211</a>.<br /> +<span style="margin-left: 1em;">To the herring fishery ib.</span><br /> +<span style="margin-left: 1em;">The boat fishery ruined by this bounty, <a href="#Page_212">212</a>.</span><br /> +<br /> +<i>Flanders</i>, the ancient commercial prosperity of, perpetuated by the solid improvements of agriculture, <a href="#Page_172">172</a>.<br /> +<br /> +<i>Flax</i>, the component parts of the price of, explained, <a href="#Page_21">21</a>.<br /> +<br /> +<i>Fleetwood</i>, Bishop, remarks on his Chronicon Pretiosum, <a href="#Page_77">77</a>, <a href="#Page_78">78</a>.<br /> +<br /> +<i>Flour</i>, the component parts of the price of, explained, <a href="#Page_21">21</a>.<br /> +<br /> +<i>Food</i>, will always purchase as much labor as it can maintain on the spot, <a href="#Page_61">61</a>.<br /> +<span style="margin-left: 1em;">Bread and butcher's meat compared, <a href="#Page_62">62</a>, <a href="#Page_63">63</a>.</span><br /> +<span style="margin-left: 1em;">Is the original source of every other production, <a href="#Page_69">69</a>.</span><br /> +<span style="margin-left: 1em;">The abundance of, constitutes the principal part of the riches of the world, and gives the principal value to many other kinds of riches, <a href="#Page_73">73</a>.</span><br /> +<br /> +<i>Forestalling</i> and <i>engrossing</i>, the popular fear of, like the suspicions of witchcraft, <a href="#Page_218">218</a>.<br /> +<br /> +<i>Forts</i>, when necessary for the protection of commerce, <a href="#Page_306">306</a>.<br /> +<br /> +<i>France</i>, fluctuations in the legal rate of interest for money there during the course of the present century, <a href="#Page_37">37</a>, <a href="#Page_38">38</a>.<br /> +<span style="margin-left: 1em;">Remarks on the trade and riches of, ib.</span><br /> +<span style="margin-left: 1em;">The nature of apprenticeships there, <a href="#Page_51">51</a>.</span><br /> +<span style="margin-left: 1em;">The propriety of restraining the planting of vineyards examined, <a href="#Page_65">65</a>.</span><br /> +<span style="margin-left: 1em;">Variations in the price of grain there, <a href="#Page_73">73</a>.</span><br /> +<span style="margin-left: 1em;">The money price of labour has sunk gradually with the money price of corn, <a href="#Page_84">84</a>.</span><br /> +<span style="margin-left: 1em;">Foundation of the Mississippi scheme, <a href="#Page_130">130</a>.</span><br /> +<span style="margin-left: 1em;">Little trade or industry to be found in the parliament towns of, <a href="#Page_138">138</a>.</span><br /> +<span style="margin-left: 1em;">Description of the class of farmers called metayers, <a href="#Page_159">159</a>.</span><br /> +<span style="margin-left: 1em;">Laws relating to the tenure of land, <a href="#Page_161">161</a>.</span><br /> +<span style="margin-left: 1em;">Services formerly exacted besides rent, ib.</span><br /> +<span style="margin-left: 1em;">The taille, what, and in operation in checking the cultivation of land, ib.</span><br /> +<span style="margin-left: 1em;">Origin of the magistrates and councils of cities, <a href="#Page_164">164</a>.</span><br /> +<span style="margin-left: 1em;">No direct legal encouragement given to agriculture, <a href="#Page_171">171</a>.</span><br /> +<span style="margin-left: 1em;">Ill policy of M. Colbert's commercial regulations, <a href="#Page_189">189</a>.</span><br /> +<span style="margin-left: 1em;">French goods heavily taxed in Great Britain, <a href="#Page_192">192</a>.</span><br /> +<span style="margin-left: 1em;">The commercial intercourse between France and England, now chiefly carried on by smugglers, ib.</span><br /> +<span style="margin-left: 1em;">The policy of the commercial restraints between France and Britain considered, ib.</span><br /> +<span style="margin-left: 1em;">State of the coinage there, <a href="#Page_194">194</a>.</span><br /> +<span style="margin-left: 1em;">Why the commerce with England has been subjected to discouragement, <a href="#Page_202">202</a>.</span><br /> +<span style="margin-left: 1em;">Foundation of the enmity between these countries, ib.</span><br /> +<span style="margin-left: 1em;">Remarks concerning the seignorage on coin, <a href="#Page_225">225</a>.</span><br /> +<span style="margin-left: 1em;">Standard of the gold coin there, ib.</span><br /> +<span style="margin-left: 1em;">The trade of the French colonies, how regulated, <a href="#Page_237">237</a>.</span><br /> +<span style="margin-left: 1em;">The government of the colonies conducted with moderation, <a href="#Page_241">241</a>.</span><br /> +<span style="margin-left: 1em;">The sugar colonies of, better governed than those of Britain, ib.</span><br /> +<span style="margin-left: 1em;">The kingdom of, how taxed, <a href="#Page_256">256</a>.</span><br /> +<span style="margin-left: 1em;">The members of the league fought more in defence of their own importance than for any other cause, <a href="#Page_258">258</a>.</span><br /> +<span class='pagenum'><a name="Page_415" id="Page_415">[Pg 415]</a></span><span style="margin-left: 1em;">The present agricultural system of political economy adopted by philosophers there described, <a href="#Page_275">275</a>.</span><br /> +<span style="margin-left: 1em;">Under what direction the funds for the repair of the roads are placed, <a href="#Page_305">305</a>.</span><br /> +<span style="margin-left: 1em;">General state of the roads, ib.</span><br /> +<span style="margin-left: 1em;">The universities badly governed, <a href="#Page_319">319</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on the management of the parliaments of, <a href="#Page_335">335</a>.</span><br /> +<span style="margin-left: 1em;">Measures taken in, to reduce the power of the clergy, <a href="#Page_337">337</a>.</span><br /> +<span style="margin-left: 1em;">Account of the mode of rectifying the inequalities of the predial taille in the generality of Montauban, <a href="#Page_352">352</a>.</span><br /> +<span style="margin-left: 1em;">The personal taille explained, <a href="#Page_360">360</a>.</span><br /> +<span style="margin-left: 1em;">The inequalities in, how remedied, <a href="#Page_361">361</a>.</span><br /> +<span style="margin-left: 1em;">How the personal taille discourages cultivation, ib.</span><br /> +<span style="margin-left: 1em;">The vingtieme, <a href="#Page_362">362</a>.</span><br /> +<span style="margin-left: 1em;">Stamp duties and the controle, <a href="#Page_364">364</a>, <a href="#Page_365">365</a>.</span><br /> +<span style="margin-left: 1em;">The capitation tax, how rated, <a href="#Page_367">367</a>.</span><br /> +<span style="margin-left: 1em;">Restraints upon the interior trade of the country by the local variety of the revenue laws, <a href="#Page_382">382</a>.</span><br /> +<span style="margin-left: 1em;">The duties on tobacco and salt, how levied, <a href="#Page_383">383</a>.</span><br /> +<span style="margin-left: 1em;">The different sources of revenue in, <a href="#Page_384">384</a>.</span><br /> +<span style="margin-left: 1em;">How the finances of, might be reformed, ib.</span><br /> +<span style="margin-left: 1em;">The French system of taxation compared with that in Britain, ib.</span><br /> +<span style="margin-left: 1em;">The nature of tontines explained, <a href="#Page_390">390</a>.</span><br /> +<span style="margin-left: 1em;">Estimate of the whole national debt of, ib.</span><br /> +<br /> +<i>Frugality</i>, generally a predominating principle in human nature, <a href="#Page_140">140</a>.<br /> +<br /> +<i>Fuller's earth</i>, the exportation of why prohibited, <a href="#Page_271">271</a>.<br /> +<br /> +<i>Funds</i>, British, brief historical view of, <a href="#Page_387">387</a>.<br /> +<span style="margin-left: 1em;">Operation of, politically considered, <a href="#Page_393">393</a>.</span><br /> +<span style="margin-left: 1em;">The practice of funding has gradually enfeebled every state that has adopted it, <a href="#Page_395">395</a>.</span><br /> +<br /> +<i>Fur trade</i>, the first principles of, <a href="#Page_68">68</a>.<br /> +<br /> +<br /> +G<br /> +<br /> +<i>Gama</i>, Vasco de, the first European who discovered a naval track to the East Indies, <a href="#Page_229">229</a>.<br /> +<br /> +<i>Gardening</i>, the gains from, distinguished into the component parts, <a href="#Page_22">22</a>.<br /> +<span style="margin-left: 1em;">Not a profitable employment, <a href="#Page_64">64</a>.</span><br /> +<br /> +<i>Gems</i>, See <i>Stones</i>.<br /> +<br /> +<i>General</i> fund in the British finances explained, <a href="#Page_389">389</a>.<br /> +<br /> +<i>Genoa</i>, why corn is dear in the territory of, <a href="#Page_80">80</a>.<br /> +<br /> +<i>Glasgow</i>, the trade of, doubled in fifteen years, by erecting banks there, <a href="#Page_120">120</a>.<br /> +<span style="margin-left: 1em;">Why a city of greater trade than Edinburgh, <a href="#Page_138">138</a>.</span><br /> +<br /> +<i>Gold</i>, not the standard value in England, <a href="#Page_16">16</a>.<br /> +<span style="margin-left: 1em;">Its value measured by silver, <a href="#Page_17">17</a>.</span><br /> +<span style="margin-left: 1em;">Reformation of the gold coin, ib.</span><br /> +<span style="margin-left: 1em;">Mint price of gold in England, ib.</span><br /> +<span style="margin-left: 1em;">The working the mines of, in Peru, very unprofitable, <a href="#Page_71">71</a>.</span><br /> +<span style="margin-left: 1em;">Qualities for which this metal is valued, <a href="#Page_72">72</a>.</span><br /> +<span style="margin-left: 1em;">The proportionate value of, to silver, how rated before and after the discovery of the American mines, <a href="#Page_89">89</a>.</span><br /> +<span style="margin-left: 1em;">Is cheaper in the Spanish market than silver, <a href="#Page_90">90</a>.</span><br /> +<span style="margin-left: 1em;">Great quantities of, remitted annually from Portugal to England, <a href="#Page_223">223</a>.</span><br /> +<span style="margin-left: 1em;">Why little of it remains in England, ib.</span><br /> +<span style="margin-left: 1em;">Is always to be had for its value, <a href="#Page_224">224</a>.</span><br /> +<br /> +<i>Gold</i> and <i>Silver</i>, the prices of, how affected by the increase of the quantity of the metals, <a href="#Page_79">79</a>.<br /> +<span style="margin-left: 1em;">Are commodities that naturally seek the best market, <a href="#Page_80">80</a>.</span><br /> +<span style="margin-left: 1em;">Are metals of the least value among the poorest nations, ib.</span><br /> +<span style="margin-left: 1em;">The increase in the quantity of, by means of wealth and improvement, has no tendency to diminish their value, <a href="#Page_81">81</a>.</span><br /> +<span style="margin-left: 1em;">The annual consumption of those metals very considerable, <a href="#Page_87">87</a>.</span><br /> +<span style="margin-left: 1em;">Annual importation of, into Spain and Portugal, <a href="#Page_88">88</a>.</span><br /> +<span style="margin-left: 1em;">Are not likely to multiply beyond the demand, ib.</span><br /> +<span style="margin-left: 1em;">The durability of, the cause of the steadiness of their price, ib.</span><br /> +<span style="margin-left: 1em;">On what circumstances the quantity of, in every particular country, depends, <a href="#Page_100">100</a>.</span><br /> +<span style="margin-left: 1em;">The low value of these metals in a country no evidence of its wealth, nor their high value of its poverty, <a href="#Page_101">101</a>.</span><br /> +<span style="margin-left: 1em;">If not employed at home, will be sent abroad notwithstanding all prohibitions, <a href="#Page_139">139</a>.</span><br /> +<span style="margin-left: 1em;">The reason why European nations have studied to accumulate these metals, <a href="#Page_174">174</a>.</span><br /> +<span style="margin-left: 1em;">Commercial arguments in favour of their exportation, ib.</span><br /> +<span style="margin-left: 1em;">These and all other commodities are mutually the prices of each other, <a href="#Page_175">175</a>.</span><br /> +<span style="margin-left: 1em;">The quantity of, in every country, regulated by the effectual demand, <a href="#Page_176">176</a>.</span><br /> +<span style="margin-left: 1em;">Why the prices of these metals do not fluctuate so much as those of other commodities, ib.</span><br /> +<span style="margin-left: 1em;">To preserve a due quantity of, in a country, no proper object of attention for the government, <a href="#Page_176">176</a>.</span><br /> +<span style="margin-left: 1em;">The accumulated gold and silver in a country distinguished into three parts, <a href="#Page_178">178</a>.</span><br /> +<span style="margin-left: 1em;">A great quantity of bullion alternately exported and imported for the purposes of foreign trade, <a href="#Page_179">179</a>.</span><br /> +<span style="margin-left: 1em;">Annual amount of these metals imported into Spain and Portugal, <a href="#Page_180">180</a>.</span><br /> +<span style="margin-left: 1em;">The importation of, not the principal benefit derived from foreign trade, <a href="#Page_181">181</a>.</span><br /> +<span style="margin-left: 1em;">The value of, how affected by the discovery of the American mines, ib.</span><br /> +<span style="margin-left: 1em;">And by the passage round the Cape of Good Hope to the East Indies, ib.</span><br /> +<span style="margin-left: 1em;">Effect of the annual exportation of silver to the East Indies, <a href="#Page_182">182</a>.</span><br /> +<span style="margin-left: 1em;">The commercial means pursued to increase the quantity of these metals in a country, ib., <a href="#Page_192">192</a>.</span><br /> +<span style="margin-left: 1em;">Bullion, how received and paid at the bank of Amsterdam, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">At what prices, <a href="#Page_196">196</a>, <i>note</i>.</span><br /> +<span style="margin-left: 1em;">A trading country without mines not likely to be exhausted by an annual exportation of these metals, <a href="#Page_200">200</a>.</span><br /> +<span style="margin-left: 1em;">The value of, in Spain and Portugal, depreciated by restraining the exportation of them, <a href="#Page_208">208</a>.</span><br /> +<span style="margin-left: 1em;">Are not imported for the purposes of plate or coin, but for foreign trade, <a href="#Page_224">224</a>.</span><br /> +<span style="margin-left: 1em;">The search after mines of, the most ruinous of all projects, <a href="#Page_230">230</a>.</span><br /> +<span style="margin-left: 1em;">Are valuable because scarce and difficult to be procured, <a href="#Page_231">231</a>.</span><br /> +<br /> +<i>Gorgias</i>, evidence of the wealth he acquired by teaching, <a href="#Page_56">56</a>.<br /> +<br /> +<i>Government</i>, civil, indispensibly necessary for the security of private property, <a href="#Page_297">297</a>.<br /> +<span style="margin-left: 1em;">Subordination in society, by what means introduced, ib.</span><br /> +<span style="margin-left: 1em;">Inequality of fortune introduces civil government for its preservation, <a href="#Page_299">299</a>.</span><br /> +<span style="margin-left: 1em;">The administration of justice a source of revenue in early times, ib.</span><br /> +<span style="margin-left: 1em;">Why government ought not to have the management of turnpikes, <a href="#Page_304">304</a>.</span><br /> +<span style="margin-left: 1em;">Nor of other public works, <a href="#Page_306">306</a>.</span><br /> +<span style="margin-left: 1em;">Want of parsimony during peace imposes a necessity of contracting debts, to carry on a war, <a href="#Page_386">386</a>.</span><br /> +<span class='pagenum'><a name="Page_416" id="Page_416">[Pg 416]</a></span><span style="margin-left: 1em;">Must support a regular administration of justice to cause manufactures and commerce to flourish, <a href="#Page_387">387</a>.</span><br /> +<span style="margin-left: 1em;">Origin of a national debt, ib.</span><br /> +<span style="margin-left: 1em;">Progression of public debts, ib.</span><br /> +<span style="margin-left: 1em;">War, why generally agreeable to the people, <a href="#Page_391">391</a>.</span><br /> +<br /> +<i>Governors</i>, political, the greatest spendthrifts in society, <a href="#Page_142">142</a>.<br /> +<br /> +<i>Grasses</i>, artificial, tend to reduce the price of butcher's meat, <a href="#Page_63">63</a>.<br /> +<br /> +<i>Graziers</i>, subject to monopolies obtained by manufactures to their prejudice, <a href="#Page_271">271</a>.<br /> +<br /> +<i>Greece</i>, foreign trade promoted in several of the ancient states of, <a href="#Page_284">284</a>.<br /> +<span style="margin-left: 1em;">Military exercises a part of general education, <a href="#Page_291">291</a>.</span><br /> +<span style="margin-left: 1em;">Soldiers not a distinct profession in, ib.</span><br /> +<span style="margin-left: 1em;">Course of education in the republics of, <a href="#Page_324">324</a>.</span><br /> +<span style="margin-left: 1em;">The morals of the Greeks inferior to those of the Romans, ib.</span><br /> +<span style="margin-left: 1em;">Schools of the philosophers and rhetoricians, <a href="#Page_325">325</a>.</span><br /> +<span style="margin-left: 1em;">Law no science among the Greeks, ib.</span><br /> +<span style="margin-left: 1em;">Courts, of justice, ib.</span><br /> +<span style="margin-left: 1em;">The martial spirit of the people, how supported, <a href="#Page_329">329</a>.</span><br /> +<br /> +<i>Greek colonies</i>, how distinguished from Roman colonies, <a href="#Page_227">227</a>, <a href="#Page_228">228</a>.<br /> +<span style="margin-left: 1em;">Rapid progress of these colonies, <a href="#Page_232">232</a>.</span><br /> +<br /> +<i>Greek language</i>, how introduced as a part of university education, <a href="#Page_322">322</a>.<br /> +<span style="margin-left: 1em;">Philosophy, the three great branches of, ib.</span><br /> +<br /> +<i>Ground rents</i>, great variations of, according to situation, <a href="#Page_354">354</a>.<br /> +<span style="margin-left: 1em;">Are a more proper subject of taxation, than houses, <a href="#Page_355">355</a>.</span><br /> +<br /> +<i>Gum senega</i>, review of the regulations imposed on the trade for, <a href="#Page_272">272</a>.<br /> +<br /> +<i>Gunpowder</i>, great revolution effected in the art of war by the invention of, <a href="#Page_292">292</a>, <a href="#Page_296">296</a>.<br /> +<span style="margin-left: 1em;">This invention favourable to the extension of civilization, <a href="#Page_296">296</a>.</span><br /> +<br /> +<i>Gustavus Vasa</i>, how enabled to establish the Reformation in Sweden, <a href="#Page_338">338</a>.<br /> +<br /> +<br /> +H<br /> +<br /> +<i>Hanseatic league</i>, causes that rendered it formidable, <a href="#Page_164">164</a>.<br /> +<span style="margin-left: 1em;">Why no vestige remains of the wealth of the Hans towns, <a href="#Page_172">172</a>.</span><br /> +<br /> +<i>Hamburgh</i>, agio of the bank of, explained, <a href="#Page_195">195</a>.<br /> +<span style="margin-left: 1em;">Sources of the revenue of that city, <a href="#Page_343">343</a>, <a href="#Page_344">344</a>.</span><br /> +<span style="margin-left: 1em;">The inhabitants of, how taxed to the state, <a href="#Page_359">359</a>.</span><br /> +<br /> +<i>Hamburgh company</i>, some account of, <a href="#Page_308">308</a>.<br /> +<br /> +<i>Hearth money</i>, why abolished in England, <a href="#Page_356">356</a>, <a href="#Page_357">357</a>.<br /> +<br /> +<i>Henry VIII.</i> of England, prepares the way for the Reformation, by shutting out the authority of the pope, <a href="#Page_338">338</a>.<br /> +<br /> +<i>Herring buss bounty</i>, remarks on, <a href="#Page_211">211</a>.<br /> +<span style="margin-left: 1em;">Fraudulent claims of the bounty, ib.</span><br /> +<span style="margin-left: 1em;">The boat fishery the most natural and profitable, <a href="#Page_212">212</a>.</span><br /> +<span style="margin-left: 1em;">Account of the British white herring fishery, ib.</span><br /> +<span style="margin-left: 1em;">Account of the busses fitted out in Scotland, the amount of their cargoes, and the bounties on them, <a href="#Page_287">287</a>, <i>Append.</i></span><br /> +<br /> +<i>Hides</i>, the produce of rude countries commonly carried to a distant market, <a href="#Page_97">97</a>.<br /> +<span style="margin-left: 1em;">Price of, in England three centuries ago, <a href="#Page_98">98</a>.</span><br /> +<span style="margin-left: 1em;">Salted hides inferior to fresh ones, <a href="#Page_98">98</a>, <a href="#Page_99">99</a>.</span><br /> +<span style="margin-left: 1em;">The price of, how affected by circumstances in cultivated and in uncultivated countries, ib.</span><br /> +<br /> +<i>Highlands of Scotland</i>, interesting remarks on the population of, <a href="#Page_33">33</a>.<br /> +<span style="margin-left: 1em;">Military character of the Highlanders, <a href="#Page_293">293</a>.</span><br /> +<br /> +<i>Hobbes</i>, Mr. remarks on his definition of wealth, <a href="#Page_13">13</a>.<br /> +<br /> +<i>Hogs</i>, circumstances which render their flesh cheap or dear, <a href="#Page_95">95</a>.<br /> +<br /> +<i>Holland</i>, observations on the riches, and trade of the republic of, <a href="#Page_38">38</a>.<br /> +<span style="margin-left: 1em;">Not to follow some business unfashionable there, <a href="#Page_40">40</a>.</span><br /> +<span style="margin-left: 1em;">Cause of the dearness of corn there, <a href="#Page_80">80</a>.</span><br /> +<span style="margin-left: 1em;">Enjoys the greatest share in the carrying trade of Europe, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">How the Dutch were excluded from being the carriers to Great Britain, <a href="#Page_188">188</a>.</span><br /> +<span style="margin-left: 1em;">Is a country that prospers under the heaviest taxation, <a href="#Page_189">189</a>.</span><br /> +<span style="margin-left: 1em;">Account of the bank of Amsterdam, <a href="#Page_194">194</a>, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">This republic derives even its subsistence from foreign trade, <a href="#Page_202">202</a>, <a href="#Page_203">203</a>.</span><br /> +<span style="margin-left: 1em;">Tax paid on houses there, <a href="#Page_356">356</a>.</span><br /> +<span style="margin-left: 1em;">Account of the tax upon successions, <a href="#Page_363">363</a>.</span><br /> +<span style="margin-left: 1em;">Stamp duties, <a href="#Page_364">364</a>.</span><br /> +<span style="margin-left: 1em;">High amount of the taxes in, <a href="#Page_370">370</a>, <a href="#Page_384">384</a>.</span><br /> +<span style="margin-left: 1em;">Its prosperity depends on the republican form of government, <a href="#Page_385">385</a>.</span><br /> +<br /> +<i>Honoraries</i>, from pupils to teachers in colleges tendency of, to quicken their diligence, <a href="#Page_319">319</a>.<br /> +<br /> +<i>Hose</i>, in the time of Edward IV., how made, <a href="#Page_104">104</a>.<br /> +<br /> +<i>Hospitality</i>, ancient, the cause and effect of, <a href="#Page_169">169</a>, <a href="#Page_385">385</a>.<br /> +<br /> +<i>House</i>, different acceptations of the term in England, and some other countries, <a href="#Page_49">49</a>.<br /> +<span style="margin-left: 1em;">Houses considered as part of the national stock, <a href="#Page_113">113</a>.</span><br /> +<span style="margin-left: 1em;">Houses produce no revenue, ib.</span><br /> +<span style="margin-left: 1em;">The rent of, distinguished into two parts, <a href="#Page_354">354</a>.</span><br /> +<span style="margin-left: 1em;">Operation of a tax upon house rent, payable by the tenant, ib.</span><br /> +<span style="margin-left: 1em;">House rent, the best test of the tenant's circumstances, <a href="#Page_355">355</a>.</span><br /> +<span style="margin-left: 1em;">Proper regulation of a tax on, ib.</span><br /> +<span style="margin-left: 1em;">How taxed in Holland, <a href="#Page_356">356</a>.</span><br /> +<span style="margin-left: 1em;">Hearth money, ib.</span><br /> +<span style="margin-left: 1em;">Window tax, <a href="#Page_357">357</a>.</span><br /> +<br /> +<i>Hudson's Bay company</i>, the nature of their establishment and trade, <a href="#Page_312">312</a>.<br /> +<span style="margin-left: 1em;">Their profits not so high as has been reported, ib.</span><br /> +<br /> +<i>Hunters</i>, war, how supported by a nation of, <a href="#Page_289">289</a>.<br /> +<span style="margin-left: 1em;">Cannot be very numerous, <a href="#Page_290">290</a>.</span><br /> +<span style="margin-left: 1em;">No established administration of justice needful among them, <a href="#Page_297">297</a>.</span><br /> +<span style="margin-left: 1em;">Age the sole foundation of rank and precedency among, ib.</span><br /> +<span style="margin-left: 1em;">No considerable inequality of fortune or subordination to be found among them, <a href="#Page_298">298</a>.</span><br /> +<span style="margin-left: 1em;">No hereditary honours in such a society, ib.</span><br /> +<br /> +<i>Husbandmen</i>, war, how supported by a nation of, <a href="#Page_290">290</a>.<br /> +<br /> +<i>Husbandry.</i> See <i>Agriculture</i>.<br /> +<br /> +<br /> +I, J<br /> +<br /> +<i>Jamaica</i>, the returns of trade from that island, why irregular, <a href="#Page_402">402</a>.<br /> +<br /> +<i>Idleness</i> unfashionable in Holland, <a href="#Page_40">40</a>.<br /> +<br /> +<i>Jewels.</i> See <i>Stones</i>.<br /> +<br /> +<i>Importation</i>, why restraints have been imposed on, with the two kinds of, <a href="#Page_182">182</a>.<br /> +<span style="margin-left: 1em;">How restrained to secure a monopoly of the home market to domestic industry, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">The true policy of these restraints doubtful, ib.</span><br /> +<span class='pagenum'><a name="Page_417" id="Page_417">[Pg 417]</a></span><span style="margin-left: 1em;">The free importation of foreign manufactures more dangerous than that of raw materials, <a href="#Page_186">186</a>.</span><br /> +<span style="margin-left: 1em;">How far it may be proper to continue the free importation of certain foreign goods, <a href="#Page_189">189</a>.</span><br /> +<span style="margin-left: 1em;">How far it may be proper to restore the free importation of goods, after it has been interrupted, ib.</span><br /> +<span style="margin-left: 1em;">Of the materials of manufacture, review of the legal encouragements given to, <a href="#Page_266">266</a>.</span><br /> +<br /> +<i>Independents</i>, the principles of that sect, explained, <a href="#Page_332">332</a>.<br /> +<br /> +<i>Indies.</i> See <i>East</i> and <i>West</i>.<br /> +<br /> +<i>Indostan</i>, the several classes of people there kept distinct, <a href="#Page_283">283</a>.<br /> +<span style="margin-left: 1em;">The natives of, how prevented from undertaking long sea voyages, ib.</span><br /> +<br /> +<i>Industry</i>, the different kinds of, seldom dealt impartially with by any nation, <a href="#Page_1">1</a>, <a href="#Page_2">2</a>.<br /> +<span style="margin-left: 1em;">The species of, frequently local, <a href="#Page_8">8</a>.</span><br /> +<span style="margin-left: 1em;">Naturally suited to the demand, <a href="#Page_24">24</a>.</span><br /> +<span style="margin-left: 1em;">Is increased by the liberal reward of labour, <a href="#Page_34">34</a>.</span><br /> +<span style="margin-left: 1em;">How affected by seasons of plenty and scarcity, ib., <a href="#Page_35">35</a>.</span><br /> +<span style="margin-left: 1em;">Is more advantageously exerted in towns than in the country, <a href="#Page_53">53</a>.</span><br /> +<span style="margin-left: 1em;">The average produce of, always suited to the average consumption, <a href="#Page_79">79</a>.</span><br /> +<span style="margin-left: 1em;">Is promoted by the circulation of paper money, <a href="#Page_119">119</a>.</span><br /> +<span style="margin-left: 1em;">Three requisites to putting industry in motion, <a href="#Page_120">120</a>.</span><br /> +<span style="margin-left: 1em;">How the general character of nations is estimated by, <a href="#Page_137">137</a>.</span><br /> +<span style="margin-left: 1em;">And idleness, the proportion between, how regulated, ib.</span><br /> +<span style="margin-left: 1em;">Is employed for subsistence before it extends to conveniencies and luxury, <a href="#Page_155">155</a>.</span><br /> +<span style="margin-left: 1em;">Whether the general industry of a society is promoted by commercial restraints on importation, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">Private interest naturally points to that employment most advantageous to the society, ib.</span><br /> +<span style="margin-left: 1em;">But without intending or knowing it, <a href="#Page_184">184</a>.</span><br /> +<span style="margin-left: 1em;">Legal regulations of private industry dangerous assumptions of power, <a href="#Page_185">185</a>.</span><br /> +<span style="margin-left: 1em;">Domestic industry ought not to be employed on what can be purchased cheaper from abroad, ib.</span><br /> +<span style="margin-left: 1em;">Of the society, can augment only in proportion as its capital augments, ib.</span><br /> +<span style="margin-left: 1em;">When it may be necessary to impose some burden upon foreign industry to favour that at home, <a href="#Page_187">187</a>.</span><br /> +<span style="margin-left: 1em;">The free exercise of industry ought to be allowed to all, <a href="#Page_191">191</a>.</span><br /> +<span style="margin-left: 1em;">The natural effort of every individual to better his condition, will, if unrestrained, result in the prosperity of the society, <a href="#Page_221">221</a>.</span><br /> +<br /> +<i>Insurance</i>, from fire and sea risks, the nature and profits of examined, <a href="#Page_45">45</a>.<br /> +<span style="margin-left: 1em;">The trade of insurance may be successfully carried on by a joint-stock company, <a href="#Page_317">317</a>, <a href="#Page_318">318</a>.</span><br /> +<br /> +<i>Interest</i>, landed, monied, and trading, distinguished, <a href="#Page_144">144</a>.<br /> +<br /> +<i>Interest</i> for the use of money, the foundation of that allowance explained, <a href="#Page_22">22</a>.<br /> +<span style="margin-left: 1em;">Historical view of the alterations of, in England, and other countries, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on the high rates of, in Bengal, <a href="#Page_39">39</a>.</span><br /> +<span style="margin-left: 1em;">And in China, <a href="#Page_40">40</a>.</span><br /> +<span style="margin-left: 1em;">May be raised by defective laws, independent on the influence of wealth or poverty, ib.</span><br /> +<span style="margin-left: 1em;">The lowest ordinary rate of, must somewhat more than compensate occasional losses, ib.</span><br /> +<span style="margin-left: 1em;">The common relative proportion between interest and mercantile profits inquired into, ib.</span><br /> +<span style="margin-left: 1em;">Was not lowered, in consequence of the discovery of the American mines, <a href="#Page_145">145</a>.</span><br /> +<span style="margin-left: 1em;">How the legal rate of, ought to be fixed, <a href="#Page_146">146</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of its being fixed too high or too low, ib., <a href="#Page_147">147</a>.</span><br /> +<span style="margin-left: 1em;">The market rate of, regulates the price of land, ib.</span><br /> +<span style="margin-left: 1em;">Whether a proper object of taxation, <a href="#Page_357">357</a>.</span><br /> +<br /> +<i>Ireland</i>, why never likely to furnish cattle to the prejudice of Great Britain, <a href="#Page_186">186</a>.<br /> +<span style="margin-left: 1em;">The proposed absentee tax there considered, <a href="#Page_379">379</a>.</span><br /> +<span style="margin-left: 1em;">Ought in justice to contribute towards the discharge of the public debt of Great Britain, <a href="#Page_402">402</a>.</span><br /> +<span style="margin-left: 1em;">Expediency of an union with Great Britain, ib.</span><br /> +<br /> +<i>Isocrates</i>, the handsome income he made by teaching, <a href="#Page_56">56</a>.<br /> +<br /> +<i>Italy</i>, the only great country in Europe which has been cultivated and improved in every part by means of its foreign commerce, <a href="#Page_172">172</a>.<br /> +<span style="margin-left: 1em;">Was originally colonized by the Dorians, <a href="#Page_227">227</a>.</span><br /> +<br /> +<i>Jurisdictions</i>, territorial, did not originate in the feudal law, <a href="#Page_168">168</a>.<br /> +<br /> +<i>Justice</i>, the administration of, a duty of the sovereign, <a href="#Page_297">297</a>.<br /> +<span style="margin-left: 1em;">In early times a source of revenue to him, <a href="#Page_299">299</a>.</span><br /> +<span style="margin-left: 1em;">The making justice subservient to the revenue a source of great abuses, ib.</span><br /> +<span style="margin-left: 1em;">Is never administered gratis, <a href="#Page_300">300</a>.</span><br /> +<span style="margin-left: 1em;">The whole administration of, but an inconsiderable part of the expense of government, ib.</span><br /> +<span style="margin-left: 1em;">How the whole expense of justice might be defrayed from the fees of court, ib.</span><br /> +<span style="margin-left: 1em;">The interference of the jurisdictions of the several English courts of law accounted for, <a href="#Page_301">301</a>.</span><br /> +<span style="margin-left: 1em;">Law language, how corrupted, <a href="#Page_302">302</a>.</span><br /> +<span style="margin-left: 1em;">The judicial and executive power, why divided, ib.</span><br /> +<span style="margin-left: 1em;">By whom the expense of administration of, ought to be borne, <a href="#Page_342">342</a>.</span><br /> +<br /> +<br /> +K<br /> +<br /> +<i>Kalm</i>, the Swedish traveller, his account of the husbandry of the British colonies in North America, <a href="#Page_94">94</a>.<br /> +<br /> +<i>Kelp</i>, a rent demanded for the rocks on which it grows, <a href="#Page_61">61</a>.<br /> +<br /> +<i>King</i>, Mr. his account of the average price of wheat, <a href="#Page_83">83</a>.<br /> +<br /> +<i>King</i>, under feudal institutions, no more than the greatest baron in the nation, <a href="#Page_168">168</a>.<br /> +<span style="margin-left: 0.5em;">Was unable to restrain the violence of his barons, <a href="#Page_169">169</a>.</span><br /> +<span style="margin-left: 1em;">Treasure-trove an important branch of revenue to, <a href="#Page_385">385</a>, <a href="#Page_386">386</a>.</span><br /> +<span style="margin-left: 1em;">His situation, how favourable for the accumulating treasure, ib.</span><br /> +<span style="margin-left: 1em;">In a commercial country, naturally spends his revenue in luxuries, ib.</span><br /> +<span style="margin-left: 1em;">Is hence driven to call upon his subjects for extraordinary aids, ib.</span><br /> +<br /> +<i>Kings</i> and their ministers the greatest spendthrifts in a country, <a href="#Page_149">149</a>.<br /> +<br /> +<br /> +L<br /> +<br /> +<i>Labour</i>, the fund which originally supplies every nation with its annual consumption, <a href="#Page_1">1</a>.<br /> +<span style="margin-left: 1em;">How the proportion between labour and consumption in regulated, ib.</span><br /> +<span style="margin-left: 1em;">The different kinds of industry seldom dealt impartially with by any nation, <a href="#Page_2">2</a>.</span><br /> +<span style="margin-left: 1em;">The division of labour considered, ib., <a href="#Page_3">3</a>.</span><br /> +<span style="margin-left: 1em;">This division increases the quantity of work, <a href="#Page_4">4</a>.</span><br /> +<span style="margin-left: 1em;">Instances in illustration, <a href="#Page_5">5</a>.</span><br /> +<span class='pagenum'><a name="Page_418" id="Page_418">[Pg 418]</a></span><span style="margin-left: 1em;">From what principle the division of labour originates, <a href="#Page_6">6</a>.</span><br /> +<span style="margin-left: 1em;">The divisibility of governed by the market, <a href="#Page_8">8</a>.</span><br /> +<span style="margin-left: 1em;">Labour the real measure of the exchangeable value of commodities, <a href="#Page_12">12</a>.</span><br /> +<span style="margin-left: 1em;">Different kinds of, not easily estimated by immediate comparison, <a href="#Page_13">13</a>.</span><br /> +<span style="margin-left: 1em;">Is compared by the intermediate standard of money, ib.</span><br /> +<span style="margin-left: 1em;">In an invariable standard for the value of commodities, <a href="#Page_14">14</a>.</span><br /> +<span style="margin-left: 1em;">Has a real and a nominal price, ib.</span><br /> +<span style="margin-left: 1em;">The quantity of labour employed on different objects, the only rule for exchanging them in the rude stages of society, <a href="#Page_20">20</a>.</span><br /> +<span style="margin-left: 1em;">Difference between the wages of labour and profits on stock in manufactures, ib.</span><br /> +<span style="margin-left: 1em;">The whole labour of a country never exerted, <a href="#Page_22">22</a>.</span><br /> +<span style="margin-left: 1em;">Is in every instance suited to the demand, <a href="#Page_24">24</a>.</span><br /> +<span style="margin-left: 1em;">The effect of extraordinary calls for, <a href="#Page_25">25</a>.</span><br /> +<span style="margin-left: 1em;">The deductions made from the produce of labour employed upon land, <a href="#Page_27">27</a>.</span><br /> +<span style="margin-left: 1em;">Why dearer in North America than in England, <a href="#Page_29">29</a>.</span><br /> +<span style="margin-left: 1em;">Is cheap in countries that are stationary, ib.</span><br /> +<span style="margin-left: 1em;">The demand for, would continually decrease, in a declining country, <a href="#Page_30">30</a>.</span><br /> +<span style="margin-left: 1em;">The province of Bengal cited as an instance, ib.</span><br /> +<span style="margin-left: 1em;">Is not badly paid for in Great Britain, ib., <a href="#Page_31">31</a>.</span><br /> +<span style="margin-left: 1em;">An increasing demand for, favourable to population, <a href="#Page_33">33</a>.</span><br /> +<span style="margin-left: 1em;">That of freemen cheaper to the employers than that of slaves, ib.</span><br /> +<span style="margin-left: 1em;">The money price of, how regulated, <a href="#Page_36">36</a>.</span><br /> +<span style="margin-left: 1em;">Is liberally rewarded in new colonies, <a href="#Page_38">38</a>.</span><br /> +<span style="margin-left: 1em;">Common labour and skilful labour distinguished, <a href="#Page_42">42</a>.</span><br /> +<span style="margin-left: 1em;">The free circulation of, from one employment to another, obstructed by corporation laws, <a href="#Page_57">57</a>.</span><br /> +<span style="margin-left: 1em;">The unequal prices of, in different places, probably owing to the law of settlements, <a href="#Page_59">59</a>.</span><br /> +<span style="margin-left: 1em;">Can always procure subsistence on the spot, where it is purchased, <a href="#Page_61">61</a>.</span><br /> +<span style="margin-left: 1em;">The money price of, in different countries, how governed, <a href="#Page_80">80</a>.</span><br /> +<span style="margin-left: 1em;">Is set into motion by stock employed for profit, <a href="#Page_106">106</a>.</span><br /> +<span style="margin-left: 1em;">The division of, depends on the accumulation of stock, <a href="#Page_111">111</a>.</span><br /> +<span style="margin-left: 1em;">Machines to facilitate labour advantageous to society, <a href="#Page_116">116</a>.</span><br /> +<span style="margin-left: 1em;">Productive and unproductive distinguished, <a href="#Page_135">135</a>.</span><br /> +<span style="margin-left: 1em;">Various orders of men specified whose labour in unproductive, <a href="#Page_136">136</a>.</span><br /> +<span style="margin-left: 1em;">Unproductive labourers all maintained by revenue, ib.</span><br /> +<span style="margin-left: 1em;">The price of, how raised by the increase of the national capital, <a href="#Page_145">145</a>.</span><br /> +<span style="margin-left: 1em;">Its price, though nominally raised, may continue the same, <a href="#Page_146">146</a>.</span><br /> +<span style="margin-left: 1em;">Is liberally rewarded in new colonies, <a href="#Page_231">231</a>.</span><br /> +<span style="margin-left: 1em;">Of artificers and manufacturers, never adds any value to the whole amount of the rude produce of the land, according to the French agricultural system of political economy, <a href="#Page_277">277</a>.</span><br /> +<span style="margin-left: 1em;">This doctrine shewn to be erroneous, <a href="#Page_281">281</a>.</span><br /> +<span style="margin-left: 1em;">The productive powers of labour, how to be improved, ib.</span><br /> +<br /> +<i>Labourers</i>, useful and productive, everywhere proportioned to the capital stock on which they are employed, <a href="#Page_1">1</a>, <a href="#Page_2">2</a>.<br /> +<span style="margin-left: 1em;">Share the produce of their labour, in most cases, with the owners of the stock on which they are employed, <a href="#Page_20">20</a>.</span><br /> +<span style="margin-left: 1em;">Their wages a continued subject of contest between them and their masters, <a href="#Page_28">28</a>.</span><br /> +<span style="margin-left: 1em;">Are seldom successful in their outrageous combinations, ib.</span><br /> +<span style="margin-left: 1em;">The sufficiency of their earnings a point not easily determined, ib.</span><br /> +<span style="margin-left: 1em;">Their wages sometimes raised by increase of work, ib.</span><br /> +<span style="margin-left: 1em;">Their demands limited by the funds destined for payment, <a href="#Page_29">29</a>.</span><br /> +<span style="margin-left: 1em;">Are continually wanted in North America, ib.</span><br /> +<span style="margin-left: 1em;">Miserable condition of those in China, ib., <a href="#Page_30">30</a>.</span><br /> +<span style="margin-left: 1em;">Are not ill paid in Great Britain, ib., <a href="#Page_31">31</a>.</span><br /> +<span style="margin-left: 1em;">If able to maintain their families in dear years, they must be at their ease in plentiful seasons, ib.</span><br /> +<span style="margin-left: 1em;">A proof furnished in the complaints of their luxury, <a href="#Page_33">33</a>.</span><br /> +<span style="margin-left: 1em;">Why worse paid than artificers, <a href="#Page_42">42</a>.</span><br /> +<span style="margin-left: 1em;">Their interests, strictly connected with the interests of the society, <a href="#Page_106">106</a>.</span><br /> +<span style="margin-left: 1em;">Labour the only source of their revenue, <a href="#Page_112">112</a>.</span><br /> +<span style="margin-left: 1em;">Effects of a life of labour on the understandings of the poor, <a href="#Page_327">327</a>.</span><br /> +<br /> +<i>Land</i>, the demand of rent for, how founded, <a href="#Page_21">21</a>.<br /> +<span style="margin-left: 1em;">The rent paid enters into the greater part of all commodities, ib.</span><br /> +<span style="margin-left: 1em;">Generally produces more food than will maintain the labour necessary to bring it to market, <a href="#Page_61">61</a>.</span><br /> +<span style="margin-left: 1em;">Good roads and navigable canals equalize difference of situation, <a href="#Page_62">62</a>.</span><br /> +<span style="margin-left: 1em;">That employed in raising food for men and cattle regulates the rent of all other cultivated land, <a href="#Page_64">64</a>, <a href="#Page_67">67</a>.</span><br /> +<span style="margin-left: 1em;">Can clothe and lodge more than it can feed while uncultivated, and the contrary when improved, <a href="#Page_68">68</a>.</span><br /> +<span style="margin-left: 1em;">The culture of land producing food creates a demand for the produce of other lands, <a href="#Page_73">73</a>.</span><br /> +<span style="margin-left: 1em;">Produces by agriculture a much greater quantity of vegetable than of animal food, <a href="#Page_79">79</a>.</span><br /> +<span style="margin-left: 1em;">The full improvement of, requires a stock of cattle to supply manure, <a href="#Page_93">93</a>.</span><br /> +<span style="margin-left: 1em;">Cause and effect of the diminution of cottagers, <a href="#Page_95">95</a>.</span><br /> +<span style="margin-left: 1em;">Signs of the land being completely improved, <a href="#Page_96">96</a>.</span><br /> +<span style="margin-left: 1em;">The whole annual produce, or the price of it, naturally divides itself into rent, wages, and profit of stock, <a href="#Page_106">106</a>.</span><br /> +<span style="margin-left: 1em;">The usual price of, depends on the common rate of interest for money, <a href="#Page_147">147</a>.</span><br /> +<span style="margin-left: 1em;">The profits of cultivation exaggerated by projectors, <a href="#Page_154">154</a>.</span><br /> +<span style="margin-left: 1em;">The cultivation of, naturally preferred to trade and manufactures, on equal terms, <a href="#Page_155">155</a>.</span><br /> +<span style="margin-left: 1em;">Artificers necessary to the cultivation of, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Was all appropriated, though not cultivated, by the northern destroyers of the Roman empire, <a href="#Page_157">157</a>.</span><br /> +<span style="margin-left: 1em;">Origin of the law of primogeniture under the feudal government, ib.</span><br /> +<span style="margin-left: 1em;">Entails, <a href="#Page_158">158</a>.</span><br /> +<span style="margin-left: 1em;">Obstacles to the improvement of land under feudal proprietors, ib.</span><br /> +<span style="margin-left: 1em;">Feudal tenures, <a href="#Page_159">159</a>, <a href="#Page_160">160</a>.</span><br /> +<span style="margin-left: 1em;">Feudal taxation, <a href="#Page_161">161</a>.</span><br /> +<span style="margin-left: 1em;">The improvement of land checked in France, by the taille, ib.</span><br /> +<span style="margin-left: 1em;">Occupiers of, labour under great disadvantages, ib.</span><br /> +<span style="margin-left: 1em;">Origin of long leases of, <a href="#Page_169">169</a>.</span><br /> +<span style="margin-left: 1em;">Small proprietors the best improvers of, <a href="#Page_170">170</a>.</span><br /> +<span style="margin-left: 1em;">Small purchasers of, cannot hope to raise fortunes by cultivation, ib., <a href="#Page_171">171</a>.</span><br /> +<span style="margin-left: 1em;">Tenures of, in the British American colonies, <a href="#Page_235">235</a>.</span><br /> +<span style="margin-left: 1em;">Is the most permanent source of revenue, <a href="#Page_345">345</a>.</span><br /> +<span style="margin-left: 1em;">The rent of a whole country not equal to the ordinary levy upon the people, ib.</span><br /> +<span style="margin-left: 1em;">The revenue from, proportioned not to the rent, but to the produce, <a href="#Page_346">346</a>.</span><br /> +<span style="margin-left: 1em;">Reasons for selling the crown lands, ib.</span><br /> +<span style="margin-left: 1em;">The land tax of Great Britain considered, <a href="#Page_348">348</a>.</span><br /> +<span style="margin-left: 1em;">An improved land-tax suggested, <a href="#Page_349">349</a>.</span><br /> +<span class='pagenum'><a name="Page_419" id="Page_419">[Pg 419]</a></span><span style="margin-left: 1em;">A land-tax, however equally rated by a general survey, will soon become unequal, <a href="#Page_352">352</a>.</span><br /> +<span style="margin-left: 1em;">Tithes a very unequal tax, ib.</span><br /> +<span style="margin-left: 1em;">Tithes discourage improvement, ib.</span><br /> +<br /> +<i>Landholders</i>, why frequently inattentive to their own particular interests, <a href="#Page_106">106</a>.<br /> +<span style="margin-left: 1em;">How they contribute to the annual production of the land, according to the French agricultural system of political economy, <a href="#Page_275">275</a>.</span><br /> +<span style="margin-left: 1em;">Should be encouraged to cultivate a part of their own land, <a href="#Page_350">350</a>.</span><br /> +<br /> +<i>Latin language</i>, how it became an essential part of university education, <a href="#Page_321">321</a>.<br /> +<br /> +<i>Law</i>, the language of, how corrupted, <a href="#Page_302">302</a>.<br /> +<span style="margin-left: 1em;">Did not improve into a science in ancient Greece, <a href="#Page_325">325</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on the courts of justice in Greece and Rome, ib., <a href="#Page_326">326</a>.</span><br /> +<br /> +<i>Law</i>, Mr. account of his banking scheme for the improvement of Scotland, <a href="#Page_130">130</a>.<br /> +<br /> +<i>Lawyers</i>, why amply rewarded for their labour, <a href="#Page_44">44</a>.<br /> +<span style="margin-left: 1em;">Great amount of their fees, <a href="#Page_300">300</a>.</span><br /> +<br /> +<i>Leases</i>, the various usual conditions of, <a href="#Page_349">349</a>, <a href="#Page_350">350</a>.<br /> +<br /> +<i>Leather</i>, restrictions on the exportation of unmanufactured, <a href="#Page_271">271</a>.<br /> +<br /> +<i>Lectures</i> in universities frequently improper for instruction, <a href="#Page_320">320</a>.<br /> +<br /> +<i>Levity</i>, the vices of, ruinous to the common people, and therefore severely censured by them, <a href="#Page_332">332</a>, <a href="#Page_333">333</a>.<br /> +<br /> +<i>Liberty</i>, three duties only necessary for a sovereign to attend to for supporting a system of, <a href="#Page_286">286</a>.<br /> +<br /> +<i>Lima</i>, computed number of inhabitants in that city, <a href="#Page_233">233</a>.<br /> +<br /> +<i>Linen manufacture</i>, narrow policy of the master manufacturers in, <a href="#Page_266">266</a>.<br /> +<br /> +<i>Literature</i>, the rewards of, reduced by competition, <a href="#Page_56">56</a>.<br /> +<span style="margin-left: 1em;">Was more profitable in ancient Greece, ib.</span><br /> +<span style="margin-left: 1em;">The cheapness of literary education an advantage to the public, <a href="#Page_57">57</a>.</span><br /> +<br /> +<i>Loans of money</i>, the nature of, analysed, <a href="#Page_144">144</a>.<br /> +<span style="margin-left: 1em;">The extensive operation of, ib.</span><br /> +<br /> +<i>Locke</i>, Mr. remarks on his opinion of the difference between the market and mint prices of silver bullion, <a href="#Page_18">18</a>.<br /> +<span style="margin-left: 1em;">His account of the cause of lowering the rates of interest for money, examined, <a href="#Page_145">145</a>.</span><br /> +<span style="margin-left: 1em;">His distinction between money and moveable goods, <a href="#Page_173">173</a>.</span><br /> +<br /> +<i>Lodgings</i>, cheaper in London than in any other capital city in Europe, <a href="#Page_49">49</a>.<br /> +<br /> +<i>Logic</i>, the origin and employment of, <a href="#Page_322">322</a>.<br /> +<br /> +<i>Lotteries</i>, the true nature of, and the causes of their success, explained, <a href="#Page_45">45</a>.<br /> +<br /> +<i>Luck</i>, instances of the universal reliance mankind have on it, <a href="#Page_45">45</a>.<br /> +<br /> +<i>Lutherans</i>, origin and principles of that sect, <a href="#Page_339">339</a>.<br /> +<br /> +<i>Luxuries</i>, distinguished from necessaries, <a href="#Page_368">368</a>.<br /> +<span style="margin-left: 1em;">Operation of taxes on, ib.</span><br /> +<span style="margin-left: 1em;">The good and bad properties of taxes on, <a href="#Page_380">380</a>.</span><br /> +<br /> +<br /> +M<br /> +<br /> +<i>Macedon</i>, Philip of, the superiority that discipline gave his army over that of his enemies, <a href="#Page_294">294</a>.<br /> +<br /> +<i>Machines</i> for facilitating mechanical operations, how invented and improved, <a href="#Page_4">4</a>, <a href="#Page_5">5</a>.<br /> +<span style="margin-left: 1em;">Are advantageous to every society, <a href="#Page_116">116</a>.</span><br /> +<br /> +<i>Madder</i>, the cultivation of, long confined to Holland by English tithes, <a href="#Page_353">353</a>.<br /> +<br /> +<i>Madeira wines</i>, how introduced into North America and Britain, <a href="#Page_204">204</a>.<br /> +<br /> +<i>Malt</i>, reasons for transferring the duties on brewing to, <a href="#Page_378">378</a>.<br /> +<span style="margin-left: 1em;">Distillery, how to prevent smuggling, <a href="#Page_377">377</a>.</span><br /> +<br /> +<i>Manufactures</i>, the great advantages resulting from a division of labour in, <a href="#Page_3">3</a>.<br /> +<span style="margin-left: 1em;">Instances in illustration, <a href="#Page_5">5</a>.</span><br /> +<span style="margin-left: 1em;">Why profits increase in the higher stages of, <a href="#Page_21">21</a>.</span><br /> +<span style="margin-left: 1em;">Of what parts the gain consists, <a href="#Page_22">22</a>.</span><br /> +<span style="margin-left: 1em;">The private advantages of secrets in, <a href="#Page_25">25</a>.</span><br /> +<span style="margin-left: 1em;">Peculiar advantages of soil and situation, ib.</span><br /> +<span style="margin-left: 1em;">Monopolies, ib.</span><br /> +<span style="margin-left: 1em;">Corporation privileges, <a href="#Page_26">26</a>.</span><br /> +<span style="margin-left: 1em;">The deductions made from labour employed on manufactures, <a href="#Page_27">27</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry how far they are affected by seasons of plenty and scarcity, <a href="#Page_35">35</a>.</span><br /> +<span style="margin-left: 1em;">Are not no materially affected by circumstances in the country where they are carried on, as in the places where they are consumed, ib.</span><br /> +<span style="margin-left: 1em;">New manufactures generally give higher wages than old ones, <a href="#Page_48">48</a>.</span><br /> +<span style="margin-left: 1em;">Are more profitably carried on in towns than in the open country, <a href="#Page_53">53</a>.</span><br /> +<span style="margin-left: 1em;">By what means the prices of, are reduced while the society continues improving, <a href="#Page_103">103</a>.</span><br /> +<span style="margin-left: 1em;">Instances in hardware, ib.</span><br /> +<span style="margin-left: 1em;">Instances in the woollen manufacture, <a href="#Page_104">104</a>.</span><br /> +<span style="margin-left: 1em;">What fixed capitals are required to carry on particular manufactures, <a href="#Page_112">112</a>.</span><br /> +<span style="margin-left: 1em;">Manufactures for distant sale, why not established in North America, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Why preferred to foreign trade for the employment of a capital, ib.</span><br /> +<span style="margin-left: 1em;">Motives to the establishment of manufactures for distant sale, <a href="#Page_165">165</a>.</span><br /> +<span style="margin-left: 1em;">How shifted from one country to another, ib., <a href="#Page_166">166</a>.</span><br /> +<span style="margin-left: 1em;">Natural circumstances which contribute to the establishment of them, ib.</span><br /> +<span style="margin-left: 1em;">Their effect on the government and manners of a country, <a href="#Page_167">167</a>.</span><br /> +<span style="margin-left: 1em;">The independence of artisans explained, <a href="#Page_169">169</a>.</span><br /> +<span style="margin-left: 1em;">May flourish amidst the ruin of a country, and begin to decay on the return of its prosperity, <a href="#Page_180">180</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry how far manufactures might be affected by a freedom of trade, <a href="#Page_190">190</a>.</span><br /> +<span style="margin-left: 1em;">British restraints on manufactures in North America, <a href="#Page_238">238</a>, <a href="#Page_239">239</a>.</span><br /> +<span style="margin-left: 1em;">The exportation of instruments in, prohibited, <a href="#Page_273">273</a>.</span><br /> +<span style="margin-left: 1em;">By the principal support of foreign trade, <a href="#Page_283">283</a>.</span><br /> +<span style="margin-left: 1em;">Require a more extensive market than rude produce of the land, ib.</span><br /> +<span style="margin-left: 1em;">Were exercised by slaves in ancient Greece, <a href="#Page_284">284</a>.</span><br /> +<span style="margin-left: 1em;">High prices of, in Greece and at Rome, <a href="#Page_285">285</a>.</span><br /> +<span style="margin-left: 1em;">False policy to check manufactures in order to promote agriculture, ib.</span><br /> +<span style="margin-left: 1em;">In Great Britain, why principally fixed in the coal countries, <a href="#Page_370">370</a>.</span><br /> +<br /> +<i>Manufacturers</i>, those thrown out of one business can transfer their industry to colateral employments, <a href="#Page_190">190</a>.<br /> +<span style="margin-left: 1em;">A spirit of combination among them to support monopolies, <a href="#Page_191">191</a>.</span><br /> +<span style="margin-left: 1em;">Manufacturers prohibited by old statutes from keeping a shop, or selling their own goods by retail, <a href="#Page_215">215</a>, <a href="#Page_216">216</a>.</span><br /> +<span style="margin-left: 1em;">The use of wholesale dealers to manufacturers, <a href="#Page_217">217</a>.</span><br /> +<span style="margin-left: 1em;">An unproductive class of the people, according to the French agricultural system of political economy, <a href="#Page_276">276</a>.</span><br /> +<span class='pagenum'><a name="Page_420" id="Page_420">[Pg 420]</a></span><span style="margin-left: 1em;">The error of this doctrine shewn, <a href="#Page_280">280</a>.</span><br /> +<span style="margin-left: 1em;">How manufacturers augment the revenue of a country, <a href="#Page_281">281</a>.</span><br /> +<br /> +<i>Manure</i>, the supply of, in most places depends on the stock of cattle raised, <a href="#Page_93">93</a>.<br /> +<br /> +<i>Maritime countries</i>, why the first that are civilized and improved, <a href="#Page_9">9</a>.<br /> +<br /> +<i>Martial spirit</i>, how supported in the ancient republics of Greece and Rome, <a href="#Page_329">329</a>.<br /> +<span style="margin-left: 1em;">The want of it now supplied by standing armies, ib.</span><br /> +<span style="margin-left: 1em;">The establishment of a militia little able to support it, ib.</span><br /> +<br /> +<i>Mediterranean sea</i>, peculiarly favourable for the first attempts in navigation, <a href="#Page_9">9</a>.<br /> +<br /> +<i>Meggens</i>, Mr. his account of the annual importation of gold and silver into Spain and Portugal, <a href="#Page_88">88</a>.<br /> +<span style="margin-left: 1em;">His relative proportion of each, <a href="#Page_89">89</a>.</span><br /> +<br /> +<i>Mercantile system</i> explained, <a href="#Page_372">372</a>.<br /> +<br /> +<i>Mercenary troops</i>, origin and reason of, <a href="#Page_291">291</a>.<br /> +<span style="margin-left: 1em;">The numbers of, how limited, ib.</span><br /> +<br /> +<i>Merchants</i>, their judgments more to be depended on respecting the interest of their particular branches of trade, than with regard to the public interest, <a href="#Page_106">106</a>, <a href="#Page_107">107</a>.<br /> +<span style="margin-left: 1em;">Their capitals altogether circulating, <a href="#Page_112">112</a>.</span><br /> +<span style="margin-left: 1em;">Their dealings extended by the aid of bankers notes, <a href="#Page_121">121</a>, <a href="#Page_124">124</a>.</span><br /> +<span style="margin-left: 1em;">Customs of, first established to supply the want of laws, and afterwards admitted as laws, <a href="#Page_126">126</a>.</span><br /> +<span style="margin-left: 1em;">The manner of negociating bills of exchange, explained, ib.</span><br /> +<span style="margin-left: 1em;">The pernicious tendency of drawing and redrawing, ib., <a href="#Page_127">127</a>.</span><br /> +<span style="margin-left: 1em;">In what method their capitals are employed, <a href="#Page_147">147</a>.</span><br /> +<span style="margin-left: 1em;">Their capitals, dispersed and unfixed, <a href="#Page_149">149</a>.</span><br /> +<span style="margin-left: 1em;">The principles of foreign trade examined, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">Are the best of improvers when they turn country gentlemen, <a href="#Page_167">167</a>.</span><br /> +<span style="margin-left: 1em;">Their preference among the different species of trade, how determined, <a href="#Page_183">183</a>.</span><br /> +<span style="margin-left: 1em;">Are actuated by a narrow spirit of monopoly, <a href="#Page_201">201</a>.</span><br /> +<span style="margin-left: 1em;">The several branches of the corn trade specified and considered, <a href="#Page_215">215</a>.</span><br /> +<span style="margin-left: 1em;">The government of a company of, the worst a country can be under, <a href="#Page_234">234</a>.</span><br /> +<span style="margin-left: 1em;">Of London, not good economists, <a href="#Page_253">253</a>.</span><br /> +<span style="margin-left: 1em;">An unproductive class of men, according to the present agricultural system of political economy in France, <a href="#Page_277">277</a>.</span><br /> +<span style="margin-left: 1em;">The quick return of mercantile capitals enables merchants to advance money to government, <a href="#Page_386">386</a>, <a href="#Page_387">387</a>.</span><br /> +<span style="margin-left: 1em;">Their capitals increased by lending money to the state, <a href="#Page_387">387</a>.</span><br /> +<br /> +<i>Mercier</i>, de la Riviere, M. character of his natural and essential order of political societies, <a href="#Page_282">282</a>.<br /> +<br /> +<i>Metals</i>, why the best medium of commerce, <a href="#Page_10">10</a>.<br /> +<span style="margin-left: 1em;">Origin of stamped coins, <a href="#Page_11">11</a>.</span><br /> +<span style="margin-left: 1em;">Why different metals became the standard of value among different nations, <a href="#Page_16">16</a>.</span><br /> +<span style="margin-left: 1em;">The durability of, the cause of the steadiness of their price, <a href="#Page_88">88</a>.</span><br /> +<span style="margin-left: 1em;">On what the quantity of precious metals in every particular country depends, <a href="#Page_100">100</a>.</span><br /> +<span style="margin-left: 1em;">Restraints upon the exportation of, <a href="#Page_272">272</a>.</span><br /> +<br /> +<i>Metaphysics</i>, the science of, explained, <a href="#Page_323">323</a>.<br /> +<br /> +<i>Metayers</i>, description of the class of farmers so called in France, <a href="#Page_159">159</a>.<br /> +<br /> +<i>Methodists</i>, the teachers among, why popular preachers, <a href="#Page_330">330</a>.<br /> +<br /> +<i>Methuen</i>, Mr. translation of the commercial treaty concluded by him between England and Portugal, <a href="#Page_223">223</a>.<br /> +<br /> +<i>Mexico</i>, was a less civilized country than Peru, when first visited by the Spaniards, <a href="#Page_85">85</a>.<br /> +<span style="margin-left: 1em;">Present populousness of the capital city, <a href="#Page_233">233</a>.</span><br /> +<span style="margin-left: 1em;">Low state of arts at the first discovery of that empire, ib.</span><br /> +<br /> +<i>Militia</i>, why allowed to be formed in cities, and its formidable nature, <a href="#Page_164">164</a>.<br /> +<span style="margin-left: 1em;">The origin and nature of, explained, <a href="#Page_292">292</a>.</span><br /> +<span style="margin-left: 1em;">How distinguished from a regular standing army, ib.</span><br /> +<span style="margin-left: 1em;">Must always be inferior to a standing army, <a href="#Page_293">293</a>.</span><br /> +<span style="margin-left: 1em;">A few campaigns of service may make a militia equal to a standing army, ib.</span><br /> +<span style="margin-left: 1em;">Instances, <a href="#Page_294">294</a>.</span><br /> +<br /> +<i>Milk</i>, a most perishable commodity, how manufactured for store, <a href="#Page_96">96</a>.<br /> +<br /> +<i>Mills</i>, wind and water, their late introduction into England, <a href="#Page_105">105</a>.<br /> +<br /> +<i>Mines</i>, distinguished by their fertility or barrenness, <a href="#Page_70">70</a>.<br /> +<span style="margin-left: 1em;">Comparison between those of coal and those of metals, <a href="#Page_71">71</a>.</span><br /> +<span style="margin-left: 1em;">The competition between, extends to all parts of the world, ib.</span><br /> +<span style="margin-left: 1em;">The working of, a lottery, <a href="#Page_72">72</a>.</span><br /> +<span style="margin-left: 1em;">Diamond mines not always worth working, <a href="#Page_73">73</a>.</span><br /> +<span style="margin-left: 1em;">Tax paid to the king of Spain from the Peruvian mines, <a href="#Page_85">85</a>.</span><br /> +<span style="margin-left: 1em;">The discovery of mines not dependent on human skill or industry, <a href="#Page_100">100</a>.</span><br /> +<span style="margin-left: 1em;">In Hungary, why worked at less expense than the neighbouring ones in Turkey, <a href="#Page_284">284</a>.</span><br /> +<br /> +<i>Mining</i>, projects of, uncertain and ruinous, and unfit for legal encouragement, <a href="#Page_230">230</a>.<br /> +<br /> +<i>Mirabeau</i>, Marquis de, his character of the economical table, <a href="#Page_282">282</a>.<br /> +<br /> +<i>Mississippi</i> scheme in France, the real foundation of, <a href="#Page_130">130</a>.<br /> +<br /> +<i>Modus</i> for tithe, a relief to the farmer, <a href="#Page_353">353</a>.<br /> +<br /> +<i>Money</i>, the origin of, traced, <a href="#Page_10">10</a>.<br /> +<span style="margin-left: 1em;">Is the representative of labour, <a href="#Page_13">13</a>.</span><br /> +<span style="margin-left: 1em;">The value of, greatly depreciated by the discovery of the American mines, <a href="#Page_14">14</a>.</span><br /> +<span style="margin-left: 1em;">How different metals became the standard money of different nations, <a href="#Page_16">16</a>.</span><br /> +<span style="margin-left: 1em;">The only part of the circulating capital of a society, of which the maintenance can diminish their neat revenue, <a href="#Page_116">116</a>.</span><br /> +<span style="margin-left: 1em;">Makes no part of the revenue of a society, <a href="#Page_117">117</a>.</span><br /> +<span style="margin-left: 1em;">The term money, in common acceptation, of ambiguous meaning, ib.</span><br /> +<span style="margin-left: 1em;">The circulating money, in society, no measure of its revenue, <a href="#Page_118">118</a>.</span><br /> +<span style="margin-left: 1em;">Paper money, ib.</span><br /> +<span style="margin-left: 1em;">Effect of paper on the circulation of cash, ib., <a href="#Page_119">119</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the proportion the circulating money of any country bears to the annual produce circulated by it, <a href="#Page_120">120</a>.</span><br /> +<span style="margin-left: 1em;">Paper can never exceed the value of the cash, of which it supplies the place, in any country, <a href="#Page_122">122</a>.</span><br /> +<span style="margin-left: 1em;">The pernicious practice of raising money by circulation, explained, <a href="#Page_126">126</a>.</span><br /> +<span style="margin-left: 1em;">The true cause of its exportation, <a href="#Page_139">139</a>.</span><br /> +<span style="margin-left: 1em;">Loans of, the principles of, analysed, <a href="#Page_144">144</a>.</span><br /> +<span style="margin-left: 1em;">Monied interest distinguished from the landed and trading interest, ib.</span><br /> +<span style="margin-left: 1em;">Inquiry into the real causes of the reduction of interest, <a href="#Page_145">145</a>.</span><br /> +<span style="margin-left: 1em;">Money and wealth synonymous terms in popular language, <a href="#Page_173">173</a>.</span><br /> +<span style="margin-left: 1em;">And moveable goods compared, ib.</span><br /> +<span class='pagenum'><a name="Page_421" id="Page_421">[Pg 421]</a></span><span style="margin-left: 1em;">The accumulation of, studied by the European nations, <a href="#Page_174">174</a>.</span><br /> +<span style="margin-left: 1em;">The mercantile arguments for liberty to export gold and silver, ib.</span><br /> +<span style="margin-left: 1em;">The validity of these arguments examined, <a href="#Page_175">175</a>.</span><br /> +<span style="margin-left: 1em;">Money and goods mutually the price of each other, ib.</span><br /> +<span style="margin-left: 1em;">Over-trading causes complaints of the scarcity of money, <a href="#Page_176">176</a>.</span><br /> +<span style="margin-left: 1em;">Why more easy to buy goods with money, than to buy money with goods, <a href="#Page_177">177</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the circulating quantity of, in Great Britain, <a href="#Page_178">178</a>.</span><br /> +<span style="margin-left: 1em;">Effect of the discovery of the American mines on the value of, <a href="#Page_181">181</a>.</span><br /> +<span style="margin-left: 1em;">Money and wealth different things, <a href="#Page_182">182</a>.</span><br /> +<span style="margin-left: 1em;">Bank money explained, <a href="#Page_195">195</a>.</span><br /> +<span style="margin-left: 1em;">See <i>Coins</i>, <i>Gold</i>, and <i>Silver</i>.</span><br /> +<br /> +<i>Monopolies</i> in trade or manufactures, the tendency of, <a href="#Page_25">25</a>.<br /> +<span style="margin-left: 1em;">Are enemies to good management, <a href="#Page_62">62</a>.</span><br /> +<span style="margin-left: 1em;">Tendency of making a monopoly, of colony trade, <a href="#Page_251">251</a>.</span><br /> +<span style="margin-left: 1em;">Countries which have colonies obliged to share their advantages with many other countries, <a href="#Page_260">260</a>.</span><br /> +<span style="margin-left: 1em;">The chief engine in the mercantile system, <a href="#Page_261">261</a>.</span><br /> +<span style="margin-left: 1em;">How monopolies derange the natural distribution of the stock of the society, ib.</span><br /> +<span style="margin-left: 1em;">Are supported by unjust and cruel laws, <a href="#Page_268">268</a>.</span><br /> +<span style="margin-left: 1em;">Of a temporary nature, how far justifiable, <a href="#Page_316">316</a>.</span><br /> +<span style="margin-left: 1em;">Perpetual monopolies injurious to the people at large, ib.</span><br /> +<br /> +<i>Montauban</i>, the inequalities in the predial taille in that generality, how rectified, <a href="#Page_352">352</a>.<br /> +<br /> +<i>Montesquieu</i>, reasons given by him for the high rates of interest among all Mahometan nations, <a href="#Page_40">40</a>.<br /> +<span style="margin-left: 1em;">Examination of his idea of the cause of lowering the rate of interest of money, <a href="#Page_145">145</a>.</span><br /> +<br /> +<i>Morality</i>, two different systems of, in every civilized society, <a href="#Page_332">332</a>.<br /> +<span style="margin-left: 1em;">The principal points of distinction between them, <a href="#Page_333">333</a>.</span><br /> +<span style="margin-left: 1em;">The ties of obligation in each system, ib.</span><br /> +<span style="margin-left: 1em;">Why the morals of the common people are more regular in sectaries than under the established church, ib.</span><br /> +<span style="margin-left: 1em;">The excesses of, how to be corrected, ib.</span><br /> +<br /> +<i>Morellet</i>, M. his account of joint-stock companies, defective, <a href="#Page_317">317</a>.<br /> +<br /> +<i>Mun</i>, Mr. his illustration of the operation of money exported for commercial purposes, <a href="#Page_174">174</a>.<br /> +<br /> +<i>Music</i>, why a part of the ancient Grecian education, <a href="#Page_324">324</a>.<br /> +<span style="margin-left: 1em;">And dancing, great amusement among barbarous nations, ib.</span><br /> +<br /> +<br /> +N<br /> +<br /> +<i>Nations</i>, sometimes driven to inhuman customs, by poverty, <a href="#Page_1">1</a>.<br /> +<span style="margin-left: 1em;">The number of useful and productive labourers in, always proportioned to the capital stock on which they are employed, <a href="#Page_1">1</a>, <a href="#Page_2">2</a>.</span><br /> +<span style="margin-left: 1em;">The several sorts of industry seldom dealt impartially by, <a href="#Page_2">2</a>.</span><br /> +<span style="margin-left: 1em;">Maritime nations, why the first improved, <a href="#Page_8">8</a>.</span><br /> +<span style="margin-left: 1em;">How ruined by a neglect of public economy, <a href="#Page_140">140</a>.</span><br /> +<span style="margin-left: 1em;">Evidences of the increase of a national capital, <a href="#Page_141">141</a>.</span><br /> +<span style="margin-left: 1em;">How the expenses of individuals may increase the national capital, <a href="#Page_142">142</a>.</span><br /> +<br /> +<i>Navigation</i>, inland, a great means of improving a country in arts and industry, <a href="#Page_9">9</a>.<br /> +<span style="margin-left: 1em;">The advantages of, <a href="#Page_62">62</a>.</span><br /> +<span style="margin-left: 1em;">May be successfully managed by joint-stock companies, <a href="#Page_317">317</a>.</span><br /> +<br /> +<i>Navigation act of England</i>, the principal dispositions of, <a href="#Page_187">187</a>.<br /> +<span style="margin-left: 1em;">Motives that dictated, this law, <a href="#Page_188">188</a>.</span><br /> +<span style="margin-left: 1em;">Its political and commercial tendency, ib.</span><br /> +<span style="margin-left: 1em;">Its consequences, so far as it affected the colony trade with England, <a href="#Page_245">245</a>.</span><br /> +<span style="margin-left: 1em;">Diminished the foreign trade with Europe, <a href="#Page_246">246</a>.</span><br /> +<span style="margin-left: 1em;">Has kept up high profits in the British trade, ib.</span><br /> +<span style="margin-left: 1em;">Subjects Britain to a disadvantage in every branch of trade of which she has not the monopoly, ib., <a href="#Page_247">247</a>.</span><br /> +<br /> +<i>Necessaries</i> distinguished from luxuries, <a href="#Page_368">368</a>.<br /> +<span style="margin-left: 1em;">Operation of taxes on, ib.</span><br /> +<span style="margin-left: 1em;">Principal necessaries taxed, <a href="#Page_369">369</a>.</span><br /> +<br /> +<i>Negro slaves</i>, why not much employed in raising corn in the English colonies, <a href="#Page_159">159</a>.<br /> +<span style="margin-left: 1em;">Why more numerous on sugar than on tobacco plantations, ib.</span><br /> +<br /> +<i>Nile</i>, river, the cause of the early improvement of agriculture and manufactures in Egypt, <a href="#Page_9">9</a>.<br /> +<br /> +<br /> +O<br /> +<br /> +<i>Oats</i>, bread made of, not so suitable to the human constitution as that made of wheat, <a href="#Page_68">68</a>.<br /> +<br /> +<i>Ontology</i>, the science of, explained, <a href="#Page_323">323</a>.<br /> +<br /> +<i>Oxford</i>, the professorships there, sinecures, <a href="#Page_319">319</a>.<br /> +<br /> +<br /> +P<br /> +<br /> +<i>Paper money</i>, the credit of, how established, <a href="#Page_118">118</a>.<br /> +<span style="margin-left: 1em;">Its operation explained, ib.</span><br /> +<span style="margin-left: 1em;">Its effect on the circulation of cash, ib., <a href="#Page_119">119</a>.</span><br /> +<span style="margin-left: 1em;">Promotes industry, ib.</span><br /> +<span style="margin-left: 1em;">Operation of the several banking companies established in Scotland, <a href="#Page_120">120</a>.</span><br /> +<span style="margin-left: 1em;">Can never exceed the value of the gold and silver, of which it supplies the place in any country, <a href="#Page_122">122</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of too much paper being issued, ib.</span><br /> +<span style="margin-left: 1em;">The practice of drawing and redrawing explained, with its pernicious effects, <a href="#Page_126">126</a>.</span><br /> +<span style="margin-left: 1em;">The advantages and disadvantages of paper credit, stated, <a href="#Page_131">131</a>.</span><br /> +<span style="margin-left: 1em;">Ill effects of notes issued for small sums, <a href="#Page_132">132</a>.</span><br /> +<span style="margin-left: 1em;">Suppressing small notes renders money more plentiful, ib.</span><br /> +<span style="margin-left: 1em;">The currency of, does not affect the prices of goods, <a href="#Page_133">133</a>.</span><br /> +<span style="margin-left: 1em;">Account of the paper currency in North America, <a href="#Page_134">134</a>.</span><br /> +<span style="margin-left: 1em;">Expedient of the government of Pennsylvania to raise money, <a href="#Page_345">345</a>.</span><br /> +<span style="margin-left: 1em;">Why convenient for the domestic purposes of the North Americans, <a href="#Page_400">400</a>.</span><br /> +<br /> +<i>Paris</i> enjoys a little more trade than is necessary for the consumption of its inhabitants, <a href="#Page_138">138</a>.<br /> +<br /> +<i>Parish ministers</i>, evils attending vesting the election of, in the people, <a href="#Page_339">339</a>.<br /> +<br /> +<i>Parsimony</i> is the immediate cause of the increase of capitals, <a href="#Page_138">138</a>.<br /> +<span style="margin-left: 1em;">Promotes industry, ib.</span><br /> +<span style="margin-left: 1em;">Frugal men public benefactors, <a href="#Page_140">140</a>.</span><br /> +<span style="margin-left: 1em;">Is the only means by which artificers and manufacturers can add to the revenue and wealth of society, according to the French agricultural system of political economy, <a href="#Page_277">277</a>.</span><br /> +<span class='pagenum'><a name="Page_422" id="Page_422">[Pg 422]</a></span><br /> +<i>Pasture land</i>, under what circumstances more profitable than arable land, <a href="#Page_62">62</a>, <a href="#Page_63">63</a>.<br /> +<span style="margin-left: 1em;">Why it ought to be inclosed, <a href="#Page_63">63</a>.</span><br /> +<br /> +<i>Patronage</i>, the right of, why established in Scotland, <a href="#Page_340">340</a>.<br /> +<br /> +<i>Pay</i>, military, origin and reason of, <a href="#Page_291">291</a>.<br /> +<br /> +<i>Pennsylvania</i>, account of the paper currency there, <a href="#Page_134">134</a>.<br /> +<span style="margin-left: 1em;">Good consequences of the government there having no religious establishment, <a href="#Page_332">332</a>.</span><br /> +<span style="margin-left: 1em;">Derive a revenue from their paper currency, <a href="#Page_401">401</a>.</span><br /> +<br /> +<i>People</i>, how divided into productive and unproductive classes according to the present French system of agricultural political economy, <a href="#Page_275">275</a>.<br /> +<span style="margin-left: 1em;">The unproductive class greatly useful to the others, <a href="#Page_277">277</a>.</span><br /> +<span style="margin-left: 1em;">The great body of, how rendered unwarlike, <a href="#Page_292">292</a>.</span><br /> +<span style="margin-left: 1em;">The different opportunities of education in the different ranks of, <a href="#Page_328">328</a>.</span><br /> +<span style="margin-left: 1em;">The inferior ranks of, the greatest consumers, <a href="#Page_375">375</a>.</span><br /> +<span style="margin-left: 1em;">The luxurious expenses of these ranks ought only to be taxed, <a href="#Page_376">376</a>.</span><br /> +<br /> +<i>Persecution</i> for religious opinions, the true cause of, <a href="#Page_330">330</a>.<br /> +<br /> +<i>Peru</i>, the discovery of the silver mines in, occasioned those in Europe to be in a great measure abandoned, <a href="#Page_71">71</a>.<br /> +<span style="margin-left: 1em;">These mines yield but small profit to the proprietors, ib.</span><br /> +<span style="margin-left: 1em;">Tax paid to the king of Spain from these mines, <a href="#Page_85">85</a>.</span><br /> +<span style="margin-left: 1em;">The early accounts of the splendour and state of arts, in this country greatly exaggerated, <a href="#Page_85">85</a>, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">Present state of, under the Spanish government, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">The working of the mines there becomes gradually more expensive, <a href="#Page_90">90</a>.</span><br /> +<span style="margin-left: 1em;">Low state of arts there when first discovered, <a href="#Page_233">233</a>.</span><br /> +<span style="margin-left: 1em;">Is probably more populous now than at any former period, ib.</span><br /> +<br /> +<i>Philosophy</i>, natural, the origin and objects of, <a href="#Page_322">322</a>.<br /> +<span style="margin-left: 1em;">Moral, the nature of, explained, ib.</span><br /> +<span style="margin-left: 1em;">Logic, the origin and employment of, ib.</span><br /> +<br /> +<i>Physicians</i>, why amply rewarded for their labour, <a href="#Page_43">43</a>, <a href="#Page_44">44</a>.<br /> +<br /> +<i>Physics</i>, the ancient system of, explained, <a href="#Page_322">322</a>.<br /> +<br /> +<i>Pin-making</i>, the extraordinary advantage of a division of labour in this art, <a href="#Page_3">3</a>.<br /> +<br /> +<i>Plate</i> of private families, the melting it down to supply state exigencies, an insignificant resource, <a href="#Page_178">178</a>.<br /> +<span style="margin-left: 1em;">New plate is chiefly made from old, <a href="#Page_225">225</a>.</span><br /> +<br /> +<i>Ploughmen</i>, their knowledge more extensive than the generality of mechanics, <a href="#Page_53">53</a>.<br /> +<br /> +<i>Pneumatics</i>, the science of, explained, <a href="#Page_323">323</a>.<br /> +<br /> +<i>Poivre</i>, M. his account of the agriculture of Chochin-China, <a href="#Page_66">66</a>.<br /> +<br /> +<i>Poland</i>, a country still kept in poverty by the feudal system of its government, <a href="#Page_101">101</a>.<br /> +<br /> +<i>Political economy</i>, the two distinct objects and two different systems of, <a href="#Page_173">173</a>.<br /> +<span style="margin-left: 1em;">The present agricultural system of, adopted by French philosophers, described, <a href="#Page_275">275</a>.</span><br /> +<span style="margin-left: 1em;">Classes of the people who contribute to the annual produce of the land, ib.</span><br /> +<span style="margin-left: 1em;">How proprietors contribute, ib.</span><br /> +<span style="margin-left: 1em;">How cultivators contribute, ib.</span><br /> +<span style="margin-left: 1em;">Artificers and manufacturers unproductive, <a href="#Page_276">276</a>.</span><br /> +<span style="margin-left: 1em;">The unproductive classes maintained by the others, <a href="#Page_277">277</a>.</span><br /> +<span style="margin-left: 1em;">Bad tendency of restrictions and prohibitions in trade, <a href="#Page_279">279</a>.</span><br /> +<span style="margin-left: 1em;">How this system is delineated by M. Quesnai. The bad effects of an injudicious political economy, how corrected, <a href="#Page_280">280</a>.</span><br /> +<span style="margin-left: 1em;">The capital error in this system pointed out, ib.</span><br /> +<br /> +<i>Poll-taxes</i>, origin of, under the feudal government, <a href="#Page_162">162</a>, <a href="#Page_163">163</a>.<br /> +<span style="margin-left: 1em;">Why esteemed badges of slavery, <a href="#Page_362">362</a>.</span><br /> +<span style="margin-left: 1em;">The nature of, considered, <a href="#Page_367">367</a>.</span><br /> +<br /> +<i>Poor</i>, history of the laws made for the provision of, in England, <a href="#Page_57">57</a>.<br /> +<br /> +<i>Pope of Rome</i>, the great power formerly assumed by, <a href="#Page_335">335</a>.<br /> +<span style="margin-left: 1em;">His power how reduced, <a href="#Page_337">337</a>.</span><br /> +<span style="margin-left: 1em;">Rapid progress of the Reformation, <a href="#Page_338">338</a>.</span><br /> +<br /> +<i>Population</i>, riches and extreme poverty equally unfavourable to, <a href="#Page_33">33</a>.<br /> +<span style="margin-left: 1em;">Is limited by the means of subsistence, ib., <a href="#Page_69">69</a>.</span><br /> +<br /> +<i>Porter</i>, the proportion of malt used in the brewing of, <a href="#Page_376">376</a>.<br /> +<br /> +<i>Portugal</i>, the cultivation of the country not advanced by its commerce, <a href="#Page_171">171</a>, <a href="#Page_172">172</a>.<br /> +<span style="margin-left: 1em;">The value of gold and silver there depreciated by prohibiting their exportation, <a href="#Page_208">208</a>.</span><br /> +<span style="margin-left: 1em;">Translation of the commercial treaty concluded in 1703 with England, <a href="#Page_223">223</a>.</span><br /> +<span style="margin-left: 1em;">A large share of the Portugal gold sent annually to England, ib.</span><br /> +<span style="margin-left: 1em;">Motives that led to the discovery of a passage to the East round the Cape of Good Hope, <a href="#Page_229">229</a>.</span><br /> +<span style="margin-left: 1em;">Lost its manufactures by acquiring rich and fertile colonies, <a href="#Page_251">251</a>.</span><br /> +<br /> +<i>Post-office</i>, a mercantile project, well calculated for being managed by a government, <a href="#Page_344">344</a>.<br /> +<br /> +<i>Potatoes</i>, remarks on, as an article of food, <a href="#Page_67">67</a>.<br /> +<span style="margin-left: 1em;">Culture and great produce of, ib.</span><br /> +<span style="margin-left: 1em;">The difficulty of preserving them the great obstacle to cultivating them for general diet, <a href="#Page_68">68</a>.</span><br /> +<br /> +<i>Poverty</i>, sometimes urges nations to inhuman customs, <a href="#Page_1">1</a>.<br /> +<span style="margin-left: 1em;">Is no check to the production of children, <a href="#Page_33">33</a>.</span><br /> +<span style="margin-left: 1em;">But very unfavourable to raising them, ib.</span><br /> +<br /> +<i>Poultry</i>, the cause of their cheapness, <a href="#Page_95">95</a>.<br /> +<span style="margin-left: 1em;">Is a more important article of rural economy in France than in England, ib.</span><br /> +<br /> +<i>Pragmatic sanction in France</i>, the object of, <a href="#Page_337">337</a>.<br /> +<span style="margin-left: 1em;">Is followed by the concordat, ib.</span><br /> +<br /> +<i>Preferments</i>, ecclesiastical, the means by which a national clergy ought to be managed by the civil magistrate, <a href="#Page_335">335</a>.<br /> +<span style="margin-left: 1em;">Alterations in the mode of electing to them, ib., <a href="#Page_337">337</a>.</span><br /> +<br /> +<i>Presbyterian church government</i>, the nature of, described, <a href="#Page_340">340</a>.<br /> +<span style="margin-left: 1em;">Character of the clergy of, ib., <a href="#Page_341">341</a>.</span><br /> +<br /> +<i>Prices</i>, real and nominal, of commodities, distinguished, <a href="#Page_14">14</a>.<br /> +<span style="margin-left: 1em;">Money price of goods explained, <a href="#Page_19">19</a>.</span><br /> +<span style="margin-left: 1em;">Rent for land enters into the price of the greater part of all commodities, <a href="#Page_21">21</a>.</span><br /> +<span style="margin-left: 1em;">The component parts of the price of goods explained, ib.</span><br /> +<span style="margin-left: 1em;">Natural and market prices distinguished, and how governed, <a href="#Page_23">23</a>, <a href="#Page_36">36</a>.</span><br /> +<span style="margin-left: 1em;">Though raised at first by an increase of demand, always reduced by it in the result, <a href="#Page_314">314</a>.</span><br /> +<br /> +<i>Primogeniture</i>, origin and motive of the law of succession by, under the feudal government, <a href="#Page_157">157</a>.<br /> +<span style="margin-left: 1em;">In contrary to the real interest of families, <a href="#Page_158">158</a>.</span><br /> +<span class='pagenum'><a name="Page_423" id="Page_423">[Pg 423]</a></span><br /> +<i>Princes</i>, why not well calculated to manage mercantile projects for the sake of a revenue, <a href="#Page_344">344</a>.<br /> +<br /> +<i>Prodigality</i>, the natural tendency of, both to the individual and to the public, <a href="#Page_138">138</a>.<br /> +<span style="margin-left: 1em;">Prodigal men enemies to their country, <a href="#Page_140">140</a>.</span><br /> +<br /> +<i>Produce</i> of land and labour the source of all revenue, <a href="#Page_136">136</a>.<br /> +<span style="margin-left: 1em;">The value of, how to be increased, <a href="#Page_141">141</a>.</span><br /> +<br /> +<i>Professors in Universities</i>, circumstances which determine their merit, <a href="#Page_340">340</a>, <a href="#Page_341">341</a>.<br /> +<br /> +<i>Profit</i>, the various articles of gain that pass under the common idea of, <a href="#Page_22">22</a>.<br /> +<span style="margin-left: 1em;">An average rate of, in all countries, <a href="#Page_23">23</a>.</span><br /> +<span style="margin-left: 1em;">Averages of, extremely difficult to ascertain, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">Interest of money the best standard of, ib.</span><br /> +<span style="margin-left: 1em;">The diminution of, a natural consequence of prosperity, <a href="#Page_38">38</a>.</span><br /> +<span style="margin-left: 1em;">Clear and gross profit distinguished, <a href="#Page_40">40</a>.</span><br /> +<span style="margin-left: 1em;">The nature of the highest ordinary rate of, defined, ib.</span><br /> +<span style="margin-left: 1em;">Double interest deemed in Great Britain a reasonable mercantile profit, ib.</span><br /> +<span style="margin-left: 1em;">In thriving countries low profit may compensate the high wages of labour, <a href="#Page_41">41</a>.</span><br /> +<span style="margin-left: 1em;">The operation of high profits and high wages compared, ib.</span><br /> +<span style="margin-left: 1em;">Compensates inconvenience and disgrace, <a href="#Page_42">42</a>.</span><br /> +<span style="margin-left: 1em;">Of stock, how affected, <a href="#Page_46">46</a>.</span><br /> +<span style="margin-left: 1em;">Large profits must be made from small capitals, <a href="#Page_47">47</a>.</span><br /> +<span style="margin-left: 1em;">Why goods are cheaper in the metropolis than in country villages, ib.</span><br /> +<span style="margin-left: 1em;">Great fortunes more frequently made by trade in large towns than in small ones, ib.</span><br /> +<span style="margin-left: 1em;">Is naturally low in rich, and high in poor countries, <a href="#Page_106">106</a>.</span><br /> +<span style="margin-left: 1em;">How that of the different classes of traders is raised, <a href="#Page_148">148</a>.</span><br /> +<span style="margin-left: 1em;">Private, the sole motive of employing capitals in any branch of business, <a href="#Page_154">154</a>.</span><br /> +<span style="margin-left: 1em;">When raised by monopolies, encourage luxury, <a href="#Page_253">253</a>.</span><br /> +<br /> +<i>Projects</i>, unsuccessful in arts, injurious to a country, <a href="#Page_140">140</a>.<br /> +<br /> +<i>Property</i>, passions which prompt mankind to the invasion of, <a href="#Page_297">297</a>.<br /> +<span style="margin-left: 1em;">Civil government necessary for the production of, ib.</span><br /> +<span style="margin-left: 1em;">Wealth a source of authority, <a href="#Page_298">298</a>.</span><br /> +<br /> +<i>Provisions</i>, how far the variations in the price of, affect labour and industry, <a href="#Page_30">30</a>, <a href="#Page_34">34</a>, <a href="#Page_36">36</a>.<br /> +<span style="margin-left: 1em;">Whether cheaper in the metropolis or in country villages, <a href="#Page_47">47</a>.</span><br /> +<span style="margin-left: 1em;">The prices of, better regulated by competition than by law, <a href="#Page_60">60</a>.</span><br /> +<span style="margin-left: 1em;">A rise in the prices of, must be uniform, to shew that it proceeds from a depreciation of the value of silver, <a href="#Page_102">102</a>.</span><br /> +<br /> +<i>Provisers</i>, object of the statute of, in England, <a href="#Page_337">337</a>.<br /> +<br /> +<i>Prussia</i>, mode of assessing the land-tax there, <a href="#Page_351">351</a>.<br /> +<br /> +<i>Public works</i> and <i>institutions</i>, how to be maintained, <a href="#Page_302">302</a>.<br /> +<span style="margin-left: 1em;">Equity of tolls for passage over roads, bridges and canals, <a href="#Page_303">303</a>.</span><br /> +<span style="margin-left: 1em;">Why government ought not to have the management of turnpikes, <a href="#Page_304">304</a>.</span><br /> +<span style="margin-left: 1em;">Nor of other public works, <a href="#Page_306">306</a>.</span><br /> +<br /> +<i>Purveyance</i>, a service still exacted in most parts of Europe, <a href="#Page_161">161</a>.<br /> +<br /> +<br /> +Q<br /> +<br /> +<i>Quakers of Pennsylvania</i>, inference from their resolution to emancipate all their negro slaves, <a href="#Page_159">159</a>.<br /> +<br /> +<i>Quesnai</i>, M. view of his agricultural system of political economy, <a href="#Page_279">279</a>.<br /> +<span style="margin-left: 1em;">His doctrine generally subscribed to, <a href="#Page_282">282</a>.</span><br /> +<br /> +<i>Quito</i>, populousness of that city, <a href="#Page_233">233</a>.<br /> +<br /> +<br /> +R<br /> +<br /> +<i>Reformation</i>, rapid progress of the doctrines of, in Germany, <a href="#Page_338">338</a>.<br /> +<span style="margin-left: 1em;">In Sweden and Switzerland, ib.</span><br /> +<span style="margin-left: 1em;">In England and Scotland, ib., <a href="#Page_339">339</a>.</span><br /> +<span style="margin-left: 1em;">Origin of the Lutheran and the Calvinistic sects, ib.</span><br /> +<br /> +<i>Regulated companies</i>. See <i>Companies</i>.<br /> +<br /> +<i>Religion</i>, the object of instruction in, <a href="#Page_330">330</a>.<br /> +<span style="margin-left: 1em;">Advantage the teachers of a new religion enjoy over those of one that is established, ib.</span><br /> +<span style="margin-left: 1em;">Origin of persecutions for heretical opinions, ib.</span><br /> +<span style="margin-left: 1em;">How the zeal of the inferior clergy of the church of Rome is kept alive, ib.</span><br /> +<span style="margin-left: 1em;">Utility of ecclesiastical establishments, <a href="#Page_331">331</a>.</span><br /> +<span style="margin-left: 1em;">How united with the civil power, ib., <a href="#Page_332">332</a>.</span><br /> +<br /> +<i>Rent</i>, reserved, ought not to consist of money, <a href="#Page_14">14</a>.<br /> +<span style="margin-left: 1em;">But of corn, ib.</span><br /> +<span style="margin-left: 1em;">Of land, constitutes a third part of the price of most kinds of goods, <a href="#Page_21">21</a>.</span><br /> +<span style="margin-left: 1em;">An average rate of, in all countries, and how regulated, <a href="#Page_23">23</a>.</span><br /> +<span style="margin-left: 1em;">Makes the first deduction from the produce of labour employed upon land, <a href="#Page_27">27</a>.</span><br /> +<span style="margin-left: 1em;">The terms of, how adjusted between landlord and tenant, <a href="#Page_60">60</a>, <a href="#Page_61">61</a>.</span><br /> +<span style="margin-left: 1em;">Is sometimes demanded for what is altogether incapable of human improvement, <a href="#Page_61">61</a>.</span><br /> +<span style="margin-left: 1em;">Is paid for, and produced, by land in almost all situations, ib.</span><br /> +<span style="margin-left: 1em;">The general proportion paid for coal mines, <a href="#Page_71">71</a>.</span><br /> +<span style="margin-left: 1em;">And metal mines, ib.</span><br /> +<span style="margin-left: 1em;">Mines of precious stones frequently yield no rent, <a href="#Page_73">73</a>.</span><br /> +<span style="margin-left: 1em;">How paid in ancient times, <a href="#Page_76">76</a>.</span><br /> +<span style="margin-left: 1em;">Is raised, either directly or indirectly, by every improvement in the circumstances of society, <a href="#Page_105">105</a>.</span><br /> +<span style="margin-left: 1em;">Gross and neat rent distinguished, <a href="#Page_115">115</a>.</span><br /> +<span style="margin-left: 1em;">How raised and paid under feudal governments, <a href="#Page_137">137</a>.</span><br /> +<span style="margin-left: 1em;">Present average proportion of, compared with the produce of the land, ib.</span><br /> +<span style="margin-left: 1em;">Of houses distinguished into two parts, <a href="#Page_354">354</a>.</span><br /> +<span style="margin-left: 1em;">Difference between rent of house and rent of land, <a href="#Page_355">355</a>.</span><br /> +<span style="margin-left: 1em;">Rent of a house the best estimate of a tenants circumstances, ib.</span><br /> +<br /> +<i>Retainers</i>, under the feudal system of government described, <a href="#Page_167">167</a>.<br /> +<span style="margin-left: 1.5em;">How the connection between them and their lords was broken, <a href="#Page_169">169</a>.</span><br /> +<br /> +<i>Revenue</i>, the original source of, pointed out, <a href="#Page_22">22</a>.<br /> +<span style="margin-left: 1em;">Of a country, of what it consists, <a href="#Page_115">115</a>.</span><br /> +<span style="margin-left: 1em;">The neat revenue of a society diminished by supporting a circulating stock of money, <a href="#Page_116">116</a>.</span><br /> +<span style="margin-left: 1em;">Money no part of revenue, <a href="#Page_117">117</a>.</span><br /> +<span style="margin-left: 1em;">Is not to be computed in money, but in what money will purchase, ib.</span><br /> +<span style="margin-left: 1em;">How produced, and how appropriated, in the first instance, <a href="#Page_136">136</a>.</span><br /> +<span style="margin-left: 1em;">Produce of land, ib.</span><br /> +<span style="margin-left: 1em;">Produce of manufactures, ib. Must always replace capital, ib.</span><br /> +<span style="margin-left: 1em;">The proportion between revenue and capital regulates the proportion between idleness and industry, <a href="#Page_138">138</a>.</span><br /> +<span style="margin-left: 1em;">Both the savings and the spendings of, annually, consumed, ib.</span><br /> +<span style="margin-left: 1em;">Of every society, equal to the exchangeable value of the whole produce of its industry, <a href="#Page_184">184</a>.</span><br /> +<span class='pagenum'><a name="Page_424" id="Page_424">[Pg 424]</a></span><span style="margin-left: 1em;">Of the customs, increase by drawbacks, <a href="#Page_205">205</a>.</span><br /> +<span style="margin-left: 1em;">Why government ought not to take the management of turnpikes, to derive a revenue from them, <a href="#Page_304">304</a>.</span><br /> +<span style="margin-left: 1em;">Public works of a local nature always better maintained by provincial revenues than by the general revenue of the state, <a href="#Page_306">306</a>.</span><br /> +<span style="margin-left: 1em;">The abuses in provincial revenues trifling, when compared with those in the revenue of a great empire, ib.</span><br /> +<span style="margin-left: 1em;">The greater the revenue of the church, the smaller must be that of the state, <a href="#Page_341">341</a>.</span><br /> +<span style="margin-left: 1em;">The revenue of the state ought to be raised proportionably from the whole society, <a href="#Page_342">342</a>.</span><br /> +<span style="margin-left: 1em;">Local expenses ought to be defrayed by a local revenue, <a href="#Page_343">343</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the sources of public revenue, ib.</span><br /> +<span style="margin-left: 1em;">Of the republic of Hamburgh, ib., <a href="#Page_344">344</a>.</span><br /> +<span style="margin-left: 1em;">Whether the government of Britain could undertake the management of the bank, to derive a revenue from it, ib.</span><br /> +<span style="margin-left: 1em;">The post office, a mercantile project, well calculated for being managed by government, ib.</span><br /> +<span style="margin-left: 1em;">Princes not well qualified to improve their fortunes by trade, ib.</span><br /> +<span style="margin-left: 1em;">The English East India Company good traders before they became sovereigns, but each character now spoils the other, ib.</span><br /> +<span style="margin-left: 1em;">Expedient of the government of Pennsylvania to raise money, <a href="#Page_345">345</a>.</span><br /> +<span style="margin-left: 1em;">Rent of land the most permanent fund, ib.</span><br /> +<span style="margin-left: 1em;">Feudal revenues, ib.</span><br /> +<span style="margin-left: 1em;">Of Great Britain, ib.</span><br /> +<span style="margin-left: 1em;">Revenue from land proportioned not to the rent but to the produce, <a href="#Page_346">346</a>.</span><br /> +<span style="margin-left: 1em;">Reasons for selling the crown lands, ib., <a href="#Page_347">347</a>.</span><br /> +<span style="margin-left: 1em;">An improved land-tax suggested, <a href="#Page_349">349</a>.</span><br /> +<span style="margin-left: 1em;">The nature and effect of tithes explained, <a href="#Page_352">352</a>.</span><br /> +<span style="margin-left: 1em;">Why a revenue cannot be raised in kind, <a href="#Page_353">353</a>.</span><br /> +<span style="margin-left: 1em;">When raised in money, how affected by different modes of valuation, ib.</span><br /> +<span style="margin-left: 1em;">A proportionable tax on houses the best source of revenue, <a href="#Page_355">355</a>.</span><br /> +<span style="margin-left: 1em;">Remedies for the diminution of, according to their causes, <a href="#Page_374">374</a>.</span><br /> +<span style="margin-left: 1em;">Bad effects of farming out public revenues, <a href="#Page_381">381</a>.</span><br /> +<span style="margin-left: 1em;">The different sources of revenue in France, <a href="#Page_384">384</a>.</span><br /> +<span style="margin-left: 1em;">How expended in the rude state of society, <a href="#Page_385">385</a>.</span><br /> +<br /> +<i>Rice</i>, a very productive article of cultivation, <a href="#Page_67">67</a>.<br /> +<span style="margin-left: 1em;">Requires a soil unfit for raising any other kind of food, ib.</span><br /> +<span style="margin-left: 1em;">Rice countries more populous than corn countries, <a href="#Page_86">86</a>.</span><br /> +<br /> +<i>Riches</i>, the chief enjoyment of, consists in the parade of, <a href="#Page_72">72</a>, <a href="#Page_73">73</a>.<br /> +<br /> +<i>Risk</i>, instances of the inattention mankind pay to it, <a href="#Page_45">45</a>.<br /> +<br /> +<i>Roads</i>, good, the public advantages of, <a href="#Page_62">62</a>.<br /> +<span style="margin-left: 1em;">How to be made and maintained, <a href="#Page_303">303</a>.</span><br /> +<span style="margin-left: 1em;">The maintenance of, why improper to be trusted to private interest, <a href="#Page_304">304</a>.</span><br /> +<span style="margin-left: 1em;">General state of, in France, <a href="#Page_305">305</a>.</span><br /> +<span style="margin-left: 1em;">In China, ib.</span><br /> +<br /> +<i>Romans</i>, why copper became the standard of value among them, <a href="#Page_16">16</a>.<br /> +<span style="margin-left: 1em;">The extravagant prices paid by them for certain luxuries for the table accounted for, <a href="#Page_92">92</a>.</span><br /> +<span style="margin-left: 1em;">The value of silver higher among them than at the present time, ib.</span><br /> +<span style="margin-left: 1em;">The republic of, founded on a division of land among the citizens, <a href="#Page_228">228</a>.</span><br /> +<span style="margin-left: 1em;">The Agrarian law only executed upon one or two occasions, ib.</span><br /> +<span style="margin-left: 1em;">How the citizens who had no land subsisted, ib.</span><br /> +<span style="margin-left: 1em;">Distinction between the Roman and Greek colonies, ib.</span><br /> +<span style="margin-left: 1em;">The improvement of the former slower than that of the latter, <a href="#Page_232">232</a>.</span><br /> +<span style="margin-left: 1em;">Origin of the social war, <a href="#Page_257">257</a>.</span><br /> +<span style="margin-left: 1em;">The republic ruined by extending the privilege of Roman citizens to the greater part of the inhabitants of Italy, <a href="#Page_258">258</a>.</span><br /> +<span style="margin-left: 1em;">When contributions were first raised to maintain those who went to the wars, <a href="#Page_290">290</a>.</span><br /> +<span style="margin-left: 1em;">Soldiers not a distinct profession there, <a href="#Page_291">291</a>.</span><br /> +<span style="margin-left: 1em;">Improvement of the Roman armies by discipline, <a href="#Page_294">294</a>.</span><br /> +<span style="margin-left: 1em;">How that discipline was lost, <a href="#Page_295">295</a>.</span><br /> +<span style="margin-left: 1em;">The fall of the western empire, how effected, ib.</span><br /> +<span style="margin-left: 1em;">Remarks on the education of the ancient Romans, <a href="#Page_324">324</a>.</span><br /> +<span style="margin-left: 1em;">Their morals superior to those of the Greeks, ib.</span><br /> +<span style="margin-left: 1em;">State of law, and forms of justice, <a href="#Page_325">325</a>.</span><br /> +<span style="margin-left: 1em;">The martial spirit of the people, how supported, <a href="#Page_329">329</a>.</span><br /> +<span style="margin-left: 1em;">Great reductions of the coin practised by, at particular exigencies, <a href="#Page_396">396</a>.</span><br /> +<br /> +<i>Rome</i>, modern, how the zeal of the inferior clergy of, is kept alive, <a href="#Page_330">330</a>.<br /> +<span style="margin-left: 1em;">The clergy of, one great spiritual army dispersed in different quarters over Europe, <a href="#Page_335">335</a>.</span><br /> +<span style="margin-left: 1em;">Their power during the feudal monkish ages similar to that of the temporal barons, <a href="#Page_336">336</a>.</span><br /> +<span style="margin-left: 1em;">Their power, how reduced, <a href="#Page_337">337</a>.</span><br /> +<br /> +<i>Rouen</i>, why a town of great trade, <a href="#Page_138">138</a>.<br /> +<br /> +<i>Ruddiman</i>, Mr. remarks on his account of the ancient price of wheat in Scotland, <a href="#Page_77">77</a>.<br /> +<br /> +<i>Russia</i>, was civilized under Peter the Great by a standing army, <a href="#Page_296">296</a>.<br /> +<br /> +<br /> +S<br /> +<br /> +<i>Sailors</i>, why no sensible inconvenience felt by the great numbers disbanded at the close of a war, <a href="#Page_190">190</a>.<br /> +<br /> +<i>Salt</i>, account of foreign salt imported into Scotland, and of Scotch salt delivered duty free for the fishery, <a href="#Page_288">288</a>, <i>Append</i>.<br /> +<span style="margin-left: 1em;">Is an object of heavy taxation everywhere, <a href="#Page_369">369</a>.</span><br /> +<span style="margin-left: 1em;">The collection of the duty on, expensive, <a href="#Page_380">380</a>.</span><br /> +<br /> +<i>Sardinia</i>, the land-tax how assessed there, <a href="#Page_352">352</a>.<br /> +<br /> +<i>Saxon lords</i>, their authority and jurisdiction as great before the Conquest as those of the Normans were afterwards, <a href="#Page_168">168</a>.<br /> +<br /> +<i>Schools</i>, parochial, observations on, <a href="#Page_328">328</a>.<br /> +<br /> +<i>Science</i> is the great antidote to the poison of enthusiasm and superstition, <a href="#Page_333">333</a>.<br /> +<br /> +<i>Scipio</i>, his Spanish militia rendered superior to the Carthaginian militia by discipline and service, <a href="#Page_294">294</a>.<br /> +<br /> +<i>Scotland</i>, compared with England as to the prices of labour and provisions, <a href="#Page_31">31</a>.<br /> +<span style="margin-left: 1em;">Remarks on the population of the Highlands, <a href="#Page_33">33</a>.</span><br /> +<span style="margin-left: 1em;">The market rate of interest higher than the legal rate, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">The situation of cottagers there described, <a href="#Page_49">49</a>.</span><br /> +<span style="margin-left: 1em;">Apprenticeships and corporations, <a href="#Page_51">51</a>.</span><br /> +<span style="margin-left: 1em;">The common people of, why neither so strong nor so handsome as the same class in England, <a href="#Page_68">68</a>.</span><br /> +<span style="margin-left: 1em;">Cause of the frequent emigrations from, <a href="#Page_80">80</a>.</span><br /> +<span style="margin-left: 1em;">Progress of agriculture there before the union with England, <a href="#Page_93">93</a>.</span><br /> +<span style="margin-left: 1em;">Present obstructions to better husbandry, ib., <a href="#Page_94">94</a>.</span><br /> +<span style="margin-left: 1em;">The price of wool reduced by the Union, <a href="#Page_99">99</a>.</span><br /> +<span class='pagenum'><a name="Page_425" id="Page_425">[Pg 425]</a></span><span style="margin-left: 1em;">Operation of the several banking companies established there, <a href="#Page_120">120</a>.</span><br /> +<span style="margin-left: 1em;">Amount of the circulating money there before the Union, ib.</span><br /> +<span style="margin-left: 1em;">Amount of the present circulating cash, <a href="#Page_121">121</a>.</span><br /> +<span style="margin-left: 1em;">Course of dealings in the Scotch banks ib.</span><br /> +<span style="margin-left: 1em;">Difficulties occasioned by these banks issuing too much paper, <a href="#Page_123">123</a>.</span><br /> +<span style="margin-left: 1em;">Necessary caution for some time observed by the banks in giving credit to their customers, with the good effects of it, <a href="#Page_124">124</a>.</span><br /> +<span style="margin-left: 1em;">The scheme of drawing and redrawing adopted by traders, <a href="#Page_126">126</a>.</span><br /> +<span style="margin-left: 1em;">Its pernicious tendency explained, ib., <a href="#Page_127">127</a>.</span><br /> +<span style="margin-left: 1em;">History of the Ayr bank, <a href="#Page_128">128</a>.</span><br /> +<span style="margin-left: 1em;">Mr. Law's scheme to improve the country, <a href="#Page_130">130</a>.</span><br /> +<span style="margin-left: 1em;">The prices of goods in, not altered by paper currency, <a href="#Page_133">133</a>.</span><br /> +<span style="margin-left: 1em;">Effect of the optional clauses in their notes, ib.</span><br /> +<span style="margin-left: 1em;">Cause of the speedy establishment of the Reformation there, <a href="#Page_339">339</a>.</span><br /> +<span style="margin-left: 1em;">The disorders attending popular elections of the clergy there, occasioned the right of patronage to be established, ib.</span><br /> +<span style="margin-left: 1em;">Amount of the whole revenue of the clergy, <a href="#Page_342">342</a>.</span><br /> +<br /> +<i>Sea service</i> and military service by land, compared, <a href="#Page_45">45</a>.<br /> +<br /> +<i>Sects in religion</i>, the more numerous, the better for society, <a href="#Page_332">332</a>.<br /> +<span style="margin-left: 1em;">Why they generally profess the austere system of morality, <a href="#Page_333">333</a>.</span><br /> +<br /> +<i>Self-love</i> the governing principle in the intercourse of human society, <a href="#Page_6">6</a>.<br /> +<br /> +<i>Servants</i>, menial, distinguished from hired workmen, <a href="#Page_135">135</a>.<br /> +<span style="margin-left: 1em;">The various orders of men who rank in the former class in reference to their labour, <a href="#Page_136">136</a>.</span><br /> +<span style="margin-left: 1em;">Their labour unproductive, <a href="#Page_280">280</a>.</span><br /> +<br /> +<i>Settlements</i> of the poor, brief review of the English laws relating to, <a href="#Page_57">57</a>.<br /> +<span style="margin-left: 1em;">The removals of the poor a violation of natural liberty, <a href="#Page_59">59</a>.</span><br /> +<span style="margin-left: 1em;">The law of, ought to be repealed, <a href="#Page_191">191</a>.</span><br /> +<br /> +<i>Sheep</i>, frequently killed in Spain for the sake of the fleece and the tallow, <a href="#Page_97">97</a>.<br /> +<span style="margin-left: 1em;">Severe laws against the exportation of them and their wool, <a href="#Page_268">268</a>.</span><br /> +<br /> +<i>Shepherds</i>, war, how supported by a nation of, <a href="#Page_289">289</a>.<br /> +<span style="margin-left: 1em;">Inequality of fortune among, the source of great authority, <a href="#Page_298">298</a>.</span><br /> +<span style="margin-left: 1em;">Birth and family highly honoured in nations of shepherds, ib.</span><br /> +<span style="margin-left: 1em;">Inequality of fortune first began to take place in the age of shepherds, <a href="#Page_299">299</a>.</span><br /> +<span style="margin-left: 1em;">And introduced civil government, ib.</span><br /> +<br /> +<i>Shetland</i>, how rents are estimated and paid there, <a href="#Page_61">61</a>.<br /> +<br /> +<i>Silk manufacture</i>, how transferred from Lucca to Venice, <a href="#Page_166">166</a>.<br /> +<br /> +<i>Silver</i>, the first standard coinage of the northern subverters of the Roman empires, <a href="#Page_16">16</a>.<br /> +<span style="margin-left: 1em;">Its proportional value to gold regulated by law, <a href="#Page_17">17</a>.</span><br /> +<span style="margin-left: 1em;">Is the measure of the value of gold, ib.</span><br /> +<span style="margin-left: 1em;">Mint price of silver in England, ib.</span><br /> +<span style="margin-left: 1em;">Inquiry into the difference between the mint and market price of bullion, ib., <a href="#Page_18">18</a>.</span><br /> +<span style="margin-left: 1em;">How to preserve the silver coin from being melted down for profit, <a href="#Page_18">18</a>.</span><br /> +<span style="margin-left: 1em;">The mines of, in Europe, why generally abandoned, <a href="#Page_71">71</a>.</span><br /> +<span style="margin-left: 1em;">Evidences of the small profit they yield to the proprietors in Peru, ib.</span><br /> +<span style="margin-left: 1em;">Qualities for which this metal is valued, <a href="#Page_72">72</a>.</span><br /> +<span style="margin-left: 1em;">The most abundant mines of, would add little to the wealth of the world, <a href="#Page_73">73</a>.</span><br /> +<span style="margin-left: 1em;">But the increase in the quantity of, would depreciate its own value, <a href="#Page_74">74</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances that might counteract this effect, ib.</span><br /> +<span style="margin-left: 1em;">Historical view of the variations in the value of, during the four last centuries, ib., <a href="#Page_75">75</a>.</span><br /> +<span style="margin-left: 1em;">Remarks on its rise in value compared with corn, <a href="#Page_76">76</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances that might have misled writers in reviewing the value of silver, ib.</span><br /> +<span style="margin-left: 1em;">Corn the best standard for judging of the real value of silver, <a href="#Page_79">79</a>.</span><br /> +<span style="margin-left: 1em;">The price of, how affected by the increase of quantity, ib.</span><br /> +<span style="margin-left: 1em;">The value of, sunk by the discovery of the American mines, <a href="#Page_81">81</a>.</span><br /> +<span style="margin-left: 1em;">When the reduction of its value from this cause appears to have been completed, ib.</span><br /> +<span style="margin-left: 1em;">Tax paid from the Peruvian mines to the king of Spain, <a href="#Page_85">85</a>.</span><br /> +<span style="margin-left: 1em;">The value of silver kept up by an extension of the market, ib.</span><br /> +<span style="margin-left: 1em;">Is the most profitable commodity that can be sent to China, <a href="#Page_86">86</a>.</span><br /> +<span style="margin-left: 1em;">The value of, how proportioned to that of gold before and after the discovery of the American mines, <a href="#Page_89">89</a>.</span><br /> +<span style="margin-left: 1em;">The quantity commonly in the market in proportion to that of gold probably greater than their relative values indicate, ib.</span><br /> +<span style="margin-left: 1em;">The value of, probably rising, and why, <a href="#Page_90">90</a>, <a href="#Page_91">91</a>.</span><br /> +<span style="margin-left: 1em;">The opinion of a depreciation of its value not well founded, <a href="#Page_100">100</a>.</span><br /> +<span style="margin-left: 1em;">The real value of, degraded by the bounty on the exportation of corn, <a href="#Page_207">207</a>.</span><br /> +<br /> +<i>Sinking fund</i> in the British finances explained, <a href="#Page_389">389</a>.<br /> +<span style="margin-left: 1em;">Is inadequate to the discharge of former debts, and almost wholly applied to other purposes, <a href="#Page_391">391</a>.</span><br /> +<span style="margin-left: 1em;">Motives to the misapplication of it, ib., <a href="#Page_392">392</a>.</span><br /> +<br /> +<i>Slaves</i>, the labour of, dearer to the masters than that of freemen, <a href="#Page_53">53</a>.<br /> +<span style="margin-left: 1em;">Under feudal lords, circumstances of their situation, <a href="#Page_159">159</a>.</span><br /> +<span style="margin-left: 1em;">Countries where this order of men still remains, ib.</span><br /> +<span style="margin-left: 1em;">Why the service of slave is preferred to that of freemen, ib.</span><br /> +<span style="margin-left: 1em;">Their labour why unprofitable, ib.</span><br /> +<span style="margin-left: 1em;">Causes of the abolishing of slavery throughout the greater part of Europe, <a href="#Page_160">160</a>.</span><br /> +<span style="margin-left: 1em;">Receive more protection from the magistrate in an arbitrary government than in one that is free, <a href="#Page_241">241</a>.</span><br /> +<span style="margin-left: 1em;">Why employed in manufactures by the ancient Grecians, <a href="#Page_284">284</a>.</span><br /> +<span style="margin-left: 1em;">Why no improvements are to be expected from them, ib.</span><br /> +<br /> +<i>Smuggling</i>, a tempting, but generally a ruinous employment, <a href="#Page_46">46</a>.<br /> +<span style="margin-left: 1em;">Encouraged by high duties, <a href="#Page_373">373</a>.</span><br /> +<span style="margin-left: 1em;">Remedies against, <a href="#Page_374">374</a>.</span><br /> +<span style="margin-left: 1em;">The crime of, morally considered, <a href="#Page_381">381</a>.</span><br /> +<br /> +<i>Society</i>, human, the first principles of, <a href="#Page_6">6</a>.<br /> +<br /> +<i>Soldiers</i>, remarks on their motives for engaging in the military line, <a href="#Page_45">45</a>.<br /> +<span style="margin-left: 1em;">Comparison between the land and sea service, ib.</span><br /> +<span style="margin-left: 1em;">Why no sensible inconvenience felt by the disbanding of great numbers after a war is over, <a href="#Page_190">190</a>.</span><br /> +<span style="margin-left: 1em;">Reason of their first serving for pay, <a href="#Page_291">291</a>.</span><br /> +<span style="margin-left: 1em;">How they became a distinct class of the people, <a href="#Page_292">292</a>.</span><br /> +<span style="margin-left: 1em;">How distinguished from the militia, ib.</span><br /> +<span style="margin-left: 1em;">Alteration in their exercise produced by the invention of fire-arms, ib.</span><br /> +<br /> +<i>South Sea company</i>, amazing capital once enjoyed by, <a href="#Page_311">311</a>.<br /> +<span style="margin-left: 1em;">Mercantile and stock-jobbing projects of, <a href="#Page_312">312</a>.</span><br /> +<span style="margin-left: 1em;">Assiento contract, ib.</span><br /> +<span style="margin-left: 1em;">Whale fishery, ib.</span><br /> +<span style="margin-left: 1em;">The capital of, turned into annuity stock, ib., <a href="#Page_388">388</a>.</span><br /> +<br /> +<i>Sovereign</i> and <i>trader</i>, inconsistent characters, <a href="#Page_344">344</a>.<br /> +<span class='pagenum'><a name="Page_426" id="Page_426">[Pg 426]</a></span><br /> +<i>Sovereign</i>, three duties only necessary for him to attend to for supporting a system of natural liberty, <a href="#Page_286">286</a>.<br /> +<span style="margin-left: 1em;">How he is to protect the society from external violence, <a href="#Page_289">289</a>, <a href="#Page_296">296</a>.</span><br /> +<span style="margin-left: 1em;">And the members of it from the injustice and oppression of each other, <a href="#Page_297">297</a>.</span><br /> +<span style="margin-left: 1em;">And to maintain public works and institutions, <a href="#Page_302">302</a>.</span><br /> +<br /> +<i>Spain</i>, One of the poorest countries in Europe, notwithstanding its rich mines, <a href="#Page_101">101</a>.<br /> +<span style="margin-left: 1em;">Its commerce has produced no considerable manufactures for distant sale, and the greater part of the country remains uncultivated, <a href="#Page_171">171</a>, <a href="#Page_172">172</a>.</span><br /> +<span style="margin-left: 1em;">Spanish mode of estimating their American discoveries, <a href="#Page_173">173</a>.</span><br /> +<span style="margin-left: 1em;">The value of gold, and silver there depreciated by laying a tax on the exportation of them, <a href="#Page_208">208</a>.</span><br /> +<span style="margin-left: 1em;">Agriculture and manufactures there discouraged by the redundancy of gold and silver, ib., <a href="#Page_209">209</a>.</span><br /> +<span style="margin-left: 1em;">Natural consequences that would result from taking away this tax, ib.</span><br /> +<span style="margin-left: 1em;">The real and pretended motives of the court of Castile for taking possession of the countries discovered by Columbus, <a href="#Page_230">230</a>.</span><br /> +<span style="margin-left: 1em;">The tax on gold and silver, how reduced, ib.</span><br /> +<span style="margin-left: 1em;">Gold the object of all the enterprises to the new world, ib.</span><br /> +<span style="margin-left: 1em;">The colonies of, less populous than those of any other European nation, <a href="#Page_232">232</a>, <a href="#Page_233">233</a>.</span><br /> +<span style="margin-left: 1em;">Asserted an exclusive claim to all America, until the miscarriage of their invincible armada, ib.</span><br /> +<span style="margin-left: 1em;">Policy of the trade with the colonies, <a href="#Page_236">236</a>.</span><br /> +<span style="margin-left: 1em;">The American establishments of, effected by private adventurers, who received little beyond permission from the government, <a href="#Page_242">242</a>.</span><br /> +<span style="margin-left: 1em;">Lost its manufactures by acquiring rich and fertile colonies, <a href="#Page_251">251</a>.</span><br /> +<span style="margin-left: 1em;">The alcavala tax there explained, <a href="#Page_381">381</a>.</span><br /> +<span style="margin-left: 1em;">The ruin of the Spanish manufactures attributed to it, ib.</span><br /> +<br /> +<i>Speculation</i>, a distinct employment in improved society, <a href="#Page_5">5</a>.<br /> +<span style="margin-left: 1em;">Speculative merchants described, <a href="#Page_47">47</a>.</span><br /> +<br /> +<i>Stage</i>, public performers on, paid for the contempt attending their profession, <a href="#Page_44">44</a>.<br /> +<span style="margin-left: 1em;">The political use of dramatic representations, <a href="#Page_334">334</a>.</span><br /> +<br /> +<i>Stamp duties</i> in England and Holland, remarks on, <a href="#Page_363">363</a>, <a href="#Page_364">364</a>, <a href="#Page_365">365</a>.<br /> +<br /> +<i>Steel-bow</i> tenants in Scotland, what, <a href="#Page_160">160</a>.<br /> +<br /> +<i>Stock</i>, the profits raised on, in manufactures, explained, <a href="#Page_20">20</a>.<br /> +<span style="margin-left: 1em;">In trade, an increase of, raises wages, and diminishes profit, <a href="#Page_36">36</a>.</span><br /> +<span style="margin-left: 1em;">Must be larger in a great town than in a country village, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">Natural consequences of a deficiency of stock in new colonies, <a href="#Page_38">38</a>.</span><br /> +<span style="margin-left: 1em;">The profits on, little affected by the easiness or difficulty of learning a trade, <a href="#Page_43">43</a>.</span><br /> +<span style="margin-left: 1em;">But by the risk or disagreeableness of the business, <a href="#Page_46">46</a>.</span><br /> +<span style="margin-left: 1em;">Stock employed for profit sets into motion the greater part of useful labour, <a href="#Page_106">106</a>.</span><br /> +<span style="margin-left: 1em;">No accumulation of, necessary in the rude state of society, <a href="#Page_111">111</a>.</span><br /> +<span style="margin-left: 1em;">The accumulation of, necessary to the division of labour, ib.</span><br /> +<span style="margin-left: 1em;">Stock distinguished into two parts, <a href="#Page_112">112</a>.</span><br /> +<span style="margin-left: 1em;">The general stock of a country or society explained, <a href="#Page_113">113</a>.</span><br /> +<span style="margin-left: 1em;">Houses, ib.</span><br /> +<span style="margin-left: 1em;">Improved land, ib.</span><br /> +<span style="margin-left: 1em;">Personal abilities, ib.</span><br /> +<span style="margin-left: 1em;">Money and provisions, <a href="#Page_114">114</a>.</span><br /> +<span style="margin-left: 1em;">Raw materials and manufactured goods, ib.</span><br /> +<span style="margin-left: 1em;">Stock of individuals, how employed, <a href="#Page_115">115</a>.</span><br /> +<span style="margin-left: 1em;">Is frequently buried or concealed in arbitrary countries, ib.</span><br /> +<span style="margin-left: 1em;">The profits on, decrease in proportion as the quantity increases, <a href="#Page_137">137</a>.</span><br /> +<span style="margin-left: 1em;">On what principles stock is lent and borrowed at interest, <a href="#Page_144">144</a>.</span><br /> +<span style="margin-left: 1em;">That of every society divided among different employments, in the proportion most agreeable to the public interest, by the private views of individuals, <a href="#Page_260">260</a>.</span><br /> +<span style="margin-left: 1em;">The natural distribution of, deranged by monopolizing systems, <a href="#Page_261">261</a>.</span><br /> +<span style="margin-left: 1em;">Every derangement of, injurious to the society, <a href="#Page_262">262</a>.</span><br /> +<span style="margin-left: 1em;">Mercantile, is barren and unproductive, according to the French agricultural system of political economy, <a href="#Page_277">277</a>.</span><br /> +<span style="margin-left: 1em;">How far the revenue from, is an object of taxation, <a href="#Page_357">357</a>.</span><br /> +<span style="margin-left: 1em;">A tax on, intended under the land-tax, <a href="#Page_358">358</a>.</span><br /> +<br /> +<i>Stockings</i>, why cheaply manufactured in Scotland, <a href="#Page_49">49</a>.<br /> +<span style="margin-left: 1em;">When first introduced into England, <a href="#Page_104">104</a>.</span><br /> +<br /> +<i>Stone quarries</i>, their value depends on situation, <a href="#Page_69">69</a>, <a href="#Page_74">74</a>.<br /> +<br /> +<i>Stones</i>, precious, of no use but for ornament, and how the price of, is regulated, <a href="#Page_73">73</a>.<br /> +<span style="margin-left: 1em;">The most abundant mines, would add little to the wealth of the world, ib.</span><br /> +<br /> +<i>Subordination</i>, how introduced into society, <a href="#Page_297">297</a>.<br /> +<span style="margin-left: 1em;">Personal qualifications, ib.</span><br /> +<span style="margin-left: 1em;">Age and fortune, ib.</span><br /> +<span style="margin-left: 1em;">Birth, <a href="#Page_298">298</a>.</span><br /> +<span style="margin-left: 1em;">Birth and fortune two great sources of personal distinction, ib.</span><br /> +<br /> +<i>Subsidy</i>, old, in the English customs, the drawbacks upon, <a href="#Page_203">203</a>.<br /> +<span style="margin-left: 1em;">Origin and import of the term, <a href="#Page_372">372</a>.</span><br /> +<br /> +<i>Sugar</i>, a very profitable article of cultivation, <a href="#Page_66">66</a>, <a href="#Page_159">159</a>.<br /> +<span style="margin-left: 1em;">Drawbacks on the importation of, from England, <a href="#Page_204">204</a>.</span><br /> +<span style="margin-left: 1em;">Might be cultivated by the drill-plough, instead of all hand-labour by slaves, <a href="#Page_241">241</a>.</span><br /> +<span style="margin-left: 1em;">A proper subject for taxation, as an article sold at monopoly price, <a href="#Page_378">378</a>.</span><br /> +<br /> +<i>Sumptuary laws</i>, superfluous restraints on the common people, <a href="#Page_142">142</a>.<br /> +<br /> +<i>Surinam</i>, present state of the Dutch colony there, <a href="#Page_234">234</a>.<br /> +<br /> +<i>Switzerland</i>, establishment of the Reformation in Berne and Zurich, <a href="#Page_338">338</a>.<br /> +<span style="margin-left: 1em;">The clergy there zealous and industrious, <a href="#Page_342">342</a>.</span><br /> +<span style="margin-left: 1em;">Taxes how paid there, <a href="#Page_359">359</a>, <a href="#Page_363">363</a>.</span><br /> +<br /> +<br /> +T<br /> +<br /> +<i>Taille</i>, in France, the nature of that tax, and its operation, explained, <a href="#Page_161">161</a>.<br /> +<br /> +<i>Talents</i>, natural, not so various in different men as is supposed, <a href="#Page_7">7</a>.<br /> +<br /> +<i>Tartars</i>, their manner of conducting war, <a href="#Page_289">289</a>.<br /> +<span style="margin-left: 1em;">Their invasions dreadful, ib.</span><br /> +<br /> +<i>Tavernier</i>, his account of the diamond mines of Golconda and Visiapour, <a href="#Page_73">73</a>.<br /> +<br /> +<i>Taxes</i>, the origin of, under the feudal government, <a href="#Page_162">162</a>.<br /> +<span style="margin-left: 1em;">The sources from whence they must arise, <a href="#Page_347">347</a>.</span><br /> +<span style="margin-left: 1em;">Unequal taxes, ib.</span><br /> +<span style="margin-left: 1em;">Ought to be clear and certain, ib.</span><br /> +<span style="margin-left: 1em;">Ought to be levied at the times most convenient for payment, ib.</span><br /> +<span style="margin-left: 1em;">Ought to take as little as possible out of the pockets of the people more than is brought into the public treasury, <a href="#Page_348">348</a>.</span><br /> +<span class='pagenum'><a name="Page_427" id="Page_427">[Pg 427]</a></span><span style="margin-left: 1em;">How they may be made more burdensome to the people than beneficial to the sovereign, ib.</span><br /> +<span style="margin-left: 1em;">The land-tax of Great Britain, ib.</span><br /> +<span style="margin-left: 1em;">Land-tax of Venice, <a href="#Page_349">349</a>.</span><br /> +<span style="margin-left: 1em;">Improvements suggested for a land-tax, ib.</span><br /> +<span style="margin-left: 1em;">Mode of assessing the land-tax in Prussia, <a href="#Page_351">351</a>.</span><br /> +<span style="margin-left: 1em;">Tithes a very unequal tax, and a discouragement to improvement, <a href="#Page_352">352</a>.</span><br /> +<span style="margin-left: 1em;">Operation of tax on house rent, payable by the tenant, <a href="#Page_354">354</a>.</span><br /> +<span style="margin-left: 1em;">A proportionable tax on houses the best source of revenue, <a href="#Page_355">355</a>.</span><br /> +<span style="margin-left: 1em;">How far the revenue from stock is a proper object of taxation, <a href="#Page_357">357</a>.</span><br /> +<span style="margin-left: 1em;">Whether interest of money is proper for taxation, ib.</span><br /> +<span style="margin-left: 1em;">How taxes are paid at Hamburgh, <a href="#Page_339">339</a>.</span><br /> +<span style="margin-left: 1em;">In Switzerland, ib.</span><br /> +<span style="margin-left: 1em;">Taxes upon particular employments, ib.</span><br /> +<span style="margin-left: 1em;">Poll-taxes, <a href="#Page_362">362</a>.</span><br /> +<span style="margin-left: 1em;">Taxes badges of liberty, ib.</span><br /> +<span style="margin-left: 1em;">Taxes upon the transfer of property, <a href="#Page_362">362</a>.</span><br /> +<span style="margin-left: 1em;">Stamp duties, <a href="#Page_363">363</a>.</span><br /> +<span style="margin-left: 1em;">On whom the several kinds of taxes principally fall, <a href="#Page_364">364</a>.</span><br /> +<span style="margin-left: 1em;">Taxes upon the wages of labour, <a href="#Page_365">365</a>.</span><br /> +<span style="margin-left: 1em;">Capitation taxes, <a href="#Page_367">367</a>.</span><br /> +<span style="margin-left: 1em;">Taxes upon consumable commodities, <a href="#Page_368">368</a>.</span><br /> +<span style="margin-left: 1em;">Upon necessaries, ib.</span><br /> +<span style="margin-left: 1em;">Upon luxuries, ib.</span><br /> +<span style="margin-left: 1em;">Principal necessaries taxed, <a href="#Page_369">369</a>.</span><br /> +<span style="margin-left: 1em;">Absurdities in taxation, <a href="#Page_370">370</a>.</span><br /> +<span style="margin-left: 1em;">Different parts of Europe very highly taxed, ib.</span><br /> +<span style="margin-left: 1em;">Two different methods of taxing consumable commodities, ib.</span><br /> +<span style="margin-left: 1em;">Sir Matthew Decker's scheme of taxation considered, <a href="#Page_371">371</a>.</span><br /> +<span style="margin-left: 1em;">Excise and customs, ib.</span><br /> +<span style="margin-left: 1em;">Taxation sometimes not an instrument of revenue, but of monopoly, <a href="#Page_373">373</a>.</span><br /> +<span style="margin-left: 1em;">Improvements of the customs suggested, <a href="#Page_374">374</a>.</span><br /> +<span style="margin-left: 1em;">Taxes paid in the price of a commodity little adverted to, <a href="#Page_379">379</a>, <a href="#Page_380">380</a>.</span><br /> +<span style="margin-left: 1em;">On luxuries, the good and bad properties of, ib.</span><br /> +<span style="margin-left: 1em;">Bad effects of farming them out, <a href="#Page_383">383</a>.</span><br /> +<span style="margin-left: 1em;">How the finances of France might be reformed, <a href="#Page_384">384</a>.</span><br /> +<span style="margin-left: 1em;">French and English taxations compared, ib.</span><br /> +<span style="margin-left: 1em;">New taxes always generate discontent, <a href="#Page_391">391</a>, <a href="#Page_392">392</a>.</span><br /> +<span style="margin-left: 1em;">How far the British system of taxation might be applicable to all the different provinces of the empire, <a href="#Page_397">397</a>.</span><br /> +<span style="margin-left: 1em;">Such a plan might speedily discharge the national debt, <a href="#Page_399">399</a>.</span><br /> +<br /> +<i>Tea</i>, great importation and consumption of that drug in Britain, <a href="#Page_86">86</a>.<br /> +<br /> +<i>Teachers in Universities</i>, tendency of endowments to diminish their application, <a href="#Page_319">319</a>.<br /> +<span style="margin-left: 1em;">The jurisdictions to which they are subject little calculated to quicken their diligence, ib.</span><br /> +<span style="margin-left: 1em;">Are frequently obliged to gain protection by servility, ib.</span><br /> +<span style="margin-left: 1em;">Defects in their establishments, ib., <a href="#Page_320">320</a>.</span><br /> +<span style="margin-left: 1em;">Teachers among the ancient Greeks and Romans superior to those of modern times, <a href="#Page_326">326</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances which draw good ones to, or drain them from, the universities, <a href="#Page_340">340</a>.</span><br /> +<span style="margin-left: 1em;">Their employment naturally renders them eminent in letters, <a href="#Page_341">341</a>.</span><br /> +<br /> +<i>Tenures</i>, feudal, general observations on, <a href="#Page_137">137</a>.<br /> +<span style="margin-left: 1em;">Described, <a href="#Page_157">157</a>.</span><br /> +<br /> +<i>Theology</i>, monkish, the complexion of, <a href="#Page_323">323</a>.<br /> +<br /> +<i>Thoulouse</i>, salary paid to counsellor or judge in the parliament of, <a href="#Page_301">301</a>.<br /> +<br /> +<i>Tin</i>, average rent of the mines of in Cornwall, <a href="#Page_71">71</a>.<br /> +<span style="margin-left: 1em;">Yield a greater profit to the proprietors than the silver mines of Peru, ib., <a href="#Page_72">72</a>.</span><br /> +<span style="margin-left: 1em;">Regulations under which tin mines are worked, ib.</span><br /> +<br /> +<i>Tobacco</i>, the culture of, why restrained in Europe, <a href="#Page_66">66</a>.<br /> +<span style="margin-left: 1em;">Not so profitable an article of cultivation in the West Indies as sugar, ib.</span><br /> +<span style="margin-left: 1em;">The amount and course of the British trade with, explained, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">The whole duty upon, drawn back on exportation, <a href="#Page_204">204</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of the exclusive trade Britain enjoys with Maryland and Virginia in this article, <a href="#Page_244">244</a>.</span><br /> +<br /> +<i>Tolls</i>, for passage over roads, bridges, and navigable canals, the equity of, shewn, <a href="#Page_303">303</a>.<br /> +<span style="margin-left: 1em;">Upon carriages of luxury, ought to be higher than upon carriages of utility, ib.</span><br /> +<span style="margin-left: 1em;">The management of turnpikes often an object of just complaint, <a href="#Page_304">304</a>.</span><br /> +<span style="margin-left: 1em;">Why government ought not to have the management of turnpikes, ib., <a href="#Page_379">379</a>.</span><br /> +<br /> +<i>Tonnage</i> and <i>poundage</i>, origin of those duties, <a href="#Page_372">372</a>.<br /> +<br /> +<i>Tontine</i> in the French finances, what, with the derivation of the name, <a href="#Page_390">390</a>.<br /> +<br /> +<i>Towns</i>, the places where industry is most profitably exerted, <a href="#Page_53">53</a>.<br /> +<span style="margin-left: 1em;">The spirit of combination prevalent among manufacturers, ib., <a href="#Page_54">54</a>.</span><br /> +<span style="margin-left: 1em;">According to what circumstances the general character of the inhabitants as to industry is formed, <a href="#Page_137">137</a>.</span><br /> +<span style="margin-left: 1em;">The reciprocal nature of the trade between them and the country explained, <a href="#Page_155">155</a>.</span><br /> +<span style="margin-left: 1em;">Subsist on the surplus produce of the country, ib.</span><br /> +<span style="margin-left: 1em;">How first formed, <a href="#Page_156">156</a>.</span><br /> +<span style="margin-left: 1em;">Are continual fairs, ib.</span><br /> +<span style="margin-left: 1em;">The original poverty and servile state of the inhabitants of, <a href="#Page_162">162</a>.</span><br /> +<span style="margin-left: 1em;">Their early exemptions and privileges, how obtained, ib.</span><br /> +<span style="margin-left: 1em;">The inhabitants of, obtained liberty much earlier than the occupiers of land in the country, <a href="#Page_163">163</a>.</span><br /> +<span style="margin-left: 1em;">Origin of free burghs, ib.</span><br /> +<span style="margin-left: 1em;">Origin of corporations, ib.</span><br /> +<span style="margin-left: 1em;">Why allowed to form militia, <a href="#Page_164">164</a>.</span><br /> +<span style="margin-left: 1em;">How the increase and riches of commercial towns contributed to the improvement of the countries to which they belonged, <a href="#Page_167">167</a>.</span><br /> +<br /> +<i>Trade</i>, double interest deemed a reasonable mercantile profit in, <a href="#Page_40">40</a>.<br /> +<span style="margin-left: 1em;">Four general classes of, equally necessary to, and dependent on, each other, <a href="#Page_147">147</a>.</span><br /> +<span style="margin-left: 1em;">Wholesale, three different sorts of, <a href="#Page_151">151</a>.</span><br /> +<span style="margin-left: 1em;">The different returns of home and foreign trade, ib.</span><br /> +<span style="margin-left: 1em;">The nature and operation of the carrying trade examined, <a href="#Page_152">152</a>.</span><br /> +<span style="margin-left: 1em;">The principles of foreign trade examined, <a href="#Page_153">153</a>.</span><br /> +<span style="margin-left: 1em;">The trade between town and country explained, <a href="#Page_155">155</a>.</span><br /> +<span style="margin-left: 1em;">Original poverty and servile state of the inhabitants of towns under feudal government, <a href="#Page_162">162</a>.</span><br /> +<span style="margin-left: 1em;">Exemptions and privileges granted to them, ib.</span><br /> +<span style="margin-left: 1em;">Extension of commerce by rude nations selling their own raw produce for the manufactures of more civilised countries, <a href="#Page_165">165</a>.</span><br /> +<span style="margin-left: 1em;">Its salutary effects on the government and manners of a country, <a href="#Page_167">167</a>.</span><br /> +<span style="margin-left: 1em;">Subverted the feudal authority, <a href="#Page_168">168</a>.</span><br /> +<span style="margin-left: 1em;">The independence of tradesmen and artizans explained, <a href="#Page_169">169</a>.</span><br /> +<span style="margin-left: 1em;">The capitals acquired by, very precarious, until some part has been realised by the cultivation and improvement of land, <a href="#Page_172">172</a>.</span><br /> +<span style="margin-left: 1em;">Over-trading, the cause of complaints of the scarcity of money, <a href="#Page_176">176</a>.</span><br /> +<span style="margin-left: 1em;">The importation of gold and silver not the principal benefit derived from foreign trade, <a href="#Page_181">181</a>.</span><br /> +<span class='pagenum'><a name="Page_428" id="Page_428">[Pg 428]</a></span><span style="margin-left: 1em;">Effect produced in trade and manufactures by the discovery of America, ib.</span><br /> +<span style="margin-left: 1em;">And by the discovery of a passage to the East Indies round the Cape of Good Hope, ib.</span><br /> +<span style="margin-left: 1em;">Error of commercial writers in estimating national wealth by gold and silver, <a href="#Page_182">182</a>.</span><br /> +<span style="margin-left: 1em;">Inquiry into the cause and effect of restraints upon trade, ib.</span><br /> +<span style="margin-left: 1em;">Individuals, by pursuing their own interest, unknowingly promote that of the public, <a href="#Page_184">184</a>.</span><br /> +<span style="margin-left: 1em;">Legal regulations, of trade unsafe, ib.</span><br /> +<span style="margin-left: 1em;">Retaliatory regulations between nations, <a href="#Page_189">189</a>.</span><br /> +<span style="margin-left: 1em;">Measures for laying trade open ought to be carried into execution slowly, <a href="#Page_191">191</a>.</span><br /> +<span style="margin-left: 1em;">Policy of the restraints on trade between France and Britain considered, <a href="#Page_192">192</a>.</span><br /> +<span style="margin-left: 1em;">No certain criterion to determine on which side the balance of trade between two countries turns, ib.</span><br /> +<span style="margin-left: 1em;">Most of the regulations of, founded on a mistaken doctrine of the balance of trade, <a href="#Page_199">199</a>.</span><br /> +<span style="margin-left: 1em;">Is generally founded on narrow principles of policy, <a href="#Page_201">201</a>.</span><br /> +<span style="margin-left: 1em;">Drawbacks of duties, <a href="#Page_203">203</a>.</span><br /> +<span style="margin-left: 1em;">The dealer who employs his whole stock on one single branch of business has an advantage of the same kind with the workman who employs his whole labour on a single operation, <a href="#Page_216">216</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of drawing it from a number of small channels into one great channel, <a href="#Page_249">249</a>.</span><br /> +<span style="margin-left: 1em;">Colony trade, and the monopoly of that trade distinguished, <a href="#Page_250">250</a>.</span><br /> +<span style="margin-left: 1em;">The interest of the consumer constantly sacrificed to that of the producer, <a href="#Page_274">274</a>.</span><br /> +<span style="margin-left: 1em;">Advantages attending a perfect freedom of, to landed nations, according to the present agricultural system of political economy in France, <a href="#Page_278">278</a>.</span><br /> +<span style="margin-left: 1em;">Origin of foreign trade, <a href="#Page_279">279</a>.</span><br /> +<span style="margin-left: 1em;">Consequences of high duties and prohibitions in landed nations, ib.</span><br /> +<span style="margin-left: 1em;">How trade augments the revenue of a country, <a href="#Page_281">281</a>.</span><br /> +<span style="margin-left: 1em;">Nature of the trading intercourse between the inhabitants of towns and those of the country, <a href="#Page_285">285</a>.</span><br /> +<br /> +<i>Trades</i>, cause and effect of the separation of, <a href="#Page_3">3</a>.<br /> +<span style="margin-left: 1em;">Origin of, <a href="#Page_7">7</a>.</span><br /> +<br /> +<i>Transit duties</i> explained, <a href="#Page_379">379</a>.<br /> +<br /> +<i>Travelling</i> for education, summary view of the effects of, <a href="#Page_324">324</a>.<br /> +<br /> +<i>Treasures</i>, why formerly accumulated by princes, <a href="#Page_180">180</a>.<br /> +<br /> +<i>Treasure-trove</i>, the term explained, <a href="#Page_115">115</a>.<br /> +<span style="margin-left: 1em;">Why an important branch of revenue under the ancient feudal governments, <a href="#Page_385">385</a>.</span><br /> +<br /> +<i>Turkey company</i>, short historical view of, <a href="#Page_308">308</a>.<br /> +<br /> +<i>Turnpikes</i>. See <i>Tolls</i>.<br /> +<br /> +<i>Tithes</i>, why an unequal tax, <a href="#Page_352">352</a>.<br /> +<span style="margin-left: 1em;">The levying of, a great discouragement to improvements, ib.</span><br /> +<span style="margin-left: 1em;">The fixing a modus for, a relief to the farmer, <a href="#Page_353">353</a>.</span><br /> +<br /> +<br /> +V<br /> +<br /> +<i>Value</i>, the term defined, <a href="#Page_12">12</a>.<br /> +<br /> +<i>Vedius Pollio</i>, his cruelty to his slaves checked by the Roman emperor Augustus, which could not have been done under the republican form of government, <a href="#Page_241">241</a>.<br /> +<br /> +<i>Venice</i>, origin of the silk manufacture in that city, <a href="#Page_166">166</a>.<br /> +<span style="margin-left: 1em;">Traded in East India goods before the sea track round the Cape of Good Hope was discovered, <a href="#Page_228">228</a>, <a href="#Page_229">229</a>.</span><br /> +<span style="margin-left: 1em;">Nature of the land-tax in that republic, <a href="#Page_349">349</a>.</span><br /> +<br /> +<i>Venison</i>, the price of, in Britain, does not compensate the expense of a deer park, <a href="#Page_94">94</a>.<br /> +<br /> +<i>Vicesima hereditatum</i> among the ancient Romans, the nature of, explained, <a href="#Page_363">363</a>.<br /> +<br /> +<i>Villages</i>, how first formed, <a href="#Page_156">156</a>.<br /> +<br /> +<i>Villenage</i>, probable cause of the wearing out of that tenure in Europe, <a href="#Page_160">160</a>, <a href="#Page_161">161</a>.<br /> +<br /> +<i>Vineyard</i>, the most profitable part of agriculture, both among the ancients and moderns, <a href="#Page_65">65</a>.<br /> +<span style="margin-left: 1em;">Great advantages derived from peculiarities of soil in, ib.</span><br /> +<br /> +<i>Universities</i>, the emoluments of the teachers in, how far calculated to promote their diligence, <a href="#Page_319">319</a>.<br /> +<span style="margin-left: 1em;">The professors at Oxford have mostly given up teaching, ib.</span><br /> +<span style="margin-left: 1em;">Those in France subject to incompetent jurisdictions, ib.</span><br /> +<span style="margin-left: 1em;">The privileges of graduates improperly obtained, <a href="#Page_320">320</a>.</span><br /> +<span style="margin-left: 1em;">Abuse of lectureships, ib.</span><br /> +<span style="margin-left: 1em;">The discipline of, seldom calculated for the benefit of the students, ib.</span><br /> +<span style="margin-left: 1em;">Are in England more corrupted than the public schools, <a href="#Page_321">321</a>.</span><br /> +<span style="margin-left: 1em;">Original foundation of, ib.</span><br /> +<span style="margin-left: 1em;">How Latin became an essential article in academical education, ib.</span><br /> +<span style="margin-left: 1em;">How the study of the Greek language was introduced, ib., <a href="#Page_322">322</a>.</span><br /> +<span style="margin-left: 1em;">The three great branches of the Greek philosophy, ib.</span><br /> +<span style="margin-left: 1em;">Are now divided into five branches, ib.</span><br /> +<span style="margin-left: 1em;">The monkish course of education in, <a href="#Page_323">323</a>.</span><br /> +<span style="margin-left: 1em;">Have not been very ready to adopt improvements, ib.</span><br /> +<span style="margin-left: 1em;">Are not well calculated to prepare men for the world, <a href="#Page_324">324</a>.</span><br /> +<span style="margin-left: 1em;">How filled with good professors or drained of them, <a href="#Page_340">340</a>.</span><br /> +<span style="margin-left: 1em;">Where the worst and best professors are generally to be met with, ib., <a href="#Page_341">341</a>.</span><br /> +<span style="margin-left: 1em;">—See <i>Colleges</i> and <i>Teachers</i>.</span><br /> +<br /> +<br /> +W<br /> +<br /> +<i>Wages</i> of labour, how settled between masters and workmen, <a href="#Page_27">27</a>.<br /> +<span style="margin-left: 1em;">The workmen generally obliged to comply with the terms of their employers, ib.</span><br /> +<span style="margin-left: 1em;">The opposition of workmen outrageous, and seldom successful, <a href="#Page_28">28</a>.</span><br /> +<span style="margin-left: 1em;">Circumstances which operate to raise wages, ib.</span><br /> +<span style="margin-left: 1em;">The extent of wages limited by the funds from which they arise, ib.</span><br /> +<span style="margin-left: 1em;">Why higher in North America than in England, ib.</span><br /> +<span style="margin-left: 1em;">Are low in countries that are stationary, ib.</span><br /> +<span style="margin-left: 1em;">Not oppressively low in Great Britain, <a href="#Page_30">30</a>.</span><br /> +<span style="margin-left: 1em;">A distinction made here between the wages in summer and in winter, <a href="#Page_31">31</a>.</span><br /> +<span style="margin-left: 1em;">If sufficient in dear years, they must be ample in seasons of plenty, ib.</span><br /> +<span style="margin-left: 1em;">Different rates of, in different places, ib.</span><br /> +<span style="margin-left: 1em;">Liberal wages encourage industry and propagation, <a href="#Page_33">33</a>.</span><br /> +<span style="margin-left: 1em;">An advance of, necessarily raises the price of many commodities, <a href="#Page_36">36</a>.</span><br /> +<span style="margin-left: 1em;">An average of, not easily ascertained, <a href="#Page_37">37</a>.</span><br /> +<span style="margin-left: 1em;">The operation of high wages and high profits compared, <a href="#Page_41">41</a>.</span><br /> +<span style="margin-left: 1em;">Causes of the variations of, in different employments, ib.</span><br /> +<span style="margin-left: 1em;">Are generally higher in new, than in old trades, <a href="#Page_48">48</a>, <a href="#Page_57">57</a>.</span><br /> +<span style="margin-left: 1em;">Legal regulations of, destroy industry and ingenuity, <a href="#Page_59">59</a>, <a href="#Page_60">60</a>.</span><br /> +<span style="margin-left: 1em;">Natural effect of a direct tax upon, <a href="#Page_365">365</a>.</span><br /> +<br /> +<i>Walpole</i>, Sir Robert, his excise scheme defended, <a href="#Page_375">375</a>.<br /> +<span class='pagenum'><a name="Page_429" id="Page_429">[Pg 429]</a></span><br /> +<i>Wants</i> of mankind, how supplied through the operation of labour, <a href="#Page_9">9</a>, <a href="#Page_10">10</a>.<br /> +<span style="margin-left: 1em;">How extended, in proportion to their supply, <a href="#Page_69">69</a>.</span><br /> +<span style="margin-left: 1em;">The far greater part of them supplied from the produce of other men's labour, <a href="#Page_111">111</a>.</span><br /> +<br /> +<i>Wars</i>, foreign, the funds for the maintenance of, in the present century, have little dependence on the quantity of gold and silver in a nation, <a href="#Page_178">178</a>, <a href="#Page_179">179</a>.<br /> +<span style="margin-left: 1em;">How supported by a nation of hunters, <a href="#Page_289">289</a>.</span><br /> +<span style="margin-left: 1em;">By a nation of shepherds, ib.</span><br /> +<span style="margin-left: 1em;">By a nation of husbandmen, <a href="#Page_290">290</a>.</span><br /> +<span style="margin-left: 1em;">Men of military age, what proportion they bear to the whole society, ib.</span><br /> +<span style="margin-left: 1em;">Feudal wars, how supported, ib.</span><br /> +<span style="margin-left: 1em;">Causes which, in the advanced state of society, rendered it impossible for those who took the field, to maintain themselves, ib.</span><br /> +<span style="margin-left: 1em;">How the art of war became a distinct profession, <a href="#Page_291">291</a>.</span><br /> +<span style="margin-left: 1em;">Distinction between the militia and regular forces, <a href="#Page_292">292</a>.</span><br /> +<span style="margin-left: 1em;">Alteration in the art of war produced by the invention of fire-arms, ib., <a href="#Page_296">296</a>.</span><br /> +<span style="margin-left: 1em;">Importance of discipline, <a href="#Page_293">293</a>.</span><br /> +<span style="margin-left: 1em;">Macedonian army, <a href="#Page_294">294</a>.</span><br /> +<span style="margin-left: 1em;">Carthaginian army, ib.</span><br /> +<span style="margin-left: 1em;">Roman army, ib.</span><br /> +<span style="margin-left: 1em;">Feudal armies, <a href="#Page_295">295</a>.</span><br /> +<span style="margin-left: 1em;">A well regulated standing army, the only defence of a civilized country, and the only means for speedily civilizing a barbarous country, <a href="#Page_296">296</a>.</span><br /> +<span style="margin-left: 1em;">The want of parsimony during peace, imposes on states the necessity of contracting debts to carry on war, <a href="#Page_386">386</a>, <a href="#Page_391">391</a>.</span><br /> +<span style="margin-left: 1em;">Why war is agreeable to those who live secure from the immediate calamities of it, <a href="#Page_391">391</a>.</span><br /> +<span style="margin-left: 1em;">Advantages of raising the supplies for, within the year, <a href="#Page_394">394</a>.</span><br /> +<br /> +<i>Watch</i> movements, great reduction in the prices of, owing to mechanical improvements, <a href="#Page_103">103</a>.<br /> +<br /> +<i>Wealth</i> and money, synonymous terms, in popular language, <a href="#Page_173">173</a>, <a href="#Page_182">182</a>.<br /> +<span style="margin-left: 1em;">Spanish and Tartarian estimate of, compared, <a href="#Page_173">173</a>.</span><br /> +<span style="margin-left: 1em;">The great authority conferred by the possession of, <a href="#Page_298">298</a>.</span><br /> +<br /> +<i>Weavers</i>, the profits of, why necessarily greater than those of spinners, <a href="#Page_21">21</a>.<br /> +<br /> +<i>West Indies</i>, discovered by Columbus, <a href="#Page_229">229</a>.<br /> +<span style="margin-left: 1em;">How they obtained this name, ib.</span><br /> +<span style="margin-left: 1em;">The original native productions of, ib.</span><br /> +<span style="margin-left: 1em;">The thirst of gold the object of all the Spanish enterprises there, <a href="#Page_230">230</a>.</span><br /> +<span style="margin-left: 1em;">And of those of every other European nation, <a href="#Page_231">231</a>.</span><br /> +<span style="margin-left: 1em;">The remoteness of, greatly in favour of the European colonies there, <a href="#Page_232">232</a>.</span><br /> +<span style="margin-left: 1em;">The sugar colonies of France better governed than those of Britain, <a href="#Page_241">241</a>.</span><br /> +<br /> +<i>Wheat</i>. See <i>Corn</i>.<br /> +<br /> +<i>Window-tax</i> in Britain, how rated, <a href="#Page_357">357</a>.<br /> +<span style="margin-left: 1em;">Tends to reduce house rent, ib.</span><br /> +<br /> +<i>Windsor</i> market, chronological table of the prices of corn at, <a href="#Page_109">109</a>.<br /> +<br /> +<i>Wine</i>, the cheapness of, would be a cause of sobriety, <a href="#Page_200">200</a>.<br /> +<span style="margin-left: 1em;">The carrying trade in, encouraged by English statutes, <a href="#Page_204">204</a>.</span><br /> +<br /> +<i>Wood</i>, the price of, rises in proportion as a country is cultivated, <a href="#Page_70">70</a>.<br /> +<span style="margin-left: 1em;">The growth of young trees prevented by cattle, ib.</span><br /> +<span style="margin-left: 1em;">When the planting of trees becomes a profitable employment, ib.</span><br /> +<br /> +<i>Wool</i>, the produce of rude countries, commonly carried to a distant market, <a href="#Page_97">97</a>.<br /> +<span style="margin-left: 1em;">The price of, in England, has fallen considerably since the time of Edward III., ib.</span><br /> +<span style="margin-left: 1em;">Causes of this diminution in price, <a href="#Page_98">98</a>.</span><br /> +<span style="margin-left: 1em;">The price of, considerably reduced in Scotland, by the Union with England, <a href="#Page_99">99</a>.</span><br /> +<span style="margin-left: 1em;">Severity of the laws against the exportation of, <a href="#Page_268">268</a>.</span><br /> +<span style="margin-left: 1em;">Restraints upon the inland commerce of, <a href="#Page_269">269</a>.</span><br /> +<span style="margin-left: 1em;">Restraints upon the coasting trade of, ib.</span><br /> +<span style="margin-left: 1em;">Pleas on which these restraints are founded, ib.</span><br /> +<span style="margin-left: 1em;">The price of wool depressed by these regulations, <a href="#Page_270">270</a>.</span><br /> +<span style="margin-left: 1em;">The exportation of, ought to be allowed, subject to a duty, <a href="#Page_271">271</a>.</span><br /> +<br /> +<i>Woollen</i> cloth, the present prices of, compared with those at the close of the fifteenth century, <a href="#Page_104">104</a>.<br /> +<span style="margin-left: 1em;">Three mechanical improvements introduced in the manufacture of, ib., <a href="#Page_105">105</a>.</span><br /> +</p> + + +<h3>THE END.</h3> + +<hr style="width: 15%;" /> + +<h4>STEREOTYPED.<br /> +<br /> +<i>Edinburgh</i>:—<i><span class="smcap">Duncan Stevenson</span></i>,<br /> +Printer to the University.</h4> + + + +<div class="notebox"> +<h3>TRANSCRIBER'S NOTES:</h3> + + +<p>1. Footnotes have been renumbered moved to the end of this HTML version.</p> + +<p>2. Obvious errors in punctuation have been silently corrected.</p> + +<p>3. Missing letters/words in improperly scanned images have been silently +added.</p> + +<p>4. The following misprints have been corrected:</p> + +<div class="pblockquot"><p class="noidt"> + Pg <a href="#Page_xiv">xiv</a>, "ralate" changed to "relate" (relate to the imitative)<br /> + Pg <a href="#Page_xviii">xviii</a>, "uxuries" changed to "luxuries" (their luxuries,)<br /> + Pg <a href="#Page_xx">xx</a>, "induustry" changed to "industry" (resources of industry?)<br /> + Pg <a href="#Page_xxiii">xxiii</a>, "exhibting" changed to "exhibiting" (exhibiting to him)<br /> + Pg <a href="#Page_xxx">xxx</a>, "beeen" changed to "been" (never been better shown;)<br /> + Pg <a href="#Page_17">17</a>, "cold" changed to "gold" (of the gold coin. In the market,)<br /> + Pg <a href="#Page_30">30</a>, "poplousness" changed to "populousness" (and populousness,)<br /> + Pg <a href="#Page_35">35</a>, "taillies" changed to "tallies" (tallies in the election)<br /> + Pg <a href="#Page_101">101</a>, "barrennes" changed to "barrenness" (only of the barrenness)<br /> + Pg <a href="#Page_112">112</a>, "requirs" changed to "requires" (master tailor requires)<br /> + Pg <a href="#Page_118">118</a>, "the the" changed to "the" (different operations of the)<br /> + Pg <a href="#Page_147">147</a>, "univesally" changed to "universally" (are universally)<br /> + Pg <a href="#Page_153">153</a>, "natrually" changed to "naturally" (violence, naturally)<br /> + Pg <a href="#Page_176">176</a>, "god" changed to "good" (though with a good deal)<br /> + Pg <a href="#Page_210">210</a>, "wich" changed to "which" (value of silver which varies)<br /> + Pg <a href="#Page_237">237</a>, "interferred" changed to "interfered" (interfered too much)<br /> + Pg <a href="#Page_246">246</a>, "fallan" changed to "fallen" (British profit has fallen)<br /> + Pg <a href="#Page_259">259</a>, "restrain" changed to "restraint" (By this restraint)<br /> + Pg <a href="#Page_281">281</a>, "manufacterers" changed to "manufacturers" (over that of + artificers and manufacturers.)<br /> + Pg <a href="#Page_288">288</a>, "85,159<sup>5</sup>⁄<sub>11</sub>" changed to "85,179<sup>5</sup>⁄<sub>11</sub>"<br /> + Pg <a href="#Page_290">290</a>, "seige" changed to "siege" (till the siege of Veii,)<br /> + Pg <a href="#Page_342">342</a>, "re-respective" changed to "respective" (to their respective + abilities.)<br /> + Pg <a href="#Page_353">353</a>, "pruduce" changed to "produce" (fifth part of the produce.)<br /> + Pg <a href="#Page_364">364</a>, "more" changed to "money" (have the money to pay.)<br /> + Pg <a href="#Page_406">406</a>, "dicovery" changed to "discovery" (The discovery and + colonization of,)<br /> + Pg <a href="#Page_415">415</a>, "evidince" changed to "evidence" (evidence of its wealth,)<br /> + Pg <a href="#Page_415">415</a>, "of of" changed to "of" (restraining the exportation of)<br /> + Pg <a href="#Page_415">415</a>, "for for" changed to "for" (but for foreign trade,) +</p></div> + +<p>5. Other than the corrections listed above, printer's inconsistencies in +spelling and hyphenation have been retained.</p> + + +</div> + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of An Inquiry Into the Nature and Causes +of the Wealth of Nations, by Adam Smith and Germain Garnier + +*** END OF THIS PROJECT GUTENBERG EBOOK AN INQUIRY INTO THE NATURE *** + +***** This file should be named 38194-h.htm or 38194-h.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/3/8/1/9/38194/ + +Produced by Jeff G. and the Online Distributed Proofreading +Team at http://www.pgdp.net (This book was produced from +scanned images of public domain material from the Google +Print project.) + + +Updated editions will replace the previous one--the old editions +will be renamed. + +Creating the works from public domain print editions means that no +one owns a United States copyright in these works, so the Foundation +(and you!) can copy and distribute it in the United States without +permission and without paying copyright royalties. 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