An Inquiry into the Nature and Causes of the Wealth of Nations
{"WorkMasterId":4698,"WpPageId":238251,"ParentWpPageId":193807,"Slug":"an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/adam-smith/an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations/","RelativeUrl":"theos/humanities/philosophy/philosophers/adam-smith/an-inquiry-into-the-nature-and-causes-of-the-wealth-of-nations/","HasFullText":true,"RawHtmlLength":2356993,"CleanHtmlLength":2300883,"Kicker":"Philosophy Work","Title":"An Inquiry into the Nature and Causes of the Wealth of Nations","Deck":"Argues that commercial prosperity grows from division of labour, exchange, capital accumulation, competition, and institutions of justice more than mercantilist direction.","BackLink":{"Text":"Back to Adam Smith","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/adam-smith/"},"AuthorCard":{"Label":"Author","Title":"Adam Smith","Url":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/adam-smith/","MediaHref":"","ImageSrc":"https://chrisdeasy.com/wp-content/uploads/adam-smith-01-muir-portrait.jpg","ImageAlt":"Muir Portrait of Adam Smith","FilterTerra":"Western Europe","ClickText":"Adam Smith","ClickHref":"https://chrisdeasy.com/theos/humanities/philosophy/philosophers/adam-smith/","Copies":["1723 CE – 1790 CE","Kirkcaldy, Fife","Scottish philosopher from Kirkcaldy, Fife associated with epistemology, ethics, and political philosophy."]},"ContextCards":[{"Label":"Period","Key":"Period:3","Title":"Early Modern History","DateText":"1500 CE – 1799 CE","Url":"https://chrisdeasy.com/theos/humanities/philosophy/eras-of-thought/philosophers-of-early-modern-history/"},{"Label":"Era","Key":"Era:9","Title":"Enlightenment and Proto-Industrial","DateText":"1700 CE – 1799 CE","Url":"https://chrisdeasy.com/theos/humanities/philosophy/eras-of-thought/philosophers-of-early-modern-history/philosophers-of-the-enlightenment-and-proto-industrial/"},{"Label":"Composition","Title":"1776 CE","Url":"","DateText":""}],"DateNote":"","GeoCards":[{"Label":"Region","Key":"Region:1"},{"Label":"Terra Avita","Key":"TerraAvita:1"},{"Label":"Terra Avita Region","Key":"TerraAvitaRegion:2"},{"Label":"Modern Country","Key":"Country:GBR:1"}],"OriginalTitle":"An Inquiry into the Nature and Causes of the Wealth of Nations","Language":"English","DisciplineCards":[{"Label":"Primary Discipline","Key":"Discipline:political-philosophy"},{"Label":"Secondary Discipline","Key":"Discipline:philosophy-of-science"}],"Tradition":"Scottish Enlightenment; classical political economy","FullText":{"Title":"Full Text","Copy":"Public-domain full text from Project Gutenberg eBook #3300 .","Url":"","Label":"","Kicker":"","Cards":[]},"CoreThesis":["Argues that commercial prosperity grows from division of labour, exchange, capital accumulation, competition, and institutions of justice more than mercantilist direction."],"Classification":{"AlternateTitles":"The Wealth of Nations; WN","KeyConcepts":"division of labour, exchange, invisible hand, natural liberty, markets, capital, labour, rent, taxation, mercantilism","Methodology":"Political economy, conjectural history, institutional analysis","Structure":"Five-book treatise"},"Arguments":["Division of labour and exchange; critique of mercantilism; natural liberty; public works, education, taxation, and state duties."],"Influence":{"InfluencedBy":"David Hume, Francis Hutcheson, the Physiocrats, jurisprudence lectures, commercial society debates","InfluenceOn":""},"Significance":["Foundational text of classical political economy and one of the central works of the Scottish Enlightenment.","Central to market theory, political economy, public policy, development, globalization, and debates over capitalism."],"EvidenceNote":[],"MainSections":[{"Kind":"RawSection","Title":"Full Versions","BodyHtml":"\u003cdiv class=\"dz-philo__full-version-grid\"\u003e\n \u003carticle class=\"dz-philo__full-version-card\"\u003e\n \u003cp class=\"dz-philo__full-version-provider\"\u003eProject Gutenberg\u003c/p\u003e\n \u003ch3 class=\"dz-philo__full-version-title\"\u003eProject Gutenberg eBook #3300\u003c/h3\u003e\n \u003cp class=\"dz-philo__full-version-meta\"\u003eHtmlText · Imported\u003c/p\u003e\n \u003ca class=\"dz-philo__full-version-link\" href=\"https://www.gutenberg.org/files/3300/3300-h/3300-h.htm\"\u003eOpen full version\u003c/a\u003e\n \u003c/article\u003e\n \u003c/div\u003e"},{"Kind":"TextSection","Title":"Core Thesis","Paragraphs":["Argues that commercial prosperity grows from division of labour, exchange, capital accumulation, competition, and institutions of justice more than mercantilist direction."]},{"Kind":"FieldSection","Title":"Classification","Fields":[{"Label":"Alternate Titles","Value":"The Wealth of Nations; WN"},{"Label":"Key Concepts","Value":"division of labour, exchange, invisible hand, natural liberty, markets, capital, labour, rent, taxation, mercantilism"},{"Label":"Methodology","Value":"Political economy, conjectural history, institutional analysis"},{"Label":"Structure","Value":"Five-book treatise"}]},{"Kind":"TextSection","Title":"Arguments","Paragraphs":["Division of labour and exchange; critique of mercantilism; natural liberty; public works, education, taxation, and state duties."]},{"Kind":"FieldSection","Title":"Influence","Fields":[{"Label":"Influenced By","Value":"David Hume, Francis Hutcheson, the Physiocrats, jurisprudence lectures, commercial society debates"},{"Label":"Influence On","Value":"Classical political economy, liberalism, economics, public finance, Marx, Ricardo, modern market theory"}]},{"Kind":"TextSection","Title":"Significance","Paragraphs":["Foundational text of classical political economy and one of the central works of the Scottish Enlightenment.","Central to market theory, political economy, public policy, development, globalization, and debates over capitalism."]},{"Kind":"RawSection","Title":"Full Text","BodyHtml":"\u003cp class=\"dz-philo__section-copy dz-philo__full-text-source\"\u003ePublic-domain full text from \u003ca href=\"https://www.gutenberg.org/files/3300/3300-h/3300-h.htm\"\u003eProject Gutenberg eBook #3300\u003c/a\u003e.\u003c/p\u003e\n \u003carticle class=\"dz-philo__full-text-body\"\u003e\r\n\u003ch1\u003eAn Inquiry into the Nature and Causes of the Wealth of Nations\u003c/h1\u003e\r\n\r\n\u003ch2\u003eby Adam Smith\u003c/h2\u003e\r\n\r\n\u003chr\u003e\r\n\r\n\u003ch3\u003eContents\u003c/h3\u003e\r\n\r\n\u003ctable style=\"margin-left: auto; margin-right: auto;\"\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap01\"\u003eINTRODUCTION AND PLAN OF THE WORK.\u003c/a\u003e\u003cbr\u003e\u003cbr\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap02\"\u003e\u003cb\u003eBOOK I. OF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE\r\nPOWERS OF LABOUR, AND OF THE ORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY\r\nDISTRIBUTED AMONG THE DIFFERENT RANKS OF THE PEOPLE. \u003c/b\u003e\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap03\"\u003eCHAPTER I. OF THE DIVISION OF LABOUR.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap04\"\u003eCHAPTER II. OF THE PRINCIPLE WHICH GIVES OCCASION TO THE\r\nDIVISION OF LABOUR.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap05\"\u003eCHAPTER III. THAT THE DIVISION OF LABOUR IS LIMITED BY\r\nTHE EXTENT OF THE MARKET.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap06\"\u003eCHAPTER IV. OF THE ORIGIN AND USE OF MONEY.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap07\"\u003eCHAPTER V. OF THE REAL AND NOMINAL PRICE OF\r\nCOMMODITIES, OR OF THEIR PRICE IN LABOUR, AND THEIR PRICE IN MONEY.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap08\"\u003eCHAPTER VI. OF THE COMPONENT PART OF THE PRICE OF COMMODITIES.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap09\"\u003eCHAPTER VII. OF THE NATURAL AND MARKET PRICE OF COMMODITIES.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap10\"\u003eCHAPTER VIII. OF THE WAGES OF LABOUR.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap11\"\u003eCHAPTER IX. OF THE PROFITS OF STOCK.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap12\"\u003eCHAPTER X. OF WAGES AND PROFIT IN THE DIFFERENT\r\nEMPLOYMENTS OF LABOUR AND STOCK.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap13\"\u003eCHAPTER XI. OF THE RENT OF LAND.\u003c/a\u003e\u003cbr\u003e\u003cbr\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap14\"\u003e\u003cb\u003eBOOK II. OF THE NATURE, ACCUMULATION, AND\r\nEMPLOYMENT OF STOCK.\u003c/b\u003e\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap15\"\u003eCHAPTER I. OF THE DIVISION OF STOCK.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap16\"\u003eCHAPTER II. OF MONEY, CONSIDERED AS A PARTICULAR BRANCH\r\nOF THE GENERAL STOCK OF THE SOCIETY, OR OF THE EXPENSE OF MAINTAINING THE\r\nNATIONAL CAPITAL.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap17\"\u003eCHAPTER III. OF THE ACCUMULATION OF CAPITAL, OR OF\r\nPRODUCTIVE AND UNPRODUCTIVE LABOUR.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap18\"\u003eCHAPTER IV. OF STOCK LENT AT INTEREST.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap19\"\u003eCHAPTER V. OF THE DIFFERENT EMPLOYMENTS OF\r\n CAPITALS.\u003c/a\u003e\u003cbr\u003e\u003cbr\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap20\"\u003e\u003cb\u003eBOOK III. OF THE DIFFERENT PROGRESS OF OPULENCE IN\r\nDIFFERENT NATIONS\u003c/b\u003e\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap21\"\u003eCHAPTER I. OF THE NATURAL PROGRESS OF OPULENCE.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap22\"\u003eCHAPTER II. OF THE DISCOURAGEMENT OF AGRICULTURE IN THE\r\nANCIENT STATE OF EUROPE, AFTER THE FALL OF THE ROMAN EMPIRE.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap23\"\u003eCHAPTER III. OF THE RISE AND PROGRESS OF CITIES AND\r\nTOWNS, AFTER THE FALL OF THE ROMAN EMPIRE.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap24\"\u003eCHAPTER IV. HOW THE COMMERCE OF TOWNS CONTRIBUTED TO THE\r\nIMPROVEMENT OF THE COUNTRY.\u003c/a\u003e\u003cbr\u003e\u003cbr\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap25\"\u003e\u003cb\u003eBOOK IV. OF SYSTEMS OF POLITICAL ECONOMY.\u003c/b\u003e\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap26\"\u003eCHAPTER I. OF THE PRINCIPLE OF THE COMMERCIAL OR\r\nMERCANTILE SYSTEM.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap27\"\u003eCHAPTER II. OF RESTRAINTS UPON IMPORTATION FROM FOREIGN\r\nCOUNTRIES OF SUCH GOODS AS CAN BE PRODUCED AT HOME.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap28\"\u003eCHAPTER III. OF THE EXTRAORDINARY RESTRAINTS UPON THE\r\nIMPORTATION OF GOODS OF ALMOST ALL KINDS, FROM THOSE COUNTRIES WITH WHICH THE\r\nBALANCE IS SUPPOSED TO BE DISADVANTAGEOUS.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap29\"\u003eCHAPTER IV. OF DRAWBACKS.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap30\"\u003eCHAPTER V. OF BOUNTIES.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap31\"\u003eCHAPTER VI. OF TREATIES OF COMMERCE.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap32\"\u003eCHAPTER VII. OF COLONIES.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap33\"\u003eCHAPTER VIII. CONCLUSION OF THE MERCANTILE SYSTEM.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap34\"\u003eCHAPTER IX. OF THE AGRICULTURAL SYSTEMS, OR OF THOSE\r\nSYSTEMS OF POLITICAL ECONOMY WHICH REPRESENT THE PRODUCE OF LAND, AS EITHER\r\nTHE SOLE OR THE PRINCIPAL SOURCE OF THE REVENUE AND WEALTH OF EVERY COUNTRY.\u003c/a\u003e\u003cbr\u003e\u003cbr\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap35\"\u003e\u003cb\u003eBOOK V. OF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH\u003c/b\u003e\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap36\"\u003eCHAPTER I. OF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap37\"\u003eCHAPTER II. OF THE SOURCES OF THE GENERAL OR PUBLIC\r\nREVENUE OF THE SOCIETY.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003ctr\u003e\r\n\u003ctd\u003e \u003ca href=\"#chap38\"\u003eCHAPTER III. OF PUBLIC DEBTS.\u003c/a\u003e\u003c/td\u003e\r\n\u003c/tr\u003e\r\n\r\n\u003c/table\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap01\"\u003e\u003c/a\u003eINTRODUCTION AND PLAN OF THE WORK.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe annual labour of every nation is the fund which originally supplies it with\r\nall the necessaries and conveniencies of life which it annually consumes, and\r\nwhich consist always either in the immediate produce of that labour, or in what\r\nis purchased with that produce from other nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAccording, therefore, as this produce, or what is purchased with it, bears a\r\ngreater or smaller proportion to the number of those who are to consume it, the\r\nnation will be better or worse supplied with all the necessaries and\r\nconveniencies for which it has occasion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut this proportion must in every nation be regulated by two different\r\ncircumstances: first, by the skill, dexterity, and judgment with which its\r\nlabour is generally applied; and, secondly, by the proportion between the\r\nnumber of those who are employed in useful labour, and that of those who are\r\nnot so employed. Whatever be the soil, climate, or extent of territory of any\r\nparticular nation, the abundance or scantiness of its annual supply must, in\r\nthat particular situation, depend upon those two circumstances.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe abundance or scantiness of this supply, too, seems to depend more upon the\r\nformer of those two circumstances than upon the latter. Among the savage\r\nnations of hunters and fishers, every individual who is able to work is more or\r\nless employed in useful labour, and endeavours to provide, as well as he can,\r\nthe necessaries and conveniencies of life, for himself, and such of his family\r\nor tribe as are either too old, or too young, or too infirm, to go a-hunting\r\nand fishing. Such nations, however, are so miserably poor, that, from mere\r\nwant, they are frequently reduced, or at least think themselves reduced, to the\r\nnecessity sometimes of directly destroying, and sometimes of abandoning their\r\ninfants, their old people, and those afflicted with lingering diseases, to\r\nperish with hunger, or to be devoured by wild beasts. Among civilized and\r\nthriving nations, on the contrary, though a great number of people do not\r\nlabour at all, many of whom consume the produce of ten times, frequently of a\r\nhundred times, more labour than the greater part of those who work; yet the\r\nproduce of the whole labour of the society is so great, that all are often\r\nabundantly supplied; and a workman, even of the lowest and poorest order, if he\r\nis frugal and industrious, may enjoy a greater share of the necessaries and\r\nconveniencies of life than it is possible for any savage to acquire.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe causes of this improvement in the productive powers of labour, and the\r\norder according to which its produce is naturally distributed among the\r\ndifferent ranks and conditions of men in the society, make the subject of the\r\nfirst book of this Inquiry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever be the actual state of the skill, dexterity, and judgment, with which\r\nlabour is applied in any nation, the abundance or scantiness of its annual\r\nsupply must depend, during the continuance of that state, upon the proportion\r\nbetween the number of those who are annually employed in useful labour, and\r\nthat of those who are not so employed. The number of useful and productive\r\nlabourers, it will hereafter appear, is everywhere in proportion to the\r\nquantity of capital stock which is employed in setting them to work, and to the\r\nparticular way in which it is so employed. The second book, therefore, treats\r\nof the nature of capital stock, of the manner in which it is gradually\r\naccumulated, and of the different quantities of labour which it puts into\r\nmotion, according to the different ways in which it is employed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNations tolerably well advanced as to skill, dexterity, and judgment, in the\r\napplication of labour, have followed very different plans in the general\r\nconduct or direction of it; and those plans have not all been equally\r\nfavourable to the greatness of its produce. The policy of some nations has\r\ngiven extraordinary encouragement to the industry of the country; that of\r\nothers to the industry of towns. Scarce any nation has dealt equally and\r\nimpartially with every sort of industry. Since the down-fall of the Roman\r\nempire, the policy of Europe has been more favourable to arts, manufactures,\r\nand commerce, the industry of towns, than to agriculture, the Industry of the\r\ncountry. The circumstances which seem to have introduced and established this\r\npolicy are explained in the third book.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough those different plans were, perhaps, first introduced by the private\r\ninterests and prejudices of particular orders of men, without any regard to, or\r\nforesight of, their consequences upon the general welfare of the society; yet\r\nthey have given occasion to very different theories of political economy; of\r\nwhich some magnify the importance of that industry which is carried on in\r\ntowns, others of that which is carried on in the country. Those theories have\r\nhad a considerable influence, not only upon the opinions of men of learning,\r\nbut upon the public conduct of princes and sovereign states. I have\r\nendeavoured, in the fourth book, to explain as fully and distinctly as I can\r\nthose different theories, and the principal effects which they have produced in\r\ndifferent ages and nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo explain in what has consisted the revenue of the great body of the people,\r\nor what has been the nature of those funds, which, in different ages and\r\nnations, have supplied their annual consumption, is the object of these four\r\nfirst books. The fifth and last book treats of the revenue of the sovereign, or\r\ncommonwealth. In this book I have endeavoured to shew, first, what are the\r\nnecessary expenses of the sovereign, or commonwealth; which of those expenses\r\nought to be defrayed by the general contribution of the whole society, and\r\nwhich of them, by that of some particular part only, or of some particular\r\nmembers of it: secondly, what are the different methods in which the whole\r\nsociety may be made to contribute towards defraying the expenses incumbent on\r\nthe whole society, and what are the principal advantages and inconveniencies of\r\neach of those methods; and, thirdly and lastly, what are the reasons and causes\r\nwhich have induced almost all modern governments to mortgage some part of this\r\nrevenue, or to contract debts; and what have been the effects of those debts\r\nupon the real wealth, the annual produce of the land and labour of the society.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap02\"\u003e\u003c/a\u003eBOOK I.\u003cbr\u003e\r\nOF THE CAUSES OF IMPROVEMENT IN THE PRODUCTIVE POWERS OF LABOUR, AND OF THE\r\nORDER ACCORDING TO WHICH ITS PRODUCE IS NATURALLY DISTRIBUTED AMONG THE\r\nDIFFERENT RANKS OF THE PEOPLE.\u003c/h2\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap03\"\u003e\u003c/a\u003eCHAPTER I.\u003cbr\u003e\r\nOF THE DIVISION OF LABOUR.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe greatest improvements in the productive powers of labour, and the greater\r\npart of the skill, dexterity, and judgment, with which it is anywhere directed,\r\nor applied, seem to have been the effects of the division of labour. The\r\neffects of the division of labour, in the general business of society, will be\r\nmore easily understood, by considering in what manner it operates in some\r\nparticular manufactures. It is commonly supposed to be carried furthest in some\r\nvery trifling ones; not perhaps that it really is carried further in them than\r\nin others of more importance: but in those trifling manufactures which are\r\ndestined to supply the small wants of but a small number of people, the whole\r\nnumber of workmen must necessarily be small; and those employed in every\r\ndifferent branch of the work can often be collected into the same workhouse,\r\nand placed at once under the view of the spectator.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn those great manufactures, on the contrary, which are destined to supply the\r\ngreat wants of the great body of the people, every different branch of the work\r\nemploys so great a number of workmen, that it is impossible to collect them all\r\ninto the same workhouse. We can seldom see more, at one time, than those\r\nemployed in one single branch. Though in such manufactures, therefore, the work\r\nmay really be divided into a much greater number of parts, than in those of a\r\nmore trifling nature, the division is not near so obvious, and has accordingly\r\nbeen much less observed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo take an example, therefore, from a very trifling manufacture, but one in\r\nwhich the division of labour has been very often taken notice of, the trade of\r\na pin-maker: a workman not educated to this business (which the division of\r\nlabour has rendered a distinct trade), nor acquainted with the use of the\r\nmachinery employed in it (to the invention of which the same division of labour\r\nhas probably given occasion), could scarce, perhaps, with his utmost industry,\r\nmake one pin in a day, and certainly could not make twenty. But in the way in\r\nwhich this business is now carried on, not only the whole work is a peculiar\r\ntrade, but it is divided into a number of branches, of which the greater part\r\nare likewise peculiar trades. One man draws out the wire; another straights it;\r\na third cuts it; a fourth points it; a fifth grinds it at the top for receiving\r\nthe head; to make the head requires two or three distinct operations; to put it\r\non is a peculiar business; to whiten the pins is another; it is even a trade by\r\nitself to put them into the paper; and the important business of making a pin\r\nis, in this manner, divided into about eighteen distinct operations, which, in\r\nsome manufactories, are all performed by distinct hands, though in others the\r\nsame man will sometimes perform two or three of them. I have seen a small\r\nmanufactory of this kind, where ten men only were employed, and where some of\r\nthem consequently performed two or three distinct operations. But though they\r\nwere very poor, and therefore but indifferently accommodated with the necessary\r\nmachinery, they could, when they exerted themselves, make among them about\r\ntwelve pounds of pins in a day. There are in a pound upwards of four thousand\r\npins of a middling size. Those ten persons, therefore, could make among them\r\nupwards of forty-eight thousand pins in a day. Each person, therefore, making a\r\ntenth part of forty-eight thousand pins, might be considered as making four\r\nthousand eight hundred pins in a day. But if they had all wrought separately\r\nand independently, and without any of them having been educated to this\r\npeculiar business, they certainly could not each of them have made twenty,\r\nperhaps not one pin in a day; that is, certainly, not the two hundred and\r\nfortieth, perhaps not the four thousand eight hundredth, part of what they are\r\nat present capable of performing, in consequence of a proper division and\r\ncombination of their different operations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every other art and manufacture, the effects of the division of labour are\r\nsimilar to what they are in this very trifling one, though, in many of them,\r\nthe labour can neither be so much subdivided, nor reduced to so great a\r\nsimplicity of operation. The division of labour, however, so far as it can be\r\nintroduced, occasions, in every art, a proportionable increase of the\r\nproductive powers of labour. The separation of different trades and employments\r\nfrom one another, seems to have taken place in consequence of this advantage.\r\nThis separation, too, is generally carried furthest in those countries which\r\nenjoy the highest degree of industry and improvement; what is the work of one\r\nman, in a rude state of society, being generally that of several in an improved\r\none. In every improved society, the farmer is generally nothing but a farmer;\r\nthe manufacturer, nothing but a manufacturer. The labour, too, which is\r\nnecessary to produce any one complete manufacture, is almost always divided\r\namong a great number of hands. How many different trades are employed in each\r\nbranch of the linen and woollen manufactures, from the growers of the flax and\r\nthe wool, to the bleachers and smoothers of the linen, or to the dyers and\r\ndressers of the cloth! The nature of agriculture, indeed, does not admit of so\r\nmany subdivisions of labour, nor of so complete a separation of one business\r\nfrom another, as manufactures. It is impossible to separate so entirely the\r\nbusiness of the grazier from that of the corn-farmer, as the trade of the\r\ncarpenter is commonly separated from that of the smith. The spinner is almost\r\nalways a distinct person from the weaver; but the ploughman, the harrower, the\r\nsower of the seed, and the reaper of the corn, are often the same. The\r\noccasions for those different sorts of labour returning with the different\r\nseasons of the year, it is impossible that one man should be constantly\r\nemployed in any one of them. This impossibility of making so complete and\r\nentire a separation of all the different branches of labour employed in\r\nagriculture, is perhaps the reason why the improvement of the productive powers\r\nof labour, in this art, does not always keep pace with their improvement in\r\nmanufactures. The most opulent nations, indeed, generally excel all their\r\nneighbours in agriculture as well as in manufactures; but they are commonly\r\nmore distinguished by their superiority in the latter than in the former. Their\r\nlands are in general better cultivated, and having more labour and expense\r\nbestowed upon them, produce more in proportion to the extent and natural\r\nfertility of the ground. But this superiority of produce is seldom much more\r\nthan in proportion to the superiority of labour and expense. In agriculture,\r\nthe labour of the rich country is not always much more productive than that of\r\nthe poor; or, at least, it is never so much more productive, as it commonly is\r\nin manufactures. The corn of the rich country, therefore, will not always, in\r\nthe same degree of goodness, come cheaper to market than that of the poor. The\r\ncorn of Poland, in the same degree of goodness, is as cheap as that of France,\r\nnotwithstanding the superior opulence and improvement of the latter country.\r\nThe corn of France is, in the corn-provinces, fully as good, and in most years\r\nnearly about the same price with the corn of England, though, in opulence and\r\nimprovement, France is perhaps inferior to England. The corn-lands of England,\r\nhowever, are better cultivated than those of France, and the corn-lands of\r\nFrance are said to be much better cultivated than those of Poland. But though\r\nthe poor country, notwithstanding the inferiority of its cultivation, can, in\r\nsome measure, rival the rich in the cheapness and goodness of its corn, it can\r\npretend to no such competition in its manufactures, at least if those\r\nmanufactures suit the soil, climate, and situation, of the rich country. The\r\nsilks of France are better and cheaper than those of England, because the silk\r\nmanufacture, at least under the present high duties upon the importation of raw\r\nsilk, does not so well suit the climate of England as that of France. But the\r\nhardware and the coarse woollens of England are beyond all comparison superior\r\nto those of France, and much cheaper, too, in the same degree of goodness. In\r\nPoland there are said to be scarce any manufactures of any kind, a few of those\r\ncoarser household manufactures excepted, without which no country can well\r\nsubsist.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis great increase in the quantity of work, which, in consequence of the\r\ndivision of labour, the same number of people are capable of performing, is\r\nowing to three different circumstances; first, to the increase of dexterity in\r\nevery particular workman; secondly, to the saving of the time which is commonly\r\nlost in passing from one species of work to another; and, lastly, to the\r\ninvention of a great number of machines which facilitate and abridge labour,\r\nand enable one man to do the work of many.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, the improvement of the dexterity of the workmen, necessarily increases\r\nthe quantity of the work he can perform; and the division of labour, by\r\nreducing every man’s business to some one simple operation, and by making\r\nthis operation the sole employment of his life, necessarily increases very much\r\nthe dexterity of the workman. A common smith, who, though accustomed to handle\r\nthe hammer, has never been used to make nails, if, upon some particular\r\noccasion, he is obliged to attempt it, will scarce, I am assured, be able to\r\nmake above two or three hundred nails in a day, and those, too, very bad ones.\r\nA smith who has been accustomed to make nails, but whose sole or principal\r\nbusiness has not been that of a nailer, can seldom, with his utmost diligence,\r\nmake more than eight hundred or a thousand nails in a day. I have seen several\r\nboys, under twenty years of age, who had never exercised any other trade but\r\nthat of making nails, and who, when they exerted themselves, could make, each\r\nof them, upwards of two thousand three hundred nails in a day. The making of a\r\nnail, however, is by no means one of the simplest operations. The same person\r\nblows the bellows, stirs or mends the fire as there is occasion, heats the\r\niron, and forges every part of the nail: in forging the head, too, he is\r\nobliged to change his tools. The different operations into which the making of\r\na pin, or of a metal button, is subdivided, are all of them much more simple,\r\nand the dexterity of the person, of whose life it has been the sole business to\r\nperform them, is usually much greater. The rapidity with which some of the\r\noperations of those manufactures are performed, exceeds what the human hand\r\ncould, by those who had never seen them, be supposed capable of acquiring.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, the advantage which is gained by saving the time commonly lost in\r\npassing from one sort of work to another, is much greater than we should at\r\nfirst view be apt to imagine it. It is impossible to pass very quickly from one\r\nkind of work to another, that is carried on in a different place, and with\r\nquite different tools. A country weaver, who cultivates a small farm, must lose\r\na good deal of time in passing from his loom to the field, and from the field\r\nto his loom. When the two trades can be carried on in the same workhouse, the\r\nloss of time is, no doubt, much less. It is, even in this case, however, very\r\nconsiderable. A man commonly saunters a little in turning his hand from one\r\nsort of employment to another. When he first begins the new work, he is seldom\r\nvery keen and hearty; his mind, as they say, does not go to it, and for some\r\ntime he rather trifles than applies to good purpose. The habit of sauntering,\r\nand of indolent careless application, which is naturally, or rather\r\nnecessarily, acquired by every country workman who is obliged to change his\r\nwork and his tools every half hour, and to apply his hand in twenty different\r\nways almost every day of his life, renders him almost always slothful and lazy,\r\nand incapable of any vigorous application, even on the most pressing occasions.\r\nIndependent, therefore, of his deficiency in point of dexterity, this cause\r\nalone must always reduce considerably the quantity of work which he is capable\r\nof performing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, and lastly, everybody must be sensible how much labour is facilitated\r\nand abridged by the application of proper machinery. It is unnecessary to give\r\nany example. I shall only observe, therefore, that the invention of all those\r\nmachines by which labour is so much facilitated and abridged, seems to have\r\nbeen originally owing to the division of labour. Men are much more likely to\r\ndiscover easier and readier methods of attaining any object, when the whole\r\nattention of their minds is directed towards that single object, than when it\r\nis dissipated among a great variety of things. But, in consequence of the\r\ndivision of labour, the whole of every man’s attention comes naturally to\r\nbe directed towards some one very simple object. It is naturally to be\r\nexpected, therefore, that some one or other of those who are employed in each\r\nparticular branch of labour should soon find out easier and readier methods of\r\nperforming their own particular work, whenever the nature of it admits of such\r\nimprovement. A great part of the machines made use of in those manufactures in\r\nwhich labour is most subdivided, were originally the invention of common\r\nworkmen, who, being each of them employed in some very simple operation,\r\nnaturally turned their thoughts towards finding out easier and readier methods\r\nof performing it. Whoever has been much accustomed to visit such manufactures,\r\nmust frequently have been shewn very pretty machines, which were the inventions\r\nof such workmen, in order to facilitate and quicken their own particular part\r\nof the work. In the first fire engines {this was the current designation for\r\nsteam engines}, a boy was constantly employed to open and shut alternately the\r\ncommunication between the boiler and the cylinder, according as the piston\r\neither ascended or descended. One of those boys, who loved to play with his\r\ncompanions, observed that, by tying a string from the handle of the valve which\r\nopened this communication to another part of the machine, the valve would open\r\nand shut without his assistance, and leave him at liberty to divert himself\r\nwith his play-fellows. One of the greatest improvements that has been made upon\r\nthis machine, since it was first invented, was in this manner the discovery of\r\na boy who wanted to save his own labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the improvements in machinery, however, have by no means been the\r\ninventions of those who had occasion to use the machines. Many improvements\r\nhave been made by the ingenuity of the makers of the machines, when to make\r\nthem became the business of a peculiar trade; and some by that of those who are\r\ncalled philosophers, or men of speculation, whose trade it is not to do any\r\nthing, but to observe every thing, and who, upon that account, are often\r\ncapable of combining together the powers of the most distant and dissimilar\r\nobjects in the progress of society, philosophy or speculation becomes, like\r\nevery other employment, the principal or sole trade and occupation of a\r\nparticular class of citizens. Like every other employment, too, it is\r\nsubdivided into a great number of different branches, each of which affords\r\noccupation to a peculiar tribe or class of philosophers; and this subdivision\r\nof employment in philosophy, as well as in every other business, improves\r\ndexterity, and saves time. Each individual becomes more expert in his own\r\npeculiar branch, more work is done upon the whole, and the quantity of science\r\nis considerably increased by it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is the great multiplication of the productions of all the different arts, in\r\nconsequence of the division of labour, which occasions, in a well-governed\r\nsociety, that universal opulence which extends itself to the lowest ranks of\r\nthe people. Every workman has a great quantity of his own work to dispose of\r\nbeyond what he himself has occasion for; and every other workman being exactly\r\nin the same situation, he is enabled to exchange a great quantity of his own\r\ngoods for a great quantity or, what comes to the same thing, for the price of a\r\ngreat quantity of theirs. He supplies them abundantly with what they have\r\noccasion for, and they accommodate him as amply with what he has occasion for,\r\nand a general plenty diffuses itself through all the different ranks of the\r\nsociety.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nObserve the accommodation of the most common artificer or daylabourer in a\r\ncivilized and thriving country, and you will perceive that the number of\r\npeople, of whose industry a part, though but a small part, has been employed in\r\nprocuring him this accommodation, exceeds all computation. The woollen coat,\r\nfor example, which covers the day-labourer, as coarse and rough as it may\r\nappear, is the produce of the joint labour of a great multitude of workmen. The\r\nshepherd, the sorter of the wool, the wool-comber or carder, the dyer, the\r\nscribbler, the spinner, the weaver, the fuller, the dresser, with many others,\r\nmust all join their different arts in order to complete even this homely\r\nproduction. How many merchants and carriers, besides, must have been employed\r\nin transporting the materials from some of those workmen to others who often\r\nlive in a very distant part of the country? How much commerce and navigation in\r\nparticular, how many ship-builders, sailors, sail-makers, rope-makers, must\r\nhave been employed in order to bring together the different drugs made use of\r\nby the dyer, which often come from the remotest corners of the world? What a\r\nvariety of labour, too, is necessary in order to produce the tools of the\r\nmeanest of those workmen! To say nothing of such complicated machines as the\r\nship of the sailor, the mill of the fuller, or even the loom of the weaver, let\r\nus consider only what a variety of labour is requisite in order to form that\r\nvery simple machine, the shears with which the shepherd clips the wool. The\r\nminer, the builder of the furnace for smelting the ore, the feller of the\r\ntimber, the burner of the charcoal to be made use of in the smelting-house, the\r\nbrickmaker, the bricklayer, the workmen who attend the furnace, the millwright,\r\nthe forger, the smith, must all of them join their different arts in order to\r\nproduce them. Were we to examine, in the same manner, all the different parts\r\nof his dress and household furniture, the coarse linen shirt which he wears\r\nnext his skin, the shoes which cover his feet, the bed which he lies on, and\r\nall the different parts which compose it, the kitchen-grate at which he\r\nprepares his victuals, the coals which he makes use of for that purpose, dug\r\nfrom the bowels of the earth, and brought to him, perhaps, by a long sea and a\r\nlong land-carriage, all the other utensils of his kitchen, all the furniture of\r\nhis table, the knives and forks, the earthen or pewter plates upon which he\r\nserves up and divides his victuals, the different hands employed in preparing\r\nhis bread and his beer, the glass window which lets in the heat and the light,\r\nand keeps out the wind and the rain, with all the knowledge and art requisite\r\nfor preparing that beautiful and happy invention, without which these northern\r\nparts of the world could scarce have afforded a very comfortable habitation,\r\ntogether with the tools of all the different workmen employed in producing\r\nthose different conveniencies; if we examine, I say, all these things, and\r\nconsider what a variety of labour is employed about each of them, we shall be\r\nsensible that, without the assistance and co-operation of many thousands, the\r\nvery meanest person in a civilized country could not be provided, even\r\naccording to, what we very falsely imagine, the easy and simple manner in which\r\nhe is commonly accommodated. Compared, indeed, with the more extravagant luxury\r\nof the great, his accommodation must no doubt appear extremely simple and easy;\r\nand yet it may be true, perhaps, that the accommodation of an European prince\r\ndoes not always so much exceed that of an industrious and frugal peasant, as\r\nthe accommodation of the latter exceeds that of many an African king, the\r\nabsolute masters of the lives and liberties of ten thousand naked savages.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap04\"\u003e\u003c/a\u003eCHAPTER II.\u003cbr\u003e\r\nOF THE PRINCIPLE WHICH GIVES OCCASION TO THE DIVISION OF LABOUR.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThis division of labour, from which so many advantages are derived, is not\r\noriginally the effect of any human wisdom, which foresees and intends that\r\ngeneral opulence to which it gives occasion. It is the necessary, though very\r\nslow and gradual, consequence of a certain propensity in human nature, which\r\nhas in view no such extensive utility; the propensity to truck, barter, and\r\nexchange one thing for another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhether this propensity be one of those original principles in human nature, of\r\nwhich no further account can be given, or whether, as seems more probable, it\r\nbe the necessary consequence of the faculties of reason and speech, it belongs\r\nnot to our present subject to inquire. It is common to all men, and to be found\r\nin no other race of animals, which seem to know neither this nor any other\r\nspecies of contracts. Two greyhounds, in running down the same hare, have\r\nsometimes the appearance of acting in some sort of concert. Each turns her\r\ntowards his companion, or endeavours to intercept her when his companion turns\r\nher towards himself. This, however, is not the effect of any contract, but of\r\nthe accidental concurrence of their passions in the same object at that\r\nparticular time. Nobody ever saw a dog make a fair and deliberate exchange of\r\none bone for another with another dog. Nobody ever saw one animal, by its\r\ngestures and natural cries signify to another, this is mine, that yours; I am\r\nwilling to give this for that. When an animal wants to obtain something either\r\nof a man, or of another animal, it has no other means of persuasion, but to\r\ngain the favour of those whose service it requires. A puppy fawns upon its dam,\r\nand a spaniel endeavours, by a thousand attractions, to engage the attention of\r\nits master who is at dinner, when it wants to be fed by him. Man sometimes uses\r\nthe same arts with his brethren, and when he has no other means of engaging\r\nthem to act according to his inclinations, endeavours by every servile and\r\nfawning attention to obtain their good will. He has not time, however, to do\r\nthis upon every occasion. In civilized society he stands at all times in need\r\nof the co-operation and assistance of great multitudes, while his whole life is\r\nscarce sufficient to gain the friendship of a few persons. In almost every\r\nother race of animals, each individual, when it is grown up to maturity, is\r\nentirely independent, and in its natural state has occasion for the assistance\r\nof no other living creature. But man has almost constant occasion for the help\r\nof his brethren, and it is in vain for him to expect it from their benevolence\r\nonly. He will be more likely to prevail if he can interest their self-love in\r\nhis favour, and shew them that it is for their own advantage to do for him what\r\nhe requires of them. Whoever offers to another a bargain of any kind, proposes\r\nto do this. Give me that which I want, and you shall have this which you want,\r\nis the meaning of every such offer; and it is in this manner that we obtain\r\nfrom one another the far greater part of those good offices which we stand in\r\nneed of. It is not from the benevolence of the butcher, the brewer, or the\r\nbaker that we expect our dinner, but from their regard to their own interest.\r\nWe address ourselves, not to their humanity, but to their self-love, and never\r\ntalk to them of our own necessities, but of their advantages. Nobody but a\r\nbeggar chooses to depend chiefly upon the benevolence of his fellow-citizens.\r\nEven a beggar does not depend upon it entirely. The charity of well-disposed\r\npeople, indeed, supplies him with the whole fund of his subsistence. But though\r\nthis principle ultimately provides him with all the necessaries of life which\r\nhe has occasion for, it neither does nor can provide him with them as he has\r\noccasion for them. The greater part of his occasional wants are supplied in the\r\nsame manner as those of other people, by treaty, by barter, and by purchase.\r\nWith the money which one man gives him he purchases food. The old clothes which\r\nanother bestows upon him he exchanges for other clothes which suit him better,\r\nor for lodging, or for food, or for money, with which he can buy either food,\r\nclothes, or lodging, as he has occasion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs it is by treaty, by barter, and by purchase, that we obtain from one another\r\nthe greater part of those mutual good offices which we stand in need of, so it\r\nis this same trucking disposition which originally gives occasion to the\r\ndivision of labour. In a tribe of hunters or shepherds, a particular person\r\nmakes bows and arrows, for example, with more readiness and dexterity than any\r\nother. He frequently exchanges them for cattle or for venison, with his\r\ncompanions; and he finds at last that he can, in this manner, get more cattle\r\nand venison, than if he himself went to the field to catch them. From a regard\r\nto his own interest, therefore, the making of bows and arrows grows to be his\r\nchief business, and he becomes a sort of armourer. Another excels in making the\r\nframes and covers of their little huts or moveable houses. He is accustomed to\r\nbe of use in this way to his neighbours, who reward him in the same manner with\r\ncattle and with venison, till at last he finds it his interest to dedicate\r\nhimself entirely to this employment, and to become a sort of house-carpenter.\r\nIn the same manner a third becomes a smith or a brazier; a fourth, a tanner or\r\ndresser of hides or skins, the principal part of the clothing of savages. And\r\nthus the certainty of being able to exchange all that surplus part of the\r\nproduce of his own labour, which is over and above his own consumption, for\r\nsuch parts of the produce of other men’s labour as he may have occasion\r\nfor, encourages every man to apply himself to a particular occupation, and to\r\ncultivate and bring to perfection whatever talent or genius he may possess for\r\nthat particular species of business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe difference of natural talents in different men, is, in reality, much less\r\nthan we are aware of; and the very different genius which appears to\r\ndistinguish men of different professions, when grown up to maturity, is not\r\nupon many occasions so much the cause, as the effect of the division of labour.\r\nThe difference between the most dissimilar characters, between a philosopher\r\nand a common street porter, for example, seems to arise not so much from\r\nnature, as from habit, custom, and education. When they came in to the world,\r\nand for the first six or eight years of their existence, they were, perhaps,\r\nvery much alike, and neither their parents nor play-fellows could perceive any\r\nremarkable difference. About that age, or soon after, they come to be employed\r\nin very different occupations. The difference of talents comes then to be taken\r\nnotice of, and widens by degrees, till at last the vanity of the philosopher is\r\nwilling to acknowledge scarce any resemblance. But without the disposition to\r\ntruck, barter, and exchange, every man must have procured to himself every\r\nnecessary and conveniency of life which he wanted. All must have had the same\r\nduties to perform, and the same work to do, and there could have been no such\r\ndifference of employment as could alone give occasion to any great difference\r\nof talents.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs it is this disposition which forms that difference of talents, so remarkable\r\namong men of different professions, so it is this same disposition which\r\nrenders that difference useful. Many tribes of animals, acknowledged to be all\r\nof the same species, derive from nature a much more remarkable distinction of\r\ngenius, than what, antecedent to custom and education, appears to take place\r\namong men. By nature a philosopher is not in genius and disposition half so\r\ndifferent from a street porter, as a mastiff is from a grey-hound, or a\r\ngrey-hound from a spaniel, or this last from a shepherd’s dog. Those\r\ndifferent tribes of animals, however, though all of the same species are of\r\nscarce any use to one another. The strength of the mastiff is not in the least\r\nsupported either by the swiftness of the greyhound, or by the sagacity of the\r\nspaniel, or by the docility of the shepherd’s dog. The effects of those\r\ndifferent geniuses and talents, for want of the power or disposition to barter\r\nand exchange, cannot be brought into a common stock, and do not in the least\r\ncontribute to the better accommodation and conveniency of the species. Each\r\nanimal is still obliged to support and defend itself, separately and\r\nindependently, and derives no sort of advantage from that variety of talents\r\nwith which nature has distinguished its fellows. Among men, on the contrary,\r\nthe most dissimilar geniuses are of use to one another; the different produces\r\nof their respective talents, by the general disposition to truck, barter, and\r\nexchange, being brought, as it were, into a common stock, where every man may\r\npurchase whatever part of the produce of other men’s talents he has\r\noccasion for.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap05\"\u003e\u003c/a\u003eCHAPTER III.\u003cbr\u003e\r\nTHAT THE DIVISION OF LABOUR IS LIMITED BY THE EXTENT OF THE MARKET.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nAs it is the power of exchanging that gives occasion to the division of labour,\r\nso the extent of this division must always be limited by the extent of that\r\npower, or, in other words, by the extent of the market. When the market is very\r\nsmall, no person can have any encouragement to dedicate himself entirely to one\r\nemployment, for want of the power to exchange all that surplus part of the\r\nproduce of his own labour, which is over and above his own consumption, for\r\nsuch parts of the produce of other men’s labour as he has occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are some sorts of industry, even of the lowest kind, which can be carried\r\non nowhere but in a great town. A porter, for example, can find employment and\r\nsubsistence in no other place. A village is by much too narrow a sphere for\r\nhim; even an ordinary market-town is scarce large enough to afford him constant\r\noccupation. In the lone houses and very small villages which are scattered\r\nabout in so desert a country as the highlands of Scotland, every farmer must be\r\nbutcher, baker, and brewer, for his own family. In such situations we can\r\nscarce expect to find even a smith, a carpenter, or a mason, within less than\r\ntwenty miles of another of the same trade. The scattered families that live at\r\neight or ten miles distance from the nearest of them, must learn to perform\r\nthemselves a great number of little pieces of work, for which, in more populous\r\ncountries, they would call in the assistance of those workmen. Country workmen\r\nare almost everywhere obliged to apply themselves to all the different branches\r\nof industry that have so much affinity to one another as to be employed about\r\nthe same sort of materials. A country carpenter deals in every sort of work\r\nthat is made of wood; a country smith in every sort of work that is made of\r\niron. The former is not only a carpenter, but a joiner, a cabinet-maker, and\r\neven a carver in wood, as well as a wheel-wright, a plough-wright, a cart and\r\nwaggon-maker. The employments of the latter are still more various. It is\r\nimpossible there should be such a trade as even that of a nailer in the remote\r\nand inland parts of the highlands of Scotland. Such a workman at the rate of a\r\nthousand nails a-day, and three hundred working days in the year, will make\r\nthree hundred thousand nails in the year. But in such a situation it would be\r\nimpossible to dispose of one thousand, that is, of one day’s work in the\r\nyear. As by means of water-carriage, a more extensive market is opened to every\r\nsort of industry than what land-carriage alone can afford it, so it is upon the\r\nsea-coast, and along the banks of navigable rivers, that industry of every kind\r\nnaturally begins to subdivide and improve itself, and it is frequently not till\r\na long time after that those improvements extend themselves to the inland parts\r\nof the country. A broad-wheeled waggon, attended by two men, and drawn by eight\r\nhorses, in about six weeks time, carries and brings back between London and\r\nEdinburgh near four ton weight of goods. In about the same time a ship\r\nnavigated by six or eight men, and sailing between the ports of London and\r\nLeith, frequently carries and brings back two hundred ton weight of goods. Six\r\nor eight men, therefore, by the help of water-carriage, can carry and bring\r\nback, in the same time, the same quantity of goods between London and Edinburgh\r\nas fifty broad-wheeled waggons, attended by a hundred men, and drawn by four\r\nhundred horses. Upon two hundred tons of goods, therefore, carried by the\r\ncheapest land-carriage from London to Edinburgh, there must be charged the\r\nmaintenance of a hundred men for three weeks, and both the maintenance and what\r\nis nearly equal to maintenance the wear and tear of four hundred horses, as\r\nwell as of fifty great waggons. Whereas, upon the same quantity of goods\r\ncarried by water, there is to be charged only the maintenance of six or eight\r\nmen, and the wear and tear of a ship of two hundred tons burthen, together with\r\nthe value of the superior risk, or the difference of the insurance between land\r\nand water-carriage. Were there no other communication between those two places,\r\ntherefore, but by land-carriage, as no goods could be transported from the one\r\nto the other, except such whose price was very considerable in proportion to\r\ntheir weight, they could carry on but a small part of that commerce which at\r\npresent subsists between them, and consequently could give but a small part of\r\nthat encouragement which they at present mutually afford to each other’s\r\nindustry. There could be little or no commerce of any kind between the distant\r\nparts of the world. What goods could bear the expense of land-carriage between\r\nLondon and Calcutta? Or if there were any so precious as to be able to support\r\nthis expense, with what safety could they be transported through the\r\nterritories of so many barbarous nations? Those two cities, however, at present\r\ncarry on a very considerable commerce with each other, and by mutually\r\naffording a market, give a good deal of encouragement to each other’s\r\nindustry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSince such, therefore, are the advantages of water-carriage, it is natural that\r\nthe first improvements of art and industry should be made where this\r\nconveniency opens the whole world for a market to the produce of every sort of\r\nlabour, and that they should always be much later in extending themselves into\r\nthe inland parts of the country. The inland parts of the country can for a long\r\ntime have no other market for the greater part of their goods, but the country\r\nwhich lies round about them, and separates them from the sea-coast, and the\r\ngreat navigable rivers. The extent of the market, therefore, must for a long\r\ntime be in proportion to the riches and populousness of that country, and\r\nconsequently their improvement must always be posterior to the improvement of\r\nthat country. In our North American colonies, the plantations have constantly\r\nfollowed either the sea-coast or the banks of the navigable rivers, and have\r\nscarce anywhere extended themselves to any considerable distance from both.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe nations that, according to the best authenticated history, appear to have\r\nbeen first civilized, were those that dwelt round the coast of the\r\nMediterranean sea. That sea, by far the greatest inlet that is known in the\r\nworld, having no tides, nor consequently any waves, except such as are caused\r\nby the wind only, was, by the smoothness of its surface, as well as by the\r\nmultitude of its islands, and the proximity of its neighbouring shores,\r\nextremely favourable to the infant navigation of the world; when, from their\r\nignorance of the compass, men were afraid to quit the view of the coast, and\r\nfrom the imperfection of the art of ship-building, to abandon themselves to the\r\nboisterous waves of the ocean. To pass beyond the pillars of Hercules, that is,\r\nto sail out of the straits of Gibraltar, was, in the ancient world, long\r\nconsidered as a most wonderful and dangerous exploit of navigation. It was late\r\nbefore even the Phoenicians and Carthaginians, the most skilful navigators and\r\nship-builders of those old times, attempted it; and they were, for a long time,\r\nthe only nations that did attempt it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf all the countries on the coast of the Mediterranean sea, Egypt seems to have\r\nbeen the first in which either agriculture or manufactures were cultivated and\r\nimproved to any considerable degree. Upper Egypt extends itself nowhere above a\r\nfew miles from the Nile; and in Lower Egypt, that great river breaks itself\r\ninto many different canals, which, with the assistance of a little art, seem to\r\nhave afforded a communication by water-carriage, not only between all the great\r\ntowns, but between all the considerable villages, and even to many farm-houses\r\nin the country, nearly in the same manner as the Rhine and the Maese do in\r\nHolland at present. The extent and easiness of this inland navigation was\r\nprobably one of the principal causes of the early improvement of Egypt.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe improvements in agriculture and manufactures seem likewise to have been of\r\nvery great antiquity in the provinces of Bengal, in the East Indies, and in\r\nsome of the eastern provinces of China, though the great extent of this\r\nantiquity is not authenticated by any histories of whose authority we, in this\r\npart of the world, are well assured. In Bengal, the Ganges, and several other\r\ngreat rivers, form a great number of navigable canals, in the same manner as\r\nthe Nile does in Egypt. In the eastern provinces of China, too, several great\r\nrivers form, by their different branches, a multitude of canals, and, by\r\ncommunicating with one another, afford an inland navigation much more extensive\r\nthan that either of the Nile or the Ganges, or, perhaps, than both of them put\r\ntogether. It is remarkable, that neither the ancient Egyptians, nor the\r\nIndians, nor the Chinese, encouraged foreign commerce, but seem all to have\r\nderived their great opulence from this inland navigation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the inland parts of Africa, and all that part of Asia which lies any\r\nconsiderable way north of the Euxine and Caspian seas, the ancient Scythia, the\r\nmodern Tartary and Siberia, seem, in all ages of the world, to have been in the\r\nsame barbarous and uncivilized state in which we find them at present. The sea\r\nof Tartary is the frozen ocean, which admits of no navigation; and though some\r\nof the greatest rivers in the world run through that country, they are at too\r\ngreat a distance from one another to carry commerce and communication through\r\nthe greater part of it. There are in Africa none of those great inlets, such as\r\nthe Baltic and Adriatic seas in Europe, the Mediterranean and Euxine seas in\r\nboth Europe and Asia, and the gulfs of Arabia, Persia, India, Bengal, and Siam,\r\nin Asia, to carry maritime commerce into the interior parts of that great\r\ncontinent; and the great rivers of Africa are at too great a distance from one\r\nanother to give occasion to any considerable inland navigation. The commerce,\r\nbesides, which any nation can carry on by means of a river which does not break\r\nitself into any great number of branches or canals, and which runs into another\r\nterritory before it reaches the sea, can never be very considerable, because it\r\nis always in the power of the nations who possess that other territory to\r\nobstruct the communication between the upper country and the sea. The\r\nnavigation of the Danube is of very little use to the different states of\r\nBavaria, Austria, and Hungary, in comparison of what it would be, if any of\r\nthem possessed the whole of its course, till it falls into the Black sea.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap06\"\u003e\u003c/a\u003eCHAPTER IV.\u003cbr\u003e\r\nOF THE ORIGIN AND USE OF MONEY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nWhen the division of labour has been once thoroughly established, it is but a\r\nvery small part of a man’s wants which the produce of his own labour can\r\nsupply. He supplies the far greater part of them by exchanging that surplus\r\npart of the produce of his own labour, which is over and above his own\r\nconsumption, for such parts of the produce of other men’s labour as he\r\nhas occasion for. Every man thus lives by exchanging, or becomes, in some\r\nmeasure, a merchant, and the society itself grows to be what is properly a\r\ncommercial society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when the division of labour first began to take place, this power of\r\nexchanging must frequently have been very much clogged and embarrassed in its\r\noperations. One man, we shall suppose, has more of a certain commodity than he\r\nhimself has occasion for, while another has less. The former, consequently,\r\nwould be glad to dispose of; and the latter to purchase, a part of this\r\nsuperfluity. But if this latter should chance to have nothing that the former\r\nstands in need of, no exchange can be made between them. The butcher has more\r\nmeat in his shop than he himself can consume, and the brewer and the baker\r\nwould each of them be willing to purchase a part of it. But they have nothing\r\nto offer in exchange, except the different productions of their respective\r\ntrades, and the butcher is already provided with all the bread and beer which\r\nhe has immediate occasion for. No exchange can, in this case, be made between\r\nthem. He cannot be their merchant, nor they his customers; and they are all of\r\nthem thus mutually less serviceable to one another. In order to avoid the\r\ninconveniency of such situations, every prudent man in every period of society,\r\nafter the first establishment of the division of labour, must naturally have\r\nendeavoured to manage his affairs in such a manner, as to have at all times by\r\nhim, besides the peculiar produce of his own industry, a certain quantity of\r\nsome one commodity or other, such as he imagined few people would be likely to\r\nrefuse in exchange for the produce of their industry. Many different\r\ncommodities, it is probable, were successively both thought of and employed for\r\nthis purpose. In the rude ages of society, cattle are said to have been the\r\ncommon instrument of commerce; and, though they must have been a most\r\ninconvenient one, yet, in old times, we find things were frequently valued\r\naccording to the number of cattle which had been given in exchange for them.\r\nThe armour of Diomede, says Homer, cost only nine oxen; but that of Glaucus\r\ncost a hundred oxen. Salt is said to be the common instrument of commerce and\r\nexchanges in Abyssinia; a species of shells in some parts of the coast of\r\nIndia; dried cod at Newfoundland; tobacco in Virginia; sugar in some of our\r\nWest India colonies; hides or dressed leather in some other countries; and\r\nthere is at this day a village in Scotland, where it is not uncommon, I am\r\ntold, for a workman to carry nails instead of money to the baker’s shop\r\nor the ale-house.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all countries, however, men seem at last to have been determined by\r\nirresistible reasons to give the preference, for this employment, to metals\r\nabove every other commodity. Metals can not only be kept with as little loss as\r\nany other commodity, scarce any thing being less perishable than they are, but\r\nthey can likewise, without any loss, be divided into any number of parts, as by\r\nfusion those parts can easily be re-united again; a quality which no other\r\nequally durable commodities possess, and which, more than any other quality,\r\nrenders them fit to be the instruments of commerce and circulation. The man who\r\nwanted to buy salt, for example, and had nothing but cattle to give in exchange\r\nfor it, must have been obliged to buy salt to the value of a whole ox, or a\r\nwhole sheep, at a time. He could seldom buy less than this, because what he was\r\nto give for it could seldom be divided without loss; and if he had a mind to\r\nbuy more, he must, for the same reasons, have been obliged to buy double or\r\ntriple the quantity, the value, to wit, of two or three oxen, or of two or\r\nthree sheep. If, on the contrary, instead of sheep or oxen, he had metals to\r\ngive in exchange for it, he could easily proportion the quantity of the metal\r\nto the precise quantity of the commodity which he had immediate occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDifferent metals have been made use of by different nations for this purpose.\r\nIron was the common instrument of commerce among the ancient Spartans, copper\r\namong the ancient Romans, and gold and silver among all rich and commercial\r\nnations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose metals seem originally to have been made use of for this purpose in rude\r\nbars, without any stamp or coinage. Thus we are told by Pliny (Plin. Hist Nat.\r\nlib. 33, cap. 3), upon the authority of Timaeus, an ancient historian, that,\r\ntill the time of Servius Tullius, the Romans had no coined money, but made use\r\nof unstamped bars of copper, to purchase whatever they had occasion for. These\r\nrude bars, therefore, performed at this time the function of money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe use of metals in this rude state was attended with two very considerable\r\ninconveniences; first, with the trouble of weighing, and secondly, with that of\r\nassaying them. In the precious metals, where a small difference in the quantity\r\nmakes a great difference in the value, even the business of weighing, with\r\nproper exactness, requires at least very accurate weights and scales. The\r\nweighing of gold, in particular, is an operation of some nicety in the coarser\r\nmetals, indeed, where a small error would be of little consequence, less\r\naccuracy would, no doubt, be necessary. Yet we should find it excessively\r\ntroublesome if every time a poor man had occasion either to buy or sell a\r\nfarthing’s worth of goods, he was obliged to weigh the farthing. The\r\noperation of assaying is still more difficult, still more tedious; and, unless\r\na part of the metal is fairly melted in the crucible, with proper dissolvents,\r\nany conclusion that can be drawn from it is extremely uncertain. Before the\r\ninstitution of coined money, however, unless they went through this tedious and\r\ndifficult operation, people must always have been liable to the grossest frauds\r\nand impositions; and instead of a pound weight of pure silver, or pure copper,\r\nmight receive, in exchange for their goods, an adulterated composition of the\r\ncoarsest and cheapest materials, which had, however, in their outward\r\nappearance, been made to resemble those metals. To prevent such abuses, to\r\nfacilitate exchanges, and thereby to encourage all sorts of industry and\r\ncommerce, it has been found necessary, in all countries that have made any\r\nconsiderable advances towards improvement, to affix a public stamp upon certain\r\nquantities of such particular metals, as were in those countries commonly made\r\nuse of to purchase goods. Hence the origin of coined money, and of those public\r\noffices called mints; institutions exactly of the same nature with those of the\r\naulnagers and stamp-masters of woollen and linen cloth. All of them are equally\r\nmeant to ascertain, by means of a public stamp, the quantity and uniform\r\ngoodness of those different commodities when brought to market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first public stamps of this kind that were affixed to the current metals,\r\nseem in many cases to have been intended to ascertain, what it was both most\r\ndifficult and most important to ascertain, the goodness or fineness of the\r\nmetal, and to have resembled the sterling mark which is at present affixed to\r\nplate and bars of silver, or the Spanish mark which is sometimes affixed to\r\ningots of gold, and which, being struck only upon one side of the piece, and\r\nnot covering the whole surface, ascertains the fineness, but not the weight of\r\nthe metal. Abraham weighs to Ephron the four hundred shekels of silver which he\r\nhad agreed to pay for the field of Machpelah. They are said, however, to be the\r\ncurrent money of the merchant, and yet are received by weight, and not by tale,\r\nin the same manner as ingots of gold and bars of silver are at present. The\r\nrevenues of the ancient Saxon kings of England are said to have been paid, not\r\nin money, but in kind, that is, in victuals and provisions of all sorts.\r\nWilliam the Conqueror introduced the custom of paying them in money. This\r\nmoney, however, was for a long time, received at the exchequer, by weight, and\r\nnot by tale.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inconveniency and difficulty of weighing those metals with exactness, gave\r\noccasion to the institution of coins, of which the stamp, covering entirely\r\nboth sides of the piece, and sometimes the edges too, was supposed to ascertain\r\nnot only the fineness, but the weight of the metal. Such coins, therefore, were\r\nreceived by tale, as at present, without the trouble of weighing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe denominations of those coins seem originally to have expressed the weight\r\nor quantity of metal contained in them. In the time of Servius Tullius, who\r\nfirst coined money at Rome, the Roman as or pondo contained a Roman pound of\r\ngood copper. It was divided, in the same manner as our Troyes pound, into\r\ntwelve ounces, each of which contained a real ounce of good copper. The English\r\npound sterling, in the time of Edward I. contained a pound, Tower weight, of\r\nsilver of a known fineness. The Tower pound seems to have been something more\r\nthan the Roman pound, and something less than the Troyes pound. This last was\r\nnot introduced into the mint of England till the 18th of Henry the VIII. The\r\nFrench livre contained, in the time of Charlemagne, a pound, Troyes weight, of\r\nsilver of a known fineness. The fair of Troyes in Champaign was at that time\r\nfrequented by all the nations of Europe, and the weights and measures of so\r\nfamous a market were generally known and esteemed. The Scots money pound\r\ncontained, from the time of Alexander the First to that of Robert Bruce, a\r\npound of silver of the same weight and fineness with the English pound\r\nsterling. English, French, and Scots pennies, too, contained all of them\r\noriginally a real penny-weight of silver, the twentieth part of an ounce, and\r\nthe two hundred-and-fortieth part of a pound. The shilling, too, seems\r\noriginally to have been the denomination of a weight. “When wheat is at\r\ntwelve shillings the quarter,” says an ancient statute of Henry III.\r\n“then wastel bread of a farthing shall weigh eleven shillings and\r\nfourpence”. The proportion, however, between the shilling, and either the\r\npenny on the one hand, or the pound on the other, seems not to have been so\r\nconstant and uniform as that between the penny and the pound. During the first\r\nrace of the kings of France, the French sou or shilling appears upon different\r\noccasions to have contained five, twelve, twenty, and forty pennies. Among the\r\nancient Saxons, a shilling appears at one time to have contained only five\r\npennies, and it is not improbable that it may have been as variable among them\r\nas among their neighbours, the ancient Franks. From the time of Charlemagne\r\namong the French, and from that of William the Conqueror among the English, the\r\nproportion between the pound, the shilling, and the penny, seems to have been\r\nuniformly the same as at present, though the value of each has been very\r\ndifferent; for in every country of the world, I believe, the avarice and\r\ninjustice of princes and sovereign states, abusing the confidence of their\r\nsubjects, have by degrees diminished the real quantity of metal, which had been\r\noriginally contained in their coins. The Roman as, in the latter ages of the\r\nrepublic, was reduced to the twenty-fourth part of its original value, and,\r\ninstead of weighing a pound, came to weigh only half an ounce. The English\r\npound and penny contain at present about a third only; the Scots pound and\r\npenny about a thirty-sixth; and the French pound and penny about a sixty-sixth\r\npart of their original value. By means of those operations, the princes and\r\nsovereign states which performed them were enabled, in appearance, to pay their\r\ndebts and fulfil their engagements with a smaller quantity of silver than would\r\notherwise have been requisite. It was indeed in appearance only; for their\r\ncreditors were really defrauded of a part of what was due to them. All other\r\ndebtors in the state were allowed the same privilege, and might pay with the\r\nsame nominal sum of the new and debased coin whatever they had borrowed in the\r\nold. Such operations, therefore, have always proved favourable to the debtor,\r\nand ruinous to the creditor, and have sometimes produced a greater and more\r\nuniversal revolution in the fortunes of private persons, than could have been\r\noccasioned by a very great public calamity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in this manner that money has become, in all civilized nations, the\r\nuniversal instrument of commerce, by the intervention of which goods of all\r\nkinds are bought and sold, or exchanged for one another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat are the rules which men naturally observe, in exchanging them either for\r\nmoney, or for one another, I shall now proceed to examine. These rules\r\ndetermine what may be called the relative or exchangeable value of goods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe word VALUE, it is to be observed, has two different meanings, and sometimes\r\nexpresses the utility of some particular object, and sometimes the power of\r\npurchasing other goods which the possession of that object conveys. The one may\r\nbe called ‘value in use;’ the other, ‘value in\r\nexchange.’ The things which have the greatest value in use have\r\nfrequently little or no value in exchange; and, on the contrary, those which\r\nhave the greatest value in exchange have frequently little or no value in use.\r\nNothing is more useful than water; but it will purchase scarce any thing;\r\nscarce any thing can be had in exchange for it. A diamond, on the contrary, has\r\nscarce any value in use; but a very great quantity of other goods may\r\nfrequently be had in exchange for it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to investigate the principles which regulate the exchangeable value of\r\ncommodities, I shall endeavour to shew,\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, what is the real measure of this exchangeable value; or wherein consists\r\nthe real price of all commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, what are the different parts of which this real price is composed or\r\nmade up.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAnd, lastly, what are the different circumstances which sometimes raise some or\r\nall of these different parts of price above, and sometimes sink them below,\r\ntheir natural or ordinary rate; or, what are the causes which sometimes hinder\r\nthe market price, that is, the actual price of commodities, from coinciding\r\nexactly with what may be called their natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI shall endeavour to explain, as fully and distinctly as I can, those three\r\nsubjects in the three following chapters, for which I must very earnestly\r\nentreat both the patience and attention of the reader: his patience, in order\r\nto examine a detail which may, perhaps, in some places, appear unnecessarily\r\ntedious; and his attention, in order to understand what may perhaps, after the\r\nfullest explication which I am capable of giving it, appear still in some\r\ndegree obscure. I am always willing to run some hazard of being tedious, in\r\norder to be sure that I am perspicuous; and, after taking the utmost pains that\r\nI can to be perspicuous, some obscurity may still appear to remain upon a\r\nsubject, in its own nature extremely abstracted.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap07\"\u003e\u003c/a\u003eCHAPTER V.\u003cbr\u003e\r\nOF THE REAL AND NOMINAL PRICE OF COMMODITIES, OR OF THEIR PRICE IN LABOUR, AND\r\nTHEIR PRICE IN MONEY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nEvery man is rich or poor according to the degree in which he can afford to\r\nenjoy the necessaries, conveniencies, and amusements of human life. But after\r\nthe division of labour has once thoroughly taken place, it is but a very small\r\npart of these with which a man’s own labour can supply him. The far\r\ngreater part of them he must derive from the labour of other people, and he\r\nmust be rich or poor according to the quantity of that labour which he can\r\ncommand, or which he can afford to purchase. The value of any commodity,\r\ntherefore, to the person who possesses it, and who means not to use or consume\r\nit himself, but to exchange it for other commodities, is equal to the quantity\r\nof labour which it enables him to purchase or command. Labour therefore, is the\r\nreal measure of the exchangeable value of all commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe real price of every thing, what every thing really costs to the man who\r\nwants to acquire it, is the toil and trouble of acquiring it. What every thing\r\nis really worth to the man who has acquired it and who wants to dispose of it,\r\nor exchange it for something else, is the toil and trouble which it can save to\r\nhimself, and which it can impose upon other people. What is bought with money,\r\nor with goods, is purchased by labour, as much as what we acquire by the toil\r\nof our own body. That money, or those goods, indeed, save us this toil. They\r\ncontain the value of a certain quantity of labour, which we exchange for what\r\nis supposed at the time to contain the value of an equal quantity. Labour was\r\nthe first price, the original purchase money that was paid for all things. It\r\nwas not by gold or by silver, but by labour, that all the wealth of the world\r\nwas originally purchased; and its value, to those who possess it, and who want\r\nto exchange it for some new productions, is precisely equal to the quantity of\r\nlabour which it can enable them to purchase or command.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWealth, as Mr Hobbes says, is power. But the person who either acquires, or\r\nsucceeds to a great fortune, does not necessarily acquire or succeed to any\r\npolitical power, either civil or military. His fortune may, perhaps, afford him\r\nthe means of acquiring both; but the mere possession of that fortune does not\r\nnecessarily convey to him either. The power which that possession immediately\r\nand directly conveys to him, is the power of purchasing a certain command over\r\nall the labour, or over all the produce of labour which is then in the market.\r\nHis fortune is greater or less, precisely in proportion to the extent of this\r\npower, or to the quantity either of other men’s labour, or, what is the\r\nsame thing, of the produce of other men’s labour, which it enables him to\r\npurchase or command. The exchangeable value of every thing must always be\r\nprecisely equal to the extent of this power which it conveys to its owner.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though labour be the real measure of the exchangeable value of all\r\ncommodities, it is not that by which their value is commonly estimated. It is\r\noften difficult to ascertain the proportion between two different quantities of\r\nlabour. The time spent in two different sorts of work will not always alone\r\ndetermine this proportion. The different degrees of hardship endured, and of\r\ningenuity exercised, must likewise be taken into account. There may be more\r\nlabour in an hour’s hard work, than in two hours easy business; or in an\r\nhour’s application to a trade which it cost ten years labour to learn,\r\nthan in a month’s industry, at an ordinary and obvious employment. But it\r\nis not easy to find any accurate measure either of hardship or ingenuity. In\r\nexchanging, indeed, the different productions of different sorts of labour for\r\none another, some allowance is commonly made for both. It is adjusted, however,\r\nnot by any accurate measure, but by the higgling and bargaining of the market,\r\naccording to that sort of rough equality which, though not exact, is sufficient\r\nfor carrying on the business of common life.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery commodity, besides, is more frequently exchanged for, and thereby\r\ncompared with, other commodities, than with labour. It is more natural,\r\ntherefore, to estimate its exchangeable value by the quantity of some other\r\ncommodity, than by that of the labour which it can produce. The greater part of\r\npeople, too, understand better what is meant by a quantity of a particular\r\ncommodity, than by a quantity of labour. The one is a plain palpable object;\r\nthe other an abstract notion, which though it can be made sufficiently\r\nintelligible, is not altogether so natural and obvious.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when barter ceases, and money has become the common instrument of commerce,\r\nevery particular commodity is more frequently exchanged for money than for any\r\nother commodity. The butcher seldom carries his beef or his mutton to the baker\r\nor the brewer, in order to exchange them for bread or for beer; but he carries\r\nthem to the market, where he exchanges them for money, and afterwards exchanges\r\nthat money for bread and for beer. The quantity of money which he gets for them\r\nregulates, too, the quantity of bread and beer which he can afterwards\r\npurchase. It is more natural and obvious to him, therefore, to estimate their\r\nvalue by the quantity of money, the commodity for which he immediately\r\nexchanges them, than by that of bread and beer, the commodities for which he\r\ncan exchange them only by the intervention of another commodity; and rather to\r\nsay that his butcher’s meat is worth three-pence or fourpence a-pound,\r\nthan that it is worth three or four pounds of bread, or three or four quarts of\r\nsmall beer. Hence it comes to pass, that the exchangeable value of every\r\ncommodity is more frequently estimated by the quantity of money, than by the\r\nquantity either of labour or of any other commodity which can be had in\r\nexchange for it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGold and silver, however, like every other commodity, vary in their value; are\r\nsometimes cheaper and sometimes dearer, sometimes of easier and sometimes of\r\nmore difficult purchase. The quantity of labour which any particular quantity\r\nof them can purchase or command, or the quantity of other goods which it will\r\nexchange for, depends always upon the fertility or barrenness of the mines\r\nwhich happen to be known about the time when such exchanges are made. The\r\ndiscovery of the abundant mines of America, reduced, in the sixteenth century,\r\nthe value of gold and silver in Europe to about a third of what it had been\r\nbefore. As it cost less labour to bring those metals from the mine to the\r\nmarket, so, when they were brought thither, they could purchase or command less\r\nlabour; and this revolution in their value, though perhaps the greatest, is by\r\nno means the only one of which history gives some account. But as a measure of\r\nquantity, such as the natural foot, fathom, or handful, which is continually\r\nvarying in its own quantity, can never be an accurate measure of the quantity\r\nof other things; so a commodity which is itself continually varying in its own\r\nvalue, can never be an accurate measure of the value of other commodities.\r\nEqual quantities of labour, at all times and places, may be said to be of equal\r\nvalue to the labourer. In his ordinary state of health, strength, and spirits;\r\nin the ordinary degree of his skill and dexterity, he must always lay down the\r\nsame portion of his ease, his liberty, and his happiness. The price which he\r\npays must always be the same, whatever may be the quantity of goods which he\r\nreceives in return for it. Of these, indeed, it may sometimes purchase a\r\ngreater and sometimes a smaller quantity; but it is their value which varies,\r\nnot that of the labour which purchases them. At all times and places, that is\r\ndear which it is difficult to come at, or which it costs much labour to\r\nacquire; and that cheap which is to be had easily, or with very little labour.\r\nLabour alone, therefore, never varying in its own value, is alone the ultimate\r\nand real standard by which the value of all commodities can at all times and\r\nplaces be estimated and compared. It is their real price; money is their\r\nnominal price only.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though equal quantities of labour are always of equal value to the\r\nlabourer, yet to the person who employs him they appear sometimes to be of\r\ngreater, and sometimes of smaller value. He purchases them sometimes with a\r\ngreater, and sometimes with a smaller quantity of goods, and to him the price\r\nof labour seems to vary like that of all other things. It appears to him dear\r\nin the one case, and cheap in the other. In reality, however, it is the goods\r\nwhich are cheap in the one case, and dear in the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this popular sense, therefore, labour, like commodities, may be said to have\r\na real and a nominal price. Its real price may be said to consist in the\r\nquantity of the necessaries and conveniencies of life which are given for it;\r\nits nominal price, in the quantity of money. The labourer is rich or poor, is\r\nwell or ill rewarded, in proportion to the real, not to the nominal price of\r\nhis labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe distinction between the real and the nominal price of commodities and\r\nlabour is not a matter of mere speculation, but may sometimes be of\r\nconsiderable use in practice. The same real price is always of the same value;\r\nbut on account of the variations in the value of gold and silver, the same\r\nnominal price is sometimes of very different values. When a landed estate,\r\ntherefore, is sold with a reservation of a perpetual rent, if it is intended\r\nthat this rent should always be of the same value, it is of importance to the\r\nfamily in whose favour it is reserved, that it should not consist in a\r\nparticular sum of money. Its value would in this case be liable to variations\r\nof two different kinds: first, to those which arise from the different\r\nquantities of gold and silver which are contained at different times in coin of\r\nthe same denomination; and, secondly, to those which arise from the different\r\nvalues of equal quantities of gold and silver at different times.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPrinces and sovereign states have frequently fancied that they had a temporary\r\ninterest to diminish the quantity of pure metal contained in their coins; but\r\nthey seldom have fancied that they had any to augment it. The quantity of metal\r\ncontained in the coins, I believe of all nations, has accordingly been almost\r\ncontinually diminishing, and hardly ever augmenting. Such variations,\r\ntherefore, tend almost always to diminish the value of a money rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discovery of the mines of America diminished the value of gold and silver\r\nin Europe. This diminution, it is commonly supposed, though I apprehend without\r\nany certain proof, is still going on gradually, and is likely to continue to do\r\nso for a long time. Upon this supposition, therefore, such variations are more\r\nlikely to diminish than to augment the value of a money rent, even though it\r\nshould be stipulated to be paid, not in such a quantity of coined money of such\r\na denomination (in so many pounds sterling, for example), but in so many\r\nounces, either of pure silver, or of silver of a certain standard.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rents which have been reserved in corn, have preserved their value much\r\nbetter than those which have been reserved in money, even where the\r\ndenomination of the coin has not been altered. By the 18th of Elizabeth, it was\r\nenacted, that a third of the rent of all college leases should be reserved in\r\ncorn, to be paid either in kind, or according to the current prices at the\r\nnearest public market. The money arising from this corn rent, though originally\r\nbut a third of the whole, is, in the present times, according to Dr.\r\nBlackstone, commonly near double of what arises from the other two-thirds. The\r\nold money rents of colleges must, according to this account, have sunk almost\r\nto a fourth part of their ancient value, or are worth little more than a fourth\r\npart of the corn which they were formerly worth. But since the reign of Philip\r\nand Mary, the denomination of the English coin has undergone little or no\r\nalteration, and the same number of pounds, shillings, and pence, have contained\r\nvery nearly the same quantity of pure silver. This degradation, therefore, in\r\nthe value of the money rents of colleges, has arisen altogether from the\r\ndegradation in the price of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the degradation in the value of silver is combined with the diminution of\r\nthe quantity of it contained in the coin of the same denomination, the loss is\r\nfrequently still greater. In Scotland, where the denomination of the coin has\r\nundergone much greater alterations than it ever did in England, and in France,\r\nwhere it has undergone still greater than it ever did in Scotland, some ancient\r\nrents, originally of considerable value, have, in this manner, been reduced\r\nalmost to nothing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEqual quantities of labour will, at distant times, be purchased more nearly\r\nwith equal quantities of corn, the subsistence of the labourer, than with equal\r\nquantities of gold and silver, or, perhaps, of any other commodity. Equal\r\nquantities of corn, therefore, will, at distant times, be more nearly of the\r\nsame real value, or enable the possessor to purchase or command more nearly the\r\nsame quantity of the labour of other people. They will do this, I say, more\r\nnearly than equal quantities of almost any other commodity; for even equal\r\nquantities of corn will not do it exactly. The subsistence of the labourer, or\r\nthe real price of labour, as I shall endeavour to shew hereafter, is very\r\ndifferent upon different occasions; more liberal in a society advancing to\r\nopulence, than in one that is standing still, and in one that is standing\r\nstill, than in one that is going backwards. Every other commodity, however,\r\nwill, at any particular time, purchase a greater or smaller quantity of labour,\r\nin proportion to the quantity of subsistence which it can purchase at that\r\ntime. A rent, therefore, reserved in corn, is liable only to the variations in\r\nthe quantity of labour which a certain quantity of corn can purchase. But a\r\nrent reserved in any other commodity is liable, not only to the variations in\r\nthe quantity of labour which any particular quantity of corn can purchase, but\r\nto the variations in the quantity of corn which can be purchased by any\r\nparticular quantity of that commodity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the real value of a corn rent, it is to be observed, however, varies\r\nmuch less from century to century than that of a money rent, it varies much\r\nmore from year to year. The money price of labour, as I shall endeavour to shew\r\nhereafter, does not fluctuate from year to year with the money price of corn,\r\nbut seems to be everywhere accommodated, not to the temporary or occasional,\r\nbut to the average or ordinary price of that necessary of life. The average or\r\nordinary price of corn, again is regulated, as I shall likewise endeavour to\r\nshew hereafter, by the value of silver, by the richness or barrenness of the\r\nmines which supply the market with that metal, or by the quantity of labour\r\nwhich must be employed, and consequently of corn which must be consumed, in\r\norder to bring any particular quantity of silver from the mine to the market.\r\nBut the value of silver, though it sometimes varies greatly from century to\r\ncentury, seldom varies much from year to year, but frequently continues the\r\nsame, or very nearly the same, for half a century or a century together. The\r\nordinary or average money price of corn, therefore, may, during so long a\r\nperiod, continue the same, or very nearly the same, too, and along with it the\r\nmoney price of labour, provided, at least, the society continues, in other\r\nrespects, in the same, or nearly in the same, condition. In the mean time, the\r\ntemporary and occasional price of corn may frequently be double one year of\r\nwhat it had been the year before, or fluctuate, for example, from\r\nfive-and-twenty to fifty shillings the quarter. But when corn is at the latter\r\nprice, not only the nominal, but the real value of a corn rent, will be double\r\nof what it is when at the former, or will command double the quantity either of\r\nlabour, or of the greater part of other commodities; the money price of labour,\r\nand along with it that of most other things, continuing the same during all\r\nthese fluctuations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLabour, therefore, it appears evidently, is the only universal, as well as the\r\nonly accurate, measure of value, or the only standard by which we can compare\r\nthe values of different commodities, at all times, and at all places. We cannot\r\nestimate, it is allowed, the real value of different commodities from century\r\nto century by the quantities of silver which were given for them. We cannot\r\nestimate it from year to year by the quantities of corn. By the quantities of\r\nlabour, we can, with the greatest accuracy, estimate it, both from century to\r\ncentury, and from year to year. From century to century, corn is a better\r\nmeasure than silver, because, from century to century, equal quantities of corn\r\nwill command the same quantity of labour more nearly than equal quantities of\r\nsilver. From year to year, on the contrary, silver is a better measure than\r\ncorn, because equal quantities of it will more nearly command the same quantity\r\nof labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though, in establishing perpetual rents, or even in letting very long\r\nleases, it may be of use to distinguish between real and nominal price; it is\r\nof none in buying and selling, the more common and ordinary transactions of\r\nhuman life.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt the same time and place, the real and the nominal price of all commodities\r\nare exactly in proportion to one another. The more or less money you get for\r\nany commodity, in the London market, for example, the more or less labour it\r\nwill at that time and place enable you to purchase or command. At the same time\r\nand place, therefore, money is the exact measure of the real exchangeable value\r\nof all commodities. It is so, however, at the same time and place only.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough at distant places there is no regular proportion between the real and\r\nthe money price of commodities, yet the merchant who carries goods from the one\r\nto the other, has nothing to consider but the money price, or the difference\r\nbetween the quantity of silver for which he buys them, and that for which he is\r\nlikely to sell them. Half an ounce of silver at Canton in China may command a\r\ngreater quantity both of labour and of the necessaries and conveniencies of\r\nlife, than an ounce at London. A commodity, therefore, which sells for half an\r\nounce of silver at Canton, may there be really dearer, of more real importance\r\nto the man who possesses it there, than a commodity which sells for an ounce at\r\nLondon is to the man who possesses it at London. If a London merchant, however,\r\ncan buy at Canton, for half an ounce of silver, a commodity which he can\r\nafterwards sell at London for an ounce, he gains a hundred per cent. by the\r\nbargain, just as much as if an ounce of silver was at London exactly of the\r\nsame value as at Canton. It is of no importance to him that half an ounce of\r\nsilver at Canton would have given him the command of more labour, and of a\r\ngreater quantity of the necessaries and conveniencies of life than an ounce can\r\ndo at London. An ounce at London will always give him the command of double the\r\nquantity of all these, which half an ounce could have done there, and this is\r\nprecisely what he wants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs it is the nominal or money price of goods, therefore, which finally\r\ndetermines the prudence or imprudence of all purchases and sales, and thereby\r\nregulates almost the whole business of common life in which price is concerned,\r\nwe cannot wonder that it should have been so much more attended to than the\r\nreal price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn such a work as this, however, it may sometimes be of use to compare the\r\ndifferent real values of a particular commodity at different times and places,\r\nor the different degrees of power over the labour of other people which it may,\r\nupon different occasions, have given to those who possessed it. We must in this\r\ncase compare, not so much the different quantities of silver for which it was\r\ncommonly sold, as the different quantities or labour which those different\r\nquantities of silver could have purchased. But the current prices of labour, at\r\ndistant times and places, can scarce ever be known with any degree of\r\nexactness. Those of corn, though they have in few places been regularly\r\nrecorded, are in general better known, and have been more frequently taken\r\nnotice of by historians and other writers. We must generally, therefore,\r\ncontent ourselves with them, not as being always exactly in the same proportion\r\nas the current prices of labour, but as being the nearest approximation which\r\ncan commonly be had to that proportion. I shall hereafter have occasion to make\r\nseveral comparisons of this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the progress of industry, commercial nations have found it convenient to\r\ncoin several different metals into money; gold for larger payments, silver for\r\npurchases of moderate value, and copper, or some other coarse metal, for those\r\nof still smaller consideration, They have always, however, considered one of\r\nthose metals as more peculiarly the measure of value than any of the other two;\r\nand this preference seems generally to have been given to the metal which they\r\nhappen first to make use of as the instrument of commerce. Having once begun to\r\nuse it as their standard, which they must have done when they had no other\r\nmoney, they have generally continued to do so even when the necessity was not\r\nthe same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Romans are said to have had nothing but copper money till within five years\r\nbefore the first Punic war (Pliny, lib. xxxiii. cap. 3), when they first began\r\nto coin silver. Copper, therefore, appears to have continued always the measure\r\nof value in that republic. At Rome all accounts appear to have been kept, and\r\nthe value of all estates to have been computed, either in asses or in\r\nsestertii. The as was always the denomination of a copper coin. The word\r\nsestertius signifies two asses and a half. Though the sestertius, therefore,\r\nwas originally a silver coin, its value was estimated in copper. At Rome, one\r\nwho owed a great deal of money was said to have a great deal of other\r\npeople’s copper.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe northern nations who established themselves upon the ruins of the Roman\r\nempire, seem to have had silver money from the first beginning of their\r\nsettlements, and not to have known either gold or copper coins for several ages\r\nthereafter. There were silver coins in England in the time of the Saxons; but\r\nthere was little gold coined till the time of Edward III nor any copper till\r\nthat of James I. of Great Britain. In England, therefore, and for the same\r\nreason, I believe, in all other modern nations of Europe, all accounts are\r\nkept, and the value of all goods and of all estates is generally computed, in\r\nsilver: and when we mean to express the amount of a person’s fortune, we\r\nseldom mention the number of guineas, but the number of pounds sterling which\r\nwe suppose would be given for it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOriginally, in all countries, I believe, a legal tender of payment could be\r\nmade only in the coin of that metal which was peculiarly considered as the\r\nstandard or measure of value. In England, gold was not considered as a legal\r\ntender for a long time after it was coined into money. The proportion between\r\nthe values of gold and silver money was not fixed by any public law or\r\nproclamation, but was left to be settled by the market. If a debtor offered\r\npayment in gold, the creditor might either reject such payment altogether, or\r\naccept of it at such a valuation of the gold as he and his debtor could agree\r\nupon. Copper is not at present a legal tender, except in the change of the\r\nsmaller silver coins.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this state of things, the distinction between the metal which was the\r\nstandard, and that which was not the standard, was something more than a\r\nnominal distinction.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn process of time, and as people became gradually more familiar with the use\r\nof the different metals in coin, and consequently better acquainted with the\r\nproportion between their respective values, it has, in most countries, I\r\nbelieve, been found convenient to ascertain this proportion, and to declare by\r\na public law, that a guinea, for example, of such a weight and fineness, should\r\nexchange for one-and-twenty shillings, or be a legal tender for a debt of that\r\namount. In this state of things, and during the continuance of any one\r\nregulated proportion of this kind, the distinction between the metal, which is\r\nthe standard, and that which is not the standard, becomes little more than a\r\nnominal distinction.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of any change, however, in this regulated proportion, this\r\ndistinction becomes, or at least seems to become, something more than nominal\r\nagain. If the regulated value of a guinea, for example, was either reduced to\r\ntwenty, or raised to two-and-twenty shillings, all accounts being kept, and\r\nalmost all obligations for debt being expressed, in silver money, the greater\r\npart of payments could in either case be made with the same quantity of silver\r\nmoney as before; but would require very different quantities of gold money; a\r\ngreater in the one case, and a smaller in the other. Silver would appear to be\r\nmore invariable in its value than gold. Silver would appear to measure the\r\nvalue of gold, and gold would not appear to measure the value of silver. The\r\nvalue of gold would seem to depend upon the quantity of silver which it would\r\nexchange for, and the value of silver would not seem to depend upon the\r\nquantity of gold which it would exchange for. This difference, however, would\r\nbe altogether owing to the custom of keeping accounts, and of expressing the\r\namount of all great and small sums rather in silver than in gold money. One of\r\nMr Drummond’s notes for five-and-twenty or fifty guineas would, after an\r\nalteration of this kind, be still payable with five-and-twenty or fifty\r\nguineas, in the same manner as before. It would, after such an alteration, be\r\npayable with the same quantity of gold as before, but with very different\r\nquantities of silver. In the payment of such a note, gold would appear to be\r\nmore invariable in its value than silver. Gold would appear to measure the\r\nvalue of silver, and silver would not appear to measure the value of gold. If\r\nthe custom of keeping accounts, and of expressing promissory-notes and other\r\nobligations for money, in this manner should ever become general, gold, and not\r\nsilver, would be considered as the metal which was peculiarly the standard or\r\nmeasure of value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn reality, during the continuance of any one regulated proportion between the\r\nrespective values of the different metals in coin, the value of the most\r\nprecious metal regulates the value of the whole coin. Twelve copper pence\r\ncontain half a pound avoirdupois of copper, of not the best quality, which,\r\nbefore it is coined, is seldom worth seven-pence in silver. But as, by the\r\nregulation, twelve such pence are ordered to exchange for a shilling, they are\r\nin the market considered as worth a shilling, and a shilling can at any time be\r\nhad for them. Even before the late reformation of the gold coin of Great\r\nBritain, the gold, that part of it at least which circulated in London and its\r\nneighbourhood, was in general less degraded below its standard weight than the\r\ngreater part of the silver. One-and-twenty worn and defaced shillings, however,\r\nwere considered as equivalent to a guinea, which, perhaps, indeed, was worn and\r\ndefaced too, but seldom so much so. The late regulations have brought the gold\r\ncoin as near, perhaps, to its standard weight as it is possible to bring the\r\ncurrent coin of any nation; and the order to receive no gold at the public\r\noffices but by weight, is likely to preserve it so, as long as that order is\r\nenforced. The silver coin still continues in the same worn and degraded state\r\nas before the reformation of the cold coin. In the market, however,\r\none-and-twenty shillings of this degraded silver coin are still considered as\r\nworth a guinea of this excellent gold coin.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe reformation of the gold coin has evidently raised the value of the silver\r\ncoin which can be exchanged for it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the English mint, a pound weight of gold is coined into forty-four guineas\r\nand a half, which at one-and-twenty shillings the guinea, is equal to forty-six\r\npounds fourteen shillings and sixpence. An ounce of such gold coin, therefore,\r\nis worth £ 3:17:10½ in silver. In England, no duty or seignorage is paid upon\r\nthe coinage, and he who carries a pound weight or an ounce weight of standard\r\ngold bullion to the mint, gets back a pound weight or an ounce weight of gold\r\nin coin, without any deduction. Three pounds seventeen shillings and tenpence\r\nhalfpenny an ounce, therefore, is said to be the mint price of gold in England,\r\nor the quantity of gold coin which the mint gives in return for standard gold\r\nbullion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the reformation of the gold coin, the price of standard gold bullion in\r\nthe market had, for many years, been upwards of £3:18s. sometimes £ 3:19s, and\r\nvery frequently £4 an ounce; that sum, it is probable, in the worn and degraded\r\ngold coin, seldom containing more than an ounce of standard gold. Since the\r\nreformation of the gold coin, the market price of standard gold bullion seldom\r\nexceeds £ 3:17:7 an ounce. Before the reformation of the gold coin, the market\r\nprice was always more or less above the mint price. Since that reformation, the\r\nmarket price has been constantly below the mint price. But that market price is\r\nthe same whether it is paid in gold or in silver coin. The late reformation of\r\nthe gold coin, therefore, has raised not only the value of the gold coin, but\r\nlikewise that of the silver coin in proportion to gold bullion, and probably,\r\ntoo, in proportion to all other commodities; though the price of the greater\r\npart of other commodities being influenced by so many other causes, the rise in\r\nthe value of either gold or silver coin in proportion to them may not be so\r\ndistinct and sensible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the English mint, a pound weight of standard silver bullion is coined into\r\nsixty-two shillings, containing, in the same manner, a pound weight of standard\r\nsilver. Five shillings and twopence an ounce, therefore, is said to be the mint\r\nprice of silver in England, or the quantity of silver coin which the mint gives\r\nin return for standard silver bullion. Before the reformation of the gold coin,\r\nthe market price of standard silver bullion was, upon different occasions, five\r\nshillings and fourpence, five shillings and fivepence, five shillings and\r\nsixpence, five shillings and sevenpence, and very often five shillings and\r\neightpence an ounce. Five shillings and sevenpence, however, seems to have been\r\nthe most common price. Since the reformation of the gold coin, the market price\r\nof standard silver bullion has fallen occasionally to five shillings and\r\nthreepence, five shillings and fourpence, and five shillings and fivepence an\r\nounce, which last price it has scarce ever exceeded. Though the market price of\r\nsilver bullion has fallen considerably since the reformation of the gold coin,\r\nit has not fallen so low as the mint price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the proportion between the different metals in the English coin, as copper\r\nis rated very much above its real value, so silver is rated somewhat below it.\r\nIn the market of Europe, in the French coin and in the Dutch coin, an ounce of\r\nfine gold exchanges for about fourteen ounces of fine silver. In the English\r\ncoin, it exchanges for about fifteen ounces, that is, for more silver than it\r\nis worth, according to the common estimation of Europe. But as the price of\r\ncopper in bars is not, even in England, raised by the high price of copper in\r\nEnglish coin, so the price of silver in bullion is not sunk by the low rate of\r\nsilver in English coin. Silver in bullion still preserves its proper proportion\r\nto gold, for the same reason that copper in bars preserves its proper\r\nproportion to silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUpon the reformation of the silver coin, in the reign of William III., the\r\nprice of silver bullion still continued to be somewhat above the mint price. Mr\r\nLocke imputed this high price to the permission of exporting silver bullion,\r\nand to the prohibition of exporting silver coin. This permission of exporting,\r\nhe said, rendered the demand for silver bullion greater than the demand for\r\nsilver coin. But the number of people who want silver coin for the common uses\r\nof buying and selling at home, is surely much greater than that of those who\r\nwant silver bullion either for the use of exportation or for any other use.\r\nThere subsists at present a like permission of exporting gold bullion, and a\r\nlike prohibition of exporting gold coin; and yet the price of gold bullion has\r\nfallen below the mint price. But in the English coin, silver was then, in the\r\nsame manner as now, under-rated in proportion to gold; and the gold coin (which\r\nat that time, too, was not supposed to require any reformation) regulated then,\r\nas well as now, the real value of the whole coin. As the reformation of the\r\nsilver coin did not then reduce the price of silver bullion to the mint price,\r\nit is not very probable that a like reformation will do so now.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWere the silver coin brought back as near to its standard weight as the gold, a\r\nguinea, it is probable, would, according to the present proportion, exchange\r\nfor more silver in coin than it would purchase in bullion. The silver coin\r\ncontaining its full standard weight, there would in this case, be a profit in\r\nmelting it down, in order, first to sell the bullion for gold coin, and\r\nafterwards to exchange this gold coin for silver coin, to be melted down in the\r\nsame manner. Some alteration in the present proportion seems to be the only\r\nmethod of preventing this inconveniency.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inconveniency, perhaps, would be less, if silver was rated in the coin as\r\nmuch above its proper proportion to gold as it is at present rated below it,\r\nprovided it was at the same time enacted, that silver should not be a legal\r\ntender for more than the change of a guinea, in the same manner as copper is\r\nnot a legal tender for more than the change of a shilling. No creditor could,\r\nin this case, be cheated in consequence of the high valuation of silver in\r\ncoin; as no creditor can at present be cheated in consequence of the high\r\nvaluation of copper. The bankers only would suffer by this regulation. When a\r\nrun comes upon them, they sometimes endeavour to gain time, by paying in\r\nsixpences, and they would be precluded by this regulation from this\r\ndiscreditable method of evading immediate payment. They would be obliged, in\r\nconsequence, to keep at all times in their coffers a greater quantity of cash\r\nthan at present; and though this might, no doubt, be a considerable\r\ninconveniency to them, it would, at the same time, be a considerable security\r\nto their creditors.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThree pounds seventeen shillings and tenpence halfpenny (the mint price of\r\ngold) certainly does not contain, even in our present excellent gold coin, more\r\nthan an ounce of standard gold, and it may be thought, therefore, should not\r\npurchase more standard bullion. But gold in coin is more convenient than gold\r\nin bullion; and though, in England, the coinage is free, yet the gold which is\r\ncarried in bullion to the mint, can seldom be returned in coin to the owner\r\ntill after a delay of several weeks. In the present hurry of the mint, it could\r\nnot be returned till after a delay of several months. This delay is equivalent\r\nto a small duty, and renders gold in coin somewhat more valuable than an equal\r\nquantity of gold in bullion. If, in the English coin, silver was rated\r\naccording to its proper proportion to gold, the price of silver bullion would\r\nprobably fall below the mint price, even without any reformation of the silver\r\ncoin; the value even of the present worn and defaced silver coin being\r\nregulated by the value of the excellent gold coin for which it can be changed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA small seignorage or duty upon the coinage of both gold and silver, would\r\nprobably increase still more the superiority of those metals in coin above an\r\nequal quantity of either of them in bullion. The coinage would, in this case,\r\nincrease the value of the metal coined in proportion to the extent of this\r\nsmall duty, for the same reason that the fashion increases the value of plate\r\nin proportion to the price of that fashion. The superiority of coin above\r\nbullion would prevent the melting down of the coin, and would discourage its\r\nexportation. If, upon any public exigency, it should become necessary to export\r\nthe coin, the greater part of it would soon return again, of its own accord.\r\nAbroad, it could sell only for its weight in bullion. At home, it would buy\r\nmore than that weight. There would be a profit, therefore, in bringing it home\r\nagain. In France, a seignorage of about eight per cent. is imposed upon the\r\ncoinage, and the French coin, when exported, is said to return home again, of\r\nits own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe occasional fluctuations in the market price of gold and silver bullion\r\narise from the same causes as the like fluctuations in that of all other\r\ncommodities. The frequent loss of those metals from various accidents by sea\r\nand by land, the continual waste of them in gilding and plating, in lace and\r\nembroidery, in the wear and tear of coin, and in that of plate, require, in all\r\ncountries which possess no mines of their own, a continual importation, in\r\norder to repair this loss and this waste. The merchant importers, like all\r\nother merchants, we may believe, endeavour, as well as they can, to suit their\r\noccasional importations to what they judge is likely to be the immediate\r\ndemand. With all their attention, however, they sometimes overdo the business,\r\nand sometimes underdo it. When they import more bullion than is wanted, rather\r\nthan incur the risk and trouble of exporting it again, they are sometimes\r\nwilling to sell a part of it for something less than the ordinary or average\r\nprice. When, on the other hand, they import less than is wanted, they get\r\nsomething more than this price. But when, under all those occasional\r\nfluctuations, the market price either of gold or silver bullion continues for\r\nseveral years together steadily and constantly, either more or less above, or\r\nmore or less below the mint price, we may be assured that this steady and\r\nconstant, either superiority or inferiority of price, is the effect of\r\nsomething in the state of the coin, which, at that time, renders a certain\r\nquantity of coin either of more value or of less value than the precise\r\nquantity of bullion which it ought to contain. The constancy and steadiness of\r\nthe effect supposes a proportionable constancy and steadiness in the cause.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe money of any particular country is, at any particular time and place, more\r\nor less an accurate measure or value, according as the current coin is more or\r\nless exactly agreeable to its standard, or contains more or less exactly the\r\nprecise quantity of pure gold or pure silver which it ought to contain. If in\r\nEngland, for example, forty-four guineas and a half contained exactly a pound\r\nweight of standard gold, or eleven ounces of fine gold, and one ounce of alloy,\r\nthe gold coin of England would be as accurate a measure of the actual value of\r\ngoods at any particular time and place as the nature of the thing would admit.\r\nBut if, by rubbing and wearing, forty-four guineas and a half generally contain\r\nless than a pound weight of standard gold, the diminution, however, being\r\ngreater in some pieces than in others, the measure of value comes to be liable\r\nto the same sort of uncertainty to which all other weights and measures are\r\ncommonly exposed. As it rarely happens that these are exactly agreeable to\r\ntheir standard, the merchant adjusts the price of his goods as well as he can,\r\nnot to what those weights and measures ought to be, but to what, upon an\r\naverage, he finds, by experience, they actually are. In consequence of a like\r\ndisorder in the coin, the price of goods comes, in the same manner, to be\r\nadjusted, not to the quantity of pure gold or silver which the coin ought to\r\ncontain, but to that which, upon an average, it is found, by experience, it\r\nactually does contain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the money price of goods, it is to be observed, I understand always the\r\nquantity of pure gold or silver for which they are sold, without any regard to\r\nthe denomination of the coin. Six shillings and eight pence, for example, in\r\nthe time of Edward I., I consider as the same money price with a pound sterling\r\nin the present times, because it contained, as nearly as we can judge, the same\r\nquantity of pure silver.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap08\"\u003e\u003c/a\u003eCHAPTER VI.\u003cbr\u003e\r\nOF THE COMPONENT PART OF THE PRICE OF COMMODITIES.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nIn that early and rude state of society which precedes both the accumulation of\r\nstock and the appropriation of land, the proportion between the quantities of\r\nlabour necessary for acquiring different objects, seems to be the only\r\ncircumstance which can afford any rule for exchanging them for one another. If\r\namong a nation of hunters, for example, it usually costs twice the labour to\r\nkill a beaver which it does to kill a deer, one beaver should naturally\r\nexchange for or be worth two deer. It is natural that what is usually the\r\nproduce of two days or two hours labour, should be worth double of what is\r\nusually the produce of one day’s or one hour’s labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the one species of labour should be more severe than the other, some\r\nallowance will naturally be made for this superior hardship; and the produce of\r\none hour’s labour in the one way may frequently exchange for that of two\r\nhour’s labour in the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOr if the one species of labour requires an uncommon degree of dexterity and\r\ningenuity, the esteem which men have for such talents, will naturally give a\r\nvalue to their produce, superior to what would be due to the time employed\r\nabout it. Such talents can seldom be acquired but in consequence of long\r\napplication, and the superior value of their produce may frequently be no more\r\nthan a reasonable compensation for the time and labour which must be spent in\r\nacquiring them. In the advanced state of society, allowances of this kind, for\r\nsuperior hardship and superior skill, are commonly made in the wages of labour;\r\nand something of the same kind must probably have taken place in its earliest\r\nand rudest period.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this state of things, the whole produce of labour belongs to the labourer;\r\nand the quantity of labour commonly employed in acquiring or producing any\r\ncommodity, is the only circumstance which can regulate the quantity of labour\r\nwhich it ought commonly to purchase, command, or exchange for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs soon as stock has accumulated in the hands of particular persons, some of\r\nthem will naturally employ it in setting to work industrious people, whom they\r\nwill supply with materials and subsistence, in order to make a profit by the\r\nsale of their work, or by what their labour adds to the value of the materials.\r\nIn exchanging the complete manufacture either for money, for labour, or for\r\nother goods, over and above what may be sufficient to pay the price of the\r\nmaterials, and the wages of the workmen, something must be given for the\r\nprofits of the undertaker of the work, who hazards his stock in this adventure.\r\nThe value which the workmen add to the materials, therefore, resolves itself in\r\nthis case into two parts, of which the one pays their wages, the other the\r\nprofits of their employer upon the whole stock of materials and wages which he\r\nadvanced. He could have no interest to employ them, unless he expected from the\r\nsale of their work something more than what was sufficient to replace his stock\r\nto him; and he could have no interest to employ a great stock rather than a\r\nsmall one, unless his profits were to bear some proportion to the extent of his\r\nstock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe profits of stock, it may perhaps be thought, are only a different name for\r\nthe wages of a particular sort of labour, the labour of inspection and\r\ndirection. They are, however, altogether different, are regulated by quite\r\ndifferent principles, and bear no proportion to the quantity, the hardship, or\r\nthe ingenuity of this supposed labour of inspection and direction. They are\r\nregulated altogether by the value of the stock employed, and are greater or\r\nsmaller in proportion to the extent of this stock. Let us suppose, for example,\r\nthat in some particular place, where the common annual profits of manufacturing\r\nstock are ten per cent. there are two different manufactures, in each of which\r\ntwenty workmen are employed, at the rate of fifteen pounds a year each, or at\r\nthe expense of three hundred a-year in each manufactory. Let us suppose, too,\r\nthat the coarse materials annually wrought up in the one cost only seven\r\nhundred pounds, while the finer materials in the other cost seven thousand. The\r\ncapital annually employed in the one will, in this case, amount only to one\r\nthousand pounds; whereas that employed in the other will amount to seven\r\nthousand three hundred pounds. At the rate of ten per cent. therefore, the\r\nundertaker of the one will expect a yearly profit of about one hundred pounds\r\nonly; while that of the other will expect about seven hundred and thirty\r\npounds. But though their profits are so very different, their labour of\r\ninspection and direction may be either altogether or very nearly the same. In\r\nmany great works, almost the whole labour of this kind is committed to some\r\nprincipal clerk. His wages properly express the value of this labour of\r\ninspection and direction. Though in settling them some regard is had commonly,\r\nnot only to his labour and skill, but to the trust which is reposed in him, yet\r\nthey never bear any regular proportion to the capital of which he oversees the\r\nmanagement; and the owner of this capital, though he is thus discharged of\r\nalmost all labour, still expects that his profit should bear a regular\r\nproportion to his capital. In the price of commodities, therefore, the profits\r\nof stock constitute a component part altogether different from the wages of\r\nlabour, and regulated by quite different principles.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this state of things, the whole produce of labour does not always belong to\r\nthe labourer. He must in most cases share it with the owner of the stock which\r\nemploys him. Neither is the quantity of labour commonly employed in acquiring\r\nor producing any commodity, the only circumstance which can regulate the\r\nquantity which it ought commonly to purchase, command or exchange for. An\r\nadditional quantity, it is evident, must be due for the profits of the stock\r\nwhich advanced the wages and furnished the materials of that labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs soon as the land of any country has all become private property, the\r\nlandlords, like all other men, love to reap where they never sowed, and demand\r\na rent even for its natural produce. The wood of the forest, the grass of the\r\nfield, and all the natural fruits of the earth, which, when land was in common,\r\ncost the labourer only the trouble of gathering them, come, even to him, to\r\nhave an additional price fixed upon them. He must then pay for the licence to\r\ngather them, and must give up to the landlord a portion of what his labour\r\neither collects or produces. This portion, or, what comes to the same thing,\r\nthe price of this portion, constitutes the rent of land, and in the price of\r\nthe greater part of commodities, makes a third component part.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe real value of all the different component parts of price, it must be\r\nobserved, is measured by the quantity of labour which they can, each of them,\r\npurchase or command. Labour measures the value, not only of that part of price\r\nwhich resolves itself into labour, but of that which resolves itself into rent,\r\nand of that which resolves itself into profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every society, the price of every commodity finally resolves itself into\r\nsome one or other, or all of those three parts; and in every improved society,\r\nall the three enter, more or less, as component parts, into the price of the\r\nfar greater part of commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the price of corn, for example, one part pays the rent of the landlord,\r\nanother pays the wages or maintenance of the labourers and labouring cattle\r\nemployed in producing it, and the third pays the profit of the farmer. These\r\nthree parts seem either immediately or ultimately to make up the whole price of\r\ncorn. A fourth part, it may perhaps be thought is necessary for replacing the\r\nstock of the farmer, or for compensating the wear and tear of his labouring\r\ncattle, and other instruments of husbandry. But it must be considered, that the\r\nprice of any instrument of husbandry, such as a labouring horse, is itself made\r\nup of the same time parts; the rent of the land upon which he is reared, the\r\nlabour of tending and rearing him, and the profits of the farmer, who advances\r\nboth the rent of this land, and the wages of this labour. Though the price of\r\nthe corn, therefore, may pay the price as well as the maintenance of the horse,\r\nthe whole price still resolves itself, either immediately or ultimately, into\r\nthe same three parts of rent, labour, and profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the price of flour or meal, we must add to the price of the corn, the\r\nprofits of the miller, and the wages of his servants; in the price of bread,\r\nthe profits of the baker, and the wages of his servants; and in the price of\r\nboth, the labour of transporting the corn from the house of the farmer to that\r\nof the miller, and from that of the miller to that of the baker, together with\r\nthe profits of those who advance the wages of that labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of flax resolves itself into the same three parts as that of corn. In\r\nthe price of linen we must add to this price the wages of the flax-dresser, of\r\nthe spinner, of the weaver, of the bleacher, etc. together with the profits of\r\ntheir respective employers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs any particular commodity comes to be more manufactured, that part of the\r\nprice which resolves itself into wages and profit, comes to be greater in\r\nproportion to that which resolves itself into rent. In the progress of the\r\nmanufacture, not only the number of profits increase, but every subsequent\r\nprofit is greater than the foregoing; because the capital from which it is\r\nderived must always be greater. The capital which employs the weavers, for\r\nexample, must be greater than that which employs the spinners; because it not\r\nonly replaces that capital with its profits, but pays, besides, the wages of\r\nthe weavers: and the profits must always bear some proportion to the capital.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the most improved societies, however, there are always a few commodities of\r\nwhich the price resolves itself into two parts only: the wages of labour, and\r\nthe profits of stock; and a still smaller number, in which it consists\r\naltogether in the wages of labour. In the price of sea-fish, for example, one\r\npart pays the labour of the fisherman, and the other the profits of the capital\r\nemployed in the fishery. Rent very seldom makes any part of it, though it does\r\nsometimes, as I shall shew hereafter. It is otherwise, at least through the\r\ngreater part of Europe, in river fisheries. A salmon fishery pays a rent; and\r\nrent, though it cannot well be called the rent of land, makes a part of the\r\nprice of a salmon, as well as wares and profit. In some parts of Scotland, a\r\nfew poor people make a trade of gathering, along the sea-shore, those little\r\nvariegated stones commonly known by the name of Scotch pebbles. The price which\r\nis paid to them by the stone-cutter, is altogether the wages of their labour;\r\nneither rent nor profit makes any part of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the whole price of any commodity must still finally resolve itself into\r\nsome one or other or all of those three parts; as whatever part of it remains\r\nafter paying the rent of the land, and the price of the whole labour employed\r\nin raising, manufacturing, and bringing it to market, must necessarily be\r\nprofit to somebody.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the price or exchangeable value of every particular commodity, taken\r\nseparately, resolves itself into some one or other, or all of those three\r\nparts; so that of all the commodities which compose the whole annual produce of\r\nthe labour of every country, taken complexly, must resolve itself into the same\r\nthree parts, and be parcelled out among different inhabitants of the country,\r\neither as the wages of their labour, the profits of their stock, or the rent of\r\ntheir land. The whole of what is annually either collected or produced by the\r\nlabour of every society, or, what comes to the same thing, the whole price of\r\nit, is in this manner originally distributed among some of its different\r\nmembers. Wages, profit, and rent, are the three original sources of all\r\nrevenue, as well as of all exchangeable value. All other revenue is ultimately\r\nderived from some one or other of these.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhoever derives his revenue from a fund which is his own, must draw it either\r\nfrom his labour, from his stock, or from his land. The revenue derived from\r\nlabour is called wages; that derived from stock, by the person who manages or\r\nemploys it, is called profit; that derived from it by the person who does not\r\nemploy it himself, but lends it to another, is called the interest or the use\r\nof money. It is the compensation which the borrower pays to the lender, for the\r\nprofit which he has an opportunity of making by the use of the money. Part of\r\nthat profit naturally belongs to the borrower, who runs the risk and takes the\r\ntrouble of employing it, and part to the lender, who affords him the\r\nopportunity of making this profit. The interest of money is always a derivative\r\nrevenue, which, if it is not paid from the profit which is made by the use of\r\nthe money, must be paid from some other source of revenue, unless perhaps the\r\nborrower is a spendthrift, who contracts a second debt in order to pay the\r\ninterest of the first. The revenue which proceeds altogether from land, is\r\ncalled rent, and belongs to the landlord. The revenue of the farmer is derived\r\npartly from his labour, and partly from his stock. To him, land is only the\r\ninstrument which enables him to earn the wages of this labour, and to make the\r\nprofits of this stock. All taxes, and all the revenue which is founded upon\r\nthem, all salaries, pensions, and annuities of every kind, are ultimately\r\nderived from some one or other of those three original sources of revenue, and\r\nare paid either immediately or mediately from the wages of labour, the profits\r\nof stock, or the rent of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen those three different sorts of revenue belong to different persons, they\r\nare readily distinguished; but when they belong to the same, they are sometimes\r\nconfounded with one another, at least in common language.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA gentleman who farms a part of his own estate, after paying the expense of\r\ncultivation, should gain both the rent of the landlord and the profit of the\r\nfarmer. He is apt to denominate, however, his whole gain, profit, and thus\r\nconfounds rent with profit, at least in common language. The greater part of\r\nour North American and West Indian planters are in this situation. They farm,\r\nthe greater part of them, their own estates: and accordingly we seldom hear of\r\nthe rent of a plantation, but frequently of its profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCommon farmers seldom employ any overseer to direct the general operations of\r\nthe farm. They generally, too, work a good deal with their own hands, as\r\nploughmen, harrowers, etc. What remains of the crop, after paying the rent,\r\ntherefore, should not only replace to them their stock employed in cultivation,\r\ntogether with its ordinary profits, but pay them the wages which are due to\r\nthem, both as labourers and overseers. Whatever remains, however, after paying\r\nthe rent and keeping up the stock, is called profit. But wages evidently make a\r\npart of it. The farmer, by saving these wages, must necessarily gain them.\r\nWages, therefore, are in this case confounded with profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn independent manufacturer, who has stock enough both to purchase materials,\r\nand to maintain himself till he can carry his work to market, should gain both\r\nthe wages of a journeyman who works under a master, and the profit which that\r\nmaster makes by the sale of that journeyman’s work. His whole gains,\r\nhowever, are commonly called profit, and wages are, in this case, too,\r\nconfounded with profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA gardener who cultivates his own garden with his own hands, unites in his own\r\nperson the three different characters, of landlord, farmer, and labourer. His\r\nproduce, therefore, should pay him the rent of the first, the profit of the\r\nsecond, and the wages of the third. The whole, however, is commonly considered\r\nas the earnings of his labour. Both rent and profit are, in this case,\r\nconfounded with wages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs in a civilized country there are but few commodities of which the\r\nexchangeable value arises from labour only, rent and profit contributing\r\nlargely to that of the far greater part of them, so the annual produce of its\r\nlabour will always be sufficient to purchase or command a much greater quantity\r\nof labour than what was employed in raising, preparing, and bringing that\r\nproduce to market. If the society were annually to employ all the labour which\r\nit can annually purchase, as the quantity of labour would increase greatly\r\nevery year, so the produce of every succeeding year would be of vastly greater\r\nvalue than that of the foregoing. But there is no country in which the whole\r\nannual produce is employed in maintaining the industrious. The idle everywhere\r\nconsume a great part of it; and, according to the different proportions in\r\nwhich it is annually divided between those two different orders of people, its\r\nordinary or average value must either annually increase or diminish, or\r\ncontinue the same from one year to another.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap09\"\u003e\u003c/a\u003eCHAPTER VII.\u003cbr\u003e\r\nOF THE NATURAL AND MARKET PRICE OF COMMODITIES.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThere is in every society or neighbourhood an ordinary or average rate, both of\r\nwages and profit, in every different employment of labour and stock. This rate\r\nis naturally regulated, as I shall shew hereafter, partly by the general\r\ncircumstances of the society, their riches or poverty, their advancing,\r\nstationary, or declining condition, and partly by the particular nature of each\r\nemployment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere is likewise in every society or neighbourhood an ordinary or average rate\r\nof rent, which is regulated, too, as I shall shew hereafter, partly by the\r\ngeneral circumstances of the society or neighbourhood in which the land is\r\nsituated, and partly by the natural or improved fertility of the land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese ordinary or average rates may be called the natural rates of wages,\r\nprofit and rent, at the time and place in which they commonly prevail.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the price of any commodity is neither more nor less than what is\r\nsufficient to pay the rent of the land, the wages of the labour, and the\r\nprofits of the stock employed in raising, preparing, and bringing it to market,\r\naccording to their natural rates, the commodity is then sold for what may be\r\ncalled its natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe commodity is then sold precisely for what it is worth, or for what it\r\nreally costs the person who brings it to market; for though, in common\r\nlanguage, what is called the prime cost of any commodity does not comprehend\r\nthe profit of the person who is to sell it again, yet, if he sells it at a\r\nprice which does not allow him the ordinary rate of profit in his\r\nneighbourhood, he is evidently a loser by the trade; since, by employing his\r\nstock in some other way, he might have made that profit. His profit, besides,\r\nis his revenue, the proper fund of his subsistence. As, while he is preparing\r\nand bringing the goods to market, he advances to his workmen their wages, or\r\ntheir subsistence; so he advances to himself, in the same manner, his own\r\nsubsistence, which is generally suitable to the profit which he may reasonably\r\nexpect from the sale of his goods. Unless they yield him this profit,\r\ntherefore, they do not repay him what they may very properly be said to have\r\nreally cost him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the price, therefore, which leaves him this profit, is not always the\r\nlowest at which a dealer may sometimes sell his goods, it is the lowest at\r\nwhich he is likely to sell them for any considerable time; at least where there\r\nis perfect liberty, or where he may change his trade as often as he pleases.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe actual price at which any commodity is commonly sold, is called its market\r\nprice. It may either be above, or below, or exactly the same with its natural\r\nprice.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe market price of every particular commodity is regulated by the proportion\r\nbetween the quantity which is actually brought to market, and the demand of\r\nthose who are willing to pay the natural price of the commodity, or the whole\r\nvalue of the rent, labour, and profit, which must be paid in order to bring it\r\nthither. Such people may be called the effectual demanders, and their demand\r\nthe effectual demand; since it maybe sufficient to effectuate the bringing of\r\nthe commodity to market. It is different from the absolute demand. A very poor\r\nman may be said, in some sense, to have a demand for a coach and six; he might\r\nlike to have it; but his demand is not an effectual demand, as the commodity\r\ncan never be brought to market in order to satisfy it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the quantity of any commodity which is brought to market falls short of\r\nthe effectual demand, all those who are willing to pay the whole value of the\r\nrent, wages, and profit, which must be paid in order to bring it thither,\r\ncannot be supplied with the quantity which they want. Rather than want it\r\naltogether, some of them will be willing to give more. A competition will\r\nimmediately begin among them, and the market price will rise more or less above\r\nthe natural price, according as either the greatness of the deficiency, or the\r\nwealth and wanton luxury of the competitors, happen to animate more or less the\r\neagerness of the competition. Among competitors of equal wealth and luxury, the\r\nsame deficiency will generally occasion a more or less eager competition,\r\naccording as the acquisition of the commodity happens to be of more or less\r\nimportance to them. Hence the exorbitant price of the necessaries of life\r\nduring the blockade of a town, or in a famine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the quantity brought to market exceeds the effectual demand, it cannot be\r\nall sold to those who are willing to pay the whole value of the rent, wages,\r\nand profit, which must be paid in order to bring it thither. Some part must be\r\nsold to those who are willing to pay less, and the low price which they give\r\nfor it must reduce the price of the whole. The market price will sink more or\r\nless below the natural price, according as the greatness of the excess\r\nincreases more or less the competition of the sellers, or according as it\r\nhappens to be more or less important to them to get immediately rid of the\r\ncommodity. The same excess in the importation of perishable, will occasion a\r\nmuch greater competition than in that of durable commodities; in the\r\nimportation of oranges, for example, than in that of old iron.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the quantity brought to market is just sufficient to supply the effectual\r\ndemand, and no more, the market price naturally comes to be either exactly, or\r\nas nearly as can be judged of, the same with the natural price. The whole\r\nquantity upon hand can be disposed of for this price, and can not be disposed\r\nof for more. The competition of the different dealers obliges them all to\r\naccept of this price, but does not oblige them to accept of less.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of every commodity brought to market naturally suits itself to the\r\neffectual demand. It is the interest of all those who employ their land,\r\nlabour, or stock, in bringing any commodity to market, that the quantity never\r\nshould exceed the effectual demand; and it is the interest of all other people\r\nthat it never should fall short of that demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf at any time it exceeds the effectual demand, some of the component parts of\r\nits price must be paid below their natural rate. If it is rent, the interest of\r\nthe landlords will immediately prompt them to withdraw a part of their land;\r\nand if it is wages or profit, the interest of the labourers in the one case,\r\nand of their employers in the other, will prompt them to withdraw a part of\r\ntheir labour or stock, from this employment. The quantity brought to market\r\nwill soon be no more than sufficient to supply the effectual demand. All the\r\ndifferent parts of its price will rise to their natural rate, and the whole\r\nprice to its natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, on the contrary, the quantity brought to market should at any time fall\r\nshort of the effectual demand, some of the component parts of its price must\r\nrise above their natural rate. If it is rent, the interest of all other\r\nlandlords will naturally prompt them to prepare more land for the raising of\r\nthis commodity; if it is wages or profit, the interest of all other labourers\r\nand dealers will soon prompt them to employ more labour and stock in preparing\r\nand bringing it to market. The quantity brought thither will soon be sufficient\r\nto supply the effectual demand. All the different parts of its price will soon\r\nsink to their natural rate, and the whole price to its natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe natural price, therefore, is, as it were, the central price, to which the\r\nprices of all commodities are continually gravitating. Different accidents may\r\nsometimes keep them suspended a good deal above it, and sometimes force them\r\ndown even somewhat below it. But whatever may be the obstacles which hinder\r\nthem from settling in this centre of repose and continuance, they are\r\nconstantly tending towards it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole quantity of industry annually employed in order to bring any\r\ncommodity to market, naturally suits itself in this manner to the effectual\r\ndemand. It naturally aims at bringing always that precise quantity thither\r\nwhich may be sufficient to supply, and no more than supply, that demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut, in some employments, the same quantity of industry will, in different\r\nyears, produce very different quantities of commodities; while, in others, it\r\nwill produce always the same, or very nearly the same. The same number of\r\nlabourers in husbandry will, in different years, produce very different\r\nquantities of corn, wine, oil, hops, etc. But the same number of spinners or\r\nweavers will every year produce the same, or very nearly the same, quantity of\r\nlinen and woollen cloth. It is only the average produce of the one species of\r\nindustry which can be suited, in any respect, to the effectual demand; and as\r\nits actual produce is frequently much greater, and frequently much less, than\r\nits average produce, the quantity of the commodities brought to market will\r\nsometimes exceed a good deal, and sometimes fall short a good deal, of the\r\neffectual demand. Even though that demand, therefore, should continue always\r\nthe same, their market price will be liable to great fluctuations, will\r\nsometimes fall a good deal below, and sometimes rise a good deal above, their\r\nnatural price. In the other species of industry, the produce of equal\r\nquantities of labour being always the same, or very nearly the same, it can be\r\nmore exactly suited to the effectual demand. While that demand continues the\r\nsame, therefore, the market price of the commodities is likely to do so too,\r\nand to be either altogether, or as nearly as can be judged of, the same with\r\nthe natural price. That the price of linen and woollen cloth is liable neither\r\nto such frequent, nor to such great variations, as the price of corn, every\r\nman’s experience will inform him. The price of the one species of\r\ncommodities varies only with the variations in the demand; that of the other\r\nvaries not only with the variations in the demand, but with the much greater,\r\nand more frequent, variations in the quantity of what is brought to market, in\r\norder to supply that demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe occasional and temporary fluctuations in the market price of any commodity\r\nfall chiefly upon those parts of its price which resolve themselves into wages\r\nand profit. That part which resolves itself into rent is less affected by them.\r\nA rent certain in money is not in the least affected by them, either in its\r\nrate or in its value. A rent which consists either in a certain proportion, or\r\nin a certain quantity, of the rude produce, is no doubt affected in its yearly\r\nvalue by all the occasional and temporary fluctuations in the market price of\r\nthat rude produce; but it is seldom affected by them in its yearly rate. In\r\nsettling the terms of the lease, the landlord and farmer endeavour, according\r\nto their best judgment, to adjust that rate, not to the temporary and\r\noccasional, but to the average and ordinary price of the produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch fluctuations affect both the value and the rate, either of wages or of\r\nprofit, according as the market happens to be either overstocked or\r\nunderstocked with commodities or with labour, with work done, or with work to\r\nbe done. A public mourning raises the price of black cloth (with which the\r\nmarket is almost always understocked upon such occasions), and augments the\r\nprofits of the merchants who possess any considerable quantity of it. It has no\r\neffect upon the wages of the weavers. The market is understocked with\r\ncommodities, not with labour, with work done, not with work to be done. It\r\nraises the wages of journeymen tailors. The market is here understocked with\r\nlabour. There is an effectual demand for more labour, for more work to be done,\r\nthan can be had. It sinks the price of coloured silks and cloths, and thereby\r\nreduces the profits of the merchants who have any considerable quantity of them\r\nupon hand. It sinks, too, the wages of the workmen employed in preparing such\r\ncommodities, for which all demand is stopped for six months, perhaps for a\r\ntwelvemonth. The market is here overstocked both with commodities and with\r\nlabour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the market price of every particular commodity is in this manner\r\ncontinually gravitating, if one may say so, towards the natural price; yet\r\nsometimes particular accidents, sometimes natural causes, and sometimes\r\nparticular regulations of policy, may, in many commodities, keep up the market\r\nprice, for a long time together, a good deal above the natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, by an increase in the effectual demand, the market price of some\r\nparticular commodity happens to rise a good deal above the natural price, those\r\nwho employ their stocks in supplying that market, are generally careful to\r\nconceal this change. If it was commonly known, their great profit would tempt\r\nso many new rivals to employ their stocks in the same way, that, the effectual\r\ndemand being fully supplied, the market price would soon be reduced to the\r\nnatural price, and, perhaps, for some time even below it. If the market is at a\r\ngreat distance from the residence of those who supply it, they may sometimes be\r\nable to keep the secret for several years together, and may so long enjoy their\r\nextraordinary profits without any new rivals. Secrets of this kind, however, it\r\nmust be acknowledged, can seldom be long kept; and the extraordinary profit can\r\nlast very little longer than they are kept.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecrets in manufactures are capable of being longer kept than secrets in trade.\r\nA dyer who has found the means of producing a particular colour with materials\r\nwhich cost only half the price of those commonly made use of, may, with good\r\nmanagement, enjoy the advantage of his discovery as long as he lives, and even\r\nleave it as a legacy to his posterity. His extraordinary gains arise from the\r\nhigh price which is paid for his private labour. They properly consist in the\r\nhigh wages of that labour. But as they are repeated upon every part of his\r\nstock, and as their whole amount bears, upon that account, a regular proportion\r\nto it, they are commonly considered as extraordinary profits of stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch enhancements of the market price are evidently the effects of particular\r\naccidents, of which, however, the operation may sometimes last for many years\r\ntogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome natural productions require such a singularity of soil and situation, that\r\nall the land in a great country, which is fit for producing them, may not be\r\nsufficient to supply the effectual demand. The whole quantity brought to\r\nmarket, therefore, may be disposed of to those who are willing to give more\r\nthan what is sufficient to pay the rent of the land which produced them,\r\ntogether with the wages of the labour and the profits of the stock which were\r\nemployed in preparing and bringing them to market, according to their natural\r\nrates. Such commodities may continue for whole centuries together to be sold at\r\nthis high price; and that part of it which resolves itself into the rent of\r\nland, is in this case the part which is generally paid above its natural rate.\r\nThe rent of the land which affords such singular and esteemed productions, like\r\nthe rent of some vineyards in France of a peculiarly happy soil and situation,\r\nbears no regular proportion to the rent of other equally fertile and equally\r\nwell cultivated land in its neighbourhood. The wages of the labour, and the\r\nprofits of the stock employed in bringing such commodities to market, on the\r\ncontrary, are seldom out of their natural proportion to those of the other\r\nemployments of labour and stock in their neighbourhood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch enhancements of the market price are evidently the effect of natural\r\ncauses, which may hinder the effectual demand from ever being fully supplied,\r\nand which may continue, therefore, to operate for ever.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA monopoly granted either to an individual or to a trading company, has the\r\nsame effect as a secret in trade or manufactures. The monopolists, by keeping\r\nthe market constantly understocked by never fully supplying the effectual\r\ndemand, sell their commodities much above the natural price, and raise their\r\nemoluments, whether they consist in wages or profit, greatly above their\r\nnatural rate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of monopoly is upon every occasion the highest which can be got. The\r\nnatural price, or the price of free competition, on the contrary, is the lowest\r\nwhich can be taken, not upon every occasion indeed, but for any considerable\r\ntime together. The one is upon every occasion the highest which can be squeezed\r\nout of the buyers, or which it is supposed they will consent to give; the other\r\nis the lowest which the sellers can commonly afford to take, and at the same\r\ntime continue their business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exclusive privileges of corporations, statutes of apprenticeship, and all\r\nthose laws which restrain in particular employments, the competition to a\r\nsmaller number than might otherwise go into them, have the same tendency,\r\nthough in a less degree. They are a sort of enlarged monopolies, and may\r\nfrequently, for ages together, and in whole classes of employments, keep up the\r\nmarket price of particular commodities above the natural price, and maintain\r\nboth the wages of the labour and the profits of the stock employed about them\r\nsomewhat above their natural rate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch enhancements of the market price may last as long as the regulations of\r\npolicy which give occasion to them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe market price of any particular commodity, though it may continue long\r\nabove, can seldom continue long below, its natural price. Whatever part of it\r\nwas paid below the natural rate, the persons whose interest it affected would\r\nimmediately feel the loss, and would immediately withdraw either so much land\r\nor so much labour, or so much stock, from being employed about it, that the\r\nquantity brought to market would soon be no more than sufficient to supply the\r\neffectual demand. Its market price, therefore, would soon rise to the natural\r\nprice; this at least would be the case where there was perfect liberty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same statutes of apprenticeship and other corporation laws, indeed, which,\r\nwhen a manufacture is in prosperity, enable the workman to raise his wages a\r\ngood deal above their natural rate, sometimes oblige him, when it decays, to\r\nlet them down a good deal below it. As in the one case they exclude many people\r\nfrom his employment, so in the other they exclude him from many employments.\r\nThe effect of such regulations, however, is not near so durable in sinking the\r\nworkman’s wages below, as in raising them above their natural rate. Their\r\noperation in the one way may endure for many centuries, but in the other it can\r\nlast no longer than the lives of some of the workmen who were bred to the\r\nbusiness in the time of its prosperity. When they are gone, the number of those\r\nwho are afterwards educated to the trade will naturally suit itself to the\r\neffectual demand. The policy must be as violent as that of Indostan or ancient\r\nEgypt (where every man was bound by a principle of religion to follow the\r\noccupation of his father, and was supposed to commit the most horrid sacrilege\r\nif he changed it for another), which can in any particular employment, and for\r\nseveral generations together, sink either the wages of labour or the profits of\r\nstock below their natural rate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis is all that I think necessary to be observed at present concerning the\r\ndeviations, whether occasional or permanent, of the market price of commodities\r\nfrom the natural price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe natural price itself varies with the natural rate of each of its component\r\nparts, of wages, profit, and rent; and in every society this rate varies\r\naccording to their circumstances, according to their riches or poverty, their\r\nadvancing, stationary, or declining condition. I shall, in the four following\r\nchapters, endeavour to explain, as fully and distinctly as I can, the causes of\r\nthose different variations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, I shall endeavour to explain what are the circumstances which naturally\r\ndetermine the rate of wages, and in what manner those circumstances are\r\naffected by the riches or poverty, by the advancing, stationary, or declining\r\nstate of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, I shall endeavour to shew what are the circumstances which naturally\r\ndetermine the rate of profit; and in what manner, too, those circumstances are\r\naffected by the like variations in the state of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough pecuniary wages and profit are very different in the different\r\nemployments of labour and stock; yet a certain proportion seems commonly to\r\ntake place between both the pecuniary wages in all the different employments of\r\nlabour, and the pecuniary profits in all the different employments of stock.\r\nThis proportion, it will appear hereafter, depends partly upon the nature of\r\nthe different employments, and partly upon the different laws and policy of the\r\nsociety in which they are carried on. But though in many respects dependent\r\nupon the laws and policy, this proportion seems to be little affected by the\r\nriches or poverty of that society, by its advancing, stationary, or declining\r\ncondition, but to remain the same, or very nearly the same, in all those\r\ndifferent states. I shall, in the third place, endeavour to explain all the\r\ndifferent circumstances which regulate this proportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the fourth and last place, I shall endeavour to shew what are the\r\ncircumstances which regulate the rent of land, and which either raise or lower\r\nthe real price of all the different substances which it produces.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap10\"\u003e\u003c/a\u003eCHAPTER VIII.\u003cbr\u003e\r\nOF THE WAGES OF LABOUR.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of labour constitutes the natural recompence or wages of labour. In\r\nthat original state of things which precedes both the appropriation of land and\r\nthe accumulation of stock, the whole produce of labour belongs to the labourer.\r\nHe has neither landlord nor master to share with him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHad this state continued, the wages of labour would have augmented with all\r\nthose improvements in its productive powers, to which the division of labour\r\ngives occasion. All things would gradually have become cheaper. They would have\r\nbeen produced by a smaller quantity of labour; and as the commodities produced\r\nby equal quantities of labour would naturally in this state of things be\r\nexchanged for one another, they would have been purchased likewise with the\r\nproduce of a smaller quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though all things would have become cheaper in reality, in appearance many\r\nthings might have become dearer, than before, or have been exchanged for a\r\ngreater quantity of other goods. Let us suppose, for example, that in the\r\ngreater part of employments the productive powers of labour had been improved\r\nto tenfold, or that a day’s labour could produce ten times the quantity\r\nof work which it had done originally; but that in a particular employment they\r\nhad been improved only to double, or that a day’s labour could produce\r\nonly twice the quantity of work which it had done before. In exchanging the\r\nproduce of a day’s labour in the greater part of employments for that of\r\na day’s labour in this particular one, ten times the original quantity of\r\nwork in them would purchase only twice the original quantity in it. Any\r\nparticular quantity in it, therefore, a pound weight, for example, would appear\r\nto be five times dearer than before. In reality, however, it would be twice as\r\ncheap. Though it required five times the quantity of other goods to purchase\r\nit, it would require only half the quantity of labour either to purchase or to\r\nproduce it. The acquisition, therefore, would be twice as easy as before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut this original state of things, in which the labourer enjoyed the whole\r\nproduce of his own labour, could not last beyond the first introduction of the\r\nappropriation of land and the accumulation of stock. It was at an end,\r\ntherefore, long before the most considerable improvements were made in the\r\nproductive powers of labour; and it would be to no purpose to trace further\r\nwhat might have been its effects upon the recompence or wages of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs soon as land becomes private property, the landlord demands a share of\r\nalmost all the produce which the labourer can either raise or collect from it.\r\nHis rent makes the first deduction from the produce of the labour which is\r\nemployed upon land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt seldom happens that the person who tills the ground has wherewithal to\r\nmaintain himself till he reaps the harvest. His maintenance is generally\r\nadvanced to him from the stock of a master, the farmer who employs him, and who\r\nwould have no interest to employ him, unless he was to share in the produce of\r\nhis labour, or unless his stock was to be replaced to him with a profit. This\r\nprofit makes a second deduction from the produce of the labour which is\r\nemployed upon land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of almost all other labour is liable to the like deduction of\r\nprofit. In all arts and manufactures, the greater part of the workmen stand in\r\nneed of a master, to advance them the materials of their work, and their wages\r\nand maintenance, till it be completed. He shares in the produce of their\r\nlabour, or in the value which it adds to the materials upon which it is\r\nbestowed; and in this share consists his profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt sometimes happens, indeed, that a single independent workman has stock\r\nsufficient both to purchase the materials of his work, and to maintain himself\r\ntill it be completed. He is both master and workman, and enjoys the whole\r\nproduce of his own labour, or the whole value which it adds to the materials\r\nupon which it is bestowed. It includes what are usually two distinct revenues,\r\nbelonging to two distinct persons, the profits of stock, and the wages of\r\nlabour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch cases, however, are not very frequent; and in every part of Europe twenty\r\nworkmen serve under a master for one that is independent, and the wages of\r\nlabour are everywhere understood to be, what they usually are, when the\r\nlabourer is one person, and the owner of the stock which employs him another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat are the common wages of labour, depends everywhere upon the contract\r\nusually made between those two parties, whose interests are by no means the\r\nsame. The workmen desire to get as much, the masters to give as little, as\r\npossible. The former are disposed to combine in order to raise, the latter in\r\norder to lower, the wages of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not, however, difficult to foresee which of the two parties must, upon\r\nall ordinary occasions, have the advantage in the dispute, and force the other\r\ninto a compliance with their terms. The masters, being fewer in number, can\r\ncombine much more easily: and the law, besides, authorises, or at least does\r\nnot prohibit, their combinations, while it prohibits those of the workmen. We\r\nhave no acts of parliament against combining to lower the price of work, but\r\nmany against combining to raise it. In all such disputes, the masters can hold\r\nout much longer. A landlord, a farmer, a master manufacturer, or merchant,\r\nthough they did not employ a single workman, could generally live a year or two\r\nupon the stocks, which they have already acquired. Many workmen could not\r\nsubsist a week, few could subsist a month, and scarce any a year, without\r\nemployment. In the long run, the workman may be as necessary to his master as\r\nhis master is to him; but the necessity is not so immediate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWe rarely hear, it has been said, of the combinations of masters, though\r\nfrequently of those of workmen. But whoever imagines, upon this account, that\r\nmasters rarely combine, is as ignorant of the world as of the subject. Masters\r\nare always and everywhere in a sort of tacit, but constant and uniform,\r\ncombination, not to raise the wages of labour above their actual rate. To\r\nviolate this combination is everywhere a most unpopular action, and a sort of\r\nreproach to a master among his neighbours and equals. We seldom, indeed, hear\r\nof this combination, because it is the usual, and, one may say, the natural\r\nstate of things, which nobody ever hears of. Masters, too, sometimes enter into\r\nparticular combinations to sink the wages of labour even below this rate. These\r\nare always conducted with the utmost silence and secrecy till the moment of\r\nexecution; and when the workmen yield, as they sometimes do without resistance,\r\nthough severely felt by them, they are never heard of by other people. Such\r\ncombinations, however, are frequently resisted by a contrary defensive\r\ncombination of the workmen, who sometimes, too, without any provocation of this\r\nkind, combine, of their own accord, to raise the price of their labour. Their\r\nusual pretences are, sometimes the high price of provisions, sometimes the\r\ngreat profit which their masters make by their work. But whether their\r\ncombinations be offensive or defensive, they are always abundantly heard of. In\r\norder to bring the point to a speedy decision, they have always recourse to the\r\nloudest clamour, and sometimes to the most shocking violence and outrage. They\r\nare desperate, and act with the folly and extravagance of desperate men, who\r\nmust either starve, or frighten their masters into an immediate compliance with\r\ntheir demands. The masters, upon these occasions, are just as clamorous upon\r\nthe other side, and never cease to call aloud for the assistance of the civil\r\nmagistrate, and the rigorous execution of those laws which have been enacted\r\nwith so much severity against the combination of servants, labourers, and\r\njourneymen. The workmen, accordingly, very seldom derive any advantage from the\r\nviolence of those tumultuous combinations, which, partly from the interposition\r\nof the civil magistrate, partly from the superior steadiness of the masters,\r\npartly from the necessity which the greater part of the workmen are under of\r\nsubmitting for the sake of present subsistence, generally end in nothing but\r\nthe punishment or ruin of the ringleaders.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though, in disputes with their workmen, masters must generally have the\r\nadvantage, there is, however, a certain rate, below which it seems impossible\r\nto reduce, for any considerable time, the ordinary wages even of the lowest\r\nspecies of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA man must always live by his work, and his wages must at least be sufficient\r\nto maintain him. They must even upon most occasions be somewhat more, otherwise\r\nit would be impossible for him to bring up a family, and the race of such\r\nworkmen could not last beyond the first generation. Mr Cantillon seems, upon\r\nthis account, to suppose that the lowest species of common labourers must\r\neverywhere earn at least double their own maintenance, in order that, one with\r\nanother, they may be enabled to bring up two children; the labour of the wife,\r\non account of her necessary attendance on the children, being supposed no more\r\nthan sufficient to provide for herself: But one half the children born, it is\r\ncomputed, die before the age of manhood. The poorest labourers, therefore,\r\naccording to this account, must, one with another, attempt to rear at least\r\nfour children, in order that two may have an equal chance of living to that\r\nage. But the necessary maintenance of four children, it is supposed, may be\r\nnearly equal to that of one man. The labour of an able-bodied slave, the same\r\nauthor adds, is computed to be worth double his maintenance; and that of the\r\nmeanest labourer, he thinks, cannot be worth less than that of an able-bodied\r\nslave. Thus far at least seems certain, that, in order to bring up a family,\r\nthe labour of the husband and wife together must, even in the lowest species of\r\ncommon labour, be able to earn something more than what is precisely necessary\r\nfor their own maintenance; but in what proportion, whether in that\r\nabove-mentioned, or any other, I shall not take upon me to determine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are certain circumstances, however, which sometimes give the labourers an\r\nadvantage, and enable them to raise their wages considerably above this rate,\r\nevidently the lowest which is consistent with common humanity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen in any country the demand for those who live by wages, labourers,\r\njourneymen, servants of every kind, is continually increasing; when every year\r\nfurnishes employment for a greater number than had been employed the year\r\nbefore, the workmen have no occasion to combine in order to raise their wages.\r\nThe scarcity of hands occasions a competition among masters, who bid against\r\none another in order to get workmen, and thus voluntarily break through the\r\nnatural combination of masters not to raise wages. The demand for those who\r\nlive by wages, it is evident, cannot increase but in proportion to the increase\r\nof the funds which are destined to the payment of wages. These funds are of two\r\nkinds, first, the revenue which is over and above what is necessary for the\r\nmaintenance; and, secondly, the stock which is over and above what is necessary\r\nfor the employment of their masters.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the landlord, annuitant, or monied man, has a greater revenue than what he\r\njudges sufficient to maintain his own family, he employs either the whole or a\r\npart of the surplus in maintaining one or more menial servants. Increase this\r\nsurplus, and he will naturally increase the number of those servants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen an independent workman, such as a weaver or shoemaker, has got more stock\r\nthan what is sufficient to purchase the materials of his own work, and to\r\nmaintain himself till he can dispose of it, he naturally employs one or more\r\njourneymen with the surplus, in order to make a profit by their work. Increase\r\nthis surplus, and he will naturally increase the number of his journeymen.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe demand for those who live by wages, therefore, necessarily increases with\r\nthe increase of the revenue and stock of every country, and cannot possibly\r\nincrease without it. The increase of revenue and stock is the increase of\r\nnational wealth. The demand for those who live by wages, therefore, naturally\r\nincreases with the increase of national wealth, and cannot possibly increase\r\nwithout it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not the actual greatness of national wealth, but its continual increase,\r\nwhich occasions a rise in the wages of labour. It is not, accordingly, in the\r\nrichest countries, but in the most thriving, or in those which are growing rich\r\nthe fastest, that the wages of labour are highest. England is certainly, in the\r\npresent times, a much richer country than any part of North America. The wages\r\nof labour, however, are much higher in North America than in any part of\r\nEngland. In the province of New York, common labourers earned in 1773, before\r\nthe commencement of the late disturbances, three shillings and sixpence\r\ncurrency, equal to two shillings sterling, a-day; ship-carpenters, ten\r\nshillings and sixpence currency, with a pint of rum, worth sixpence sterling,\r\nequal in all to six shillings and sixpence sterling; house-carpenters and\r\nbricklayers, eight shillings currency, equal to four shillings and sixpence\r\nsterling; journeymen tailors, five shillings currency, equal to about two\r\nshillings and tenpence sterling. These prices are all above the London price;\r\nand wages are said to be as high in the other colonies as in New York. The\r\nprice of provisions is everywhere in North America much lower than in England.\r\nA dearth has never been known there. In the worst seasons they have always had\r\na sufficiency for themselves, though less for exportation. If the money price\r\nof labour, therefore, be higher than it is anywhere in the mother-country, its\r\nreal price, the real command of the necessaries and conveniencies of life which\r\nit conveys to the labourer, must be higher in a still greater proportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though North America is not yet so rich as England, it is much more\r\nthriving, and advancing with much greater rapidity to the further acquisition\r\nof riches. The most decisive mark of the prosperity of any country is the\r\nincrease of the number of its inhabitants. In Great Britain, and most other\r\nEuropean countries, they are not supposed to double in less than five hundred\r\nyears. In the British colonies in North America, it has been found that they\r\ndouble in twenty or five-and-twenty years. Nor in the present times is this\r\nincrease principally owing to the continual importation of new inhabitants, but\r\nto the great multiplication of the species. Those who live to old age, it is\r\nsaid, frequently see there from fifty to a hundred, and sometimes many more,\r\ndescendants from their own body. Labour is there so well rewarded, that a\r\nnumerous family of children, instead of being a burden, is a source of opulence\r\nand prosperity to the parents. The labour of each child, before it can leave\r\ntheir house, is computed to be worth a hundred pounds clear gain to them. A\r\nyoung widow with four or five young children, who, among the middling or\r\ninferior ranks of people in Europe, would have so little chance for a second\r\nhusband, is there frequently courted as a sort of fortune. The value of\r\nchildren is the greatest of all encouragements to marriage. We cannot,\r\ntherefore, wonder that the people in North America should generally marry very\r\nyoung. Notwithstanding the great increase occasioned by such early marriages,\r\nthere is a continual complaint of the scarcity of hands in North America. The\r\ndemand for labourers, the funds destined for maintaining them increase, it\r\nseems, still faster than they can find labourers to employ.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the wealth of a country should be very great, yet if it has been long\r\nstationary, we must not expect to find the wages of labour very high in it. The\r\nfunds destined for the payment of wages, the revenue and stock of its\r\ninhabitants, may be of the greatest extent; but if they have continued for\r\nseveral centuries of the same, or very nearly of the same extent, the number of\r\nlabourers employed every year could easily supply, and even more than supply,\r\nthe number wanted the following year. There could seldom be any scarcity of\r\nhands, nor could the masters be obliged to bid against one another in order to\r\nget them. The hands, on the contrary, would, in this case, naturally multiply\r\nbeyond their employment. There would be a constant scarcity of employment, and\r\nthe labourers would be obliged to bid against one another in order to get it.\r\nIf in such a country the wages of labour had ever been more than sufficient to\r\nmaintain the labourer, and to enable him to bring up a family, the competition\r\nof the labourers and the interest of the masters would soon reduce them to the\r\nlowest rate which is consistent with common humanity. China has been long one\r\nof the richest, that is, one of the most fertile, best cultivated, most\r\nindustrious, and most populous, countries in the world. It seems, however, to\r\nhave been long stationary. Marco Polo, who visited it more than five hundred\r\nyears ago, describes its cultivation, industry, and populousness, almost in the\r\nsame terms in which they are described by travellers in the present times. It\r\nhad, perhaps, even long before his time, acquired that full complement of\r\nriches which the nature of its laws and institutions permits it to acquire. The\r\naccounts of all travellers, inconsistent in many other respects, agree in the\r\nlow wages of labour, and in the difficulty which a labourer finds in bringing\r\nup a family in China. If by digging the ground a whole day he can get what will\r\npurchase a small quantity of rice in the evening, he is contented. The\r\ncondition of artificers is, if possible, still worse. Instead of waiting\r\nindolently in their work-houses for the calls of their customers, as in Europe,\r\nthey are continually running about the streets with the tools of their\r\nrespective trades, offering their services, and, as it were, begging\r\nemployment. The poverty of the lower ranks of people in China far surpasses\r\nthat of the most beggarly nations in Europe. In the neighbourhood of Canton,\r\nmany hundred, it is commonly said, many thousand families have no habitation on\r\nthe land, but live constantly in little fishing-boats upon the rivers and\r\ncanals. The subsistence which they find there is so scanty, that they are eager\r\nto fish up the nastiest garbage thrown overboard from any European ship. Any\r\ncarrion, the carcase of a dead dog or cat, for example, though half putrid and\r\nstinking, is as welcome to them as the most wholesome food to the people of\r\nother countries. Marriage is encouraged in China, not by the profitableness of\r\nchildren, but by the liberty of destroying them. In all great towns, several\r\nare every night exposed in the street, or drowned like puppies in the water.\r\nThe performance of this horrid office is even said to be the avowed business by\r\nwhich some people earn their subsistence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nChina, however, though it may, perhaps, stand still, does not seem to go\r\nbackwards. Its towns are nowhere deserted by their inhabitants. The lands which\r\nhad once been cultivated, are nowhere neglected. The same, or very nearly the\r\nsame, annual labour, must, therefore, continue to be performed, and the funds\r\ndestined for maintaining it must not, consequently, be sensibly diminished. The\r\nlowest class of labourers, therefore, notwithstanding their scanty subsistence,\r\nmust some way or another make shift to continue their race so far as to keep up\r\ntheir usual numbers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut it would be otherwise in a country where the funds destined for the\r\nmaintenance of labour were sensibly decaying. Every year the demand for\r\nservants and labourers would, in all the different classes of employments, be\r\nless than it had been the year before. Many who had been bred in the superior\r\nclasses, not being able to find employment in their own business, would be glad\r\nto seek it in the lowest. The lowest class being not only overstocked with its\r\nown workmen, but with the overflowings of all the other classes, the\r\ncompetition for employment would be so great in it, as to reduce the wages of\r\nlabour to the most miserable and scanty subsistence of the labourer. Many would\r\nnot be able to find employment even upon these hard terms, but would either\r\nstarve, or be driven to seek a subsistence, either by begging, or by the\r\nperpetration perhaps, of the greatest enormities. Want, famine, and mortality,\r\nwould immediately prevail in that class, and from thence extend themselves to\r\nall the superior classes, till the number of inhabitants in the country was\r\nreduced to what could easily be maintained by the revenue and stock which\r\nremained in it, and which had escaped either the tyranny or calamity which had\r\ndestroyed the rest. This, perhaps, is nearly the present state of Bengal, and\r\nof some other of the English settlements in the East Indies. In a fertile\r\ncountry, which had before been much depopulated, where subsistence,\r\nconsequently, should not be very difficult, and where, notwithstanding, three\r\nor four hundred thousand people die of hunger in one year, we may be assured\r\nthat the funds destined for the maintenance of the labouring poor are fast\r\ndecaying. The difference between the genius of the British constitution, which\r\nprotects and governs North America, and that of the mercantile company which\r\noppresses and domineers in the East Indies, cannot, perhaps, be better\r\nillustrated than by the different state of those countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe liberal reward of labour, therefore, as it is the necessary effect, so it\r\nis the natural symptom of increasing national wealth. The scanty maintenance of\r\nthe labouring poor, on the other hand, is the natural symptom that things are\r\nat a stand, and their starving condition, that they are going fast backwards.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the wages of labour seem, in the present times, to be\r\nevidently more than what is precisely necessary to enable the labourer to bring\r\nup a family. In order to satisfy ourselves upon this point, it will not be\r\nnecessary to enter into any tedious or doubtful calculation of what may be the\r\nlowest sum upon which it is possible to do this. There are many plain symptoms,\r\nthat the wages of labour are nowhere in this country regulated by this lowest\r\nrate, which is consistent with common humanity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, in almost every part of Great Britain there is a distinction, even in\r\nthe lowest species of labour, between summer and winter wages. Summer wages are\r\nalways highest. But, on account of the extraordinary expense of fuel, the\r\nmaintenance of a family is most expensive in winter. Wages, therefore, being\r\nhighest when this expense is lowest, it seems evident that they are not\r\nregulated by what is necessary for this expense, but by the quantity and\r\nsupposed value of the work. A labourer, it may be said, indeed, ought to save\r\npart of his summer wages, in order to defray his winter expense; and that,\r\nthrough the whole year, they do not exceed what is necessary to maintain his\r\nfamily through the whole year. A slave, however, or one absolutely dependent on\r\nus for immediate subsistence, would not be treated in this manner. His daily\r\nsubsistence would be proportioned to his daily necessities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, the wages of labour do not, in Great Britain, fluctuate with the\r\nprice of provisions. These vary everywhere from year to year, frequently from\r\nmonth to month. But in many places, the money price of labour remains uniformly\r\nthe same, sometimes for half a century together. If, in these places,\r\ntherefore, the labouring poor can maintain their families in dear years, they\r\nmust be at their ease in times of moderate plenty, and in affluence in those of\r\nextraordinary cheapness. The high price of provisions during these ten years\r\npast, has not, in many parts of the kingdom, been accompanied with any sensible\r\nrise in the money price of labour. It has, indeed, in some; owing, probably,\r\nmore to the increase of the demand for labour, than to that of the price of\r\nprovisions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, as the price of provisions varies more from year to year than the\r\nwages of labour, so, on the other hand, the wages of labour vary more from\r\nplace to place than the price of provisions. The prices of bread and\r\nbutchers’ meat are generally the same, or very nearly the same, through\r\nthe greater part of the united kingdom. These, and most other things which are\r\nsold by retail, the way in which the labouring poor buy all things, are\r\ngenerally fully as cheap, or cheaper, in great towns than in the remoter parts\r\nof the country, for reasons which I shall have occasion to explain hereafter.\r\nBut the wages of labour in a great town and its neighbourhood are frequently a\r\nfourth or a fifth part, twenty or five-and—twenty per cent. higher than\r\nat a few miles distance. Eighteen pence a day may be reckoned the common price\r\nof labour in London and its neighbourhood. At a few miles distance, it falls to\r\nfourteen and fifteen pence. Tenpence may be reckoned its price in Edinburgh and\r\nits neighbourhood. At a few miles distance, it falls to eightpence, the usual\r\nprice of common labour through the greater part of the low country of Scotland,\r\nwhere it varies a good deal less than in England. Such a difference of prices,\r\nwhich, it seems, is not always sufficient to transport a man from one parish to\r\nanother, would necessarily occasion so great a transportation of the most bulky\r\ncommodities, not only from one parish to another, but from one end of the\r\nkingdom, almost from one end of the world to the other, as would soon reduce\r\nthem more nearly to a level. After all that has been said of the levity and\r\ninconstancy of human nature, it appears evidently from experience, that man is,\r\nof all sorts of luggage, the most difficult to be transported. If the labouring\r\npoor, therefore, can maintain their families in those parts of the kingdom\r\nwhere the price of labour is lowest, they must be in affluence where it is\r\nhighest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, the variations in the price of labour not only do not correspond,\r\neither in place or time, with those in the price of provisions, but they are\r\nfrequently quite opposite.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGrain, the food of the common people, is dearer in Scotland than in England,\r\nwhence Scotland receives almost every year very large supplies. But English\r\ncorn must be sold dearer in Scotland, the country to which it is brought, than\r\nin England, the country from which it comes; and in proportion to its quality\r\nit cannot be sold dearer in Scotland than the Scotch corn that comes to the\r\nsame market in competition with it. The quality of grain depends chiefly upon\r\nthe quantity of flour or meal which it yields at the mill; and, in this\r\nrespect, English grain is so much superior to the Scotch, that though often\r\ndearer in appearance, or in proportion to the measure of its bulk, it is\r\ngenerally cheaper in reality, or in proportion to its quality, or even to the\r\nmeasure of its weight. The price of labour, on the contrary, is dearer in\r\nEngland than in Scotland. If the labouring poor, therefore, can maintain their\r\nfamilies in the one part of the united kingdom, they must be in affluence in\r\nthe other. Oatmeal, indeed, supplies the common people in Scotland with the\r\ngreatest and the best part of their food, which is, in general, much inferior\r\nto that of their neighbours of the same rank in England. This difference,\r\nhowever, in the mode of their subsistence, is not the cause, but the effect, of\r\nthe difference in their wages; though, by a strange misapprehension, I have\r\nfrequently heard it represented as the cause. It is not because one man keeps a\r\ncoach, while his neighbour walks a-foot, that the one is rich, and the other\r\npoor; but because the one is rich, he keeps a coach, and because the other is\r\npoor, he walks a-foot.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the course of the last century, taking one year with another, grain was\r\ndearer in both parts of the united kingdom than during that of the present.\r\nThis is a matter of fact which cannot now admit of any reasonable doubt; and\r\nthe proof of it is, if possible, still more decisive with regard to Scotland\r\nthan with regard to England. It is in Scotland supported by the evidence of the\r\npublic fiars, annual valuations made upon oath, according to the actual state\r\nof the markets, of all the different sorts of grain in every different county\r\nof Scotland. If such direct proof could require any collateral evidence to\r\nconfirm it, I would observe, that this has likewise been the case in France,\r\nand probably in most other parts of Europe. With regard to France, there is the\r\nclearest proof. But though it is certain, that in both parts of the united\r\nkingdom grain was somewhat dearer in the last century than in the present, it\r\nis equally certain that labour was much cheaper. If the labouring poor,\r\ntherefore, could bring up their families then, they must be much more at their\r\nease now. In the last century, the most usual day-wages of common labour\r\nthrough the greater part of Scotland were sixpence in summer, and fivepence in\r\nwinter. Three shillings a-week, the same price, very nearly still continues to\r\nbe paid in some parts of the Highlands and Western islands. Through the greater\r\npart of the Low country, the most usual wages of common labour are now eight\r\npence a-day; tenpence, sometimes a shilling, about Edinburgh, in the counties\r\nwhich border upon England, probably on account of that neighbourhood, and in a\r\nfew other places where there has lately been a considerable rise in the demand\r\nfor labour, about Glasgow, Carron, Ayrshire, etc. In England, the improvements\r\nof agriculture, manufactures, and commerce, began much earlier than in\r\nScotland. The demand for labour, and consequently its price, must necessarily\r\nhave increased with those improvements. In the last century, accordingly, as\r\nwell as in the present, the wages of labour were higher in England than in\r\nScotland. They have risen, too, considerably since that time, though, on\r\naccount of the greater variety of wages paid there in different places, it is\r\nmore difficult to ascertain how much. In 1614, the pay of a foot soldier was\r\nthe same as in the present times, eightpence a-day. When it was first\r\nestablished, it would naturally be regulated by the usual wages of common\r\nlabourers, the rank of people from which foot soldiers are commonly drawn.\r\nLord-chief-justice Hales, who wrote in the time of Charles II. computes the\r\nnecessary expense of a labourer’s family, consisting of six persons, the\r\nfather and mother, two children able to do something, and two not able, at ten\r\nshillings a-week, or twenty-six pounds a-year. If they cannot earn this by\r\ntheir labour, they must make it up, he supposes, either by begging or stealing.\r\nHe appears to have enquired very carefully into this subject {See his scheme\r\nfor the maintenance of the poor, in Burn’s History of the Poor Laws.}. In\r\n1688, Mr Gregory King, whose skill in political arithmetic is so much extolled\r\nby Dr Davenant, computed the ordinary income of labourers and out-servants to\r\nbe fifteen pounds a-year to a family, which he supposed to consist, one with\r\nanother, of three and a half persons. His calculation, therefore, though\r\ndifferent in appearance, corresponds very nearly at bottom with that of Judge\r\nHales. Both suppose the weekly expense of such families to be about\r\ntwenty-pence a-head. Both the pecuniary income and expense of such families\r\nhave increased considerably since that time through the greater part of the\r\nkingdom, in some places more, and in some less, though perhaps scarce anywhere\r\nso much as some exaggerated accounts of the present wages of labour have lately\r\nrepresented them to the public. The price of labour, it must be observed,\r\ncannot be ascertained very accurately anywhere, different prices being often\r\npaid at the same place and for the same sort of labour, not only according to\r\nthe different abilities of the workman, but according to the easiness or\r\nhardness of the masters. Where wages are not regulated by law, all that we can\r\npretend to determine is, what are the most usual; and experience seems to shew\r\nthat law can never regulate them properly, though it has often pretended to do\r\nso.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe real recompence of labour, the real quantity of the necessaries and\r\nconveniencies of life which it can procure to the labourer, has, during the\r\ncourse of the present century, increased perhaps in a still greater proportion\r\nthan its money price. Not only grain has become somewhat cheaper, but many\r\nother things, from which the industrious poor derive an agreeable and wholesome\r\nvariety of food, have become a great deal cheaper. Potatoes, for example, do\r\nnot at present, through the greater part of the kingdom, cost half the price\r\nwhich they used to do thirty or forty years ago. The same thing may be said of\r\nturnips, carrots, cabbages; things which were formerly never raised but by the\r\nspade, but which are now commonly raised by the plough. All sort of garden\r\nstuff, too, has become cheaper. The greater part of the apples, and even of the\r\nonions, consumed in Great Britain, were, in the last century, imported from\r\nFlanders. The great improvements in the coarser manufactories of both linen and\r\nwoollen cloth furnish the labourers with cheaper and better clothing; and those\r\nin the manufactories of the coarser metals, with cheaper and better instruments\r\nof trade, as well as with many agreeable and convenient pieces of household\r\nfurniture. Soap, salt, candles, leather, and fermented liquors, have, indeed,\r\nbecome a good deal dearer, chiefly from the taxes which have been laid upon\r\nthem. The quantity of these, however, which the labouring poor are under any\r\nnecessity of consuming, is so very small, that the increase in their price does\r\nnot compensate the diminution in that of so many other things. The common\r\ncomplaint, that luxury extends itself even to the lowest ranks of the people,\r\nand that the labouring poor will not now be contented with the same food,\r\nclothing, and lodging, which satisfied them in former times, may convince us\r\nthat it is not the money price of labour only, but its real recompence, which\r\nhas augmented.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIs this improvement in the circumstances of the lower ranks of the people to be\r\nregarded as an advantage, or as an inconveniency, to the society? The answer\r\nseems at first abundantly plain. Servants, labourers, and workmen of different\r\nkinds, make up the far greater part of every great political society. But what\r\nimproves the circumstances of the greater part, can never be regarded as any\r\ninconveniency to the whole. No society can surely be flourishing and happy, of\r\nwhich the far greater part of the members are poor and miserable. It is but\r\nequity, besides, that they who feed, clothe, and lodge the whole body of the\r\npeople, should have such a share of the produce of their own labour as to be\r\nthemselves tolerably well fed, clothed, and lodged.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPoverty, though it no doubt discourages, does not always prevent, marriage. It\r\nseems even to be favourable to generation. A half-starved Highland woman\r\nfrequently bears more than twenty children, while a pampered fine lady is often\r\nincapable of bearing any, and is generally exhausted by two or three.\r\nBarrenness, so frequent among women of fashion, is very rare among those of\r\ninferior station. Luxury, in the fair sex, while it inflames, perhaps, the\r\npassion for enjoyment, seems always to weaken, and frequently to destroy\r\naltogether, the powers of generation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut poverty, though it does not prevent the generation, is extremely\r\nunfavourable to the rearing of children. The tender plant is produced; but in\r\nso cold a soil, and so severe a climate, soon withers and dies. It is not\r\nuncommon, I have been frequently told, in the Highlands of Scotland, for a\r\nmother who has born twenty children not to have two alive. Several officers of\r\ngreat experience have assured me, that, so far from recruiting their regiment,\r\nthey have never been able to supply it with drums and fifes, from all the\r\nsoldiers’ children that were born in it. A greater number of fine\r\nchildren, however, is seldom seen anywhere than about a barrack of soldiers.\r\nVery few of them, it seems, arrive at the age of thirteen or fourteen. In some\r\nplaces, one half the children die before they are four years of age, in many\r\nplaces before they are seven, and in almost all places before they are nine or\r\nten. This great mortality, however will everywhere be found chiefly among the\r\nchildren of the common people, who cannot afford to tend them with the same\r\ncare as those of better station. Though their marriages are generally more\r\nfruitful than those of people of fashion, a smaller proportion of their\r\nchildren arrive at maturity. In foundling hospitals, and among the children\r\nbrought up by parish charities, the mortality is still greater than among those\r\nof the common people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery species of animals naturally multiplies in proportion to the means of\r\ntheir subsistence, and no species can ever multiply beyond it. But in civilized\r\nsociety, it is only among the inferior ranks of people that the scantiness of\r\nsubsistence can set limits to the further multiplication of the human species;\r\nand it can do so in no other way than by destroying a great part of the\r\nchildren which their fruitful marriages produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe liberal reward of labour, by enabling them to provide better for their\r\nchildren, and consequently to bring up a greater number, naturally tends to\r\nwiden and extend those limits. It deserves to be remarked, too, that it\r\nnecessarily does this as nearly as possible in the proportion which the demand\r\nfor labour requires. If this demand is continually increasing, the reward of\r\nlabour must necessarily encourage in such a manner the marriage and\r\nmultiplication of labourers, as may enable them to supply that continually\r\nincreasing demand by a continually increasing population. If the reward should\r\nat any time be less than what was requisite for this purpose, the deficiency of\r\nhands would soon raise it; and if it should at any time be more, their\r\nexcessive multiplication would soon lower it to this necessary rate. The market\r\nwould be so much understocked with labour in the one case, and so much\r\noverstocked in the other, as would soon force back its price to that proper\r\nrate which the circumstances of the society required. It is in this manner that\r\nthe demand for men, like that for any other commodity, necessarily regulates\r\nthe production of men, quickens it when it goes on too slowly, and stops it\r\nwhen it advances too fast. It is this demand which regulates and determines the\r\nstate of propagation in all the different countries of the world; in North\r\nAmerica, in Europe, and in China; which renders it rapidly progressive in the\r\nfirst, slow and gradual in the second, and altogether stationary in the last.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wear and tear of a slave, it has been said, is at the expense of his\r\nmaster; but that of a free servant is at his own expense. The wear and tear of\r\nthe latter, however, is, in reality, as much at the expense of his master as\r\nthat of the former. The wages paid to journeymen and servants of every kind\r\nmust be such as may enable them, one with another to continue the race of\r\njourneymen and servants, according as the increasing, diminishing, or\r\nstationary demand of the society, may happen to require. But though the wear\r\nand tear of a free servant be equally at the expense of his master, it\r\ngenerally costs him much less than that of a slave. The fund destined for\r\nreplacing or repairing, if I may say so, the wear and tear of the slave, is\r\ncommonly managed by a negligent master or careless overseer. That destined for\r\nperforming the same office with regard to the freeman is managed by the freeman\r\nhimself. The disorders which generally prevail in the economy of the rich,\r\nnaturally introduce themselves into the management of the former; the strict\r\nfrugality and parsimonious attention of the poor as naturally establish\r\nthemselves in that of the latter. Under such different management, the same\r\npurpose must require very different degrees of expense to execute it. It\r\nappears, accordingly, from the experience of all ages and nations, I believe,\r\nthat the work done by freemen comes cheaper in the end than that performed by\r\nslaves. It is found to do so even at Boston, New-York, and Philadelphia, where\r\nthe wages of common labour are so very high.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe liberal reward of labour, therefore, as it is the effect of increasing\r\nwealth, so it is the cause of increasing population. To complain of it, is to\r\nlament over the necessary cause and effect of the greatest public prosperity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt deserves to be remarked, perhaps, that it is in the progressive state, while\r\nthe society is advancing to the further acquisition, rather than when it has\r\nacquired its full complement of riches, that the condition of the labouring\r\npoor, of the great body of the people, seems to be the happiest and the most\r\ncomfortable. It is hard in the stationary, and miserable in the declining\r\nstate. The progressive state is, in reality, the cheerful and the hearty state\r\nto all the different orders of the society; the stationary is dull; the\r\ndeclining melancholy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe liberal reward of labour, as it encourages the propagation, so it increases\r\nthe industry of the common people. The wages of labour are the encouragement of\r\nindustry, which, like every other human quality, improves in proportion to the\r\nencouragement it receives. A plentiful subsistence increases the bodily\r\nstrength of the labourer, and the comfortable hope of bettering his condition,\r\nand of ending his days, perhaps, in ease and plenty, animates him to exert that\r\nstrength to the utmost. Where wages are high, accordingly, we shall always find\r\nthe workmen more active, diligent, and expeditious, than where they are low; in\r\nEngland, for example, than in Scotland; in the neighbourhood of great towns,\r\nthan in remote country places. Some workmen, indeed, when they can earn in four\r\ndays what will maintain them through the week, will be idle the other three.\r\nThis, however, is by no means the case with the greater part. Workmen, on the\r\ncontrary, when they are liberally paid by the piece, are very apt to overwork\r\nthemselves, and to ruin their health and constitution in a few years. A\r\ncarpenter in London, and in some other places, is not supposed to last in his\r\nutmost vigour above eight years. Something of the same kind happens in many\r\nother trades, in which the workmen are paid by the piece; as they generally are\r\nin manufactures, and even in country labour, wherever wages are higher than\r\nordinary. Almost every class of artificers is subject to some peculiar\r\ninfirmity occasioned by excessive application to their peculiar species of\r\nwork. Ramuzzini, an eminent Italian physician, has written a particular book\r\nconcerning such diseases. We do not reckon our soldiers the most industrious\r\nset of people among us; yet when soldiers have been employed in some particular\r\nsorts of work, and liberally paid by the piece, their officers have frequently\r\nbeen obliged to stipulate with the undertaker, that they should not be allowed\r\nto earn above a certain sum every day, according to the rate at which they were\r\npaid. Till this stipulation was made, mutual emulation, and the desire of\r\ngreater gain, frequently prompted them to overwork themselves, and to hurt\r\ntheir health by excessive labour. Excessive application, during four days of\r\nthe week, is frequently the real cause of the idleness of the other three, so\r\nmuch and so loudly complained of. Great labour, either of mind or body,\r\ncontinued for several days together is, in most men, naturally followed by a\r\ngreat desire of relaxation, which, if not restrained by force, or by some\r\nstrong necessity, is almost irresistible. It is the call of nature, which\r\nrequires to be relieved by some indulgence, sometimes of ease only, but\r\nsometimes too of dissipation and diversion. If it is not complied with, the\r\nconsequences are often dangerous and sometimes fatal, and such as almost\r\nalways, sooner or later, bring on the peculiar infirmity of the trade. If\r\nmasters would always listen to the dictates of reason and humanity, they have\r\nfrequently occasion rather to moderate, than to animate the application of many\r\nof their workmen. It will be found, I believe, in every sort of trade, that the\r\nman who works so moderately, as to be able to work constantly, not only\r\npreserves his health the longest, but, in the course of the year, executes the\r\ngreatest quantity of work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn cheap years it is pretended, workmen are generally more idle, and in dear\r\ntimes more industrious than ordinary. A plentiful subsistence, therefore, it\r\nhas been concluded, relaxes, and a scanty one quickens their industry. That a\r\nlittle more plenty than ordinary may render some workmen idle, cannot be well\r\ndoubted; but that it should have this effect upon the greater part, or that men\r\nin general should work better when they are ill fed, than when they are well\r\nfed, when they are disheartened than when they are in good spirits, when they\r\nare frequently sick than when they are generally in good health, seems not very\r\nprobable. Years of dearth, it is to be observed, are generally among the common\r\npeople years of sickness and mortality, which cannot fail to diminish the\r\nproduce of their industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn years of plenty, servants frequently leave their masters, and trust their\r\nsubsistence to what they can make by their own industry. But the same cheapness\r\nof provisions, by increasing the fund which is destined for the maintenance of\r\nservants, encourages masters, farmers especially, to employ a greater number.\r\nFarmers, upon such occasions, expect more profit from their corn by maintaining\r\na few more labouring servants, than by selling it at a low price in the market.\r\nThe demand for servants increases, while the number of those who offer to\r\nsupply that demand diminishes. The price of labour, therefore, frequently rises\r\nin cheap years.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn years of scarcity, the difficulty and uncertainty of subsistence make all\r\nsuch people eager to return to service. But the high price of provisions, by\r\ndiminishing the funds destined for the maintenance of servants, disposes\r\nmasters rather to diminish than to increase the number of those they have. In\r\ndear years, too, poor independent workmen frequently consume the little stock\r\nwith which they had used to supply themselves with the materials of their work,\r\nand are obliged to become journeymen for subsistence. More people want\r\nemployment than easily get it; many are willing to take it upon lower terms\r\nthan ordinary; and the wages of both servants and journeymen frequently sink in\r\ndear years.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMasters of all sorts, therefore, frequently make better bargains with their\r\nservants in dear than in cheap years, and find them more humble and dependent\r\nin the former than in the latter. They naturally, therefore, commend the former\r\nas more favourable to industry. Landlords and farmers, besides, two of the\r\nlargest classes of masters, have another reason for being pleased with dear\r\nyears. The rents of the one, and the profits of the other, depend very much\r\nupon the price of provisions. Nothing can be more absurd, however, than to\r\nimagine that men in general should work less when they work for themselves,\r\nthan when they work for other people. A poor independent workman will generally\r\nbe more industrious than even a journeyman who works by the piece. The one\r\nenjoys the whole produce of his own industry, the other shares it with his\r\nmaster. The one, in his separate independent state, is less liable to the\r\ntemptations of bad company, which, in large manufactories, so frequently ruin\r\nthe morals of the other. The superiority of the independent workman over those\r\nservants who are hired by the month or by the year, and whose wages and\r\nmaintenance are the same, whether they do much or do little, is likely to be\r\nstill greater. Cheap years tend to increase the proportion of independent\r\nworkmen to journeymen and servants of all kinds, and dear years to diminish it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA French author of great knowledge and ingenuity, Mr Messance, receiver of the\r\ntallies in the election of St Etienne, endeavours to shew that the poor do more\r\nwork in cheap than in dear years, by comparing the quantity and value of the\r\ngoods made upon those different occasions in three different manufactures; one\r\nof coarse woollens, carried on at Elbeuf; one of linen, and another of silk,\r\nboth which extend through the whole generality of Rouen. It appears from his\r\naccount, which is copied from the registers of the public offices, that the\r\nquantity and value of the goods made in all those three manufactories has\r\ngenerally been greater in cheap than in dear years, and that it has always been\r\ngreatest in the cheapest, and least in the dearest years. All the three seem to\r\nbe stationary manufactures, or which, though their produce may vary somewhat\r\nfrom year to year, are, upon the whole, neither going backwards nor forwards.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe manufacture of linen in Scotland, and that of coarse woollens in the West\r\nRiding of Yorkshire, are growing manufactures, of which the produce is\r\ngenerally, though with some variations, increasing both in quantity and value.\r\nUpon examining, however, the accounts which have been published of their annual\r\nproduce, I have not been able to observe that its variations have had any\r\nsensible connection with the dearness or cheapness of the seasons. In 1740, a\r\nyear of great scarcity, both manufactures, indeed, appear to have declined very\r\nconsiderably. But in 1756, another year of great scarcity, the Scotch\r\nmanufactures made more than ordinary advances. The Yorkshire manufacture,\r\nindeed, declined, and its produce did not rise to what it had been in 1755,\r\ntill 1766, after the repeal of the American stamp act. In that and the\r\nfollowing year, it greatly exceeded what it had ever been before, and it has\r\ncontinued to advance ever since.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of all great manufactures for distant sale must necessarily depend,\r\nnot so much upon the dearness or cheapness of the seasons in the countries\r\nwhere they are carried on, as upon the circumstances which affect the demand in\r\nthe countries where they are consumed; upon peace or war, upon the prosperity\r\nor declension of other rival manufactures and upon the good or bad humour of\r\ntheir principal customers. A great part of the extraordinary work, besides,\r\nwhich is probably done in cheap years, never enters the public registers of\r\nmanufactures. The men-servants, who leave their masters, become independent\r\nlabourers. The women return to their parents, and commonly spin, in order to\r\nmake clothes for themselves and their families. Even the independent workmen do\r\nnot always work for public sale, but are employed by some of their neighbours\r\nin manufactures for family use. The produce of their labour, therefore,\r\nfrequently makes no figure in those public registers, of which the records are\r\nsometimes published with so much parade, and from which our merchants and\r\nmanufacturers would often vainly pretend to announce the prosperity or\r\ndeclension of the greatest empires.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the variations in the price of labour not only do not always correspond\r\nwith those in the price of provisions, but are frequently quite opposite, we\r\nmust not, upon this account, imagine that the price of provisions has no\r\ninfluence upon that of labour. The money price of labour is necessarily\r\nregulated by two circumstances; the demand for labour, and the price of the\r\nnecessaries and conveniencies of life. The demand for labour, according as it\r\nhappens to be increasing, stationary, or declining, or to require an\r\nincreasing, stationary, or declining population, determines the quantities of\r\nthe necessaries and conveniencies of life which must be given to the labourer;\r\nand the money price of labour is determined by what is requisite for purchasing\r\nthis quantity. Though the money price of labour, therefore, is sometimes high\r\nwhere the price of provisions is low, it would be still higher, the demand\r\ncontinuing the same, if the price of provisions was high.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is because the demand for labour increases in years of sudden and\r\nextraordinary plenty, and diminishes in those of sudden and extraordinary\r\nscarcity, that the money price of labour sometimes rises in the one, and sinks\r\nin the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a year of sudden and extraordinary plenty, there are funds in the hands of\r\nmany of the employers of industry, sufficient to maintain and employ a greater\r\nnumber of industrious people than had been employed the year before; and this\r\nextraordinary number cannot always be had. Those masters, therefore, who want\r\nmore workmen, bid against one another, in order to get them, which sometimes\r\nraises both the real and the money price of their labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe contrary of this happens in a year of sudden and extraordinary scarcity.\r\nThe funds destined for employing industry are less than they had been the year\r\nbefore. A considerable number of people are thrown out of employment, who bid\r\none against another, in order to get it, which sometimes lowers both the real\r\nand the money price of labour. In 1740, a year of extraordinary scarcity, many\r\npeople were willing to work for bare subsistence. In the succeeding years of\r\nplenty, it was more difficult to get labourers and servants. The scarcity of a\r\ndear year, by diminishing the demand for labour, tends to lower its price, as\r\nthe high price of provisions tends to raise it. The plenty of a cheap year, on\r\nthe contrary, by increasing the demand, tends to raise the price of labour, as\r\nthe cheapness of provisions tends to lower it. In the ordinary variations of\r\nthe prices of provisions, those two opposite causes seem to counterbalance one\r\nanother, which is probably, in part, the reason why the wages of labour are\r\neverywhere so much more steady and permanent than the price of provisions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe increase in the wages of labour necessarily increases the price of many\r\ncommodities, by increasing that part of it which resolves itself into wages,\r\nand so far tends to diminish their consumption, both at home and abroad. The\r\nsame cause, however, which raises the wages of labour, the increase of stock,\r\ntends to increase its productive powers, and to make a smaller quantity of\r\nlabour produce a greater quantity of work. The owner of the stock which employs\r\na great number of labourers necessarily endeavours, for his own advantage, to\r\nmake such a proper division and distribution of employment, that they may be\r\nenabled to produce the greatest quantity of work possible. For the same reason,\r\nhe endeavours to supply them with the best machinery which either he or they\r\ncan think of. What takes place among the labourers in a particular workhouse,\r\ntakes place, for the same reason, among those of a great society. The greater\r\ntheir number, the more they naturally divide themselves into different classes\r\nand subdivisions of employments. More heads are occupied in inventing the most\r\nproper machinery for executing the work of each, and it is, therefore, more\r\nlikely to be invented. There are many commodities, therefore, which, in\r\nconsequence of these improvements, come to be produced by so much less labour\r\nthan before, that the increase of its price is more than compensated by the\r\ndiminution of its quantity.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap11\"\u003e\u003c/a\u003eCHAPTER IX.\u003cbr\u003e\r\nOF THE PROFITS OF STOCK.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe rise and fall in the profits of stock depend upon the same causes with the\r\nrise and fall in the wages of labour, the increasing or declining state of the\r\nwealth of the society; but those causes affect the one and the other very\r\ndifferently.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe increase of stock, which raises wages, tends to lower profit. When the\r\nstocks of many rich merchants are turned into the same trade, their mutual\r\ncompetition naturally tends to lower its profit; and when there is a like\r\nincrease of stock in all the different trades carried on in the same society,\r\nthe same competition must produce the same effect in them all.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not easy, it has already been observed, to ascertain what are the average\r\nwages of labour, even in a particular place, and at a particular time. We can,\r\neven in this case, seldom determine more than what are the most usual wages.\r\nBut even this can seldom be done with regard to the profits of stock. Profit is\r\nso very fluctuating, that the person who carries on a particular trade, cannot\r\nalways tell you himself what is the average of his annual profit. It is\r\naffected, not only by every variation of price in the commodities which he\r\ndeals in, but by the good or bad fortune both of his rivals and of his\r\ncustomers, and by a thousand other accidents, to which goods, when carried\r\neither by sea or by land, or even when stored in a warehouse, are liable. It\r\nvaries, therefore, not only from year to year, but from day to day, and almost\r\nfrom hour to hour. To ascertain what is the average profit of all the different\r\ntrades carried on in a great kingdom, must be much more difficult; and to judge\r\nof what it may have been formerly, or in remote periods of time, with any\r\ndegree of precision, must be altogether impossible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though it may be impossible to determine, with any degree of precision,\r\nwhat are or were the average profits of stock, either in the present or in\r\nancient times, some notion may be formed of them from the interest of money. It\r\nmay be laid down as a maxim, that wherever a great deal can be made by the use\r\nof money, a great deal will commonly be given for the use of it; and that,\r\nwherever little can be made by it, less will commonly he given for it.\r\nAccordingly, therefore, as the usual market rate of interest varies in any\r\ncountry, we may be assured that the ordinary profits of stock must vary with\r\nit, must sink as it sinks, and rise as it rises. The progress of interest,\r\ntherefore, may lead us to form some notion of the progress of profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 37th of Henry VIII. all interest above ten per cent. was declared\r\nunlawful. More, it seems, had sometimes been taken before that. In the reign of\r\nEdward VI. religious zeal prohibited all interest. This prohibition, however,\r\nlike all others of the same kind, is said to have produced no effect, and\r\nprobably rather increased than diminished the evil of usury. The statute of\r\nHenry VIII. was revived by the 13th of Elizabeth, cap. 8. and ten per cent.\r\ncontinued to be the legal rate of interest till the 21st of James I. when it\r\nwas restricted to eight per cent. It was reduced to six per cent. soon after\r\nthe Restoration, and by the 12th of Queen Anne, to five per cent. All these\r\ndifferent statutory regulations seem to have been made with great propriety.\r\nThey seem to have followed, and not to have gone before, the market rate of\r\ninterest, or the rate at which people of good credit usually borrowed. Since\r\nthe time of Queen Anne, five per cent. seems to have been rather above than\r\nbelow the market rate. Before the late war, the government borrowed at three\r\nper cent.; and people of good credit in the capital, and in many other parts of\r\nthe kingdom, at three and a-half, four, and four and a-half per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSince the time of Henry VIII. the wealth and revenue of the country have been\r\ncontinually advancing, and in the course of their progress, their pace seems\r\nrather to have been gradually accelerated than retarded. They seem not only to\r\nhave been going on, but to have been going on faster and faster. The wages of\r\nlabour have been continually increasing during the same period, and, in the\r\ngreater part of the different branches of trade and manufactures, the profits\r\nof stock have been diminishing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt generally requires a greater stock to carry on any sort of trade in a great\r\ntown than in a country village. The great stocks employed in every branch of\r\ntrade, and the number of rich competitors, generally reduce the rate of profit\r\nin the former below what it is in the latter. But the wages of labour are\r\ngenerally higher in a great town than in a country village. In a thriving town,\r\nthe people who have great stocks to employ, frequently cannot get the number of\r\nworkmen they want, and therefore bid against one another, in order to get as\r\nmany as they can, which raises the wages of labour, and lowers the profits of\r\nstock. In the remote parts of the country, there is frequently not stock\r\nsufficient to employ all the people, who therefore bid against one another, in\r\norder to get employment, which lowers the wages of labour, and raises the\r\nprofits of stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Scotland, though the legal rate of interest is the same as in England, the\r\nmarket rate is rather higher. People of the best credit there seldom borrow\r\nunder five per cent. Even private bankers in Edinburgh give four per cent. upon\r\ntheir promissory-notes, of which payment, either in whole or in part may be\r\ndemanded at pleasure. Private bankers in London give no interest for the money\r\nwhich is deposited with them. There are few trades which cannot be carried on\r\nwith a smaller stock in Scotland than in England. The common rate of profit,\r\ntherefore, must be somewhat greater. The wages of labour, it has already been\r\nobserved, are lower in Scotland than in England. The country, too, is not only\r\nmuch poorer, but the steps by which it advances to a better condition, for it\r\nis evidently advancing, seem to be much slower and more tardy. The legal rate\r\nof interest in France has not during the course of the present century, been\r\nalways regulated by the market rate {See Denisart, Article Taux des Interests,\r\ntom. iii, p.13}. In 1720, interest was reduced from the twentieth to the\r\nfiftieth penny, or from five to two per cent. In 1724, it was raised to the\r\nthirtieth penny, or to three and a third per cent. In 1725, it was again raised\r\nto the twentieth penny, or to five per cent. In 1766, during the administration\r\nof Mr Laverdy, it was reduced to the twenty-fifth penny, or to four per cent.\r\nThe Abbé Terray raised it afterwards to the old rate of five per cent. The\r\nsupposed purpose of many of those violent reductions of interest was to prepare\r\nthe way for reducing that of the public debts; a purpose which has sometimes\r\nbeen executed. France is, perhaps, in the present times, not so rich a country\r\nas England; and though the legal rate of interest has in France frequently been\r\nlower than in England, the market rate has generally been higher; for there, as\r\nin other countries, they have several very safe and easy methods of evading the\r\nlaw. The profits of trade, I have been assured by British merchants who had\r\ntraded in both countries, are higher in France than in England; and it is no\r\ndoubt upon this account, that many British subjects chuse rather to employ\r\ntheir capitals in a country where trade is in disgrace, than in one where it is\r\nhighly respected. The wages of labour are lower in France than in England. When\r\nyou go from Scotland to England, the difference which you may remark between\r\nthe dress and countenance of the common people in the one country and in the\r\nother, sufficiently indicates the difference in their condition. The contrast\r\nis still greater when you return from France. France, though no doubt a richer\r\ncountry than Scotland, seems not to be going forward so fast. It is a common\r\nand even a popular opinion in the country, that it is going backwards; an\r\nopinion which I apprehend, is ill-founded, even with regard to France, but\r\nwhich nobody can possibly entertain with regard to Scotland, who sees the\r\ncountry now, and who saw it twenty or thirty years ago.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe province of Holland, on the other hand, in proportion to the extent of its\r\nterritory and the number of its people, is a richer country than England. The\r\ngovernment there borrow at two per cent. and private people of good credit at\r\nthree. The wages of labour are said to be higher in Holland than in England,\r\nand the Dutch, it is well known, trade upon lower profits than any people in\r\nEurope. The trade of Holland, it has been pretended by some people, is\r\ndecaying, and it may perhaps be true that some particular branches of it are\r\nso; but these symptoms seem to indicate sufficiently that there is no general\r\ndecay. When profit diminishes, merchants are very apt to complain that trade\r\ndecays, though the diminution of profit is the natural effect of its\r\nprosperity, or of a greater stock being employed in it than before. During the\r\nlate war, the Dutch gained the whole carrying trade of France, of which they\r\nstill retain a very large share. The great property which they possess both in\r\nFrench and English funds, about forty millions, it is said in the latter (in\r\nwhich, I suspect, however, there is a considerable exaggeration ), the great\r\nsums which they lend to private people, in countries where the rate of interest\r\nis higher than in their own, are circumstances which no doubt demonstrate the\r\nredundancy of their stock, or that it has increased beyond what they can employ\r\nwith tolerable profit in the proper business of their own country; but they do\r\nnot demonstrate that that business has decreased. As the capital of a private\r\nman, though acquired by a particular trade, may increase beyond what he can\r\nemploy in it, and yet that trade continue to increase too, so may likewise the\r\ncapital of a great nation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn our North American and West Indian colonies, not only the wages of labour,\r\nbut the interest of money, and consequently the profits of stock, are higher\r\nthan in England. In the different colonies, both the legal and the market rate\r\nof interest run from six to eight percent. High wages of labour and high\r\nprofits of stock, however, are things, perhaps, which scarce ever go together,\r\nexcept in the peculiar circumstances of new colonies. A new colony must always,\r\nfor some time, be more understocked in proportion to the extent of its\r\nterritory, and more underpeopled in proportion to the extent of its stock, than\r\nthe greater part of other countries. They have more land than they have stock\r\nto cultivate. What they have, therefore, is applied to the cultivation only of\r\nwhat is most fertile and most favourably situated, the land near the sea-shore,\r\nand along the banks of navigable rivers. Such land, too, is frequently\r\npurchased at a price below the value even of its natural produce. Stock\r\nemployed in the purchase and improvement of such lands, must yield a very large\r\nprofit, and, consequently, afford to pay a very large interest. Its rapid\r\naccumulation in so profitable an employment enables the planter to increase the\r\nnumber of his hands faster than he can find them in a new settlement. Those\r\nwhom he can find, therefore, are very liberally rewarded. As the colony\r\nincreases, the profits of stock gradually diminish. When the most fertile and\r\nbest situated lands have been all occupied, less profit can be made by the\r\ncultivation of what is inferior both in soil and situation, and less interest\r\ncan be afforded for the stock which is so employed. In the greater part of our\r\ncolonies, accordingly, both the legal and the market rate of interest have been\r\nconsiderably reduced during the course of the present century. As riches,\r\nimprovement, and population, have increased, interest has declined. The wages\r\nof labour do not sink with the profits of stock. The demand for labour\r\nincreases with the increase of stock, whatever be its profits; and after these\r\nare diminished, stock may not only continue to increase, but to increase much\r\nfaster than before. It is with industrious nations, who are advancing in the\r\nacquisition of riches, as with industrious individuals. A great stock, though\r\nwith small profits, generally increases faster than a small stock with great\r\nprofits. Money, says the proverb, makes money. When you have got a little, it\r\nis often easy to get more. The great difficulty is to get that little. The\r\nconnection between the increase of stock and that of industry, or of the demand\r\nfor useful labour, has partly been explained already, but will be explained\r\nmore fully hereafter, in treating of the accumulation of stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe acquisition of new territory, or of new branches of trade, may sometimes\r\nraise the profits of stock, and with them the interest of money, even in a\r\ncountry which is fast advancing in the acquisition of riches. The stock of the\r\ncountry, not being sufficient for the whole accession of business which such\r\nacquisitions present to the different people among whom it is divided, is\r\napplied to those particular branches only which afford the greatest profit.\r\nPart of what had before been employed in other trades, is necessarily withdrawn\r\nfrom them, and turned into some of the new and more profitable ones. In all\r\nthose old trades, therefore, the competition comes to be less than before. The\r\nmarket comes to be less fully supplied with many different sorts of goods.\r\nTheir price necessarily rises more or less, and yields a greater profit to\r\nthose who deal in them, who can, therefore, afford to borrow at a higher\r\ninterest. For some time after the conclusion of the late war, not only private\r\npeople of the best credit, but some of the greatest companies in London,\r\ncommonly borrowed at five per cent. who, before that, had not been used to pay\r\nmore than four, and four and a half per cent. The great accession both of\r\nterritory and trade by our acquisitions in North America and the West Indies,\r\nwill sufficiently account for this, without supposing any diminution in the\r\ncapital stock of the society. So great an accession of new business to be\r\ncarried on by the old stock, must necessarily have diminished the quantity\r\nemployed in a great number of particular branches, in which the competition\r\nbeing less, the profits must have been greater. I shall hereafter have occasion\r\nto mention the reasons which dispose me to believe that the capital stock of\r\nGreat Britain was not diminished, even by the enormous expense of the late war.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe diminution of the capital stock of the society, or of the funds destined\r\nfor the maintenance of industry, however, as it lowers the wages of labour, so\r\nit raises the profits of stock, and consequently the interest of money. By the\r\nwages of labour being lowered, the owners of what stock remains in the society\r\ncan bring their goods at less expense to market than before; and less stock\r\nbeing employed in supplying the market than before, they can sell them dearer.\r\nTheir goods cost them less, and they get more for them. Their profits,\r\ntherefore, being augmented at both ends, can well afford a large interest. The\r\ngreat fortunes so suddenly and so easily acquired in Bengal and the other\r\nBritish settlements in the East Indies, may satisfy us, that as the wages of\r\nlabour are very low, so the profits of stock are very high in those ruined\r\ncountries. The interest of money is proportionably so. In Bengal, money is\r\nfrequently lent to the farmers at forty, fifty, and sixty per cent. and the\r\nsucceeding crop is mortgaged for the payment. As the profits which can afford\r\nsuch an interest must eat up almost the whole rent of the landlord, so such\r\nenormous usury must in its turn eat up the greater part of those profits.\r\nBefore the fall of the Roman republic, a usury of the same kind seems to have\r\nbeen common in the provinces, under the ruinous administration of their\r\nproconsuls. The virtuous Brutus lent money in Cyprus at eight-and-forty per\r\ncent. as we learn from the letters of Cicero.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country which had acquired that full complement of riches which the nature\r\nof its soil and climate, and its situation with respect to other countries,\r\nallowed it to acquire, which could, therefore, advance no further, and which\r\nwas not going backwards, both the wages of labour and the profits of stock\r\nwould probably be very low. In a country fully peopled in proportion to what\r\neither its territory could maintain, or its stock employ, the competition for\r\nemployment would necessarily be so great as to reduce the wages of labour to\r\nwhat was barely sufficient to keep up the number of labourers, and the country\r\nbeing already fully peopled, that number could never be augmented. In a country\r\nfully stocked in proportion to all the business it had to transact, as great a\r\nquantity of stock would be employed in every particular branch as the nature\r\nand extent of the trade would admit. The competition, therefore, would\r\neverywhere be as great, and, consequently, the ordinary profit as low as\r\npossible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut, perhaps, no country has ever yet arrived at this degree of opulence. China\r\nseems to have been long stationary, and had, probably, long ago acquired that\r\nfull complement of riches which is consistent with the nature of its laws and\r\ninstitutions. But this complement may be much inferior to what, with other laws\r\nand institutions, the nature of its soil, climate, and situation, might admit\r\nof. A country which neglects or despises foreign commerce, and which admits the\r\nvessel of foreign nations into one or two of its ports only, cannot transact\r\nthe same quantity of business which it might do with different laws and\r\ninstitutions. In a country, too, where, though the rich, or the owners of large\r\ncapitals, enjoy a good deal of security, the poor, or the owners of small\r\ncapitals, enjoy scarce any, but are liable, under the pretence of justice, to\r\nbe pillaged and plundered at any time by the inferior mandarins, the quantity\r\nof stock employed in all the different branches of business transacted within\r\nit, can never be equal to what the nature and extent of that business might\r\nadmit. In every different branch, the oppression of the poor must establish the\r\nmonopoly of the rich, who, by engrossing the whole trade to themselves, will be\r\nable to make very large profits. Twelve per cent. accordingly, is said to be\r\nthe common interest of money in China, and the ordinary profits of stock must\r\nbe sufficient to afford this large interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA defect in the law may sometimes raise the rate of interest considerably above\r\nwhat the condition of the country, as to wealth or poverty, would require. When\r\nthe law does not enforce the performance of contracts, it puts all borrowers\r\nnearly upon the same footing with bankrupts, or people of doubtful credit, in\r\nbetter regulated countries. The uncertainty of recovering his money makes the\r\nlender exact the same usurious interest which is usually required from\r\nbankrupts. Among the barbarous nations who overran the western provinces of the\r\nRoman empire, the performance of contracts was left for many ages to the faith\r\nof the contracting parties. The courts of justice of their kings seldom\r\nintermeddled in it. The high rate of interest which took place in those ancient\r\ntimes, may, perhaps, be partly accounted for from this cause.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the law prohibits interest altogether, it does not prevent it. Many people\r\nmust borrow, and nobody will lend without such a consideration for the use of\r\ntheir money as is suitable, not only to what can be made by the use of it, but\r\nto the difficulty and danger of evading the law. The high rate of interest\r\namong all Mahometan nations is accounted for by M. Montesquieu, not from their\r\npoverty, but partly from this, and partly from the difficulty of recovering the\r\nmoney.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe lowest ordinary rate of profit must always be something more than what is\r\nsufficient to compensate the occasional losses to which every employment of\r\nstock is exposed. It is this surplus only which is neat or clear profit. What\r\nis called gross profit, comprehends frequently not only this surplus, but what\r\nis retained for compensating such extraordinary losses. The interest which the\r\nborrower can afford to pay is in proportion to the clear profit only. The\r\nlowest ordinary rate of interest must, in the same manner, be something more\r\nthan sufficient to compensate the occasional losses to which lending, even with\r\ntolerable prudence, is exposed. Were it not, mere charity or friendship could\r\nbe the only motives for lending.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country which had acquired its full complement of riches, where, in every\r\nparticular branch of business, there was the greatest quantity of stock that\r\ncould be employed in it, as the ordinary rate of clear profit would be very\r\nsmall, so the usual market rate of interest which could be afforded out of it\r\nwould be so low as to render it impossible for any but the very wealthiest\r\npeople to live upon the interest of their money. All people of small or\r\nmiddling fortunes would be obliged to superintend themselves the employment of\r\ntheir own stocks. It would be necessary that almost every man should be a man\r\nof business, or engage in some sort of trade. The province of Holland seems to\r\nbe approaching near to this state. It is there unfashionable not to be a man of\r\nbusiness. Necessity makes it usual for almost every man to be so, and custom\r\neverywhere regulates fashion. As it is ridiculous not to dress, so is it, in\r\nsome measure, not to be employed like other people. As a man of a civil\r\nprofession seems awkward in a camp or a garrison, and is even in some danger of\r\nbeing despised there, so does an idle man among men of business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe highest ordinary rate of profit may be such as, in the price of the greater\r\npart of commodities, eats up the whole of what should go to the rent of the\r\nland, and leaves only what is sufficient to pay the labour of preparing and\r\nbringing them to market, according to the lowest rate at which labour can\r\nanywhere be paid, the bare subsistence of the labourer. The workman must always\r\nhave been fed in some way or other while he was about the work, but the\r\nlandlord may not always have been paid. The profits of the trade which the\r\nservants of the East India Company carry on in Bengal may not, perhaps, be very\r\nfar from this rate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion which the usual market rate of interest ought to bear to the\r\nordinary rate of clear profit, necessarily varies as profit rises or falls.\r\nDouble interest is in Great Britain reckoned what the merchants call a good,\r\nmoderate, reasonable profit; terms which, I apprehend, mean no more than a\r\ncommon and usual profit. In a country where the ordinary rate of clear profit\r\nis eight or ten per cent. it may be reasonable that one half of it should go to\r\ninterest, wherever business is carried on with borrowed money. The stock is at\r\nthe risk of the borrower, who, as it were, insures it to the lender; and four\r\nor five per cent. may, in the greater part of trades, be both a sufficient\r\nprofit upon the risk of this insurance, and a sufficient recompence for the\r\ntrouble of employing the stock. But the proportion between interest and clear\r\nprofit might not be the same in countries where the ordinary rate of profit was\r\neither a good deal lower, or a good deal higher. If it were a good deal lower,\r\none half of it, perhaps, could not be afforded for interest; and more might be\r\nafforded if it were a good deal higher.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries which are fast advancing to riches, the low rate of profit may, in\r\nthe price of many commodities, compensate the high wages of labour, and enable\r\nthose countries to sell as cheap as their less thriving neighbours, among whom\r\nthe wages of labour may be lower.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn reality, high profits tend much more to raise the price of work than high\r\nwages. If, in the linen manufacture, for example, the wages of the different\r\nworking people, the flax-dressers, the spinners, the weavers, etc. should all\r\nof them be advanced twopence a-day, it would be necessary to heighten the price\r\nof a piece of linen only by a number of twopences equal to the number of people\r\nthat had been employed about it, multiplied by the number of days during which\r\nthey had been so employed. That part of the price of the commodity which\r\nresolved itself into the wages, would, through all the different stages of the\r\nmanufacture, rise only in arithmetical proportion to this rise of wages. But if\r\nthe profits of all the different employers of those working people should be\r\nraised five per cent. that part of the price of the commodity which resolved\r\nitself into profit would, through all the different stages of the manufacture,\r\nrise in geometrical proportion to this rise of profit. The employer of the flax\r\ndressers would, in selling his flax, require an additional five per cent. upon\r\nthe whole value of the materials and wages which he advanced to his workmen.\r\nThe employer of the spinners would require an additional five per cent. both\r\nupon the advanced price of the flax, and upon the wages of the spinners. And\r\nthe employer of the weavers would require alike five per cent. both upon the\r\nadvanced price of the linen-yarn, and upon the wages of the weavers. In raising\r\nthe price of commodities, the rise of wages operates in the same manner as\r\nsimple interest does in the accumulation of debt. The rise of profit operates\r\nlike compound interest. Our merchants and master manufacturers complain much of\r\nthe bad effects of high wages in raising the price, and thereby lessening the\r\nsale of their goods, both at home and abroad. They say nothing concerning the\r\nbad effects of high profits; they are silent with regard to the pernicious\r\neffects of their own gains; they complain only of those of other people.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap12\"\u003e\u003c/a\u003eCHAPTER X.\u003cbr\u003e\r\nOF WAGES AND PROFIT IN THE DIFFERENT EMPLOYMENTS OF LABOUR AND STOCK.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe whole of the advantages and disadvantages of the different employments of\r\nlabour and stock, must, in the same neighbourhood, be either perfectly equal,\r\nor continually tending to equality. If, in the same neighbourhood, there was\r\nany employment evidently either more or less advantageous than the rest, so\r\nmany people would crowd into it in the one case, and so many would desert it in\r\nthe other, that its advantages would soon return to the level of other\r\nemployments. This, at least, would be the case in a society where things were\r\nleft to follow their natural course, where there was perfect liberty, and where\r\nevery man was perfectly free both to choose what occupation he thought proper,\r\nand to change it as often as he thought proper. Every man’s interest\r\nwould prompt him to seek the advantageous, and to shun the disadvantageous\r\nemployment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPecuniary wages and profit, indeed, are everywhere in Europe extremely\r\ndifferent, according to the different employments of labour and stock. But this\r\ndifference arises, partly from certain circumstances in the employments\r\nthemselves, which, either really, or at least in the imagination of men, make\r\nup for a small pecuniary gain in some, and counterbalance a great one in\r\nothers, and partly from the policy of Europe, which nowhere leaves things at\r\nperfect liberty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe particular consideration of those circumstances, and of that policy, will\r\ndivide this Chapter into two parts.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART I. Inequalities arising from the nature of the employments\r\nthemselves.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe five following are the principal circumstances which, so far as I have been\r\nable to observe, make up for a small pecuniary gain in some employments, and\r\ncounterbalance a great one in others. First, the agreeableness or\r\ndisagreeableness of the employments themselves; secondly, the easiness and\r\ncheapness, or the difficulty and expense of learning them; thirdly, the\r\nconstancy or inconstancy of employment in them; fourthly, the small or great\r\ntrust which must be reposed in those who exercise them; and, fifthly, the\r\nprobability or improbability of success in them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, the wages of labour vary with the ease or hardship, the cleanliness or\r\ndirtiness, the honourableness or dishonourableness, of the employment. Thus in\r\nmost places, take the year round, a journeyman tailor earns less than a\r\njourneyman weaver. His work is much easier. A journeyman weaver earns less than\r\na journeyman smith. His work is not always easier, but it is much cleanlier. A\r\njourneyman blacksmith, though an artificer, seldom earns so much in twelve\r\nhours, as a collier, who is only a labourer, does in eight. His work is not\r\nquite so dirty, is less dangerous, and is carried on in day-light, and above\r\nground. Honour makes a great part of the reward of all honourable professions.\r\nIn point of pecuniary gain, all things considered, they are generally\r\nunder-recompensed, as I shall endeavour to shew by and by. Disgrace has the\r\ncontrary effect. The trade of a butcher is a brutal and an odious business; but\r\nit is in most places more profitable than the greater part of common trades.\r\nThe most detestable of all employments, that of public executioner, is, in\r\nproportion to the quantity of work done, better paid than any common trade\r\nwhatever.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHunting and fishing, the most important employments of mankind in the rude\r\nstate of society, become, in its advanced state, their most agreeable\r\namusements, and they pursue for pleasure what they once followed from\r\nnecessity. In the advanced state of society, therefore, they are all very poor\r\npeople who follow as a trade, what other people pursue as a pastime. Fishermen\r\nhave been so since the time of Theocritus. {See Idyllium xxi.}. A poacher is\r\neverywhere a very poor man in Great Britain. In countries where the rigour of\r\nthe law suffers no poachers, the licensed hunter is not in a much better\r\ncondition. The natural taste for those employments makes more people follow\r\nthem, than can live comfortably by them; and the produce of their labour, in\r\nproportion to its quantity, comes always too cheap to market, to afford any\r\nthing but the most scanty subsistence to the labourers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDisagreeableness and disgrace affect the profits of stock in the same manner as\r\nthe wages of labour. The keeper of an inn or tavern, who is never master of his\r\nown house, and who is exposed to the brutality of every drunkard, exercises\r\nneither a very agreeable nor a very creditable business. But there is scarce\r\nany common trade in which a small stock yields so great a profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, the wages of labour vary with the easiness and cheapness, or the\r\ndifficulty and expense, of learning the business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen any expensive machine is erected, the extraordinary work to be performed\r\nby it before it is worn out, it must be expected, will replace the capital laid\r\nout upon it, with at least the ordinary profits. A man educated at the expense\r\nof much labour and time to any of those employments which require extraordinary\r\ndexterity and skill, may be compared to one of those expensive machines. The\r\nwork which he learns to perform, it must be expected, over and above the usual\r\nwages of common labour, will replace to him the whole expense of his education,\r\nwith at least the ordinary profits of an equally valuable capital. It must do\r\nthis too in a reasonable time, regard being had to the very uncertain duration\r\nof human life, in the same manner as to the more certain duration of the\r\nmachine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe difference between the wages of skilled labour and those of common labour,\r\nis founded upon this principle.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe policy of Europe considers the labour of all mechanics, artificers, and\r\nmanufacturers, as skilled labour; and that of all country labourers as common\r\nlabour. It seems to suppose that of the former to be of a more nice and\r\ndelicate nature than that of the latter. It is so perhaps in some cases; but in\r\nthe greater part it is quite otherwise, as I shall endeavour to shew by and by.\r\nThe laws and customs of Europe, therefore, in order to qualify any person for\r\nexercising the one species of labour, impose the necessity of an\r\napprenticeship, though with different degrees of rigour in different places.\r\nThey leave the other free and open to every body. During the continuance of the\r\napprenticeship, the whole labour of the apprentice belongs to his master. In\r\nthe meantime he must, in many cases, be maintained by his parents or relations,\r\nand, in almost all cases, must be clothed by them. Some money, too, is commonly\r\ngiven to the master for teaching him his trade. They who cannot give money,\r\ngive time, or become bound for more than the usual number of years; a\r\nconsideration which, though it is not always advantageous to the master, on\r\naccount of the usual idleness of apprentices, is always disadvantageous to the\r\napprentice. In country labour, on the contrary, the labourer, while he is\r\nemployed about the easier, learns the more difficult parts of his business, and\r\nhis own labour maintains him through all the different stages of his\r\nemployment. It is reasonable, therefore, that in Europe the wages of mechanics,\r\nartificers, and manufacturers, should be somewhat higher than those of common\r\nlabourers. They are so accordingly, and their superior gains make them, in most\r\nplaces, be considered as a superior rank of people. This superiority, however,\r\nis generally very small: the daily or weekly earnings of journeymen in the more\r\ncommon sorts of manufactures, such as those of plain linen and woollen cloth,\r\ncomputed at an average, are, in most places, very little more than the\r\nday-wages of common labourers. Their employment, indeed, is more steady and\r\nuniform, and the superiority of their earnings, taking the whole year together,\r\nmay be somewhat greater. It seems evidently, however, to be no greater than\r\nwhat is sufficient to compensate the superior expense of their education.\r\nEducation in the ingenious arts, and in the liberal professions, is still more\r\ntedious and expensive. The pecuniary recompence, therefore, of painters and\r\nsculptors, of lawyers and physicians, ought to be much more liberal; and it is\r\nso accordingly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe profits of stock seem to be very little affected by the easiness or\r\ndifficulty of learning the trade in which it is employed. All the different\r\nways in which stock is commonly employed in great towns seem, in reality, to be\r\nalmost equally easy and equally difficult to learn. One branch, either of\r\nforeign or domestic trade, cannot well be a much more intricate business than\r\nanother.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, the wages of labour in different occupations vary with the constancy\r\nor inconstancy of employment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEmployment is much more constant in some trades than in others. In the greater\r\npart of manufactures, a journeyman maybe pretty sure of employment almost every\r\nday in the year that he is able to work. A mason or bricklayer, on the\r\ncontrary, can work neither in hard frost nor in foul weather, and his\r\nemployment at all other times depends upon the occasional calls of his\r\ncustomers. He is liable, in consequence, to be frequently without any. What he\r\nearns, therefore, while he is employed, must not only maintain him while he is\r\nidle, but make him some compensation for those anxious and desponding moments\r\nwhich the thought of so precarious a situation must sometimes occasion. Where\r\nthe computed earnings of the greater part of manufacturers, accordingly, are\r\nnearly upon a level with the day-wages of common labourers, those of masons and\r\nbricklayers are generally from one-half more to double those wages. Where\r\ncommon labourers earn four or five shillings a-week, masons and bricklayers\r\nfrequently earn seven and eight; where the former earn six, the latter often\r\nearn nine and ten; and where the former earn nine and ten, as in London, the\r\nlatter commonly earn fifteen and eighteen. No species of skilled labour,\r\nhowever, seems more easy to learn than that of masons and bricklayers. Chairmen\r\nin London, during the summer season, are said sometimes to be employed as\r\nbricklayers. The high wages of those workmen, therefore, are not so much the\r\nrecompence of their skill, as the compensation for the inconstancy of their\r\nemployment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA house-carpenter seems to exercise rather a nicer and a more ingenious trade\r\nthan a mason. In most places, however, for it is not universally so, his\r\nday-wages are somewhat lower. His employment, though it depends much, does not\r\ndepend so entirely upon the occasional calls of his customers; and it is not\r\nliable to be interrupted by the weather.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the trades which generally afford constant employment, happen in a\r\nparticular place not to do so, the wages of the workmen always rise a good deal\r\nabove their ordinary proportion to those of common labour. In London, almost\r\nall journeymen artificers are liable to be called upon and dismissed by their\r\nmasters from day to day, and from week to week, in the same manner as\r\nday-labourers in other places. The lowest order of artificers, journeymen\r\ntailors, accordingly, earn their half-a-crown a-day, though eighteen pence may\r\nbe reckoned the wages of common labour. In small towns and country villages,\r\nthe wages of journeymen tailors frequently scarce equal those of common labour;\r\nbut in London they are often many weeks without employment, particularly during\r\nthe summer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the inconstancy of employment is combined with the hardship,\r\ndisagreeableness, and dirtiness of the work, it sometimes raises the wages of\r\nthe most common labour above those of the most skilful artificers. A collier\r\nworking by the piece is supposed, at Newcastle, to earn commonly about double,\r\nand, in many parts of Scotland, about three times, the wages of common labour.\r\nHis high wages arise altogether from the hardship, disagreeableness, and\r\ndirtiness of his work. His employment may, upon most occasions, be as constant\r\nas he pleases. The coal-heavers in London exercise a trade which, in hardship,\r\ndirtiness, and disagreeableness, almost equals that of colliers; and, from the\r\nunavoidable irregularity in the arrivals of coal-ships, the employment of the\r\ngreater part of them is necessarily very inconstant. If colliers, therefore,\r\ncommonly earn double and triple the wages of common labour, it ought not to\r\nseem unreasonable that coal-heavers should sometimes earn four and five times\r\nthose wages. In the inquiry made into their condition a few years ago, it was\r\nfound that, at the rate at which they were then paid, they could earn from six\r\nto ten shillings a-day. Six shillings are about four times the wages of common\r\nlabour in London; and, in every particular trade, the lowest common earnings\r\nmay always be considered as those of the far greater number. How extravagant\r\nsoever those earnings may appear, if they were more than sufficient to\r\ncompensate all the disagreeable circumstances of the business, there would soon\r\nbe so great a number of competitors, as, in a trade which has no exclusive\r\nprivilege, would quickly reduce them to a lower rate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe constancy or inconstancy of employment cannot affect the ordinary profits\r\nof stock in any particular trade. Whether the stock is or is not constantly\r\nemployed, depends, not upon the trade, but the trader.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, the wages of labour vary according to the small or great trust which\r\nmust be reposed in the workmen.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wages of goldsmiths and jewellers are everywhere superior to those of many\r\nother workmen, not only of equal, but of much superior ingenuity, on account of\r\nthe precious materials with which they are entrusted. We trust our health to\r\nthe physician, our fortune, and sometimes our life and reputation, to the\r\nlawyer and attorney. Such confidence could not safely be reposed in people of a\r\nvery mean or low condition. Their reward must be such, therefore, as may give\r\nthem that rank in the society which so important a trust requires. The long\r\ntime and the great expense which must be laid out in their education, when\r\ncombined with this circumstance, necessarily enhance still further the price of\r\ntheir labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a person employs only his own stock in trade, there is no trust; and the\r\ncredit which he may get from other people, depends, not upon the nature of the\r\ntrade, but upon their opinion of his fortune, probity and prudence. The\r\ndifferent rates of profit, therefore, in the different branches of trade,\r\ncannot arise from the different degrees of trust reposed in the traders.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFifthly, the wages of labour in different employments vary according to the\r\nprobability or improbability of success in them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe probability that any particular person shall ever be qualified for the\r\nemployments to which he is educated, is very different in different\r\noccupations. In the greatest part of mechanic trades success is almost certain;\r\nbut very uncertain in the liberal professions. Put your son apprentice to a\r\nshoemaker, there is little doubt of his learning to make a pair of shoes; but\r\nsend him to study the law, it as at least twenty to one if he ever makes such\r\nproficiency as will enable him to live by the business. In a perfectly fair\r\nlottery, those who draw the prizes ought to gain all that is lost by those who\r\ndraw the blanks. In a profession, where twenty fail for one that succeeds, that\r\none ought to gain all that should have been gained by the unsuccessful twenty.\r\nThe counsellor at law, who, perhaps, at near forty years of age, begins to make\r\nsomething by his profession, ought to receive the retribution, not only of his\r\nown so tedious and expensive education, but of that of more than twenty others,\r\nwho are never likely to make any thing by it. How extravagant soever the fees\r\nof counsellors at law may sometimes appear, their real retribution is never\r\nequal to this. Compute, in any particular place, what is likely to be annually\r\ngained, and what is likely to be annually spent, by all the different workmen\r\nin any common trade, such as that of shoemakers or weavers, and you will find\r\nthat the former sum will generally exceed the latter. But make the same\r\ncomputation with regard to all the counsellors and students of law, in all the\r\ndifferent Inns of Court, and you will find that their annual gains bear but a\r\nvery small proportion to their annual expense, even though you rate the former\r\nas high, and the latter as low, as can well be done. The lottery of the law,\r\ntherefore, is very far from being a perfectly fair lottery; and that as well as\r\nmany other liberal and honourable professions, is, in point of pecuniary gain,\r\nevidently under-recompensed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose professions keep their level, however, with other occupations; and,\r\nnotwithstanding these discouragements, all the most generous and liberal\r\nspirits are eager to crowd into them. Two different causes contribute to\r\nrecommend them. First, the desire of the reputation which attends upon superior\r\nexcellence in any of them; and, secondly, the natural confidence which every\r\nman has, more or less, not only in his own abilities, but in his own good\r\nfortune.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo excel in any profession, in which but few arrive at mediocrity, is the most\r\ndecisive mark of what is called genius, or superior talents. The public\r\nadmiration which attends upon such distinguished abilities makes always a part\r\nof their reward; a greater or smaller, in proportion as it is higher or lower\r\nin degree. It makes a considerable part of that reward in the profession of\r\nphysic; a still greater, perhaps, in that of law; in poetry and philosophy it\r\nmakes almost the whole.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are some very agreeable and beautiful talents, of which the possession\r\ncommands a certain sort of admiration, but of which the exercise, for the sake\r\nof gain, is considered, whether from reason or prejudice, as a sort of public\r\nprostitution. The pecuniary recompence, therefore, of those who exercise them\r\nin this manner, must be sufficient, not only to pay for the time, labour, and\r\nexpense of acquiring the talents, but for the discredit which attends the\r\nemployment of them as the means of subsistence. The exorbitant rewards of\r\nplayers, opera-singers, opera-dancers, etc. are founded upon those two\r\nprinciples; the rarity and beauty of the talents, and the discredit of\r\nemploying them in this manner. It seems absurd at first sight, that we should\r\ndespise their persons, and yet reward their talents with the most profuse\r\nliberality. While we do the one, however, we must of necessity do the other,\r\nShould the public opinion or prejudice ever alter with regard to such\r\noccupations, their pecuniary recompence would quickly diminish. More people\r\nwould apply to them, and the competition would quickly reduce the price of\r\ntheir labour. Such talents, though far from being common, are by no means so\r\nrare as imagined. Many people possess them in great perfection, who disdain to\r\nmake this use of them; and many more are capable of acquiring them, if any\r\nthing could be made honourably by them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe over-weening conceit which the greater part of men have of their own\r\nabilities, is an ancient evil remarked by the philosophers and moralists of all\r\nages. Their absurd presumption in their own good fortune has been less taken\r\nnotice of. It is, however, if possible, still more universal. There is no man\r\nliving, who, when in tolerable health and spirits, has not some share of it.\r\nThe chance of gain is by every man more or less over-valued, and the chance of\r\nloss is by most men under-valued, and by scarce any man, who is in tolerable\r\nhealth and spirits, valued more than it is worth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the chance of gain is naturally overvalued, we may learn from the\r\nuniversal success of lotteries. The world neither ever saw, nor ever will see,\r\na perfectly fair lottery, or one in which the whole gain compensated the whole\r\nloss; because the undertaker could make nothing by it. In the state lotteries,\r\nthe tickets are really not worth the price which is paid by the original\r\nsubscribers, and yet commonly sell in the market for twenty, thirty, and\r\nsometimes forty per cent. advance. The vain hopes of gaining some of the great\r\nprizes is the sole cause of this demand. The soberest people scarce look upon\r\nit as a folly to pay a small sum for the chance of gaining ten or twenty\r\nthousand pounds, though they know that even that small sum is perhaps twenty or\r\nthirty per cent. more than the chance is worth. In a lottery in which no prize\r\nexceeded twenty pounds, though in other respects it approached much nearer to a\r\nperfectly fair one than the common state lotteries, there would not be the same\r\ndemand for tickets. In order to have a better chance for some of the great\r\nprizes, some people purchase several tickets; and others, small shares in a\r\nstill greater number. There is not, however, a more certain proposition in\r\nmathematics, than that the more tickets you adventure upon, the more likely you\r\nare to be a loser. Adventure upon all the tickets in the lottery, and you lose\r\nfor certain; and the greater the number of your tickets, the nearer you\r\napproach to this certainty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the chance of loss is frequently undervalued, and scarce ever valued more\r\nthan it is worth, we may learn from the very moderate profit of insurers. In\r\norder to make insurance, either from fire or sea-risk, a trade at all, the\r\ncommon premium must be sufficient to compensate the common losses, to pay the\r\nexpense of management, and to afford such a profit as might have been drawn\r\nfrom an equal capital employed in any common trade. The person who pays no more\r\nthan this, evidently pays no more than the real value of the risk, or the\r\nlowest price at which he can reasonably expect to insure it. But though many\r\npeople have made a little money by insurance, very few have made a great\r\nfortune; and, from this consideration alone, it seems evident enough that the\r\nordinary balance of profit and loss is not more advantageous in this than in\r\nother common trades, by which so many people make fortunes. Moderate, however,\r\nas the premium of insurance commonly is, many people despise the risk too much\r\nto care to pay it. Taking the whole kingdom at an average, nineteen houses in\r\ntwenty, or rather, perhaps, ninety-nine in a hundred, are not insured from\r\nfire. Sea-risk is more alarming to the greater part of people; and the\r\nproportion of ships insured to those not insured is much greater. Many sail,\r\nhowever, at all seasons, and even in time of war, without any insurance. This\r\nmay sometimes, perhaps, be done without any imprudence. When a great company,\r\nor even a great merchant, has twenty or thirty ships at sea, they may, as it\r\nwere, insure one another. The premium saved up on them all may more than\r\ncompensate such losses as they are likely to meet with in the common course of\r\nchances. The neglect of insurance upon shipping, however, in the same manner as\r\nupon houses, is, in most cases, the effect of no such nice calculation, but of\r\nmere thoughtless rashness, and presumptuous contempt of the risk.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe contempt of risk, and the presumptuous hope of success, are in no period of\r\nlife more active than at the age at which young people choose their\r\nprofessions. How little the fear of misfortune is then capable of balancing the\r\nhope of good luck, appears still more evidently in the readiness of the common\r\npeople to enlist as soldiers, or to go to sea, than in the eagerness of those\r\nof better fashion to enter into what are called the liberal professions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat a common soldier may lose is obvious enough. Without regarding the danger,\r\nhowever, young volunteers never enlist so readily as at the beginning of a new\r\nwar; and though they have scarce any chance of preferment, they figure to\r\nthemselves, in their youthful fancies, a thousand occasions of acquiring honour\r\nand distinction which never occur. These romantic hopes make the whole price of\r\ntheir blood. Their pay is less than that of common labourers, and, in actual\r\nservice, their fatigues are much greater.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe lottery of the sea is not altogether so disadvantageous as that of the\r\narmy. The son of a creditable labourer or artificer may frequently go to sea\r\nwith his father’s consent; but if he enlists as a soldier, it is always\r\nwithout it. Other people see some chance of his making something by the one\r\ntrade; nobody but himself sees any of his making any thing by the other. The\r\ngreat admiral is less the object of public admiration than the great general;\r\nand the highest success in the sea service promises a less brilliant fortune\r\nand reputation than equal success in the land. The same difference runs through\r\nall the inferior degrees of preferment in both. By the rules of precedency, a\r\ncaptain in the navy ranks with a colonel in the army; but he does not rank with\r\nhim in the common estimation. As the great prizes in the lottery are less, the\r\nsmaller ones must be more numerous. Common sailors, therefore, more frequently\r\nget some fortune and preferment than common soldiers; and the hope of those\r\nprizes is what principally recommends the trade. Though their skill and\r\ndexterity are much superior to that of almost any artificers; and though their\r\nwhole life is one continual scene of hardship and danger; yet for all this\r\ndexterity and skill, for all those hardships and dangers, while they remain in\r\nthe condition of common sailors, they receive scarce any other recompence but\r\nthe pleasure of exercising the one and of surmounting the other. Their wages\r\nare not greater than those of common labourers at the port which regulates the\r\nrate of seamen’s wages. As they are continually going from port to port,\r\nthe monthly pay of those who sail from all the different ports of Great\r\nBritain, is more nearly upon a level than that of any other workmen in those\r\ndifferent places; and the rate of the port to and from which the greatest\r\nnumber sail, that is, the port of London, regulates that of all the rest. At\r\nLondon, the wages of the greater part of the different classes of workmen are\r\nabout double those of the same classes at Edinburgh. But the sailors who sail\r\nfrom the port of London, seldom earn above three or four shillings a month more\r\nthan those who sail from the port of Leith, and the difference is frequently\r\nnot so great. In time of peace, and in the merchant-service, the London price\r\nis from a guinea to about seven-and-twenty shillings the calendar month. A\r\ncommon labourer in London, at the rate of nine or ten shillings a week, may\r\nearn in the calendar month from forty to five-and-forty shillings. The sailor,\r\nindeed, over and above his pay, is supplied with provisions. Their value,\r\nhowever, may not perhaps always exceed the difference between his pay and that\r\nof the common labourer; and though it sometimes should, the excess will not be\r\nclear gain to the sailor, because he cannot share it with his wife and family,\r\nwhom he must maintain out of his wages at home.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe dangers and hair-breadth escapes of a life of adventures, instead of\r\ndisheartening young people, seem frequently to recommend a trade to them. A\r\ntender mother, among the inferior ranks of people, is often afraid to send her\r\nson to school at a sea-port town, lest the sight of the ships, and the\r\nconversation and adventures of the sailors, should entice him to go to sea. The\r\ndistant prospect of hazards, from which we can hope to extricate ourselves by\r\ncourage and address, is not disagreeable to us, and does not raise the wages of\r\nlabour in any employment. It is otherwise with those in which courage and\r\naddress can be of no avail. In trades which are known to be very unwholesome,\r\nthe wages of labour are always remarkably high. Unwholesomeness is a species of\r\ndisagreeableness, and its effects upon the wages of labour are to be ranked\r\nunder that general head.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all the different employments of stock, the ordinary rate of profit varies\r\nmore or less with the certainty or uncertainty of the returns. These are, in\r\ngeneral, less uncertain in the inland than in the foreign trade, and in some\r\nbranches of foreign trade than in others; in the trade to North America, for\r\nexample, than in that to Jamaica. The ordinary rate of profit always rises more\r\nor less with the risk. It does not, however, seem to rise in proportion to it,\r\nor so as to compensate it completely. Bankruptcies are most frequent in the\r\nmost hazardous trades. The most hazardous of all trades, that of a smuggler,\r\nthough, when the adventure succeeds, it is likewise the most profitable, is the\r\ninfallible road to bankruptcy. The presumptuous hope of success seems to act\r\nhere as upon all other occasions, and to entice so many adventurers into those\r\nhazardous trades, that their competition reduces the profit below what is\r\nsufficient to compensate the risk. To compensate it completely, the common\r\nreturns ought, over and above the ordinary profits of stock, not only to make\r\nup for all occasional losses, but to afford a surplus profit to the\r\nadventurers, of the same nature with the profit of insurers. But if the common\r\nreturns were sufficient for all this, bankruptcies would not be more frequent\r\nin these than in other trades.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf the five circumstances, therefore, which vary the wages of labour, two only\r\naffect the profits of stock; the agreeableness or disagreeableness of the\r\nbusiness, and the risk or security with which it is attended. In point of\r\nagreeableness or disagreeableness, there is little or no difference in the far\r\ngreater part of the different employments of stock, but a great deal in those\r\nof labour; and the ordinary profit of stock, though it rises with the risk,\r\ndoes not always seem to rise in proportion to it. It should follow from all\r\nthis, that, in the same society or neighbourhood, the average and ordinary\r\nrates of profit in the different employments of stock should be more nearly\r\nupon a level than the pecuniary wages of the different sorts of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThey are so accordingly. The difference between the earnings of a common\r\nlabourer and those of a well employed lawyer or physician, is evidently much\r\ngreater than that between the ordinary profits in any two different branches of\r\ntrade. The apparent difference, besides, in the profits of different trades, is\r\ngenerally a deception arising from our not always distinguishing what ought to\r\nbe considered as wages, from what ought to be considered as profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nApothecaries’ profit is become a bye-word, denoting something uncommonly\r\nextravagant. This great apparent profit, however, is frequently no more than\r\nthe reasonable wages of labour. The skill of an apothecary is a much nicer and\r\nmore delicate matter than that of any artificer whatever; and the trust which\r\nis reposed in him is of much greater importance. He is the physician of the\r\npoor in all cases, and of the rich when the distress or danger is not very\r\ngreat. His reward, therefore, ought to be suitable to his skill and his trust;\r\nand it arises generally from the price at which he sells his drugs. But the\r\nwhole drugs which the best employed apothecary in a large market-town, will\r\nsell in a year, may not perhaps cost him above thirty or forty pounds. Though\r\nhe should sell them, therefore, for three or four hundred, or at a thousand per\r\ncent. profit, this may frequently be no more than the reasonable wages of his\r\nlabour, charged, in the only way in which he can charge them, upon the price of\r\nhis drugs. The greater part of the apparent profit is real wages disguised in\r\nthe garb of profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a small sea-port town, a little grocer will make forty or fifty per cent.\r\nupon a stock of a single hundred pounds, while a considerable wholesale\r\nmerchant in the same place will scarce make eight or ten per cent. upon a stock\r\nof ten thousand. The trade of the grocer may be necessary for the conveniency\r\nof the inhabitants, and the narrowness of the market may not admit the\r\nemployment of a larger capital in the business. The man, however, must not only\r\nlive by his trade, but live by it suitably to the qualifications which it\r\nrequires. Besides possessing a little capital, he must be able to read, write,\r\nand account and must be a tolerable judge, too, of perhaps fifty or sixty\r\ndifferent sorts of goods, their prices, qualities, and the markets where they\r\nare to be had cheapest. He must have all the knowledge, in short, that is\r\nnecessary for a great merchant, which nothing hinders him from becoming but the\r\nwant of a sufficient capital. Thirty or forty pounds a year cannot be\r\nconsidered as too great a recompence for the labour of a person so\r\naccomplished. Deduct this from the seemingly great profits of his capital, and\r\nlittle more will remain, perhaps, than the ordinary profits of stock. The\r\ngreater part of the apparent profit is, in this case too, real wages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe difference between the apparent profit of the retail and that of the\r\nwholesale trade, is much less in the capital than in small towns and country\r\nvillages. Where ten thousand pounds can be employed in the grocery trade, the\r\nwages of the grocer’s labour must be a very trifling addition to the real\r\nprofits of so great a stock. The apparent profits of the wealthy retailer,\r\ntherefore, are there more nearly upon a level with those of the wholesale\r\nmerchant. It is upon this account that goods sold by retail are generally as\r\ncheap, and frequently much cheaper, in the capital than in small towns and\r\ncountry villages. Grocery goods, for example, are generally much cheaper; bread\r\nand butchers’ meat frequently as cheap. It costs no more to bring grocery\r\ngoods to the great town than to the country village; but it costs a great deal\r\nmore to bring corn and cattle, as the greater part of them must be brought from\r\na much greater distance. The prime cost of grocery goods, therefore, being the\r\nsame in both places, they are cheapest where the least profit is charged upon\r\nthem. The prime cost of bread and butchers’ meat is greater in the great\r\ntown than in the country village; and though the profit is less, therefore they\r\nare not always cheaper there, but often equally cheap. In such articles as\r\nbread and butchers’ meat, the same cause which diminishes apparent\r\nprofit, increases prime cost. The extent of the market, by giving employment to\r\ngreater stocks, diminishes apparent profit; but by requiring supplies from a\r\ngreater distance, it increases prime cost. This diminution of the one and\r\nincrease of the other, seem, in most cases, nearly to counterbalance one\r\nanother; which is probably the reason that, though the prices of corn and\r\ncattle are commonly very different in different parts of the kingdom, those of\r\nbread and butchers’ meat are generally very nearly the same through the\r\ngreater part of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the profits of stock, both in the wholesale and retail trade, are\r\ngenerally less in the capital than in small towns and country villages, yet\r\ngreat fortunes are frequently acquired from small beginnings in the former, and\r\nscarce ever in the latter. In small towns and country villages, on account of\r\nthe narrowness of the market, trade cannot always be extended as stock extends.\r\nIn such places, therefore, though the rate of a particular person’s\r\nprofits may be very high, the sum or amount of them can never be very great,\r\nnor consequently that of his annual accumulation. In great towns, on the\r\ncontrary, trade can be extended as stock increases, and the credit of a frugal\r\nand thriving man increases much faster than his stock. His trade is extended in\r\nproportion to the amount of both; and the sum or amount of his profits is in\r\nproportion to the extent of his trade, and his annual accumulation in\r\nproportion to the amount of his profits. It seldom happens, however, that great\r\nfortunes are made, even in great towns, by any one regular, established, and\r\nwell-known branch of business, but in consequence of a long life of industry,\r\nfrugality, and attention. Sudden fortunes, indeed, are sometimes made in such\r\nplaces, by what is called the trade of speculation. The speculative merchant\r\nexercises no one regular, established, or well-known branch of business. He is\r\na corn merchant this year, and a wine merchant the next, and a sugar, tobacco,\r\nor tea merchant the year after. He enters into every trade, when he foresees\r\nthat it is likely to be more than commonly profitable, and he quits it when he\r\nforesees that its profits are likely to return to the level of other trades.\r\nHis profits and losses, therefore, can bear no regular proportion to those of\r\nany one established and well-known branch of business. A bold adventurer may\r\nsometimes acquire a considerable fortune by two or three successful\r\nspeculations, but is just as likely to lose one by two or three unsuccessful\r\nones. This trade can be carried on nowhere but in great towns. It is only in\r\nplaces of the most extensive commerce and correspondence that the intelligence\r\nrequisite for it can be had.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe five circumstances above mentioned, though they occasion considerable\r\ninequalities in the wages of labour and profits of stock, occasion none in the\r\nwhole of the advantages and disadvantages, real or imaginary, of the different\r\nemployments of either. The nature of those circumstances is such, that they\r\nmake up for a small pecuniary gain in some, and counterbalance a great one in\r\nothers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order, however, that this equality may take place in the whole of their\r\nadvantages or disadvantages, three things are requisite, even where there is\r\nthe most perfect freedom. First the employments must be well known and long\r\nestablished in the neighbourhood; secondly, they must be in their ordinary, or\r\nwhat may be called their natural state; and, thirdly, they must be the sole or\r\nprincipal employments of those who occupy them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, this equality can take place only in those employments which are well\r\nknown, and have been long established in the neighbourhood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhere all other circumstances are equal, wages are generally higher in new than\r\nin old trades. When a projector attempts to establish a new manufacture, he\r\nmust at first entice his workmen from other employments, by higher wages than\r\nthey can either earn in their own trades, or than the nature of his work would\r\notherwise require; and a considerable time must pass away before he can venture\r\nto reduce them to the common level. Manufactures for which the demand arises\r\naltogether from fashion and fancy, are continually changing, and seldom last\r\nlong enough to be considered as old established manufactures. Those, on the\r\ncontrary, for which the demand arises chiefly from use or necessity, are less\r\nliable to change, and the same form or fabric may continue in demand for whole\r\ncenturies together. The wages of labour, therefore, are likely to be higher in\r\nmanufactures of the former, than in those of the latter kind. Birmingham deals\r\nchiefly in manufactures of the former kind; Sheffield in those of the latter;\r\nand the wages of labour in those two different places are said to be suitable\r\nto this difference in the nature of their manufactures.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe establishment of any new manufacture, of any new branch of commerce, or of\r\nany new practice in agriculture, is always a speculation from which the\r\nprojector promises himself extraordinary profits. These profits sometimes are\r\nvery great, and sometimes, more frequently, perhaps, they are quite otherwise;\r\nbut, in general, they bear no regular proportion to those of other old trades\r\nin the neighbourhood. If the project succeeds, they are commonly at first very\r\nhigh. When the trade or practice becomes thoroughly established and well known,\r\nthe competition reduces them to the level of other trades.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, this equality in the whole of the advantages and disadvantages of the\r\ndifferent employments of labour and stock, can take place only in the ordinary,\r\nor what may be called the natural state of those employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe demand for almost every different species of labour is sometimes greater,\r\nand sometimes less than usual. In the one case, the advantages of the\r\nemployment rise above, in the other they fall below the common level. The\r\ndemand for country labour is greater at hay-time and harvest than during the\r\ngreater part of the year; and wages rise with the demand. In time of war, when\r\nforty or fifty thousand sailors are forced from the merchant service into that\r\nof the king, the demand for sailors to merchant ships necessarily rises with\r\ntheir scarcity; and their wages, upon such occasions, commonly rise from a\r\nguinea and seven-and-twenty shillings to forty shillings and three pounds\r\na-month. In a decaying manufacture, on the contrary, many workmen, rather than\r\nquit their own trade, are contented with smaller wages than would otherwise be\r\nsuitable to the nature of their employment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe profits of stock vary with the price of the commodities in which it is\r\nemployed. As the price of any commodity rises above the ordinary or average\r\nrate, the profits of at least some part of the stock that is employed in\r\nbringing it to market, rise above their proper level, and as it falls they sink\r\nbelow it. All commodities are more or less liable to variations of price, but\r\nsome are much more so than others. In all commodities which are produced by\r\nhuman industry, the quantity of industry annually employed is necessarily\r\nregulated by the annual demand, in such a manner that the average annual\r\nproduce may, as nearly as possible, be equal to the average annual consumption.\r\nIn some employments, it has already been observed, the same quantity of\r\nindustry will always produce the same, or very nearly the same quantity of\r\ncommodities. In the linen or woollen manufactures, for example, the same number\r\nof hands will annually work up very nearly the same quantity of linen and\r\nwoollen cloth. The variations in the market price of such commodities,\r\ntherefore, can arise only from some accidental variation in the demand. A\r\npublic mourning raises the price of black cloth. But as the demand for most\r\nsorts of plain linen and woollen cloth is pretty uniform, so is likewise the\r\nprice. But there are other employments in which the same quantity of industry\r\nwill not always produce the same quantity of commodities. The same quantity of\r\nindustry, for example, will, in different years, produce very different\r\nquantities of corn, wine, hops, sugar, tobacco, etc. The price of such\r\ncommodities, therefore, varies not only with the variations of demand, but with\r\nthe much greater and more frequent variations of quantity, and is consequently\r\nextremely fluctuating; but the profit of some of the dealers must necessarily\r\nfluctuate with the price of the commodities. The operations of the speculative\r\nmerchant are principally employed about such commodities. He endeavours to buy\r\nthem up when he foresees that their price is likely to rise, and to sell them\r\nwhen it is likely to fall.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, this equality in the whole of the advantages and disadvantages of the\r\ndifferent employments of labour and stock, can take place only in such as are\r\nthe sole or principal employments of those who occupy them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a person derives his subsistence from one employment, which does not\r\noccupy the greater part of his time, in the intervals of his leisure he is\r\noften willing to work at another for less wages than would otherwise suit the\r\nnature of the employment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere still subsists, in many parts of Scotland, a set of people called cottars\r\nor cottagers, though they were more frequent some years ago than they are now.\r\nThey are a sort of out-servants of the landlords and farmers. The usual reward\r\nwhich they receive from their master is a house, a small garden for pot-herbs,\r\nas much grass as will feed a cow, and, perhaps, an acre or two of bad arable\r\nland. When their master has occasion for their labour, he gives them, besides,\r\ntwo pecks of oatmeal a-week, worth about sixteen pence sterling. During a great\r\npart of the year, he has little or no occasion for their labour, and the\r\ncultivation of their own little possession is not sufficient to occupy the time\r\nwhich is left at their own disposal. When such occupiers were more numerous\r\nthan they are at present, they are said to have been willing to give their\r\nspare time for a very small recompence to any body, and to have wrought for\r\nless wages than other labourers. In ancient times, they seem to have been\r\ncommon all over Europe. In countries ill cultivated, and worse inhabited, the\r\ngreater part of landlords and farmers could not otherwise provide themselves\r\nwith the extraordinary number of hands which country labour requires at certain\r\nseasons. The daily or weekly recompence which such labourers occasionally\r\nreceived from their masters, was evidently not the whole price of their labour.\r\nTheir small tenement made a considerable part of it. This daily or weekly\r\nrecompence, however, seems to have been considered as the whole of it, by many\r\nwriters who have collected the prices of labour and provisions in ancient\r\ntimes, and who have taken pleasure in representing both as wonderfully low.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of such labour comes frequently cheaper to market than would\r\notherwise be suitable to its nature. Stockings, in many parts of Scotland, are\r\nknit much cheaper than they can anywhere be wrought upon the loom. They are the\r\nwork of servants and labourers who derive the principal part of their\r\nsubsistence from some other employment. More than a thousand pair of Shetland\r\nstockings are annually imported into Leith, of which the price is from\r\nfivepence to seven-pence a pair. At Lerwick, the small capital of the Shetland\r\nislands, tenpence a-day, I have been assured, is a common price of common\r\nlabour. In the same islands, they knit worsted stockings to the value of a\r\nguinea a pair and upwards.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe spinning of linen yarn is carried on in Scotland nearly in the same way as\r\nthe knitting of stockings, by servants, who are chiefly hired for other\r\npurposes. They earn but a very scanty subsistence, who endeavour to get their\r\nlivelihood by either of those trades. In most parts of Scotland, she is a good\r\nspinner who can earn twentypence a-week.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn opulent countries, the market is generally so extensive, that any one trade\r\nis sufficient to employ the whole labour and stock of those who occupy it.\r\nInstances of people living by one employment, and, at the same time, deriving\r\nsome little advantage from another, occur chiefly in poor countries. The\r\nfollowing instance, however, of something of the same kind, is to be found in\r\nthe capital of a very rich one. There is no city in Europe, I believe, in which\r\nhouse-rent is dearer than in London, and yet I know no capital in which a\r\nfurnished apartment can be hired so cheap. Lodging is not only much cheaper in\r\nLondon than in Paris; it is much cheaper than in Edinburgh, of the same degree\r\nof goodness; and, what may seem extraordinary, the dearness of house-rent is\r\nthe cause of the cheapness of lodging. The dearness of house-rent in London\r\narises, not only from those causes which render it dear in all great capitals,\r\nthe dearness of labour, the dearness of all the materials of building, which\r\nmust generally be brought from a great distance, and, above all, the dearness\r\nof ground-rent, every landlord acting the part of a monopolist, and frequently\r\nexacting a higher rent for a single acre of bad land in a town, than can be had\r\nfor a hundred of the best in the country; but it arises in part from the\r\npeculiar manners and customs of the people, which oblige every master of a\r\nfamily to hire a whole house from top to bottom. A dwelling-house in England\r\nmeans every thing that is contained under the same roof. In France, Scotland,\r\nand many other parts of Europe, it frequently means no more than a single\r\nstorey. A tradesman in London is obliged to hire a whole house in that part of\r\nthe town where his customers live. His shop is upon the ground floor, and he\r\nand his family sleep in the garret; and he endeavours to pay a part of his\r\nhouse-rent by letting the two middle storeys to lodgers. He expects to maintain\r\nhis family by his trade, and not by his lodgers. Whereas at Paris and\r\nEdinburgh, people who let lodgings have commonly no other means of subsistence;\r\nand the price of the lodging must pay, not only the rent of the house, but the\r\nwhole expense of the family.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II.—Inequalities occasioned by the Policy of Europe.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nSuch are the inequalities in the whole of the advantages and disadvantages of\r\nthe different employments of labour and stock, which the defect of any of the\r\nthree requisites above mentioned must occasion, even where there is the most\r\nperfect liberty. But the policy of Europe, by not leaving things at perfect\r\nliberty, occasions other inequalities of much greater importance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt does this chiefly in the three following ways. First, by restraining the\r\ncompetition in some employments to a smaller number than would otherwise be\r\ndisposed to enter into them; secondly, by increasing it in others beyond what\r\nit naturally would be; and, thirdly, by obstructing the free circulation of\r\nlabour and stock, both from employment to employment, and from place to place.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, The policy of Europe occasions a very important inequality in the whole\r\nof the advantages and disadvantages of the different employments of labour and\r\nstock, by restraining the competition in some employments to a smaller number\r\nthan might otherwise be disposed to enter into them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exclusive privileges of corporations are the principal means it makes use\r\nof for this purpose.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exclusive privilege of an incorporated trade necessarily restrains the\r\ncompetition, in the town where it is established, to those who are free of the\r\ntrade. To have served an apprenticeship in the town, under a master properly\r\nqualified, is commonly the necessary requisite for obtaining this freedom. The\r\nbye-laws of the corporation regulate sometimes the number of apprentices which\r\nany master is allowed to have, and almost always the number of years which each\r\napprentice is obliged to serve. The intention of both regulations is to\r\nrestrain the competition to a much smaller number than might otherwise be\r\ndisposed to enter into the trade. The limitation of the number of apprentices\r\nrestrains it directly. A long term of apprenticeship restrains it more\r\nindirectly, but as effectually, by increasing the expense of education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Sheffield, no master cutler can have more than one apprentice at a time, by\r\na bye-law of the corporation. In Norfolk and Norwich, no master weaver can have\r\nmore than two apprentices, under pain of forfeiting five pounds a-month to the\r\nking. No master hatter can have more than two apprentices anywhere in England,\r\nor in the English plantations, under pain of forfeiting; five pounds a-month,\r\nhalf to the king, and half to him who shall sue in any court of record. Both\r\nthese regulations, though they have been confirmed by a public law of the\r\nkingdom, are evidently dictated by the same corporation-spirit which enacted\r\nthe bye-law of Sheffield. The silk-weavers in London had scarce been\r\nincorporated a year, when they enacted a bye-law, restraining any master from\r\nhaving more than two apprentices at a time. It required a particular act of\r\nparliament to rescind this bye-law.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSeven years seem anciently to have been, all over Europe, the usual term\r\nestablished for the duration of apprenticeships in the greater part of\r\nincorporated trades. All such incorporations were anciently called\r\nuniversities, which, indeed, is the proper Latin name for any incorporation\r\nwhatever. The university of smiths, the university of tailors, etc. are\r\nexpressions which we commonly meet with in the old charters of ancient towns.\r\nWhen those particular incorporations, which are now peculiarly called\r\nuniversities, were first established, the term of years which it was necessary\r\nto study, in order to obtain the degree of master of arts, appears evidently to\r\nhave been copied from the term of apprenticeship in common trades, of which the\r\nincorporations were much more ancient. As to have wrought seven years under a\r\nmaster properly qualified, was necessary, in order to entitle any person to\r\nbecome a master, and to have himself apprentices in a common trade; so to have\r\nstudied seven years under a master properly qualified, was necessary to entitle\r\nhim to become a master, teacher, or doctor (words anciently synonymous), in the\r\nliberal arts, and to have scholars or apprentices (words likewise originally\r\nsynonymous) to study under him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 5th of Elizabeth, commonly called the Statute of Apprenticeship, it was\r\nenacted, that no person should, for the future, exercise any trade, craft, or\r\nmystery, at that time exercised in England, unless he had previously served to\r\nit an apprenticeship of seven years at least; and what before had been the\r\nbye-law of many particular corporations, became in England the general and\r\npublic law of all trades carried on in market towns. For though the words of\r\nthe statute are very general, and seem plainly to include the whole kingdom, by\r\ninterpretation its operation has been limited to market towns; it having been\r\nheld that, in country villages, a person may exercise several different trades,\r\nthough he has not served a seven years apprenticeship to each, they being\r\nnecessary for the conveniency of the inhabitants, and the number of people\r\nfrequently not being sufficient to supply each with a particular set of hands.\r\nBy a strict interpretation of the words, too, the operation of this statute has\r\nbeen limited to those trades which were established in England before the 5th\r\nof Elizabeth, and has never been extended to such as have been introduced since\r\nthat time. This limitation has given occasion to several distinctions, which,\r\nconsidered as rules of police, appear as foolish as can well be imagined. It\r\nhas been adjudged, for example, that a coach-maker can neither himself make nor\r\nemploy journeymen to make his coach-wheels, but must buy them of a master\r\nwheel-wright; this latter trade having been exercised in England before the 5th\r\nof Elizabeth. But a wheel-wright, though he has never served an apprenticeship\r\nto a coachmaker, may either himself make or employ journeymen to make coaches;\r\nthe trade of a coachmaker not being within the statute, because not exercised\r\nin England at the time when it was made. The manufactures of Manchester,\r\nBirmingham, and Wolverhampton, are many of them, upon this account, not within\r\nthe statute, not having been exercised in England before the 5th of Elizabeth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the duration of apprenticeships is different in different towns and\r\nin different trades. In Paris, five years is the term required in a great\r\nnumber; but, before any person can be qualified to exercise the trade as a\r\nmaster, he must, in many of them, serve five years more as a journeyman. During\r\nthis latter term, he is called the companion of his master, and the term itself\r\nis called his companionship.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Scotland, there is no general law which regulates universally the duration\r\nof apprenticeships. The term is different in different corporations. Where it\r\nis long, a part of it may generally be redeemed by paying a small fine. In most\r\ntowns, too, a very small fine is sufficient to purchase the freedom of any\r\ncorporation. The weavers of linen and hempen cloth, the principal manufactures\r\nof the country, as well as all other artificers subservient to them,\r\nwheel-makers, reel-makers, etc. may exercise their trades in any town-corporate\r\nwithout paying any fine. In all towns-corporate, all persons are free to sell\r\nbutchers’ meat upon any lawful day of the week. Three years is, in\r\nScotland, a common term of apprenticeship, even in some very nice trades; and,\r\nin general, I know of no country in Europe, in which corporation laws are so\r\nlittle oppressive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe property which every man has in his own labour, as it is the original\r\nfoundation of all other property, so it is the most sacred and inviolable. The\r\npatrimony of a poor man lies in the strength and dexterity of his hands; and to\r\nhinder him from employing this strength and dexterity in what manner he thinks\r\nproper, without injury to his neighbour, is a plain violation of this most\r\nsacred property. It is a manifest encroachment upon the just liberty, both of\r\nthe workman, and of those who might be disposed to employ him. As it hinders\r\nthe one from working at what he thinks proper, so it hinders the others from\r\nemploying whom they think proper. To judge whether he is fit to be employed,\r\nmay surely be trusted to the discretion of the employers, whose interest it so\r\nmuch concerns. The affected anxiety of the lawgiver, lest they should employ an\r\nimproper person, is evidently as impertinent as it is oppressive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe institution of long apprenticeships can give no security that insufficient\r\nworkmanship shall not frequently be exposed to public sale. When this is done,\r\nit is generally the effect of fraud, and not of inability; and the longest\r\napprenticeship can give no security against fraud. Quite different regulations\r\nare necessary to prevent this abuse. The sterling mark upon plate, and the\r\nstamps upon linen and woollen cloth, give the purchaser much greater security\r\nthan any statute of apprenticeship. He generally looks at these, but never\r\nthinks it worth while to enquire whether the workman had served a seven years\r\napprenticeship.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe institution of long apprenticeships has no tendency to form young people to\r\nindustry. A journeyman who works by the piece is likely to be industrious,\r\nbecause he derives a benefit from every exertion of his industry. An apprentice\r\nis likely to be idle, and almost always is so, because he has no immediate\r\ninterest to be otherwise. In the inferior employments, the sweets of labour\r\nconsist altogether in the recompence of labour. They who are soonest in a\r\ncondition to enjoy the sweets of it, are likely soonest to conceive a relish\r\nfor it, and to acquire the early habit of industry. A young man naturally\r\nconceives an aversion to labour, when for a long time he receives no benefit\r\nfrom it. The boys who are put out apprentices from public charities are\r\ngenerally bound for more than the usual number of years, and they generally\r\nturn out very idle and worthless.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nApprenticeships were altogether unknown to the ancients. The reciprocal duties\r\nof master and apprentice make a considerable article in every modern code. The\r\nRoman law is perfectly silent with regard to them. I know no Greek or Latin\r\nword (I might venture, I believe, to assert that there is none) which expresses\r\nthe idea we now annex to the word apprentice, a servant bound to work at a\r\nparticular trade for the benefit of a master, during a term of years, upon\r\ncondition that the master shall teach him that trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLong apprenticeships are altogether unnecessary. The arts, which are much\r\nsuperior to common trades, such as those of making clocks and watches, contain\r\nno such mystery as to require a long course of instruction. The first invention\r\nof such beautiful machines, indeed, and even that of some of the instruments\r\nemployed in making them, must no doubt have been the work of deep thought and\r\nlong time, and may justly be considered as among the happiest efforts of human\r\ningenuity. But when both have been fairly invented, and are well understood, to\r\nexplain to any young man, in the completest manner, how to apply the\r\ninstruments, and how to construct the machines, cannot well require more than\r\nthe lessons of a few weeks; perhaps those of a few days might be sufficient. In\r\nthe common mechanic trades, those of a few days might certainly be sufficient.\r\nThe dexterity of hand, indeed, even in common trades, cannot be acquired\r\nwithout much practice and experience. But a young man would practice with much\r\nmore diligence and attention, if from the beginning he wrought as a journeyman,\r\nbeing paid in proportion to the little work which he could execute, and paying\r\nin his turn for the materials which he might sometimes spoil through\r\nawkwardness and inexperience. His education would generally in this way be more\r\neffectual, and always less tedious and expensive. The master, indeed, would be\r\na loser. He would lose all the wages of the apprentice, which he now saves, for\r\nseven years together. In the end, perhaps, the apprentice himself would be a\r\nloser. In a trade so easily learnt he would have more competitors, and his\r\nwages, when he came to be a complete workman, would be much less than at\r\npresent. The same increase of competition would reduce the profits of the\r\nmasters, as well as the wages of workmen. The trades, the crafts, the\r\nmysteries, would all be losers. But the public would be a gainer, the work of\r\nall artificers coming in this way much cheaper to market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is to prevent this reduction of price, and consequently of wages and profit,\r\nby restraining that free competition which would most certainly occasion it,\r\nthat all corporations, and the greater part of corporation laws have been\r\nestablished. In order to erect a corporation, no other authority in ancient\r\ntimes was requisite, in many parts of Europe, but that of the town-corporate in\r\nwhich it was established. In England, indeed, a charter from the king was\r\nlikewise necessary. But this prerogative of the crown seems to have been\r\nreserved rather for extorting money from the subject, than for the defence of\r\nthe common liberty against such oppressive monopolies. Upon paying a fine to\r\nthe king, the charter seems generally to have been readily granted; and when\r\nany particular class of artificers or traders thought proper to act as a\r\ncorporation, without a charter, such adulterine guilds, as they were called,\r\nwere not always disfranchised upon that account, but obliged to fine annually\r\nto the king, for permission to exercise their usurped privileges {See Madox\r\nFirma Burgi p. 26 etc.}. The immediate inspection of all corporations, and of\r\nthe bye-laws which they might think proper to enact for their own government,\r\nbelonged to the town-corporate in which they were established; and whatever\r\ndiscipline was exercised over them, proceeded commonly, not from the king, but\r\nfrom that greater incorporation of which those subordinate ones were only parts\r\nor members.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe government of towns-corporate was altogether in the hands of traders and\r\nartificers, and it was the manifest interest of every particular class of them,\r\nto prevent the market from being overstocked, as they commonly express it, with\r\ntheir own particular species of industry; which is in reality to keep it always\r\nunderstocked. Each class was eager to establish regulations proper for this\r\npurpose, and, provided it was allowed to do so, was willing to consent that\r\nevery other class should do the same. In consequence of such regulations,\r\nindeed, each class was obliged to buy the goods they had occasion for from\r\nevery other within the town, somewhat dearer than they otherwise might have\r\ndone. But, in recompence, they were enabled to sell their own just as much\r\ndearer; so that, so far it was as broad as long, as they say; and in the\r\ndealings of the different classes within the town with one another, none of\r\nthem were losers by these regulations. But in their dealings with the country\r\nthey were all great gainers; and in these latter dealings consist the whole\r\ntrade which supports and enriches every town.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery town draws its whole subsistence, and all the materials of its industry,\r\nfrom the: country. It pays for these chiefly in two ways. First, by sending\r\nback to the country a part of those materials wrought up and manufactured; in\r\nwhich case, their price is augmented by the wages of the workmen, and the\r\nprofits of their masters or immediate employers; secondly, by sending to it a\r\npart both of the rude and manufactured produce, either of other countries, or\r\nof distant parts of the same country, imported into the town; in which case,\r\ntoo, the original price of those goods is augmented by the wages of the\r\ncarriers or sailors, and by the profits of the merchants who employ them. In\r\nwhat is gained upon the first of those branches of commerce, consists the\r\nadvantage which the town makes by its manufactures; in what is gained upon the\r\nsecond, the advantage of its inland and foreign trade. The wages of the\r\nworkmen, and the profits of their different employers, make up the whole of\r\nwhat is gained upon both. Whatever regulations, therefore, tend to increase\r\nthose wages and profits beyond what they otherwise: would be, tend to enable\r\nthe town to purchase, with a smaller quantity of its labour, the produce of a\r\ngreater quantity of the labour of the country. They give the traders and\r\nartificers in the town an advantage over the landlords, farmers, and labourers,\r\nin the country, and break down that natural equality which would otherwise take\r\nplace in the commerce which is carried on between them. The whole annual\r\nproduce of the labour of the society is annually divided between those two\r\ndifferent sets of people. By means of those regulations, a greater share of it\r\nis given to the inhabitants of the town than would otherwise fall to them, and\r\na less to those of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price which the town really pays for the provisions and materials annually\r\nimported into it, is the quantity of manufactures and other goods annually\r\nexported from it. The dearer the latter are sold, the cheaper the former are\r\nbought. The industry of the town becomes more, and that of the country less\r\nadvantageous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the industry which is carried on in towns is, everywhere in Europe, more\r\nadvantageous than that which is carried on in the country, without entering\r\ninto any very nice computations, we may satisfy ourselves by one very simple\r\nand obvious observation. In every country of Europe, we find at least a hundred\r\npeople who have acquired great fortunes, from small beginnings, by trade and\r\nmanufactures, the industry which properly belongs to towns, for one who has\r\ndone so by that which properly belongs to the country, the raising of rude\r\nproduce by the improvement and cultivation of land. Industry, therefore, must\r\nbe better rewarded, the wages of labour and the profits of stock must evidently\r\nbe greater, in the one situation than in the other. But stock and labour\r\nnaturally seek the most advantageous employment. They naturally, therefore,\r\nresort as much as they can to the town, and desert the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inhabitants of a town being collected into one place, can easily combine\r\ntogether. The most insignificant trades carried on in towns have, accordingly,\r\nin some place or other, been incorporated; and even where they have never been\r\nincorporated, yet the corporation-spirit, the jealousy of strangers, the\r\naversion to take apprentices, or to communicate the secret of their trade,\r\ngenerally prevail in them, and often teach them, by voluntary associations and\r\nagreements, to prevent that free competition which they cannot prohibit by\r\nbye-laws. The trades which employ but a small number of hands, run most easily\r\ninto such combinations. Half-a-dozen wool-combers, perhaps, are necessary to\r\nkeep a thousand spinners and weavers at work. By combining not to take\r\napprentices, they can not only engross the employment, but reduce the whole\r\nmanufacture into a sort of slavery to themselves, and raise the price of their\r\nlabour much above what is due to the nature of their work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inhabitants of the country, dispersed in distant places, cannot easily\r\ncombine together. They have not only never been incorporated, but the\r\nincorporation spirit never has prevailed among them. No apprenticeship has ever\r\nbeen thought necessary to qualify for husbandry, the great trade of the\r\ncountry. After what are called the fine arts, and the liberal professions,\r\nhowever, there is perhaps no trade which requires so great a variety of\r\nknowledge and experience. The innumerable volumes which have been written upon\r\nit in all languages, may satisfy us, that among the wisest and most learned\r\nnations, it has never been regarded as a matter very easily understood. And\r\nfrom all those volumes we shall in vain attempt to collect that knowledge of\r\nits various and complicated operations which is commonly possessed even by the\r\ncommon farmer; how contemptuously soever the very contemptible authors of some\r\nof them may sometimes affect to speak of him. There is scarce any common\r\nmechanic trade, on the contrary, of which all the operations may not be as\r\ncompletely and distinctly explained in a pamphlet of a very few pages, as it is\r\npossible for words illustrated by figures to explain them. In the history of\r\nthe arts, now publishing by the French Academy of Sciences, several of them are\r\nactually explained in this manner. The direction of operations, besides, which\r\nmust be varied with every change of the weather, as well as with many other\r\naccidents, requires much more judgment and discretion, than that of those which\r\nare always the same, or very nearly the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNot only the art of the farmer, the general direction of the operations of\r\nhusbandry, but many inferior branches of country labour require much more skill\r\nand experience than the greater part of mechanic trades. The man who works upon\r\nbrass and iron, works with instruments, and upon materials of which the temper\r\nis always the same, or very nearly the same. But the man who ploughs the ground\r\nwith a team of horses or oxen, works with instruments of which the health,\r\nstrength, and temper, are very different upon different occasions. The\r\ncondition of the materials which he works upon, too, is as variable as that of\r\nthe instruments which he works with, and both require to be managed with much\r\njudgment and discretion. The common ploughman, though generally regarded as the\r\npattern of stupidity and ignorance, is seldom defective in this judgment and\r\ndiscretion. He is less accustomed, indeed, to social intercourse, than the\r\nmechanic who lives in a town. His voice and language are more uncouth, and more\r\ndifficult to be understood by those who are not used to them. His\r\nunderstanding, however, being accustomed to consider a greater variety of\r\nobjects, is generally much superior to that of the other, whose whole\r\nattention, from morning till night, is commonly occupied in performing one or\r\ntwo very simple operations. How much the lower ranks of people in the country\r\nare really superior to those of the town, is well known to every man whom\r\neither business or curiosity has led to converse much with both. In China and\r\nIndostan, accordingly, both the rank and the wages of country labourers are\r\nsaid to be superior to those of the greater part of artificers and\r\nmanufacturers. They would probably be so everywhere, if corporation laws and\r\nthe corporation spirit did not prevent it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe superiority which the industry of the towns has everywhere in Europe over\r\nthat of the country, is not altogether owing to corporations and corporation\r\nlaws. It is supported by many other regulations. The high duties upon foreign\r\nmanufactures, and upon all goods imported by alien merchants, all tend to the\r\nsame purpose. Corporation laws enable the inhabitants of towns to raise their\r\nprices, without fearing to be undersold by the free competition of their own\r\ncountrymen. Those other regulations secure them equally against that of\r\nforeigners. The enhancement of price occasioned by both is everywhere finally\r\npaid by the landlords, farmers, and labourers, of the country, who have seldom\r\nopposed the establishment of such monopolies. They have commonly neither\r\ninclination nor fitness to enter into combinations; and the clamour and\r\nsophistry of merchants and manufacturers easily persuade them, that the private\r\ninterest of a part, and of a subordinate part, of the society, is the general\r\ninterest of the whole.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the superiority of the industry of the towns over that of the\r\ncountry seems to have been greater formerly than in the present times. The\r\nwages of country labour approach nearer to those of manufacturing labour, and\r\nthe profits of stock employed in agriculture to those of trading and\r\nmanufacturing stock, than they are said to have done in the last century, or in\r\nthe beginning of the present. This change may be regarded as the necessary,\r\nthough very late consequence of the extraordinary encouragement given to the\r\nindustry of the towns. The stocks accumulated in them come in time to be so\r\ngreat, that it can no longer be employed with the ancient profit in that\r\nspecies of industry which is peculiar to them. That industry has its limits\r\nlike every other; and the increase of stock, by increasing the competition,\r\nnecessarily reduces the profit. The lowering of profit in the town forces out\r\nstock to the country, where, by creating a new demand for country labour, it\r\nnecessarily raises its wages. It then spreads itself, if I my say so, over the\r\nface of the land, and, by being employed in agriculture, is in part restored to\r\nthe country, at the expense of which, in a great measure, it had originally\r\nbeen accumulated in the town. That everywhere in Europe the greatest\r\nimprovements of the country have been owing to such over flowings of the stock\r\noriginally accumulated in the towns, I shall endeavour to shew hereafter, and\r\nat the same time to demonstrate, that though some countries have, by this\r\ncourse, attained to a considerable degree of opulence, it is in itself\r\nnecessarily slow, uncertain, liable to be disturbed and interrupted by\r\ninnumerable accidents, and, in every respect, contrary to the order of nature\r\nand of reason. The interests, prejudices, laws, and customs, which have given\r\noccasion to it, I shall endeavour to explain as fully and distinctly as I can\r\nin the third and fourth books of this Inquiry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPeople of the same trade seldom meet together, even for merriment and\r\ndiversion, but the conversation ends in a conspiracy against the public, or in\r\nsome contrivance to raise prices. It is impossible, indeed, to prevent such\r\nmeetings, by any law which either could be executed, or would be consistent\r\nwith liberty and justice. But though the law cannot hinder people of the same\r\ntrade from sometimes assembling together, it ought to do nothing to facilitate\r\nsuch assemblies, much less to render them necessary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA regulation which obliges all those of the same trade in a particular town to\r\nenter their names and places of abode in a public register, facilitates such\r\nassemblies. It connects individuals who might never otherwise be known to one\r\nanother, and gives every man of the trade a direction where to find every other\r\nman of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA regulation which enables those of the same trade to tax themselves, in order\r\nto provide for their poor, their sick, their widows and orphans, by giving them\r\na common interest to manage, renders such assemblies necessary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn incorporation not only renders them necessary, but makes the act of the\r\nmajority binding upon the whole. In a free trade, an effectual combination\r\ncannot be established but by the unanimous consent of every single trader, and\r\nit cannot last longer than every single trader continues of the same mind. The\r\nmajority of a corporation can enact a bye-law, with proper penalties, which\r\nwill limit the competition more effectually and more durably than any voluntary\r\ncombination whatever.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe pretence that corporations are necessary for the better government of the\r\ntrade, is without any foundation. The real and effectual discipline which is\r\nexercised over a workman, is not that of his corporation, but that of his\r\ncustomers. It is the fear of losing their employment which restrains his frauds\r\nand corrects his negligence. An exclusive corporation necessarily weakens the\r\nforce of this discipline. A particular set of workmen must then be employed,\r\nlet them behave well or ill. It is upon this account that, in many large\r\nincorporated towns, no tolerable workmen are to be found, even in some of the\r\nmost necessary trades. If you would have your work tolerably executed, it must\r\nbe done in the suburbs, where the workmen, having no exclusive privilege, have\r\nnothing but their character to depend upon, and you must then smuggle it into\r\nthe town as well as you can.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in this manner that the policy of Europe, by restraining the competition\r\nin some employments to a smaller number than would otherwise be disposed to\r\nenter into them, occasions a very important inequality in the whole of the\r\nadvantages and disadvantages of the different employments of labour and stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, the policy of Europe, by increasing the competition in some\r\nemployments beyond what it naturally would be, occasions another inequality, of\r\nan opposite kind, in the whole of the advantages and disadvantages of the\r\ndifferent employments of labour and stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been considered as of so much importance that a proper number of young\r\npeople should be educated for certain professions, that sometimes the public,\r\nand sometimes the piety of private founders, have established many pensions,\r\nscholarships, exhibitions, bursaries, etc. for this purpose, which draw many\r\nmore people into those trades than could otherwise pretend to follow them. In\r\nall Christian countries, I believe, the education of the greater part of\r\nchurchmen is paid for in this manner. Very few of them are educated altogether\r\nat their own expense. The long, tedious, and expensive education, therefore, of\r\nthose who are, will not always procure them a suitable reward, the church being\r\ncrowded with people, who, in order to get employment, are willing to accept of\r\na much smaller recompence than what such an education would otherwise have\r\nentitled them to; and in this manner the competition of the poor takes away the\r\nreward of the rich. It would be indecent, no doubt, to compare either a curate\r\nor a chaplain with a journeyman in any common trade. The pay of a curate or\r\nchaplain, however, may very properly be considered as of the same nature with\r\nthe wages of a journeyman. They are all three paid for their work according to\r\nthe contract which they may happen to make with their respective superiors.\r\nTill after the middle of the fourteenth century, five merks, containing about\r\nas much silver as ten pounds of our present money, was in England the usual pay\r\nof a curate or a stipendiary parish priest, as we find it regulated by the\r\ndecrees of several different national councils. At the same period, fourpence\r\na-day, containing the same quantity of silver as a shilling of our present\r\nmoney, was declared to be the pay of a master mason; and threepence a-day,\r\nequal to ninepence of our present money, that of a journeyman mason. {See the\r\nStatute of Labourers, 25, Ed. III.} The wages of both these labourers,\r\ntherefore, supposing them to have been constantly employed, were much superior\r\nto those of the curate. The wages of the master mason, supposing him to have\r\nbeen without employment one-third of the year, would have fully equalled them.\r\nBy the 12th of Queen Anne, c. 12. it is declared, “That whereas, for want\r\nof sufficient maintenance and encouragement to curates, the cures have, in\r\nseveral places, been meanly supplied, the bishop is, therefore, empowered to\r\nappoint, by writing under his hand and seal, a sufficient certain stipend or\r\nallowance, not exceeding fifty, and not less than twenty pounds a-year”.\r\nForty pounds a-year is reckoned at present very good pay for a curate; and,\r\nnotwithstanding this act of parliament, there are many curacies under twenty\r\npounds a-year. There are journeymen shoemakers in London who earn forty pounds\r\na-year, and there is scarce an industrious workman of any kind in that\r\nmetropolis who does not earn more than twenty. This last sum, indeed, does not\r\nexceed what is frequently earned by common labourers in many country parishes.\r\nWhenever the law has attempted to regulate the wages of workmen, it has always\r\nbeen rather to lower them than to raise them. But the law has, upon many\r\noccasions, attempted to raise the wages of curates, and, for the dignity of the\r\nchurch, to oblige the rectors of parishes to give them more than the wretched\r\nmaintenance which they themselves might be willing to accept of. And, in both\r\ncases, the law seems to have been equally ineffectual, and has never either\r\nbeen able to raise the wages of curates, or to sink those of labourers to the\r\ndegree that was intended; because it has never been able to hinder either the\r\none from being willing to accept of less than the legal allowance, on account\r\nof the indigence of their situation and the multitude of their competitors, or\r\nthe other from receiving more, on account of the contrary competition of those\r\nwho expected to derive either profit or pleasure from employing them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great benefices and other ecclesiastical dignities support the honour of\r\nthe church, notwithstanding the mean circumstances of some of its inferior\r\nmembers. The respect paid to the profession, too, makes some compensation even\r\nto them for the meanness of their pecuniary recompence. In England, and in all\r\nRoman catholic countries, the lottery of the church is in reality much more\r\nadvantageous than is necessary. The example of the churches of Scotland, of\r\nGeneva, and of several other protestant churches, may satisfy us, that in so\r\ncreditable a profession, in which education is so easily procured, the hopes of\r\nmuch more moderate benefices will draw a sufficient number of learned, decent,\r\nand respectable men into holy orders.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn professions in which there are no benefices, such as law and physic, if an\r\nequal proportion of people were educated at the public expense, the competition\r\nwould soon be so great as to sink very much their pecuniary reward. It might\r\nthen not be worth any man’s while to educate his son to either of those\r\nprofessions at his own expense. They would be entirely abandoned to such as had\r\nbeen educated by those public charities, whose numbers and necessities would\r\noblige them in general to content themselves with a very miserable recompence,\r\nto the entire degradation of the now respectable professions of law and physic.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat unprosperous race of men, commonly called men of letters, are pretty much\r\nin the situation which lawyers and physicians probably would be in, upon the\r\nforegoing supposition. In every part of Europe, the greater part of them have\r\nbeen educated for the church, but have been hindered by different reasons from\r\nentering into holy orders. They have generally, therefore, been educated at the\r\npublic expense; and their numbers are everywhere so great, as commonly to\r\nreduce the price of their labour to a very paltry recompence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the invention of the art of printing, the only employment by which a man\r\nof letters could make any thing by his talents, was that of a public or private\r\nteacher, or by communicating to other people the curious and useful knowledge\r\nwhich he had acquired himself; and this is still surely a more honourable, a\r\nmore useful, and, in general, even a more profitable employment than that other\r\nof writing for a bookseller, to which the art of printing has given occasion.\r\nThe time and study, the genius, knowledge, and application requisite to qualify\r\nan eminent teacher of the sciences, are at least equal to what is necessary for\r\nthe greatest practitioners in law and physic. But the usual reward of the\r\neminent teacher bears no proportion to that of the lawyer or physician, because\r\nthe trade of the one is crowded with indigent people, who have been brought up\r\nto it at the public expense; whereas those of the other two are encumbered with\r\nvery few who have not been educated at their own. The usual recompence,\r\nhowever, of public and private teachers, small as it may appear, would\r\nundoubtedly be less than it is, if the competition of those yet more indigent\r\nmen of letters, who write for bread, was not taken out of the market. Before\r\nthe invention of the art of printing, a scholar and a beggar seem to have been\r\nterms very nearly synonymous. The different governors of the universities,\r\nbefore that time, appear to have often granted licences to their scholars to\r\nbeg.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn ancient times, before any charities of this kind had been established for\r\nthe education of indigent people to the learned professions, the rewards of\r\neminent teachers appear to have been much more considerable. Isocrates, in what\r\nis called his discourse against the sophists, reproaches the teachers of his\r\nown times with inconsistency. “They make the most magnificent promises to\r\ntheir scholars,” says he, “and undertake to teach them to be wise,\r\nto be happy, and to be just; and, in return for so important a service, they\r\nstipulate the paltry reward of four or five minae.” “They who teach\r\nwisdom,” continues he, “ought certainly to be wise themselves; but\r\nif any man were to sell such a bargain for such a price, he would be convicted\r\nof the most evident folly.” He certainly does not mean here to exaggerate\r\nthe reward, and we may be assured that it was not less than he represents it.\r\nFour minae were equal to thirteen pounds six shillings and eightpence; five\r\nminae to sixteen pounds thirteen shillings and fourpence. Something not less\r\nthan the largest of those two sums, therefore, must at that time have been\r\nusually paid to the most eminent teachers at Athens. Isocrates himself demanded\r\nten minae, or £ 33:6:8 from each scholar. When he taught at Athens, he is said\r\nto have had a hundred scholars. I understand this to be the number whom he\r\ntaught at one time, or who attended what we would call one course of lectures;\r\na number which will not appear extraordinary from so great a city to so famous\r\na teacher, who taught, too, what was at that time the most fashionable of all\r\nsciences, rhetoric. He must have made, therefore, by each course of lectures, a\r\nthousand minae, or £ 3335:6:8. A thousand minae, accordingly, is said by\r\nPlutarch, in another place, to have been his didactron, or usual price of\r\nteaching. Many other eminent teachers in those times appear to have acquired\r\ngreat fortunes. Georgias made a present to the temple of Delphi of his own\r\nstatue in solid gold. We must not, I presume, suppose that it was as large as\r\nthe life. His way of living, as well as that of Hippias and Protagoras, two\r\nother eminent teachers of those times, is represented by Plato as splendid,\r\neven to ostentation. Plato himself is said to have lived with a good deal of\r\nmagnificence. Aristotle, after having been tutor to Alexander, and most\r\nmunificently rewarded, as it is universally agreed, both by him and his father,\r\nPhilip, thought it worth while, notwithstanding, to return to Athens, in order\r\nto resume the teaching of his school. Teachers of the sciences were probably in\r\nthose times less common than they came to be in an age or two afterwards, when\r\nthe competition had probably somewhat reduced both the price of their labour\r\nand the admiration for their persons. The most eminent of them, however, appear\r\nalways to have enjoyed a degree of consideration much superior to any of the\r\nlike profession in the present times. The Athenians sent Carneades the\r\nacademic, and Diogenes the stoic, upon a solemn embassy to Rome; and though\r\ntheir city had then declined from its former grandeur, it was still an\r\nindependent and considerable republic.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCarneades, too, was a Babylonian by birth; and as there never was a people more\r\njealous of admitting foreigners to public offices than the Athenians, their\r\nconsideration for him must have been very great.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis inequality is, upon the whole, perhaps rather advantageous than hurtful to\r\nthe public. It may somewhat degrade the profession of a public teacher; but the\r\ncheapness of literary education is surely an advantage which greatly\r\noverbalances this trifling inconveniency. The public, too, might derive still\r\ngreater benefit from it, if the constitution of those schools and colleges, in\r\nwhich education is carried on, was more reasonable than it is at present\r\nthrough the greater part of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, the policy of Europe, by obstructing the free circulation of labour\r\nand stock, both from employment to employment, and from place to place,\r\noccasions, in some cases, a very inconvenient inequality in the whole of the\r\nadvantages and disadvantages of their different employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe statute of apprenticeship obstructs the free circulation of labour from one\r\nemployment to another, even in the same place. The exclusive privileges of\r\ncorporations obstruct it from one place to another, even in the same\r\nemployment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt frequently happens, that while high wages are given to the workmen in one\r\nmanufacture, those in another are obliged to content themselves with bare\r\nsubsistence. The one is in an advancing state, and has therefore a continual\r\ndemand for new hands; the other is in a declining state, and the superabundance\r\nof hands is continually increasing. Those two manufactures may sometimes be in\r\nthe same town, and sometimes in the same neighbourhood, without being able to\r\nlend the least assistance to one another. The statute of apprenticeship may\r\noppose it in the one case, and both that and an exclusive corporation in the\r\nother. In many different manufactures, however, the operations are so much\r\nalike, that the workmen could easily change trades with one another, if those\r\nabsurd laws did not hinder them. The arts of weaving plain linen and plain\r\nsilk, for example, are almost entirely the same. That of weaving plain woollen\r\nis somewhat different; but the difference is so insignificant, that either a\r\nlinen or a silk weaver might become a tolerable workman in a very few days. If\r\nany of those three capital manufactures, therefore, were decaying, the workmen\r\nmight find a resource in one of the other two which was in a more prosperous\r\ncondition; and their wages would neither rise too high in the thriving, nor\r\nsink too low in the decaying manufacture. The linen manufacture, indeed, is in\r\nEngland, by a particular statute, open to every body; but as it is not much\r\ncultivated through the greater part of the country, it can afford no general\r\nresource to the work men of other decaying manufactures, who, wherever the\r\nstatute of apprenticeship takes place, have no other choice, but either to come\r\nupon the parish, or to work as common labourers; for which, by their habits,\r\nthey are much worse qualified than for any sort of manufacture that bears any\r\nresemblance to their own. They generally, therefore, chuse to come upon the\r\nparish.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever obstructs the free circulation of labour from one employment to\r\nanother, obstructs that of stock likewise; the quantity of stock which can be\r\nemployed in any branch of business depending very much upon that of the labour\r\nwhich can be employed in it. Corporation laws, however, give less obstruction\r\nto the free circulation of stock from one place to another, than to that of\r\nlabour. It is everywhere much easier for a wealthy merchant to obtain the\r\nprivilege of trading in a town-corporate, than for a poor artificer to obtain\r\nthat of working in it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe obstruction which corporation laws give to the free circulation of labour\r\nis common, I believe, to every part of Europe. That which is given to it by the\r\npoor laws is, so far as I know, peculiar to England. It consists in the\r\ndifficulty which a poor man finds in obtaining a settlement, or even in being\r\nallowed to exercise his industry in any parish but that to which he belongs. It\r\nis the labour of artificers and manufacturers only of which the free\r\ncirculation is obstructed by corporation laws. The difficulty of obtaining\r\nsettlements obstructs even that of common labour. It may be worth while to give\r\nsome account of the rise, progress, and present state of this disorder, the\r\ngreatest, perhaps, of any in the police of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, by the destruction of monasteries, the poor had been deprived of the\r\ncharity of those religious houses, after some other ineffectual attempts for\r\ntheir relief, it was enacted, by the 43d of Elizabeth, c. 2. that every parish\r\nshould be bound to provide for its own poor, and that overseers of the poor\r\nshould be annually appointed, who, with the church-wardens, should raise, by a\r\nparish rate, competent sums for this purpose.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy this statute, the necessity of providing for their own poor was\r\nindispensably imposed upon every parish. Who were to be considered as the poor\r\nof each parish became, therefore, a question of some importance. This question,\r\nafter some variation, was at last determined by the 13th and 14th of Charles\r\nII. when it was enacted, that forty days undisturbed residence should gain any\r\nperson a settlement in any parish; but that within that time it should be\r\nlawful for two justices of the peace, upon complaint made by the church-wardens\r\nor overseers of the poor, to remove any new inhabitant to the parish where he\r\nwas last legally settled; unless he either rented a tenement of ten pounds\r\na-year, or could give such security for the discharge of the parish where he\r\nwas then living, as those justices should judge sufficient.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome frauds, it is said, were committed in consequence of this statute; parish\r\nofficers sometimes bribing their own poor to go clandestinely to another\r\nparish, and, by keeping themselves concealed for forty days, to gain a\r\nsettlement there, to the discharge of that to which they properly belonged. It\r\nwas enacted, therefore, by the 1st of James II. that the forty days undisturbed\r\nresidence of any person necessary to gain a settlement, should be accounted\r\nonly from the time of his delivering notice, in writing, of the place of his\r\nabode and the number of his family, to one of the church-wardens or overseers\r\nof the parish where he came to dwell.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut parish officers, it seems, were not always more honest with regard to their\r\nown than they had been with regard to other parishes, and sometimes connived at\r\nsuch intrusions, receiving the notice, and taking no proper steps in\r\nconsequence of it. As every person in a parish, therefore, was supposed to have\r\nan interest to prevent as much as possible their being burdened by such\r\nintruders, it was further enacted by the 3rd of William III. that the forty\r\ndays residence should be accounted only from the publication of such notice in\r\nwriting on Sunday in the church, immediately after divine service.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n“After all,” says Doctor Burn, “this kind of settlement, by\r\ncontinuing forty days after publication of notice in writing, is very seldom\r\nobtained; and the design of the acts is not so much for gaining of settlements,\r\nas for the avoiding of them by persons coming into a parish clandestinely, for\r\nthe giving of notice is only putting a force upon the parish to remove. But if\r\na person’s situation is such, that it is doubtful whether he is actually\r\nremovable or not, he shall, by giving of notice, compel the parish either to\r\nallow him a settlement uncontested, by suffering him to continue forty days, or\r\nby removing him to try the right.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis statute, therefore, rendered it almost impracticable for a poor man to\r\ngain a new settlement in the old way, by forty days inhabitancy. But that it\r\nmight not appear to preclude altogether the common people of one parish from\r\never establishing themselves with security in another, it appointed four other\r\nways by which a settlement might be gained without any notice delivered or\r\npublished. The first was, by being taxed to parish rates and paying them; the\r\nsecond, by being elected into an annual parish office, and serving in it a\r\nyear; the third, by serving an apprenticeship in the parish; the fourth, by\r\nbeing hired into service there for a year, and continuing in the same service\r\nduring the whole of it. Nobody can gain a settlement by either of the two first\r\nways, but by the public deed of the whole parish, who are too well aware of the\r\nconsequences to adopt any new-comer, who has nothing but his labour to support\r\nhim, either by taxing him to parish rates, or by electing him into a parish\r\noffice.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo married man can well gain any settlement in either of the two last ways. An\r\napprentice is scarce ever married; and it is expressly enacted, that no married\r\nservant shall gain any settlement by being hired for a year. The principal\r\neffect of introducing settlement by service, has been to put out in a great\r\nmeasure the old fashion of hiring for a year; which before had been so\r\ncustomary in England, that even at this day, if no particular term is agreed\r\nupon, the law intends that every servant is hired for a year. But masters are\r\nnot always willing to give their servants a settlement by hiring them in this\r\nmanner; and servants are not always willing to be so hired, because, as every\r\nlast settlement discharges all the foregoing, they might thereby lose their\r\noriginal settlement in the places of their nativity, the habitation of their\r\nparents and relations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo independent workman, it is evident, whether labourer or artificer, is likely\r\nto gain any new settlement, either by apprenticeship or by service. When such a\r\nperson, therefore, carried his industry to a new parish, he was liable to be\r\nremoved, how healthy and industrious soever, at the caprice of any churchwarden\r\nor overseer, unless he either rented a tenement of ten pounds a-year, a thing\r\nimpossible for one who has nothing but his labour to live by, or could give\r\nsuch security for the discharge of the parish as two justices of the peace\r\nshould judge sufficient.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat security they shall require, indeed, is left altogether to their\r\ndiscretion; but they cannot well require less than thirty pounds, it having\r\nbeen enacted, that the purchase even of a freehold estate of less than thirty\r\npounds value, shall not gain any person a settlement, as not being sufficient\r\nfor the discharge of the parish. But this is a security which scarce any man\r\nwho lives by labour can give; and much greater security is frequently demanded.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to restore, in some measure, that free circulation of labour which\r\nthose different statutes had almost entirely taken away, the invention of\r\ncertificates was fallen upon. By the 8th and 9th of William III. it was enacted\r\nthat if any person should bring a certificate from the parish where he was last\r\nlegally settled, subscribed by the church-wardens and overseers of the poor,\r\nand allowed by two justices of the peace, that every other parish should be\r\nobliged to receive him; that he should not be removable merely upon account of\r\nhis being likely to become chargeable, but only upon his becoming actually\r\nchargeable; and that then the parish which granted the certificate should be\r\nobliged to pay the expense both of his maintenance and of his removal. And in\r\norder to give the most perfect security to the parish where such certificated\r\nman should come to reside, it was further enacted by the same statute, that he\r\nshould gain no settlement there by any means whatever, except either by renting\r\na tenement of ten pounds a-year, or by serving upon his own account in an\r\nannual parish office for one whole year; and consequently neither by notice nor\r\nby service, nor by apprenticeship, nor by paying parish rates. By the 12th of\r\nQueen Anne, too, stat. 1, c.18, it was further enacted, that neither the\r\nservants nor apprentices of such certificated man should gain any settlement in\r\nthe parish where he resided under such certificate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHow far this invention has restored that free circulation of labour, which the\r\npreceding statutes had almost entirely taken away, we may learn from the\r\nfollowing very judicious observation of Doctor Burn. “It is\r\nobvious,” says he, “that there are divers good reasons for\r\nrequiring certificates with persons coming to settle in any place; namely, that\r\npersons residing under them can gain no settlement, neither by apprenticeship,\r\nnor by service, nor by giving notice, nor by paying parish rates; that they can\r\nsettle neither apprentices nor servants; that if they become chargeable, it is\r\ncertainly known whither to remove them, and the parish shall be paid for the\r\nremoval, and for their maintenance in the mean time; and that, if they fall\r\nsick, and cannot be removed, the parish which gave the certificate must\r\nmaintain them; none of all which can be without a certificate. Which reasons\r\nwill hold proportionably for parishes not granting certificates in ordinary\r\ncases; for it is far more than an equal chance, but that they will have the\r\ncertificated persons again, and in a worse condition.” The moral of this\r\nobservation seems to be, that certificates ought always to be required by the\r\nparish where any poor man comes to reside, and that they ought very seldom to\r\nbe granted by that which he purposes to leave. “There is somewhat of\r\nhardship in this matter of certificates,” says the same very intelligent\r\nauthor, in his History of the Poor Laws, “by putting it in the power of a\r\nparish officer to imprison a man as it were for life, however inconvenient it\r\nmay be for him to continue at that place where he has had the misfortune to\r\nacquire what is called a settlement, or whatever advantage he may propose\r\nhimself by living elsewhere.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough a certificate carries along with it no testimonial of good behaviour,\r\nand certifies nothing but that the person belongs to the parish to which he\r\nreally does belong, it is altogether discretionary in the parish officers\r\neither to grant or to refuse it. A mandamus was once moved for, says Doctor\r\nBurn, to compel the church-wardens and overseers to sign a certificate; but the\r\nCourt of King’s Bench rejected the motion as a very strange attempt.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe very unequal price of labour which we frequently find in England, in places\r\nat no great distance from one another, is probably owing to the obstruction\r\nwhich the law of settlements gives to a poor man who would carry his industry\r\nfrom one parish to another without a certificate. A single man, indeed who is\r\nhealthy and industrious, may sometimes reside by sufferance without one; but a\r\nman with a wife and family who should attempt to do so, would, in most\r\nparishes, be sure of being removed; and, if the single man should afterwards\r\nmarry, he would generally be removed likewise. The scarcity of hands in one\r\nparish, therefore, cannot always be relieved by their superabundance in\r\nanother, as it is constantly in Scotland, and I believe, in all other countries\r\nwhere there is no difficulty of settlement. In such countries, though wages may\r\nsometimes rise a little in the neighbourhood of a great town, or wherever else\r\nthere is an extraordinary demand for labour, and sink gradually as the distance\r\nfrom such places increases, till they fall back to the common rate of the\r\ncountry; yet we never meet with those sudden and unaccountable differences in\r\nthe wages of neighbouring places which we sometimes find in England, where it\r\nis often more difficult for a poor man to pass the artificial boundary of a\r\nparish, than an arm of the sea, or a ridge of high mountains, natural\r\nboundaries which sometimes separate very distinctly different rates of wages in\r\nother countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo remove a man who has committed no misdemeanour, from the parish where he\r\nchooses to reside, is an evident violation of natural liberty and justice. The\r\ncommon people of England, however, so jealous of their liberty, but like the\r\ncommon people of most other countries, never rightly understanding wherein it\r\nconsists, have now, for more than a century together, suffered themselves to be\r\nexposed to this oppression without a remedy. Though men of reflection, too,\r\nhave sometimes complained of the law of settlements as a public grievance; yet\r\nit has never been the object of any general popular clamour, such as that\r\nagainst general warrants, an abusive practice undoubtedly, but such a one as\r\nwas not likely to occasion any general oppression. There is scarce a poor man\r\nin England, of forty years of age, I will venture to say, who has not, in some\r\npart of his life, felt himself most cruelly oppressed by this ill-contrived law\r\nof settlements.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI shall conclude this long chapter with observing, that though anciently it was\r\nusual to rate wages, first by general laws extending over the whole kingdom,\r\nand afterwards by particular orders of the justices of peace in every\r\nparticular county, both these practices have now gone entirely into disuse.\r\n“By the experience of above four hundred years,” says Doctor Burn,\r\n“it seems time to lay aside all endeavours to bring under strict\r\nregulations, what in its own nature seems incapable of minute limitation; for\r\nif all persons in the same kind of work were to receive equal wages, there\r\nwould be no emulation, and no room left for industry or ingenuity.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nParticular acts of parliament, however, still attempt sometimes to regulate\r\nwages in particular trades, and in particular places. Thus the 8th of George\r\nIII. prohibits, under heavy penalties, all master tailors in London, and five\r\nmiles round it, from giving, and their workmen from accepting, more than two\r\nshillings and sevenpence halfpenny a-day, except in the case of a general\r\nmourning. Whenever the legislature attempts to regulate the differences between\r\nmasters and their workmen, its counsellors are always the masters. When the\r\nregulation, therefore, is in favour of the workmen, it is always just and\r\nequitable; but it is sometimes otherwise when in favour of the masters. Thus\r\nthe law which obliges the masters in several different trades to pay their\r\nworkmen in money, and not in goods, is quite just and equitable. It imposes no\r\nreal hardship upon the masters. It only obliges them to pay that value in\r\nmoney, which they pretended to pay, but did not always really pay, in goods.\r\nThis law is in favour of the workmen; but the 8th of George III. is in favour\r\nof the masters. When masters combine together, in order to reduce the wages of\r\ntheir workmen, they commonly enter into a private bond or agreement, not to\r\ngive more than a certain wage, under a certain penalty. Were the workmen to\r\nenter into a contrary combination of the same kind, not to accept of a certain\r\nwage, under a certain penalty, the law would punish them very severely; and, if\r\nit dealt impartially, it would treat the masters in the same manner. But the\r\n8th of George III. enforces by law that very regulation which masters sometimes\r\nattempt to establish by such combinations. The complaint of the workmen, that\r\nit puts the ablest and most industrious upon the same footing with an ordinary\r\nworkman, seems perfectly well founded.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn ancient times, too, it was usual to attempt to regulate the profits of\r\nmerchants and other dealers, by regulating the price of provisions and ether\r\ngoods. The assize of bread is, so far as I know, the only remnant of this\r\nancient usage. Where there is an exclusive corporation, it may, perhaps, be\r\nproper to regulate the price of the first necessary of life; but, where there\r\nis none, the competition will regulate it much better than any assize. The\r\nmethod of fixing the assize of bread, established by the 31st of George II.\r\ncould not be put in practice in Scotland, on account of a defect in the law,\r\nits execution depending upon the office of clerk of the market, which does not\r\nexist there. This defect was not remedied till the third of George III. The\r\nwant of an assize occasioned no sensible inconveniency; and the establishment\r\nof one in the few places where it has yet taken place has produced no sensible\r\nadvantage. In the greater part of the towns in Scotland, however, there is an\r\nincorporation of bakers, who claim exclusive privileges, though they are not\r\nvery strictly guarded. The proportion between the different rates, both of\r\nwages and profit, in the different employments of labour and stock, seems not\r\nto be much affected, as has already been observed, by the riches or poverty,\r\nthe advancing, stationary, or declining state of the society. Such revolutions\r\nin the public welfare, though they affect the general rates both of wages and\r\nprofit, must, in the end, affect them equally in all different employments. The\r\nproportion between them, therefore, must remain the same, and cannot well be\r\naltered, at least for any considerable time, by any such revolutions.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap13\"\u003e\u003c/a\u003eCHAPTER XI.\u003cbr\u003e\r\nOF THE RENT OF LAND.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nRent, considered as the price paid for the use of land, is naturally the\r\nhighest which the tenant can afford to pay in the actual circumstances of the\r\nland. In adjusting the terms of the lease, the landlord endeavours to leave him\r\nno greater share of the produce than what is sufficient to keep up the stock\r\nfrom which he furnishes the seed, pays the labour, and purchases and maintains\r\nthe cattle and other instruments of husbandry, together with the ordinary\r\nprofits of farming stock in the neighbourhood. This is evidently the smallest\r\nshare with which the tenant can content himself, without being a loser, and the\r\nlandlord seldom means to leave him any more. Whatever part of the produce, or,\r\nwhat is the same thing, whatever part of its price, is over and above this\r\nshare, he naturally endeavours to reserve to himself as the rent of his land,\r\nwhich is evidently the highest the tenant can afford to pay in the actual\r\ncircumstances of the land. Sometimes, indeed, the liberality, more frequently\r\nthe ignorance, of the landlord, makes him accept of somewhat less than this\r\nportion; and sometimes, too, though more rarely, the ignorance of the tenant\r\nmakes him undertake to pay somewhat more, or to content himself with somewhat\r\nless, than the ordinary profits of farming stock in the neighbourhood. This\r\nportion, however, may still be considered as the natural rent of land, or the\r\nrent at which it is naturally meant that land should, for the most part, be\r\nlet.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of land, it may be thought, is frequently no more than a reasonable\r\nprofit or interest for the stock laid out by the landlord upon its improvement.\r\nThis, no doubt, may be partly the case upon some occasions; for it can scarce\r\never be more than partly the case. The landlord demands a rent even for\r\nunimproved land, and the supposed interest or profit upon the expense of\r\nimprovement is generally an addition to this original rent. Those improvements,\r\nbesides, are not always made by the stock of the landlord, but sometimes by\r\nthat of the tenant. When the lease comes to be renewed, however, the landlord\r\ncommonly demands the same augmentation of rent as if they had been all made by\r\nhis own.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHe sometimes demands rent for what is altogether incapable of human\r\nimprovements. Kelp is a species of sea-weed, which, when burnt, yields an\r\nalkaline salt, useful for making glass, soap, and for several other purposes.\r\nIt grows in several parts of Great Britain, particularly in Scotland, upon such\r\nrocks only as lie within the high-water mark, which are twice every day covered\r\nwith the sea, and of which the produce, therefore, was never augmented by human\r\nindustry. The landlord, however, whose estate is bounded by a kelp shore of\r\nthis kind, demands a rent for it as much as for his corn-fields.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sea in the neighbourhood of the islands of Shetland is more than commonly\r\nabundant in fish, which makes a great part of the subsistence of their\r\ninhabitants. But, in order to profit by the produce of the water, they must\r\nhave a habitation upon the neighbouring land. The rent of the landlord is in\r\nproportion, not to what the farmer can make by the land, but to what he can\r\nmake both by the land and the water. It is partly paid in sea-fish; and one of\r\nthe very few instances in which rent makes a part of the price of that\r\ncommodity, is to be found in that country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of land, therefore, considered as the price paid for the use of the\r\nland, is naturally a monopoly price. It is not at all proportioned to what the\r\nlandlord may have laid out upon the improvement of the land, or to what he can\r\nafford to take, but to what the farmer can afford to give.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch parts only of the produce of land can commonly be brought to market, of\r\nwhich the ordinary price is sufficient to replace the stock which must be\r\nemployed in bringing them thither, together with its ordinary profits. If the\r\nordinary price is more than this, the surplus part of it will naturally go to\r\nthe rent of the land. If it is not more, though the commodity may be brought to\r\nmarket, it can afford no rent to the landlord. Whether the price is, or is not\r\nmore, depends upon the demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are some parts of the produce of land, for which the demand must always\r\nbe such as to afford a greater price than what is sufficient to bring them to\r\nmarket; and there are others for which it either may or may not be such as to\r\nafford this greater price. The former must always afford a rent to the\r\nlandlord. The latter sometimes may and sometimes may not, according to\r\ndifferent circumstances.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRent, it is to be observed, therefore, enters into the composition of the price\r\nof commodities in a different way from wages and profit. High or low wages and\r\nprofit are the causes of high or low price; high or low rent is the effect of\r\nit. It is because high or low wages and profit must be paid, in order to bring\r\na particular commodity to market, that its price is high or low. But it is\r\nbecause its price is high or low, a great deal more, or very little more, or no\r\nmore, than what is sufficient to pay those wages and profit, that it affords a\r\nhigh rent, or a low rent, or no rent at all.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe particular consideration, first, of those parts of the produce of land\r\nwhich always afford some rent; secondly, of those which sometimes may and\r\nsometimes may not afford rent; and, thirdly, of the variations which, in the\r\ndifferent periods of improvement, naturally take place in the relative value of\r\nthose two different sorts of rude produce, when compared both with one another\r\nand with manufactured commodities, will divide this chapter into three parts.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART I.—Of the Produce of Land which always affords Rent.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nAs men, like all other animals, naturally multiply in proportion to the means\r\nof their subsistence, food is always more or less in demand. It can always\r\npurchase or command a greater or smaller quantity of labour, and somebody can\r\nalways be found who is willing to do something in order to obtain it. The\r\nquantity of labour, indeed, which it can purchase, is not always equal to what\r\nit could maintain, if managed in the most economical manner, on account of the\r\nhigh wages which are sometimes given to labour; but it can always purchase such\r\na quantity of labour as it can maintain, according to the rate at which that\r\nsort of labour is commonly maintained in the neighbourhood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut land, in almost any situation, produces a greater quantity of food than\r\nwhat is sufficient to maintain all the labour necessary for bringing it to\r\nmarket, in the most liberal way in which that labour is ever maintained. The\r\nsurplus, too, is always more than sufficient to replace the stock which\r\nemployed that labour, together with its profits. Something, therefore, always\r\nremains for a rent to the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe most desert moors in Norway and Scotland produce some sort of pasture for\r\ncattle, of which the milk and the increase are always more than sufficient, not\r\nonly to maintain all the labour necessary for tending them, and to pay the\r\nordinary profit to the farmer or the owner of the herd or flock, but to afford\r\nsome small rent to the landlord. The rent increases in proportion to the\r\ngoodness of the pasture. The same extent of ground not only maintains a greater\r\nnumber of cattle, but as they are brought within a smaller compass, less labour\r\nbecomes requisite to tend them, and to collect their produce. The landlord\r\ngains both ways; by the increase of the produce, and by the diminution of the\r\nlabour which must be maintained out of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of land not only varies with its fertility, whatever be its produce,\r\nbut with its situation, whatever be its fertility. Land in the neighbourhood of\r\na town gives a greater rent than land equally fertile in a distant part of the\r\ncountry. Though it may cost no more labour to cultivate the one than the other,\r\nit must always cost more to bring the produce of the distant land to market. A\r\ngreater quantity of labour, therefore, must be maintained out of it; and the\r\nsurplus, from which are drawn both the profit of the farmer and the rent of the\r\nlandlord, must be diminished. But in remote parts of the country, the rate of\r\nprofit, as has already been shewn, is generally higher than in the\r\nneighbourhood of a large town. A smaller proportion of this diminished surplus,\r\ntherefore, must belong to the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGood roads, canals, and navigable rivers, by diminishing the expense of\r\ncarriage, put the remote parts of the country more nearly upon a level with\r\nthose in the neighbourhood of the town. They are upon that account the greatest\r\nof all improvements. They encourage the cultivation of the remote, which must\r\nalways be the most extensive circle of the country. They are advantageous to\r\nthe town by breaking down the monopoly of the country in its neighbourhood.\r\nThey are advantageous even to that part of the country. Though they introduce\r\nsome rival commodities into the old market, they open many new markets to its\r\nproduce. Monopoly, besides, is a great enemy to good management, which can\r\nnever be universally established, but in consequence of that free and universal\r\ncompetition which forces every body to have recourse to it for the sake of self\r\ndefence. It is not more than fifty years ago, that some of the counties in the\r\nneighbourhood of London petitioned the parliament against the extension of the\r\nturnpike roads into the remoter counties. Those remoter counties, they\r\npretended, from the cheapness of labour, would be able to sell their grass and\r\ncorn cheaper in the London market than themselves, and would thereby reduce\r\ntheir rents, and ruin their cultivation. Their rents, however, have risen, and\r\ntheir cultivation has been improved since that time.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA corn field of moderate fertility produces a much greater quantity of food for\r\nman, than the best pasture of equal extent. Though its cultivation requires\r\nmuch more labour, yet the surplus which remains after replacing the seed and\r\nmaintaining all that labour, is likewise much greater. If a pound of\r\nbutcher’s meat, therefore, was never supposed to be worth more than a\r\npound of bread, this greater surplus would everywhere be of greater value and\r\nconstitute a greater fund, both for the profit of the farmer and the rent of\r\nthe landlord. It seems to have done so universally in the rude beginnings of\r\nagriculture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the relative values of those two different species of food, bread and\r\nbutcher’s meat, are very different in the different periods of\r\nagriculture. In its rude beginnings, the unimproved wilds, which then occupy\r\nthe far greater part of the country, are all abandoned to cattle. There is more\r\nbutcher’s meat than bread; and bread, therefore, is the food for which\r\nthere is the greatest competition, and which consequently brings the greatest\r\nprice. At Buenos Ayres, we are told by Ulloa, four reals, one-and-twenty pence\r\nhalfpenny sterling, was, forty or fifty years ago, the ordinary price of an ox,\r\nchosen from a herd of two or three hundred. He says nothing of the price of\r\nbread, probably because he found nothing remarkable about it. An ox there, he\r\nsays, costs little more than the labour of catching him. But corn can nowhere\r\nbe raised without a great deal of labour; and in a country which lies upon the\r\nriver Plate, at that time the direct road from Europe to the silver mines of\r\nPotosi, the money-price of labour could be very cheap. It is otherwise when\r\ncultivation is extended over the greater part of the country. There is then\r\nmore bread than butcher’s meat. The competition changes its direction,\r\nand the price of butcher’s meat becomes greater than the price of bread.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the extension, besides, of cultivation, the unimproved wilds become\r\ninsufficient to supply the demand for butcher’s meat. A great part of the\r\ncultivated lands must be employed in rearing and fattening cattle; of which the\r\nprice, therefore, must be sufficient to pay, not only the labour necessary for\r\ntending them, but the rent which the landlord, and the profit which the farmer,\r\ncould have drawn from such land employed in tillage. The cattle bred upon the\r\nmost uncultivated moors, when brought to the same market, are, in proportion to\r\ntheir weight or goodness, sold at the same price as those which are reared upon\r\nthe most improved land. The proprietors of those moors profit by it, and raise\r\nthe rent of their land in proportion to the price of their cattle. It is not\r\nmore than a century ago, that in many parts of the Highlands of Scotland,\r\nbutcher’s meat was as cheap or cheaper than even bread made of oatmeal.\r\nThe Union opened the market of England to the Highland cattle. Their ordinary\r\nprice, at present, is about three times greater than at the beginning of the\r\ncentury, and the rents of many Highland estates have been tripled and\r\nquadrupled in the same time. In almost every part of Great Britain, a pound of\r\nthe best butcher’s meat is, in the present times, generally worth more\r\nthan two pounds of the best white bread; and in plentiful years it is sometimes\r\nworth three or four pounds.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that, in the progress of improvement, the rent and profit of\r\nunimproved pasture come to be regulated in some measure by the rent and profit\r\nof what is improved, and these again by the rent and profit of corn. Corn is an\r\nannual crop; butcher’s meat, a crop which requires four or five years to\r\ngrow. As an acre of land, therefore, will produce a much smaller quantity of\r\nthe one species of food than of the other, the inferiority of the quantity must\r\nbe compensated by the superiority of the price. If it was more than\r\ncompensated, more corn-land would be turned into pasture; and if it was not\r\ncompensated, part of what was in pasture would be brought back into corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis equality, however, between the rent and profit of grass and those of corn;\r\nof the land of which the immediate produce is food for cattle, and of that of\r\nwhich the immediate produce is food for men, must be understood to take place\r\nonly through the greater part of the improved lands of a great country. In some\r\nparticular local situations it is quite otherwise, and the rent and profit of\r\ngrass are much superior to what can be made by corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, in the neighbourhood of a great town, the demand for milk, and for forage\r\nto horses, frequently contribute, together with the high price of\r\nbutcher’s meat, to raise the value of grass above what may be called its\r\nnatural proportion to that of corn. This local advantage, it is evident, cannot\r\nbe communicated to the lands at a distance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nParticular circumstances have sometimes rendered some countries so populous,\r\nthat the whole territory, like the lands in the neighbourhood of a great town,\r\nhas not been sufficient to produce both the grass and the corn necessary for\r\nthe subsistence of their inhabitants. Their lands, therefore, have been\r\nprincipally employed in the production of grass, the more bulky commodity, and\r\nwhich cannot be so easily brought from a great distance; and corn, the food of\r\nthe great body of the people, has been chiefly imported from foreign countries.\r\nHolland is at present in this situation; and a considerable part of ancient\r\nItaly seems to have been so during the prosperity of the Romans. To feed well,\r\nold Cato said, as we are told by Cicero, was the first and most profitable\r\nthing in the management of a private estate; to feed tolerably well, the\r\nsecond; and to feed ill, the third. To plough, he ranked only in the fourth\r\nplace of profit and advantage. Tillage, indeed, in that part of ancient Italy\r\nwhich lay in the neighbour hood of Rome, must have been very much discouraged\r\nby the distributions of corn which were frequently made to the people, either\r\ngratuitously, or at a very low price. This corn was brought from the conquered\r\nprovinces, of which several, instead of taxes, were obliged to furnish a tenth\r\npart of their produce at a stated price, about sixpence a-peck, to the\r\nrepublic. The low price at which this corn was distributed to the people, must\r\nnecessarily have sunk the price of what could be brought to the Roman market\r\nfrom Latium, or the ancient territory of Rome, and must have discouraged its\r\ncultivation in that country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn an open country, too, of which the principal produce is corn, a\r\nwell-inclosed piece of grass will frequently rent higher than any corn field in\r\nits neighbourhood. It is convenient for the maintenance of the cattle employed\r\nin the cultivation of the corn; and its high rent is, in this case, not so\r\nproperly paid from the value of its own produce, as from that of the corn lands\r\nwhich are cultivated by means of it. It is likely to fall, if ever the\r\nneighbouring lands are completely inclosed. The present high rent of inclosed\r\nland in Scotland seems owing to the scarcity of inclosure, and will probably\r\nlast no longer than that scarcity. The advantage of inclosure is greater for\r\npasture than for corn. It saves the labour of guarding the cattle, which feed\r\nbetter, too, when they are not liable to be disturbed by their keeper or his\r\ndog.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut where there is no local advantage of this kind, the rent and profit of\r\ncorn, or whatever else is the common vegetable food of the people, must\r\nnaturally regulate upon the land which is fit for producing it, the rent and\r\nprofit of pasture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe use of the artificial grasses, of turnips, carrots, cabbages, and the other\r\nexpedients which have been fallen upon to make an equal quantity of land feed a\r\ngreater number of cattle than when in natural grass, should somewhat reduce, it\r\nmight be expected, the superiority which, in an improved country, the price of\r\nbutcher’s meat naturally has over that of bread. It seems accordingly to\r\nhave done so; and there is some reason for believing that, at least in the\r\nLondon market, the price of butcher’s meat, in proportion to the price of\r\nbread, is a good deal lower in the present times than it was in the beginning\r\nof the last century.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the Appendix to the life of Prince Henry, Doctor Birch has given us an\r\naccount of the prices of butcher’s meat as commonly paid by that prince.\r\nIt is there said, that the four quarters of an ox, weighing six hundred pounds,\r\nusually cost him nine pounds ten shillings, or thereabouts; that is thirty-one\r\nshillings and eight-pence per hundred pounds weight. Prince Henry died on the\r\n6th of November 1612, in the nineteenth year of his age.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn March 1764, there was a parliamentary inquiry into the causes of the high\r\nprice of provisions at that time. It was then, among other proof to the same\r\npurpose, given in evidence by a Virginia merchant, that in March 1763, he had\r\nvictualled his ships for twentyfour or twenty-five shillings the hundred weight\r\nof beef, which he considered as the ordinary price; whereas, in that dear year,\r\nhe had paid twenty-seven shillings for the same weight and sort. This high\r\nprice in 1764 is, however, four shillings and eight-pence cheaper than the\r\nordinary price paid by Prince Henry; and it is the best beef only, it must be\r\nobserved, which is fit to be salted for those distant voyages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price paid by Prince Henry amounts to 3d. 4/5ths per pound weight of the\r\nwhole carcase, coarse and choice pieces taken together; and at that rate the\r\nchoice pieces could not have been sold by retail for less than 4½d. or 5d. the\r\npound.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the parliamentary inquiry in 1764, the witnesses stated the price of the\r\nchoice pieces of the best beef to be to the consumer 4d. and 4½d. the pound;\r\nand the coarse pieces in general to be from seven farthings to 2½d. and 2¾d.;\r\nand this, they said, was in general one halfpenny dearer than the same sort of\r\npieces had usually been sold in the month of March. But even this high price is\r\nstill a good deal cheaper than what we can well suppose the ordinary retail\r\nprice to have been in the time of Prince Henry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the first twelve years of the last century, the average price of the\r\nbest wheat at the Windsor market was £ 1:18:3½d. the quarter of nine Winchester\r\nbushels.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in the twelve years preceding 1764 including that year, the average price\r\nof the same measure of the best wheat at the same market was £ 2:1:9½d.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the first twelve years of the last century, therefore, wheat appears to have\r\nbeen a good deal cheaper, and butcher’s meat a good deal dearer, than in\r\nthe twelve years preceding 1764, including that year.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all great countries, the greater part of the cultivated lands are employed\r\nin producing either food for men or food for cattle. The rent and profit of\r\nthese regulate the rent and profit of all other cultivated land. If any\r\nparticular produce afforded less, the land would soon be turned into corn or\r\npasture; and if any afforded more, some part of the lands in corn or pasture\r\nwould soon be turned to that produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose productions, indeed, which require either a greater original expense of\r\nimprovement, or a greater annual expense of cultivation in order to fit the\r\nland for them, appear commonly to afford, the one a greater rent, the other a\r\ngreater profit, than corn or pasture. This superiority, however, will seldom be\r\nfound to amount to more than a reasonable interest or compensation for this\r\nsuperior expense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a hop garden, a fruit garden, a kitchen garden, both the rent of the\r\nlandlord, and the profit of the farmer, are generally greater than in acorn or\r\ngrass field. But to bring the ground into this condition requires more expense.\r\nHence a greater rent becomes due to the landlord. It requires, too, a more\r\nattentive and skilful management. Hence a greater profit becomes due to the\r\nfarmer. The crop, too, at least in the hop and fruit garden, is more\r\nprecarious. Its price, therefore, besides compensating all occasional losses,\r\nmust afford something like the profit of insurance. The circumstances of\r\ngardeners, generally mean, and always moderate, may satisfy us that their great\r\ningenuity is not commonly over-recompensed. Their delightful art is practised\r\nby so many rich people for amusement, that little advantage is to be made by\r\nthose who practise it for profit; because the persons who should naturally be\r\ntheir best customers, supply themselves with all their most precious\r\nproductions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe advantage which the landlord derives from such improvements, seems at no\r\ntime to have been greater than what was sufficient to compensate the original\r\nexpense of making them. In the ancient husbandry, after the vineyard, a\r\nwell-watered kitchen garden seems to have been the part of the farm which was\r\nsupposed to yield the most valuable produce. But Democritus, who wrote upon\r\nhusbandry about two thousand years ago, and who was regarded by the ancients as\r\none of the fathers of the art, thought they did not act wisely who inclosed a\r\nkitchen garden. The profit, he said, would not compensate the expense of a\r\nstone-wall: and bricks (he meant, I suppose, bricks baked in the sun) mouldered\r\nwith the rain and the winter-storm, and required continual repairs. Columella,\r\nwho reports this judgment of Democritus, does not controvert it, but proposes a\r\nvery frugal method of inclosing with a hedge of brambles and briars, which he\r\nsays he had found by experience to be both a lasting and an impenetrable fence;\r\nbut which, it seems, was not commonly known in the time of Democritus.\r\nPalladius adopts the opinion of Columella, which had before been recommended by\r\nVarro. In the judgment of those ancient improvers, the produce of a kitchen\r\ngarden had, it seems, been little more than sufficient to pay the extraordinary\r\nculture and the expense of watering; for in countries so near the sun, it was\r\nthought proper, in those times as in the present, to have the command of a\r\nstream of water, which could be conducted to every bed in the garden. Through\r\nthe greater part of Europe, a kitchen garden is not at present supposed to\r\ndeserve a better inclosure than that recommended by Columella. In Great\r\nBritain, and some other northern countries, the finer fruits cannot be brought\r\nto perfection but by the assistance of a wall. Their price, therefore, in such\r\ncountries, must be sufficient to pay the expense of building and maintaining\r\nwhat they cannot be had without. The fruit-wall frequently surrounds the\r\nkitchen garden, which thus enjoys the benefit of an inclosure which its own\r\nproduce could seldom pay for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the vineyard, when properly planted and brought to perfection, was the\r\nmost valuable part of the farm, seems to have been an undoubted maxim in the\r\nancient agriculture, as it is in the modern, through all the wine countries.\r\nBut whether it was advantageous to plant a new vineyard, was a matter of\r\ndispute among the ancient Italian husbandmen, as we learn from Columella. He\r\ndecides, like a true lover of all curious cultivation, in favour of the\r\nvineyard; and endeavours to shew, by a comparison of the profit and expense,\r\nthat it was a most advantageous improvement. Such comparisons, however, between\r\nthe profit and expense of new projects are commonly very fallacious; and in\r\nnothing more so than in agriculture. Had the gain actually made by such\r\nplantations been commonly as great as he imagined it might have been, there\r\ncould have been no dispute about it. The same point is frequently at this day a\r\nmatter of controversy in the wine countries. Their writers on agriculture,\r\nindeed, the lovers and promoters of high cultivation, seem generally disposed\r\nto decide with Columella in favour of the vineyard. In France, the anxiety of\r\nthe proprietors of the old vineyards to prevent the planting of any new ones,\r\nseems to favour their opinion, and to indicate a consciousness in those who\r\nmust have the experience, that this species of cultivation is at present in\r\nthat country more profitable than any other. It seems, at the same time,\r\nhowever, to indicate another opinion, that this superior profit can last no\r\nlonger than the laws which at present restrain the free cultivation of the\r\nvine. In 1731, they obtained an order of council, prohibiting both the planting\r\nof new vineyards, and the renewal of these old ones, of which the cultivation\r\nhad been interrupted for two years, without a particular permission from the\r\nking, to be granted only in consequence of an information from the intendant of\r\nthe province, certifying that he had examined the land, and that it was\r\nincapable of any other culture. The pretence of this order was the scarcity of\r\ncorn and pasture, and the superabundance of wine. But had this superabundance\r\nbeen real, it would, without any order of council, have effectually prevented\r\nthe plantation of new vineyards, by reducing the profits of this species of\r\ncultivation below their natural proportion to those of corn and pasture. With\r\nregard to the supposed scarcity of corn occasioned by the multiplication of\r\nvineyards, corn is nowhere in France more carefully cultivated than in the wine\r\nprovinces, where the land is fit for producing it: as in Burgundy, Guienne, and\r\nthe Upper Languedoc. The numerous hands employed in the one species of\r\ncultivation necessarily encourage the other, by affording a ready market for\r\nits produce. To diminish the number of those who are capable of paying it, is\r\nsurely a most unpromising expedient for encouraging the cultivation of corn. It\r\nis like the policy which would promote agriculture, by discouraging\r\nmanufactures.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent and profit of those productions, therefore, which require either a\r\ngreater original expense of improvement in order to fit the land for them, or a\r\ngreater annual expense of cultivation, though often much superior to those of\r\ncorn and pasture, yet when they do no more than compensate such extraordinary\r\nexpense, are in reality regulated by the rent and profit of those common crops.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt sometimes happens, indeed, that the quantity of land which can be fitted for\r\nsome particular produce, is too small to supply the effectual demand. The whole\r\nproduce can be disposed of to those who are willing to give somewhat more than\r\nwhat is sufficient to pay the whole rent, wages, and profit, necessary for\r\nraising and bringing it to market, according to their natural rates, or\r\naccording to the rates at which they are paid in the greater part of other\r\ncultivated land. The surplus part of the price which remains after defraying\r\nthe whole expense of improvement and cultivation, may commonly, in this case,\r\nand in this case only, bear no regular proportion to the like surplus in corn\r\nor pasture, but may exceed it in almost any degree; and the greater part of\r\nthis excess naturally goes to the rent of the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe usual and natural proportion, for example, between the rent and profit of\r\nwine, and those of corn and pasture, must be understood to take place only with\r\nregard to those vineyards which produce nothing but good common wine, such as\r\ncan be raised almost anywhere, upon any light, gravelly, or sandy soil, and\r\nwhich has nothing to recommend it but its strength and wholesomeness. It is\r\nwith such vineyards only, that the common land of the country can be brought\r\ninto competition; for with those of a peculiar quality it is evident that it\r\ncannot.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe vine is more affected by the difference of soils than any other fruit-tree.\r\nFrom some it derives a flavour which no culture or management can equal, it is\r\nsupposed, upon any other. This flavour, real or imaginary, is sometimes\r\npeculiar to the produce of a few vineyards; sometimes it extends through the\r\ngreater part of a small district, and sometimes through a considerable part of\r\na large province. The whole quantity of such wines that is brought to market\r\nfalls short of the effectual demand, or the demand of those who would be\r\nwilling to pay the whole rent, profit, and wages, necessary for preparing and\r\nbringing them thither, according to the ordinary rate, or according to the rate\r\nat which they are paid in common vineyards. The whole quantity, therefore, can\r\nbe disposed of to those who are willing to pay more, which necessarily raises\r\ntheir price above that of common wine. The difference is greater or less,\r\naccording as the fashionableness and scarcity of the wine render the\r\ncompetition of the buyers more or less eager. Whatever it be, the greater part\r\nof it goes to the rent of the landlord. For though such vineyards are in\r\ngeneral more carefully cultivated than most others, the high price of the wine\r\nseems to be, not so much the effect, as the cause of this careful cultivation.\r\nIn so valuable a produce, the loss occasioned by negligence is so great, as to\r\nforce even the most careless to attention. A small part of this high price,\r\ntherefore, is sufficient to pay the wages of the extraordinary labour bestowed\r\nupon their cultivation, and the profits of the extraordinary stock which puts\r\nthat labour into motion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sugar colonies possessed by the European nations in the West Indies may be\r\ncompared to those precious vineyards. Their whole produce falls short of the\r\neffectual demand of Europe, and can be disposed of to those who are willing to\r\ngive more than what is sufficient to pay the whole rent, profit, and wages,\r\nnecessary for preparing and bringing it to market, according to the rate at\r\nwhich they are commonly paid by any other produce. In Cochin China, the finest\r\nwhite sugar generally sells for three piastres the quintal, about thirteen\r\nshillings and sixpence of our money, as we are told by Mr Poivre {Voyages\r\nd’un Philosophe.}, a very careful observer of the agriculture of that\r\ncountry. What is there called the quintal, weighs from a hundred and fifty to\r\ntwo hundred Paris pounds, or a hundred and seventy-five Paris pounds at a\r\nmedium, which reduces the price of the hundred weight English to about eight\r\nshillings sterling; not a fourth part of what is commonly paid for the brown or\r\nmuscovada sugars imported from our colonies, and not a sixth part of what is\r\npaid for the finest white sugar. The greater part of the cultivated lands in\r\nCochin China are employed in producing corn and rice, the food of the great\r\nbody of the people. The respective prices of corn, rice, and sugar, are there\r\nprobably in the natural proportion, or in that which naturally takes place in\r\nthe different crops of the greater part of cultivated land, and which\r\nrecompenses the landlord and farmer, as nearly as can be computed, according to\r\nwhat is usually the original expense of improvement, and the annual expense of\r\ncultivation. But in our sugar colonies, the price of sugar bears no such\r\nproportion to that of the produce of a rice or corn field either in Europe or\r\nAmerica. It is commonly said that a sugar planter expects that the rum and the\r\nmolasses should defray the whole expense of his cultivation, and that his sugar\r\nshould be all clear profit. If this be true, for I pretend not to affirm it, it\r\nis as if a corn farmer expected to defray the expense of his cultivation with\r\nthe chaff and the straw, and that the grain should be all clear profit. We see\r\nfrequently societies of merchants in London, and other trading towns, purchase\r\nwaste lands in our sugar colonies, which they expect to improve and cultivate\r\nwith profit, by means of factors and agents, notwithstanding the great distance\r\nand the uncertain returns, from the defective administration of justice in\r\nthose countries. Nobody will attempt to improve and cultivate in the same\r\nmanner the most fertile lands of Scotland, Ireland, or the corn provinces of\r\nNorth America, though, from the more exact administration of justice in these\r\ncountries, more regular returns might be expected.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Virginia and Maryland, the cultivation of tobacco is preferred, as most\r\nprofitable, to that of corn. Tobacco might be cultivated with advantage through\r\nthe greater part of Europe; but, in almost every part of Europe, it has become\r\na principal subject of taxation; and to collect a tax from every different farm\r\nin the country where this plant might happen to be cultivated, would be more\r\ndifficult, it has been supposed, than to levy one upon its importation at the\r\ncustom-house. The cultivation of tobacco has, upon this account, been most\r\nabsurdly prohibited through the greater part of Europe, which necessarily gives\r\na sort of monopoly to the countries where it is allowed; and as Virginia and\r\nMaryland produce the greatest quantity of it, they share largely, though with\r\nsome competitors, in the advantage of this monopoly. The cultivation of\r\ntobacco, however, seems not to be so advantageous as that of sugar. I have\r\nnever even heard of any tobacco plantation that was improved and cultivated by\r\nthe capital of merchants who resided in Great Britain; and our tobacco colonies\r\nsend us home no such wealthy planters as we see frequently arrive from our\r\nsugar islands. Though, from the preference given in those colonies to the\r\ncultivation of tobacco above that of corn, it would appear that the effectual\r\ndemand of Europe for tobacco is not completely supplied, it probably is more\r\nnearly so than that for sugar; and though the present price of tobacco is\r\nprobably more than sufficient to pay the whole rent, wages, and profit,\r\nnecessary for preparing and bringing it to market, according to the rate at\r\nwhich they are commonly paid in corn land, it must not be so much more as the\r\npresent price of sugar. Our tobacco planters, accordingly, have shewn the same\r\nfear of the superabundance of tobacco, which the proprietors of the old\r\nvineyards in France have of the superabundance of wine. By act of assembly,\r\nthey have restrained its cultivation to six thousand plants, supposed to yield\r\na thousand weight of tobacco, for every negro between sixteen and sixty years\r\nof age. Such a negro, over and above this quantity of tobacco, can manage, they\r\nreckon, four acres of Indian corn. To prevent the market from being\r\noverstocked, too, they have sometimes, in plentiful years, we are told by Dr\r\nDouglas {Douglas’s Summary, vol. ii. p. 379, 373.} (I suspect he has been\r\nill informed), burnt a certain quantity of tobacco for every negro, in the same\r\nmanner as the Dutch are said to do of spices. If such violent methods are\r\nnecessary to keep up the present price of tobacco, the superior advantage of\r\nits culture over that of corn, if it still has any, will not probably be of\r\nlong continuance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in this manner that the rent of the cultivated land, of which the produce\r\nis human food, regulates the rent of the greater part of other cultivated land.\r\nNo particular produce can long afford less, because the land would immediately\r\nbe turned to another use; and if any particular produce commonly affords more,\r\nit is because the quantity of land which can be fitted for it is too small to\r\nsupply the effectual demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Europe, corn is the principal produce of land, which serves immediately for\r\nhuman food. Except in particular situations, therefore, the rent of corn land\r\nregulates in Europe that of all other cultivated land. Britain need envy\r\nneither the vineyards of France, nor the olive plantations of Italy. Except in\r\nparticular situations, the value of these is regulated by that of corn, in\r\nwhich the fertility of Britain is not much inferior to that of either of those\r\ntwo countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, in any country, the common and favourite vegetable food of the people\r\nshould be drawn from a plant of which the most common land, with the same, or\r\nnearly the same culture, produced a much greater quantity than the most fertile\r\ndoes of corn; the rent of the landlord, or the surplus quantity of food which\r\nwould remain to him, after paying the labour, and replacing the stock of the\r\nfarmer, together with its ordinary profits, would necessarily be much greater.\r\nWhatever was the rate at which labour was commonly maintained in that country,\r\nthis greater surplus could always maintain a greater quantity of it, and,\r\nconsequently, enable the landlord to purchase or command a greater quantity of\r\nit. The real value of his rent, his real power and authority, his command of\r\nthe necessaries and conveniencies of life with which the labour of other people\r\ncould supply him, would necessarily be much greater.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA rice field produces a much greater quantity of food than the most fertile\r\ncorn field. Two crops in the year, from thirty to sixty bushels each, are said\r\nto be the ordinary produce of an acre. Though its cultivation, therefore,\r\nrequires more labour, a much greater surplus remains after maintaining all that\r\nlabour. In those rice countries, therefore, where rice is the common and\r\nfavourite vegetable food of the people, and where the cultivators are chiefly\r\nmaintained with it, a greater share of this greater surplus should belong to\r\nthe landlord than in corn countries. In Carolina, where the planters, as in\r\nother British colonies, are generally both farmers and landlords, and where\r\nrent, consequently, is confounded with profit, the cultivation of rice is found\r\nto be more profitable than that of corn, though their fields produce only one\r\ncrop in the year, and though, from the prevalence of the customs of Europe,\r\nrice is not there the common and favourite vegetable food of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA good rice field is a bog at all seasons, and at one season a bog covered with\r\nwater. It is unfit either for corn, or pasture, or vineyard, or, indeed, for\r\nany other vegetable produce that is very useful to men; and the lands which are\r\nfit for those purposes are not fit for rice. Even in the rice countries,\r\ntherefore, the rent of rice lands cannot regulate the rent of the other\r\ncultivated land which can never be turned to that produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe food produced by a field of potatoes is not inferior in quantity to that\r\nproduced by a field of rice, and much superior to what is produced by a field\r\nof wheat. Twelve thousand weight of potatoes from an acre of land is not a\r\ngreater produce than two thousand weight of wheat. The food or solid\r\nnourishment, indeed, which can be drawn from each of those two plants, is not\r\naltogether in proportion to their weight, on account of the watery nature of\r\npotatoes. Allowing, however, half the weight of this root to go to water, a\r\nvery large allowance, such an acre of potatoes will still produce six thousand\r\nweight of solid nourishment, three times the quantity produced by the acre of\r\nwheat. An acre of potatoes is cultivated with less expense than an acre of\r\nwheat; the fallow, which generally precedes the sowing of wheat, more than\r\ncompensating the hoeing and other extraordinary culture which is always given\r\nto potatoes. Should this root ever become in any part of Europe, like rice in\r\nsome rice countries, the common and favourite vegetable food of the people, so\r\nas to occupy the same proportion of the lands in tillage, which wheat and other\r\nsorts of grain for human food do at present, the same quantity of cultivated\r\nland would maintain a much greater number of people; and the labourers being\r\ngenerally fed with potatoes, a greater surplus would remain after replacing all\r\nthe stock, and maintaining all the labour employed in cultivation. A greater\r\nshare of this surplus, too, would belong to the landlord. Population would\r\nincrease, and rents would rise much beyond what they are at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe land which is fit for potatoes, is fit for almost every other useful\r\nvegetable. If they occupied the same proportion of cultivated land which corn\r\ndoes at present, they would regulate, in the same manner, the rent of the\r\ngreater part of other cultivated land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some parts of Lancashire, it is pretended, I have been told, that bread of\r\noatmeal is a heartier food for labouring people than wheaten bread, and I have\r\nfrequently heard the same doctrine held in Scotland. I am, however, somewhat\r\ndoubtful of the truth of it. The common people in Scotland, who are fed with\r\noatmeal, are in general neither so strong nor so handsome as the same rank of\r\npeople in England, who are fed with wheaten bread. They neither work so well,\r\nnor look so well; and as there is not the same difference between the people of\r\nfashion in the two countries, experience would seem to shew, that the food of\r\nthe common people in Scotland is not so suitable to the human constitution as\r\nthat of their neighbours of the same rank in England. But it seems to be\r\notherwise with potatoes. The chairmen, porters, and coal-heavers in London, and\r\nthose unfortunate women who live by prostitution, the strongest men and the\r\nmost beautiful women perhaps in the British dominions, are said to be, the\r\ngreater part of them, from the lowest rank of people in Ireland, who are\r\ngenerally fed with this root. No food can afford a more decisive proof of its\r\nnourishing quality, or of its being peculiarly suitable to the health of the\r\nhuman constitution.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is difficult to preserve potatoes through the year, and impossible to store\r\nthem like corn, for two or three years together. The fear of not being able to\r\nsell them before they rot, discourages their cultivation, and is, perhaps, the\r\nchief obstacle to their ever becoming in any great country, like bread, the\r\nprincipal vegetable food of all the different ranks of the people.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II.—Of the Produce of Land, which sometimes does, and sometimes\r\ndoes not, afford Rent.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nHuman food seems to be the only produce of land, which always and necessarily\r\naffords some rent to the landlord. Other sorts of produce sometimes may, and\r\nsometimes may not, according to different circumstances.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter food, clothing and lodging are the two great wants of mankind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLand, in its original rude state, can afford the materials of clothing and\r\nlodging to a much greater number of people than it can feed. In its improved\r\nstate, it can sometimes feed a greater number of people than it can supply with\r\nthose materials; at least in the way in which they require them, and are\r\nwilling to pay for them. In the one state, therefore, there is always a\r\nsuperabundance of these materials, which are frequently, upon that account, of\r\nlittle or no value. In the other, there is often a scarcity, which necessarily\r\naugments their value. In the one state, a great part of them is thrown away as\r\nuseless and the price of what is used is considered as equal only to the labour\r\nand expense of fitting it for use, and can, therefore, afford no rent to the\r\nlandlord. In the other, they are all made use of, and there is frequently a\r\ndemand for more than can be had. Somebody is always willing to give more for\r\nevery part of them, than what is sufficient to pay the expense of bringing them\r\nto market. Their price, therefore, can always afford some rent to the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe skins of the larger animals were the original materials of clothing. Among\r\nnations of hunters and shepherds, therefore, whose food consists chiefly in the\r\nflesh of those animals, everyman, by providing himself with food, provides\r\nhimself with the materials of more clothing than he can wear. If there was no\r\nforeign commerce, the greater part of them would be thrown away as things of no\r\nvalue. This was probably the case among the hunting nations of North America,\r\nbefore their country was discovered by the Europeans, with whom they now\r\nexchange their surplus peltry, for blankets, fire-arms, and brandy, which gives\r\nit some value. In the present commercial state of the known world, the most\r\nbarbarous nations, I believe, among whom land property is established, have\r\nsome foreign commerce of this kind, and find among their wealthier neighbours\r\nsuch a demand for all the materials of clothing, which their land produces, and\r\nwhich can neither be wrought up nor consumed at home, as raises their price\r\nabove what it costs to send them to those wealthier neighbours. It affords,\r\ntherefore, some rent to the landlord. When the greater part of the Highland\r\ncattle were consumed on their own hills, the exportation of their hides made\r\nthe most considerable article of the commerce of that country, and what they\r\nwere exchanged for afforded some addition to the rent of the Highland estates.\r\nThe wool of England, which in old times, could neither be consumed nor wrought\r\nup at home, found a market in the then wealthier and more industrious country\r\nof Flanders, and its price afforded something to the rent of the land which\r\nproduced it. In countries not better cultivated than England was then, or than\r\nthe Highlands of Scotland are now, and which had no foreign commerce, the\r\nmaterials of clothing would evidently be so superabundant, that a great part of\r\nthem would be thrown away as useless, and no part could afford any rent to the\r\nlandlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe materials of lodging cannot always be transported to so great a distance as\r\nthose of clothing, and do not so readily become an object of foreign commerce.\r\nWhen they are superabundant in the country which produces them, it frequently\r\nhappens, even in the present commercial state of the world, that they are of no\r\nvalue to the landlord. A good stone quarry in the neighbourhood of London would\r\nafford a considerable rent. In many parts of Scotland and Wales it affords\r\nnone. Barren timber for building is of great value in a populous and\r\nwell-cultivated country, and the land which produces it affords a considerable\r\nrent. But in many parts of North America, the landlord would be much obliged to\r\nany body who would carry away the greater part of his large trees. In some\r\nparts of the Highlands of Scotland, the bark is the only part of the wood\r\nwhich, for want of roads and water-carriage, can be sent to market; the timber\r\nis left to rot upon the ground. When the materials of lodging are so\r\nsuperabundant, the part made use of is worth only the labour and expense of\r\nfitting it for that use. It affords no rent to the landlord, who generally\r\ngrants the use of it to whoever takes the trouble of asking it. The demand of\r\nwealthier nations, however, sometimes enables him to get a rent for it. The\r\npaving of the streets of London has enabled the owners of some barren rocks on\r\nthe coast of Scotland to draw a rent from what never afforded any before. The\r\nwoods of Norway, and of the coasts of the Baltic, find a market in many parts\r\nof Great Britain, which they could not find at home, and thereby afford some\r\nrent to their proprietors.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCountries are populous, not in proportion to the number of people whom their\r\nproduce can clothe and lodge, but in proportion to that of those whom it can\r\nfeed. When food is provided, it is easy to find the necessary clothing and\r\nlodging. But though these are at hand, it may often be difficult to find food.\r\nIn some parts of the British dominions, what is called a house may be built by\r\none day’s labour of one man. The simplest species of clothing, the skins\r\nof animals, require somewhat more labour to dress and prepare them for use.\r\nThey do not, however, require a great deal. Among savage or barbarous nations,\r\na hundredth, or little more than a hundredth part of the labour of the whole\r\nyear, will be sufficient to provide them with such clothing and lodging as\r\nsatisfy the greater part of the people. All the other ninety-nine parts are\r\nfrequently no more than enough to provide them with food.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when, by the improvement and cultivation of land, the labour of one family\r\ncan provide food for two, the labour of half the society becomes sufficient to\r\nprovide food for the whole. The other half, therefore, or at least the greater\r\npart of them, can be employed in providing other things, or in satisfying the\r\nother wants and fancies of mankind. Clothing and lodging, household furniture,\r\nand what is called equipage, are the principal objects of the greater part of\r\nthose wants and fancies. The rich man consumes no more food than his poor\r\nneighbour. In quality it may be very different, and to select and prepare it\r\nmay require more labour and art; but in quantity it is very nearly the same.\r\nBut compare the spacious palace and great wardrobe of the one, with the hovel\r\nand the few rags of the other, and you will be sensible that the difference\r\nbetween their clothing, lodging, and household furniture, is almost as great in\r\nquantity as it is in quality. The desire of food is limited in every man by the\r\nnarrow capacity of the human stomach; but the desire of the conveniencies and\r\nornaments of building, dress, equipage, and household furniture, seems to have\r\nno limit or certain boundary. Those, therefore, who have the command of more\r\nfood than they themselves can consume, are always willing to exchange the\r\nsurplus, or, what is the same thing, the price of it, for gratifications of\r\nthis other kind. What is over and above satisfying the limited desire, is given\r\nfor the amusement of those desires which cannot be satisfied, but seem to be\r\naltogether endless. The poor, in order to obtain food, exert themselves to\r\ngratify those fancies of the rich; and to obtain it more certainly, they vie\r\nwith one another in the cheapness and perfection of their work. The number of\r\nworkmen increases with the increasing quantity of food, or with the growing\r\nimprovement and cultivation of the lands; and as the nature of their business\r\nadmits of the utmost subdivisions of labour, the quantity of materials which\r\nthey can work up, increases in a much greater proportion than their numbers.\r\nHence arises a demand for every sort of material which human invention can\r\nemploy, either usefully or ornamentally, in building, dress, equipage, or\r\nhousehold furniture; for the fossils and minerals contained in the bowels of\r\nthe earth, the precious metals, and the precious stones.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFood is, in this manner, not only the original source of rent, but every other\r\npart of the produce of land which afterwards affords rent, derives that part of\r\nits value from the improvement of the powers of labour in producing food, by\r\nmeans of the improvement and cultivation of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose other parts of the produce of land, however, which afterwards afford\r\nrent, do not afford it always. Even in improved and cultivated countries, the\r\ndemand for them is not always such as to afford a greater price than what is\r\nsufficient to pay the labour, and replace, together with its ordinary profits,\r\nthe stock which must be employed in bringing them to market. Whether it is or\r\nis not such, depends upon different circumstances.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhether a coal mine, for example, can afford any rent, depends partly upon its\r\nfertility, and partly upon its situation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA mine of any kind may be said to be either fertile or barren, according as the\r\nquantity of mineral which can be brought from it by a certain quantity of\r\nlabour, is greater or less than what can be brought by an equal quantity from\r\nthe greater part of other mines of the same kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome coal mines, advantageously situated, cannot be wrought on account of their\r\nbarrenness. The produce does not pay the expense. They can afford neither\r\nprofit nor rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are some, of which the produce is barely sufficient to pay the labour,\r\nand replace, together with its ordinary profits, the stock employed in working\r\nthem. They afford some profit to the undertaker of the work, but no rent to the\r\nlandlord. They can be wrought advantageously by nobody but the landlord, who,\r\nbeing himself the undertaker of the work, gets the ordinary profit of the\r\ncapital which he employs in it. Many coal mines in Scotland are wrought in this\r\nmanner, and can be wrought in no other. The landlord will allow nobody else to\r\nwork them without paying some rent, and nobody can afford to pay any.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOther coal mines in the same country, sufficiently fertile, cannot be wrought\r\non account of their situation. A quantity of mineral, sufficient to defray the\r\nexpense of working, could be brought from the mine by the ordinary, or even\r\nless than the ordinary quantity of labour: but in an inland country, thinly\r\ninhabited, and without either good roads or water-carriage, this quantity could\r\nnot be sold.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCoals are a less agreeable fuel than wood: they are said too to be less\r\nwholesome. The expense of coals, therefore, at the place where they are\r\nconsumed, must generally be somewhat less than that of wood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of wood, again, varies with the state of agriculture, nearly in the\r\nsame manner, and exactly for the same reason, as the price of cattle. In its\r\nrude beginnings, the greater part of every country is covered with wood, which\r\nis then a mere incumbrance, of no value to the landlord, who would gladly give\r\nit to any body for the cutting. As agriculture advances, the woods are partly\r\ncleared by the progress of tillage, and partly go to decay in consequence of\r\nthe increased number of cattle. These, though they do not increase in the same\r\nproportion as corn, which is altogether the acquisition of human industry, yet\r\nmultiply under the care and protection of men, who store up in the season of\r\nplenty what may maintain them in that of scarcity; who, through the whole year,\r\nfurnish them with a greater quantity of food than uncultivated nature provides\r\nfor them; and who, by destroying and extirpating their enemies, secure them in\r\nthe free enjoyment of all that she provides. Numerous herds of cattle, when\r\nallowed to wander through the woods, though they do not destroy the old trees,\r\nhinder any young ones from coming up; so that, in the course of a century or\r\ntwo, the whole forest goes to ruin. The scarcity of wood then raises its price.\r\nIt affords a good rent; and the landlord sometimes finds that he can scarce\r\nemploy his best lands more advantageously than in growing barren timber, of\r\nwhich the greatness of the profit often compensates the lateness of the\r\nreturns. This seems, in the present times, to be nearly the state of things in\r\nseveral parts of Great Britain, where the profit of planting is found to be\r\nequal to that of either corn or pasture. The advantage which the landlord\r\nderives from planting can nowhere exceed, at least for any considerable time,\r\nthe rent which these could afford him; and in an inland country, which is\r\nhighly cultivated, it will frequently not fall much short of this rent. Upon\r\nthe sea-coast of a well-improved country, indeed, if coals can conveniently be\r\nhad for fuel, it may sometimes be cheaper to bring barren timber for building\r\nfrom less cultivated foreign countries than to raise it at home. In the new\r\ntown of Edinburgh, built within these few years, there is not, perhaps, a\r\nsingle stick of Scotch timber.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever may be the price of wood, if that of coals is such that the expense of\r\na coal fire is nearly equal to that of a wood one we may be assured, that at\r\nthat place, and in these circumstances, the price of coals is as high as it can\r\nbe. It seems to be so in some of the inland parts of England, particularly in\r\nOxfordshire, where it is usual, even in the fires of the common people, to mix\r\ncoals and wood together, and where the difference in the expense of those two\r\nsorts of fuel cannot, therefore, be very great. Coals, in the coal countries,\r\nare everywhere much below this highest price. If they were not, they could not\r\nbear the expense of a distant carriage, either by land or by water. A small\r\nquantity only could be sold; and the coal masters and the coal proprietors find\r\nit more for their interest to sell a great quantity at a price somewhat above\r\nthe lowest, than a small quantity at the highest. The most fertile coal mine,\r\ntoo, regulates the price of coals at all the other mines in its neighbourhood.\r\nBoth the proprietor and the undertaker of the work find, the one that he can\r\nget a greater rent, the other that he can get a greater profit, by somewhat\r\nunderselling all their neighbours. Their neighbours are soon obliged to sell at\r\nthe same price, though they cannot so well afford it, and though it always\r\ndiminishes, and sometimes takes away altogether, both their rent and their\r\nprofit. Some works are abandoned altogether; others can afford no rent, and can\r\nbe wrought only by the proprietor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe lowest price at which coals can be sold for any considerable time, is, like\r\nthat of all other commodities, the price which is barely sufficient to replace,\r\ntogether with its ordinary profits, the stock which must be employed in\r\nbringing them to market. At a coal mine for which the landlord can get no rent,\r\nbut, which he must either work himself or let it alone altogether, the price of\r\ncoals must generally be nearly about this price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRent, even where coals afford one, has generally a smaller share in their price\r\nthan in that of most other parts of the rude produce of land. The rent of an\r\nestate above ground, commonly amounts to what is supposed to be a third of the\r\ngross produce; and it is generally a rent certain and independent of the\r\noccasional variations in the crop. In coal mines, a fifth of the gross produce\r\nis a very great rent, a tenth the common rent; and it is seldom a rent certain,\r\nbut depends upon the occasional variations in the produce. These are so great,\r\nthat in a country where thirty years purchase is considered as a moderate price\r\nfor the property of a landed estate, ten years purchase is regarded as a good\r\nprice for that of a coal mine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of a coal mine to the proprietor, frequently depends as much upon its\r\nsituation as upon its fertility. That of a metallic mine depends more upon its\r\nfertility, and less upon its situation. The coarse, and still more the precious\r\nmetals, when separated from the ore, are so valuable, that they can generally\r\nbear the expense of a very long land, and of the most distant sea carriage.\r\nTheir market is not confined to the countries in the neighbourhood of the mine,\r\nbut extends to the whole world. The copper of Japan makes an article of\r\ncommerce in Europe; the iron of Spain in that of Chili and Peru. The silver of\r\nPeru finds its way, not only to Europe, but from Europe to China.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of coals in Westmoreland or Shropshire can have little effect on\r\ntheir price at Newcastle; and their price in the Lionnois can have none at all.\r\nThe productions of such distant coal mines can never be brought into\r\ncompetition with one another. But the productions of the most distant metallic\r\nmines frequently may, and in fact commonly are.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price, therefore, of the coarse, and still more that of the precious\r\nmetals, at the most fertile mines in the world, must necessarily more or less\r\naffect their price at every other in it. The price of copper in Japan must have\r\nsome influence upon its price at the copper mines in Europe. The price of\r\nsilver in Peru, or the quantity either of labour or of other goods which it\r\nwill purchase there, must have some influence on its price, not only at the\r\nsilver mines of Europe, but at those of China. After the discovery of the mines\r\nof Peru, the silver mines of Europe were, the greater part of them, abandoned.\r\nThe value of silver was so much reduced, that their produce could no longer pay\r\nthe expense of working them, or replace, with a profit, the food, clothes,\r\nlodging, and other necessaries which were consumed in that operation. This was\r\nthe case, too, with the mines of Cuba and St. Domingo, and even with the\r\nancient mines of Peru, after the discovery of those of Potosi. The price of\r\nevery metal, at every mine, therefore, being regulated in some measure by its\r\nprice at the most fertile mine in the world that is actually wrought, it can,\r\nat the greater part of mines, do very little more than pay the expense of\r\nworking, and can seldom afford a very high rent to the landlord. Rent\r\naccordingly, seems at the greater part of mines to have but a small share in\r\nthe price of the coarse, and a still smaller in that of the precious metals.\r\nLabour and profit make up the greater part of both.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA sixth part of the gross produce may be reckoned the average rent of the tin\r\nmines of Cornwall, the most fertile that are known in the world, as we are told\r\nby the Rev. Mr. Borlace, vice-warden of the stannaries. Some, he says, afford\r\nmore, and some do not afford so much. A sixth part of the gross produce is the\r\nrent, too, of several very fertile lead mines in Scotland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the silver mines of Peru, we are told by Frezier and Ulloa, the proprietor\r\nfrequently exacts no other acknowledgment from the undertaker of the mine, but\r\nthat he will grind the ore at his mill, paying him the ordinary multure or\r\nprice of grinding. Till 1736, indeed, the tax of the king of Spain amounted to\r\none fifth of the standard silver, which till then might be considered as the\r\nreal rent of the greater part of the silver mines of Peru, the richest which\r\nhave been known in the world. If there had been no tax, this fifth would\r\nnaturally have belonged to the landlord, and many mines might have been wrought\r\nwhich could not then be wrought, because they could not afford this tax. The\r\ntax of the duke of Cornwall upon tin is supposed to amount to more than five\r\nper cent. or one twentieth part of the value; and whatever may be his\r\nproportion, it would naturally, too, belong to the proprietor of the mine, if\r\ntin was duty free. But if you add one twentieth to one sixth, you will find\r\nthat the whole average rent of the tin mines of Cornwall, was to the whole\r\naverage rent of the silver mines of Peru, as thirteen to twelve. But the silver\r\nmines of Peru are not now able to pay even this low rent; and the tax upon\r\nsilver was, in 1736, reduced from one fifth to one tenth. Even this tax upon\r\nsilver, too, gives more temptation to smuggling than the tax of one twentieth\r\nupon tin; and smuggling must be much easier in the precious than in the bulky\r\ncommodity. The tax of the king of Spain, accordingly, is said to be very ill\r\npaid, and that of the duke of Cornwall very well. Rent, therefore, it is\r\nprobable, makes a greater part of the price of tin at the most fertile tin\r\nmines than it does of silver at the most fertile silver mines in the world.\r\nAfter replacing the stock employed in working those different mines, together\r\nwith its ordinary profits, the residue which remains to the proprietor is\r\ngreater, it seems, in the coarse, than in the precious metal.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNeither are the profits of the undertakers of silver mines commonly very great\r\nin Peru. The same most respectable and well-informed authors acquaint us, that\r\nwhen any person undertakes to work a new mine in Peru, he is universally looked\r\nupon as a man destined to bankruptcy and ruin, and is upon that account shunned\r\nand avoided by every body. Mining, it seems, is considered there in the same\r\nlight as here, as a lottery, in which the prizes do not compensate the blanks,\r\nthough the greatness of some tempts many adventurers to throw away their\r\nfortunes in such unprosperous projects.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the sovereign, however, derives a considerable part of his revenue from the\r\nproduce of silver mines, the law in Peru gives every possible encouragement to\r\nthe discovery and working of new ones. Whoever discovers a new mine, is\r\nentitled to measure off two hundred and forty-six feet in length, according to\r\nwhat he supposes to be the direction of the vein, and half as much in breadth.\r\nHe becomes proprietor of this portion of the mine, and can work it without\r\npaving any acknowledgment to the landlord. The interest of the duke of Cornwall\r\nhas given occasion to a regulation nearly of the same kind in that ancient\r\ndutchy. In waste and uninclosed lands, any person who discovers a tin mine may\r\nmark out its limits to a certain extent, which is called bounding a mine. The\r\nbounder becomes the real proprietor of the mine, and may either work it\r\nhimself, or give it in lease to another, without the consent of the owner of\r\nthe land, to whom, however, a very small acknowledgment must be paid upon\r\nworking it. In both regulations, the sacred rights of private property are\r\nsacrificed to the supposed interests of public revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same encouragement is given in Peru to the discovery and working of new\r\ngold mines; and in gold the king’s tax amounts only to a twentieth part\r\nof the standard rental. It was once a fifth, and afterwards a tenth, as in\r\nsilver; but it was found that the work could not bear even the lowest of these\r\ntwo taxes. If it is rare, however, say the same authors, Frezier and Ulloa, to\r\nfind a person who has made his fortune by a silver, it is still much rarer to\r\nfind one who has done so by a gold mine. This twentieth part seems to be the\r\nwhole rent which is paid by the greater part of the gold mines of Chili and\r\nPeru. Gold, too, is much more liable to be smuggled than even silver; not only\r\non account of the superior value of the metal in proportion to its bulk, but on\r\naccount of the peculiar way in which nature produces it. Silver is very seldom\r\nfound virgin, but, like most other metals, is generally mineralized with some\r\nother body, from which it is impossible to separate it in such quantities as\r\nwill pay for the expense, but by a very laborious and tedious operation, which\r\ncannot well be carried on but in work-houses erected for the purpose, and,\r\ntherefore, exposed to the inspection of the king’s officers. Gold, on the\r\ncontrary, is almost always found virgin. It is sometimes found in pieces of\r\nsome bulk; and, even when mixed, in small and almost insensible particles, with\r\nsand, earth, and other extraneous bodies, it can be separated from them by a\r\nvery short and simple operation, which can be carried on in any private house\r\nby any body who is possessed of a small quantity of mercury. If the\r\nking’s tax, therefore, is but ill paid upon silver, it is likely to be\r\nmuch worse paid upon gold; and rent must make a much smaller part of the price\r\nof gold than that of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe lowest price at which the precious metals can be sold, or the smallest\r\nquantity of other goods for which they can be exchanged, during any\r\nconsiderable time, is regulated by the same principles which fix the lowest\r\nordinary price of all other goods. The stock which must commonly be employed,\r\nthe food, clothes, and lodging, which must commonly be consumed in bringing\r\nthem from the mine to the market, determine it. It must at least be sufficient\r\nto replace that stock, with the ordinary profits.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTheir highest price, however, seems not to be necessarily determined by any\r\nthing but the actual scarcity or plenty of these metals themselves. It is not\r\ndetermined by that of any other commodity, in the same manner as the price of\r\ncoals is by that of wood, beyond which no scarcity can ever raise it. Increase\r\nthe scarcity of gold to a certain degree, and the smallest bit of it may become\r\nmore precious than a diamond, and exchange for a greater quantity of other\r\ngoods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe demand for those metals arises partly from their utility, and partly from\r\ntheir beauty. If you except iron, they are more useful than, perhaps, any other\r\nmetal. As they are less liable to rust and impurity, they can more easily be\r\nkept clean; and the utensils, either of the table or the kitchen, are often,\r\nupon that account, more agreeable when made of them. A silver boiler is more\r\ncleanly than a lead, copper, or tin one; and the same quality would render a\r\ngold boiler still better than a silver one. Their principal merit, however,\r\narises from their beauty, which renders them peculiarly fit for the ornaments\r\nof dress and furniture. No paint or dye can give so splendid a colour as\r\ngilding. The merit of their beauty is greatly enhanced by their scarcity. With\r\nthe greater part of rich people, the chief enjoyment of riches consists in the\r\nparade of riches; which, in their eye, is never so complete as when they appear\r\nto possess those decisive marks of opulence which nobody can possess but\r\nthemselves. In their eyes, the merit of an object, which is in any degree\r\neither useful or beautiful, is greatly enhanced by its scarcity, or by the\r\ngreat labour which it requires to collect any considerable quantity of it; a\r\nlabour which nobody can afford to pay but themselves. Such objects they are\r\nwilling to purchase at a higher price than things much more beautiful and\r\nuseful, but more common. These qualities of utility, beauty, and scarcity, are\r\nthe original foundation of the high price of those metals, or of the great\r\nquantity of other goods for which they can everywhere be exchanged. This value\r\nwas antecedent to, and independent of their being employed as coin, and was the\r\nquality which fitted them for that employment. That employment, however, by\r\noccasioning a new demand, and by diminishing the quantity which could be\r\nemployed in any other way, may have afterwards contributed to keep up or\r\nincrease their value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe demand for the precious stones arises altogether from their beauty. They\r\nare of no use but as ornaments; and the merit of their beauty is greatly\r\nenhanced by their scarcity, or by the difficulty and expense of getting them\r\nfrom the mine. Wages and profit accordingly make up, upon most occasions,\r\nalmost the whole of the high price. Rent comes in but for a very small share,\r\nfrequently for no share; and the most fertile mines only afford any\r\nconsiderable rent. When Tavernier, a jeweller, visited the diamond mines of\r\nGolconda and Visiapour, he was informed that the sovereign of the country, for\r\nwhose benefit they were wrought, had ordered all of them to be shut up except\r\nthose which yielded the largest and finest stones. The other, it seems, were to\r\nthe proprietor not worth the working.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the prices, both of the precious metals and of the precious stones, is\r\nregulated all over the world by their price at the most fertile mine in it, the\r\nrent which a mine of either can afford to its proprietor is in proportion, not\r\nto its absolute, but to what may be called its relative fertility, or to its\r\nsuperiority over other mines of the same kind. If new mines were discovered, as\r\nmuch superior to those of Potosi, as they were superior to those of Europe, the\r\nvalue of silver might be so much degraded as to render even the mines of Potosi\r\nnot worth the working. Before the discovery of the Spanish West Indies, the\r\nmost fertile mines in Europe may have afforded as great a rent to their\r\nproprietors as the richest mines in Peru do at present. Though the quantity of\r\nsilver was much less, it might have exchanged for an equal quantity of other\r\ngoods, and the proprietor’s share might have enabled him to purchase or\r\ncommand an equal quantity either of labour or of commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value, both of the produce and of the rent, the real revenue which they\r\nafforded, both to the public and to the proprietor, might have been the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe most abundant mines, either of the precious metals, or of the precious\r\nstones, could add little to the wealth of the world. A produce, of which the\r\nvalue is principally derived from its scarcity, is necessarily degraded by its\r\nabundance. A service of plate, and the other frivolous ornaments of dress and\r\nfurniture, could be purchased for a smaller quantity of commodities; and in\r\nthis would consist the sole advantage which the world could derive from that\r\nabundance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is otherwise in estates above ground. The value, both of their produce and\r\nof their rent, is in proportion to their absolute, and not to their relative\r\nfertility. The land which produces a certain quantity of food, clothes, and\r\nlodging, can always feed, clothe, and lodge, a certain number of people; and\r\nwhatever may be the proportion of the landlord, it will always give him a\r\nproportionable command of the labour of those people, and of the commodities\r\nwith which that labour can supply him. The value of the most barren land is not\r\ndiminished by the neighbourhood of the most fertile. On the contrary, it is\r\ngenerally increased by it. The great number of people maintained by the fertile\r\nlands afford a market to many parts of the produce of the barren, which they\r\ncould never have found among those whom their own produce could maintain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever increases the fertility of land in producing food, increases not only\r\nthe value of the lands upon which the improvement is bestowed, but contributes\r\nlikewise to increase that of many other lands, by creating a new demand for\r\ntheir produce. That abundance of food, of which, in consequence of the\r\nimprovement of land, many people have the disposal beyond what they themselves\r\ncan consume, is the great cause of the demand, both for the precious metals and\r\nthe precious stones, as well as for every other conveniency and ornament of\r\ndress, lodging, household furniture, and equipage. Food not only constitutes\r\nthe principal part of the riches of the world, but it is the abundance of food\r\nwhich gives the principal part of their value to many other sorts of riches.\r\nThe poor inhabitants of Cuba and St. Domingo, when they were first discovered\r\nby the Spaniards, used to wear little bits of gold as ornaments in their hair\r\nand other parts of their dress. They seemed to value them as we would do any\r\nlittle pebbles of somewhat more than ordinary beauty, and to consider them as\r\njust worth the picking up, but not worth the refusing to any body who asked\r\nthem, They gave them to their new guests at the first request, without seeming\r\nto think that they had made them any very valuable present. They were\r\nastonished to observe the rage of the Spaniards to obtain them; and had no\r\nnotion that there could anywhere be a country in which many people had the\r\ndisposal of so great a superfluity of food; so scanty always among themselves,\r\nthat, for a very small quantity of those glittering baubles, they would\r\nwillingly give as much as might maintain a whole family for many years. Could\r\nthey have been made to understand this, the passion of the Spaniards would not\r\nhave surprised them.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART III.—Of the variations in the Proportion between the respective\r\nValues of that sort of Produce which always affords Rent, and of that which\r\nsometimes does, and sometimes does not, afford Rent.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe increasing abundance of food, in consequence of the increasing improvement\r\nand cultivation, must necessarily increase the demand for every part of the\r\nproduce of land which is not food, and which can be applied either to use or to\r\nornament. In the whole progress of improvement, it might, therefore, be\r\nexpected there should be only one variation in the comparative values of those\r\ntwo different sorts of produce. The value of that sort which sometimes does,\r\nand sometimes does not afford rent, should constantly rise in proportion to\r\nthat which always affords some rent. As art and industry advance, the materials\r\nof clothing and lodging, the useful fossils and materials of the earth, the\r\nprecious metals and the precious stones, should gradually come to be more and\r\nmore in demand, should gradually exchange for a greater and a greater quantity\r\nof food; or, in other words, should gradually become dearer and dearer. This,\r\naccordingly, has been the case with most of these things upon most occasions,\r\nand would have been the case with all of them upon all occasions, if particular\r\naccidents had not, upon some occasions, increased the supply of some of them in\r\na still greater proportion than the demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of a free-stone quarry, for example, will necessarily increase with\r\nthe increasing improvement and population of the country round about it,\r\nespecially if it should be the only one in the neighbourhood. But the value of\r\na silver mine, even though there should not be another within a thousand miles\r\nof it, will not necessarily increase with the improvement of the country in\r\nwhich it is situated. The market for the produce of a free-stone quarry can\r\nseldom extend more than a few miles round about it, and the demand must\r\ngenerally be in proportion to the improvement and population of that small\r\ndistrict; but the market for the produce of a silver mine may extend over the\r\nwhole known world. Unless the world in general, therefore, be advancing in\r\nimprovement and population, the demand for silver might not be at all increased\r\nby the improvement even of a large country in the neighbourhood of the mine.\r\nEven though the world in general were improving, yet if, in the course of its\r\nimprovements, new mines should be discovered, much more fertile than any which\r\nhad been known before, though the demand for silver would necessarily increase,\r\nyet the supply might increase in so much a greater proportion, that the real\r\nprice of that metal might gradually fall; that is, any given quantity, a pound\r\nweight of it, for example, might gradually purchase or command a smaller and a\r\nsmaller quantity of labour, or exchange for a smaller and a smaller quantity of\r\ncorn, the principal part of the subsistence of the labourer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great market for silver is the commercial and civilized part of the world.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, by the general progress of improvement, the demand of this market should\r\nincrease, while, at the same time, the supply did not increase in the same\r\nproportion, the value of silver would gradually rise in proportion to that of\r\ncorn. Any given quantity of silver would exchange for a greater and a greater\r\nquantity of corn; or, in other words, the average money price of corn would\r\ngradually become cheaper and cheaper.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, on the contrary, the supply, by some accident, should increase, for many\r\nyears together, in a greater proportion than the demand, that metal would\r\ngradually become cheaper and cheaper; or, in other words, the average money\r\nprice of corn would, in spite of all improvements, gradually become dearer and\r\ndearer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if, on the other hand, the supply of that metal should increase nearly in\r\nthe same proportion as the demand, it would continue to purchase or exchange\r\nfor nearly the same quantity of corn; and the average money price of corn\r\nwould, in spite of all improvements. continue very nearly the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese three seem to exhaust all the possible combinations of events which can\r\nhappen in the progress of improvement; and during the course of the four\r\ncenturies preceding the present, if we may judge by what has happened both in\r\nFrance and Great Britain, each of those three different combinations seems to\r\nhave taken place in the European market, and nearly in the same order, too, in\r\nwhich I have here set them down.\r\n\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n\u003ci\u003eDigression concerning the Variations in the value of Silver during the\r\nCourse of the Four last Centuries.\u003c/i\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst Period.—In 1350, and for some time before, the average price of the\r\nquarter of wheat in England seems not to have been estimated lower than four\r\nounces of silver, Tower weight, equal to about twenty shillings of our present\r\nmoney. From this price it seems to have fallen gradually to two ounces of\r\nsilver, equal to about ten shillings of our present money, the price at which\r\nwe find it estimated in the beginning of the sixteenth century, and at which it\r\nseems to have continued to be estimated till about 1570.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1350, being the 25th of Edward III. was enacted what is called the Statute\r\nof Labourers. In the preamble, it complains much of the insolence of servants,\r\nwho endeavoured to raise their wages upon their masters. It therefore ordains,\r\nthat all servants and labourers should, for the future, be contented with the\r\nsame wages and liveries (liveries in those times signified not only clothes,\r\nbut provisions) which they had been accustomed to receive in the 20th year of\r\nthe king, and the four preceding years; that, upon this account, their\r\nlivery-wheat should nowhere be estimated higher than tenpence a-bushel, and\r\nthat it should always be in the option of the master to deliver them either the\r\nwheat or the money. Tenpence: a-bushel, therefore, had, in the 25th of Edward\r\nIII. been reckoned a very moderate price of wheat, since it required a\r\nparticular statute to oblige servants to accept of it in exchange for their\r\nusual livery of provisions; and it had been reckoned a reasonable price ten\r\nyears before that, or in the 16th year of the king, the term to which the\r\nstatute refers. But in the 16th year of Edward III. tenpence contained about\r\nhalf an ounce of silver, Tower weight, and was nearly equal to half-a-crown of\r\nour present money. Four ounces of silver, Tower weight, therefore, equal to six\r\nshillings and eightpence of the money of those times, and to near twenty\r\nshillings of that of the present, must have been reckoned a moderate price for\r\nthe quarter of eight bushels.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis statute is surely a better evidence of what was reckoned, in those times,\r\na moderate price of grain, than the prices of some particular years, which have\r\ngenerally been recorded by historians and other writers, on account of their\r\nextraordinary dearness or cheapness, and from which, therefore, it is difficult\r\nto form any judgment concerning what may have been the ordinary price. There\r\nare, besides, other reasons for believing that, in the beginning of the\r\nfourteenth century, and for some time before, the common price of wheat was not\r\nless than four ounces of silver the quarter, and that of other grain in\r\nproportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1309, Ralph de Born, prior of St Augustine’s, Canterbury, gave a feast\r\nupon his installation-day, of which William Thorn has preserved, not only the\r\nbill of fare, but the prices of many particulars. In that feast were consumed,\r\n1st, fifty-three quarters of wheat, which cost nineteen pounds, or seven\r\nshillings, and twopence a-quarter, equal to about one-and-twenty shillings and\r\nsixpence of our present money; 2dly, fifty-eight quarters of malt, which cost\r\nseventeen pounds ten shillings, or six shillings a-quarter, equal to about\r\neighteen shillings of our present money; 3dly, twenty quarters of oats, which\r\ncost four pounds, or four shillings a-quarter, equal to about twelve shillings\r\nof our present money. The prices of malt and oats seem here to be higher than\r\ntheir ordinary proportion to the price of wheat.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese prices are not recorded, on account of their extraordinary dearness or\r\ncheapness, but are mentioned accidentally, as the prices actually paid for\r\nlarge quantities of grain consumed at a feast, which was famous for its\r\nmagnificence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1262, being the 51st of Henry III. was revived an ancient statute, called\r\nthe assize of bread and ale, which, the king says in the preamble, had been\r\nmade in the times of his progenitors, some time kings of England. It is\r\nprobably, therefore, as old at least as the time of his grandfather, Henry II.\r\nand may have been as old as the Conquest. It regulates the price of bread\r\naccording as the prices of wheat may happen to be, from one shilling to twenty\r\nshillings the quarter of the money of those times. But statutes of this kind\r\nare generally presumed to provide with equal care for all deviations from the\r\nmiddle price, for those below it, as well as for those above it. Ten shillings,\r\ntherefore, containing six ounces of silver, Tower weight, and equal to about\r\nthirty shillings of our present money, must, upon this supposition, have been\r\nreckoned the middle price of the quarter of wheat when this statute was first\r\nenacted, and must have continued to be so in the 51st of Henry III. We cannot,\r\ntherefore, be very wrong in supposing that the middle price was not less than\r\none-third of the highest price at which this statute regulates the price of\r\nbread, or than six shillings and eightpence of the money of those times,\r\ncontaining four ounces of silver, Tower weight.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom these different facts, therefore, we seem to have some reason to conclude\r\nthat, about the middle of the fourteenth century, and for a considerable time\r\nbefore, the average or ordinary price of the quarter of wheat was not supposed\r\nto be less than four ounces of silver, Tower weight.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom about the middle of the fourteenth to the beginning of the sixteenth\r\ncentury, what was reckoned the reasonable and moderate, that is, the ordinary\r\nor average price of wheat, seems to have sunk gradually to about one half of\r\nthis price; so as at last to have fallen to about two ounces of silver, Tower\r\nweight, equal to about ten shillings of our present money. It continued to be\r\nestimated at this price till about 1570.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the household book of Henry, the fifth earl of Northumberland, drawn up in\r\n1512 there are two different estimations of wheat. In one of them it is\r\ncomputed at six shilling and eightpence the quarter, in the other at five\r\nshillings and eightpence only. In 1512, six shillings and eightpence contained\r\nonly two ounces of silver, Tower weight, and were equal to about ten shillings\r\nof our present money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom the 25th of Edward III. to the beginning of the reign of Elizabeth, during\r\nthe space of more than two hundred years, six shillings and eightpence, it\r\nappears from several different statutes, had continued to be considered as what\r\nis called the moderate and reasonable, that is, the ordinary or average price\r\nof wheat. The quantity of silver, however, contained in that nominal sum was,\r\nduring the course of this period, continually diminishing in consequence of\r\nsome alterations which were made in the coin. But the increase of the value of\r\nsilver had, it seems, so far compensated the diminution of the quantity of it\r\ncontained in the same nominal sum, that the legislature did not think it worth\r\nwhile to attend to this circumstance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, in 1436, it was enacted, that wheat might be exported without a licence\r\nwhen the price was so low as six shillings and eightpence: and in 1463, it was\r\nenacted, that no wheat should be imported if the price was not above six\r\nshillings and eightpence the quarter: The legislature had imagined, that when\r\nthe price was so low, there could be no inconveniency in exportation, but that\r\nwhen it rose higher, it became prudent to allow of importation. Six shillings\r\nand eightpence, therefore, containing about the same quantity of silver as\r\nthirteen shillings and fourpence of our present money (one-third part less than\r\nthe same nominal sum contained in the time of Edward III), had, in those times,\r\nbeen considered as what is called the moderate and reasonable price of wheat.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1554, by the 1st and 2nd of Philip and Mary, and in 1558, by the 1st of\r\nElizabeth, the exportation of wheat was in the same manner prohibited, whenever\r\nthe price of the quarter should exceed six shillings and eightpence, which did\r\nnot then contain two penny worth more silver than the same nominal sum does at\r\npresent. But it had soon been found, that to restrain the exportation of wheat\r\ntill the price was so very low, was, in reality, to prohibit it altogether. In\r\n1562, therefore, by the 5th of Elizabeth, the exportation of wheat was allowed\r\nfrom certain ports, whenever the price of the quarter should not exceed ten\r\nshillings, containing nearly the same quantity of silver as the like nominal\r\nsum does at present. This price had at this time, therefore, been considered as\r\nwhat is called the moderate and reasonable price of wheat. It agrees nearly\r\nwith the estimation of the Northumberland book in 1512.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat in France the average price of grain was, in the same manner, much lower\r\nin the end of the fifteenth and beginning of the sixteenth century, than in the\r\ntwo centuries preceding, has been observed both by Mr Dupré de St Maur, and by\r\nthe elegant author of the Essay on the Policy of Grain. Its price, during the\r\nsame period, had probably sunk in the same manner through the greater part of\r\nEurope.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis rise in the value of silver, in proportion to that of corn, may either\r\nhave been owing altogether to the increase of the demand for that metal, in\r\nconsequence of increasing improvement and cultivation, the supply, in the mean\r\ntime, continuing the same as before; or, the demand continuing the same as\r\nbefore, it may have been owing altogether to the gradual diminution of the\r\nsupply: the greater part of the mines which were then known in the world being\r\nmuch exhausted, and, consequently, the expense of working them much increased;\r\nor it may have been owing partly to the one, and partly to the other of those\r\ntwo circumstances. In the end of the fifteenth and beginning of the sixteenth\r\ncenturies, the greater part of Europe was approaching towards a more settled\r\nform of government than it had enjoyed for several ages before. The increase of\r\nsecurity would naturally increase industry and improvement; and the demand for\r\nthe precious metals, as well as for every other luxury and ornament, would\r\nnaturally increase with the increase of riches. A greater annual produce would\r\nrequire a greater quantity of coin to circulate it; and a greater number of\r\nrich people would require a greater quantity of plate and other ornaments of\r\nsilver. It is natural to suppose, too, that the greater part of the mines which\r\nthen supplied the European market with silver might be a good deal exhausted,\r\nand have become more expensive in the working. They had been wrought, many of\r\nthem, from the time of the Romans.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been the opinion, however, of the greater part of those who have written\r\nupon the prices of commodities in ancient times, that, from the Conquest,\r\nperhaps from the invasion of Julius Caesar, till the discovery of the mines of\r\nAmerica, the value of silver was continually diminishing. This opinion they\r\nseem to have been led into, partly by the observations which they had occasion\r\nto make upon the prices both of corn and of some other parts of the rude\r\nproduce of land, and partly by the popular notion, that as the quantity of\r\nsilver naturally increases in every country with the increase of wealth, so its\r\nvalue diminishes as it quantity increases.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn their observations upon the prices of corn, three different circumstances\r\nseem frequently to have misled them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, in ancient times, almost all rents were paid in kind; in a certain\r\nquantity of corn, cattle, poultry, etc. It sometimes happened, however, that\r\nthe landlord would stipulate, that he should be at liberty to demand of the\r\ntenant, either the annual payment in kind or a certain sum of money instead of\r\nit. The price at which the payment in kind was in this manner exchanged for a\r\ncertain sum of money, is in Scotland called the conversion price. As the option\r\nis always in the landlord to take either the substance or the price, it is\r\nnecessary, for the safety of the tenant, that the conversion price should\r\nrather be below than above the average market price. In many places,\r\naccordingly, it is not much above one half of this price. Through the greater\r\npart of Scotland this custom still continues with regard to poultry, and in\r\nsome places with regard to cattle. It might probably have continued to take\r\nplace, too, with regard to corn, had not the institution of the public fiars\r\nput an end to it. These are annual valuations, according to the judgment of an\r\nassize, of the average price of all the different sorts of grain, and of all\r\nthe different qualities of each, according to the actual market price in every\r\ndifferent county. This institution rendered it sufficiently safe for the\r\ntenant, and much more convenient for the landlord, to convert, as they call it,\r\nthe corn rent, rather at what should happen to be the price of the fiars of\r\neach year, than at any certain fixed price. But the writers who have collected\r\nthe prices of corn in ancient times seem frequently to have mistaken what is\r\ncalled in Scotland the conversion price for the actual market price. Fleetwood\r\nacknowledges, upon one occasion, that he had made this mistake. As he wrote his\r\nbook, however, for a particular purpose, he does not think proper to make this\r\nacknowledgment till after transcribing this conversion price fifteen times. The\r\nprice is eight shillings the quarter of wheat. This sum in 1423, the year at\r\nwhich he begins with it, contained the same quantity of silver as sixteen\r\nshillings of our present money. But in 1562, the year at which he ends with it,\r\nit contained no more than the same nominal sum does at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, they have been misled by the slovenly manner in which some ancient\r\nstatutes of assize had been sometimes transcribed by lazy copiers, and\r\nsometimes, perhaps, actually composed by the legislature.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient statutes of assize seem to have begun always with determining what\r\nought to be the price of bread and ale when the price of wheat and barley were\r\nat the lowest; and to have proceeded gradually to determine what it ought to\r\nbe, according as the prices of those two sorts of grain should gradually rise\r\nabove this lowest price. But the transcribers of those statutes seem frequently\r\nto have thought it sufficient to copy the regulation as far as the three or\r\nfour first and lowest prices; saving in this manner their own labour, and\r\njudging, I suppose, that this was enough to show what proportion ought to be\r\nobserved in all higher prices.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, in the assize of bread and ale, of the 51st of Henry III. the price of\r\nbread was regulated according to the different prices of wheat, from one\r\nshilling to twenty shillings the quarter of the money of those times. But in\r\nthe manuscripts from which all the different editions of the statutes,\r\npreceding that of Mr Ruffhead, were printed, the copiers had never transcribed\r\nthis regulation beyond the price of twelve shillings. Several writers,\r\ntherefore, being misled by this faulty transcription, very naturally conclude\r\nthat the middle price, or six shillings the quarter, equal to about eighteen\r\nshillings of our present money, was the ordinary or average price of wheat at\r\nthat time.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the statute of Tumbrel and Pillory, enacted nearly about the same time, the\r\nprice of ale is regulated according to every sixpence rise in the price of\r\nbarley, from two shillings, to four shillings the quarter. That four shillings,\r\nhowever, was not considered as the highest price to which barley might\r\nfrequently rise in those times, and that these prices were only given as an\r\nexample of the proportion which ought to be observed in all other prices,\r\nwhether higher or lower, we may infer from the last words of the statute:\r\n“Et sic deinceps crescetur vel diminuetur per sex denarios.” The\r\nexpression is very slovenly, but the meaning is plain enough, “that the\r\nprice of ale is in this manner to be increased or diminished according to every\r\nsixpence rise or fall in the price of barley.” In the composition of this\r\nstatute, the legislature itself seems to have been as negligent as the copiers\r\nwere in the transcription of the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn an ancient manuscript of the Regiam Majestatem, an old Scotch law book,\r\nthere is a statute of assize, in which the price of bread is regulated\r\naccording to all the different prices of wheat, from tenpence to three\r\nshillings the Scotch boll, equal to about half an English quarter. Three\r\nshillings Scotch, at the time when this assize is supposed to have been\r\nenacted, were equal to about nine shillings sterling of our present money. Mr\r\nRuddiman seems {See his Preface to Anderson’s Diplomata Scotiae.} to\r\nconclude from this, that three shillings was the highest price to which wheat\r\never rose in those times, and that tenpence, a shilling, or at most two\r\nshillings, were the ordinary prices. Upon consulting the manuscript, however,\r\nit appears evidently, that all these prices are only set down as examples of\r\nthe proportion which ought to be observed between the respective prices of\r\nwheat and bread. The last words of the statute are “reliqua judicabis\r\nsecundum praescripta, habendo respectum ad pretium\r\nbladi.”—“You shall judge of the remaining cases, according to\r\nwhat is above written, having respect to the price of corn.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, they seem to have been misled too, by the very low price at which\r\nwheat was sometimes sold in very ancient times; and to have imagined, that as\r\nits lowest price was then much lower than in later times its ordinary price\r\nmust likewise have been much lower. They might have found, however, that in\r\nthose ancient times its highest price was fully as much above, as its lowest\r\nprice was below any thing that had ever been known in later times. Thus, in\r\n1270, Fleetwood gives us two prices of the quarter of wheat. The one is four\r\npounds sixteen shillings of the money of those times, equal to fourteen pounds\r\neight shillings of that of the present; the other is six pounds eight\r\nshillings, equal to nineteen pounds four shillings of our present money. No\r\nprice can be found in the end of the fifteenth, or beginning of the sixteenth\r\ncentury, which approaches to the extravagance of these. The price of corn,\r\nthough at all times liable to variation varies most in those turbulent and\r\ndisorderly societies, in which the interruption of all commerce and\r\ncommunication hinders the plenty of one part of the country from relieving the\r\nscarcity of another. In the disorderly state of England under the Plantagenets,\r\nwho governed it from about the middle of the twelfth till towards the end of\r\nthe fifteenth century, one district might be in plenty, while another, at no\r\ngreat distance, by having its crop destroyed, either by some accident of the\r\nseasons, or by the incursion of some neighbouring baron, might be suffering all\r\nthe horrors of a famine; and yet if the lands of some hostile lord were\r\ninterposed between them, the one might not be able to give the least assistance\r\nto the other. Under the vigorous administration of the Tudors, who governed\r\nEngland during the latter part of the fifteenth, and through the whole of the\r\nsixteenth century, no baron was powerful enough to dare to disturb the public\r\nsecurity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe reader will find at the end of this chapter all the prices of wheat which\r\nhave been collected by Fleetwood, from 1202 to 1597, both inclusive, reduced to\r\nthe money of the present times, and digested, according to the order of time,\r\ninto seven divisions of twelve years each. At the end of each division, too, he\r\nwill find the average price of the twelve years of which it consists. In that\r\nlong period of time, Fleetwood has been able to collect the prices of no more\r\nthan eighty years; so that four years are wanting to make out the last twelve\r\nyears. I have added, therefore, from the accounts of Eton college, the prices\r\nof 1598, 1599, 1600, and 1601. It is the only addition which I have made. The\r\nreader will see, that from the beginning of the thirteenth till after the\r\nmiddle of the sixteenth century, the average price of each twelve years grows\r\ngradually lower and lower; and that towards the end of the sixteenth century it\r\nbegins to rise again. The prices, indeed, which Fleetwood has been able to\r\ncollect, seem to have been those chiefly which were remarkable for\r\nextraordinary dearness or cheapness; and I do not pretend that any very certain\r\nconclusion can be drawn from them. So far, however, as they prove any thing at\r\nall, they confirm the account which I have been endeavouring to give. Fleetwood\r\nhimself, however, seems, with most other writers, to have believed, that,\r\nduring all this period, the value of silver, in consequence of its increasing\r\nabundance, was continually diminishing. The prices of corn, which he himself\r\nhas collected, certainly do not agree with this opinion. They agree perfectly\r\nwith that of Mr Dupré de St Maur, and with that which I have been endeavouring\r\nto explain. Bishop Fleetwood and Mr Dupré de St Maur are the two authors who\r\nseem to have collected, with the greatest diligence and fidelity, the prices of\r\nthings in ancient times. It is somewhat curious that, though their opinions are\r\nso very different, their facts, so far as they relate to the price of corn at\r\nleast, should coincide so very exactly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not, however, so much from the low price of corn, as from that of some\r\nother parts of the rude produce of land, that the most judicious writers have\r\ninferred the great value of silver in those very ancient times. Corn, it has\r\nbeen said, being a sort of manufacture, was, in those rude ages, much dearer in\r\nproportion than the greater part of other commodities; it is meant, I suppose,\r\nthan the greater part of unmanufactured commodities, such as cattle, poultry,\r\ngame of all kinds, etc. That in those times of poverty and barbarism these were\r\nproportionably much cheaper than corn, is undoubtedly true. But this cheapness\r\nwas not the effect of the high value of silver, but of the low value of those\r\ncommodities. It was not because silver would in such times purchase or\r\nrepresent a greater quantity of labour, but because such commodities would\r\npurchase or represent a much smaller quantity than in times of more opulence\r\nand improvement. Silver must certainly be cheaper in Spanish America than in\r\nEurope; in the country where it is produced, than in the country to which it is\r\nbrought, at the expense of a long carriage both by land and by sea, of a\r\nfreight, and an insurance. One-and-twenty pence halfpenny sterling, however, we\r\nare told by Ulloa, was, not many years ago, at Buenos Ayres, the price of an ox\r\nchosen from a herd of three or four hundred. Sixteen shillings sterling, we are\r\ntold by Mr Byron, was the price of a good horse in the capital of Chili. In a\r\ncountry naturally fertile, but of which the far greater part is altogether\r\nuncultivated, cattle, poultry, game of all kinds, etc. as they can be acquired\r\nwith a very small quantity of labour, so they will purchase or command but a\r\nvery small quantity. The low money price for which they may be sold, is no\r\nproof that the real value of silver is there very high, but that the real value\r\nof those commodities is very low.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLabour, it must always be remembered, and not any particular commodity, or set\r\nof commodities, is the real measure of the value both of silver and of all\r\nother commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in countries almost waste, or but thinly inhabited, cattle, poultry, game\r\nof all kinds, etc. as they are the spontaneous productions of Nature, so she\r\nfrequently produces them in much greater quantities than the consumption of the\r\ninhabitants requires. In such a state of things, the supply commonly exceeds\r\nthe demand. In different states of society, in different states of improvement,\r\ntherefore, such commodities will represent, or be equivalent, to very different\r\nquantities of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every state of society, in every stage of improvement, corn is the\r\nproduction of human industry. But the average produce of every sort of industry\r\nis always suited, more or less exactly, to the average consumption; the average\r\nsupply to the average demand. In every different stage of improvement, besides,\r\nthe raising of equal quantities of corn in the same soil and climate, will, at\r\nan average, require nearly equal quantities of labour; or, what comes to the\r\nsame thing, the price of nearly equal quantities; the continual increase of the\r\nproductive powers of labour, in an improved state of cultivation, being more or\r\nless counterbalanced by the continual increasing price of cattle, the principal\r\ninstruments of agriculture. Upon all these accounts, therefore, we may rest\r\nassured, that equal quantities of corn will, in every state of society, in\r\nevery stage of improvement, more nearly represent, or be equivalent to, equal\r\nquantities of labour, than equal quantities of any other part of the rude\r\nproduce of land. Corn, accordingly, it has already been observed, is, in all\r\nthe different stages of wealth and improvement, a more accurate measure of\r\nvalue than any other commodity or set of commodities. In all those different\r\nstages, therefore, we can judge better of the real value of silver, by\r\ncomparing it with corn, than by comparing it with any other commodity or set of\r\ncommodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCorn, besides, or whatever else is the common and favourite vegetable food of\r\nthe people, constitutes, in every civilized country, the principal part of the\r\nsubsistence of the labourer. In consequence of the extension of agriculture,\r\nthe land of every country produces a much greater quantity of vegetable than of\r\nanimal food, and the labourer everywhere lives chiefly upon the wholesome food\r\nthat is cheapest and most abundant. Butcher’s meat, except in the most\r\nthriving countries, or where labour is most highly rewarded, makes but an\r\ninsignificant part of his subsistence; poultry makes a still smaller part of\r\nit, and game no part of it. In France, and even in Scotland, where labour is\r\nsomewhat better rewarded than in France, the labouring poor seldom eat\r\nbutcher’s meat, except upon holidays, and other extraordinary occasions.\r\nThe money price of labour, therefore, depends much more upon the average money\r\nprice of corn, the subsistence of the labourer, than upon that of\r\nbutcher’s meat, or of any other part of the rude produce of land. The\r\nreal value of gold and silver, therefore, the real quantity of labour which\r\nthey can purchase or command, depends much more upon the quantity of corn which\r\nthey can purchase or command, than upon that of butcher’s meat, or any\r\nother part of the rude produce of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch slight observations, however, upon the prices either of corn or of other\r\ncommodities, would not probably have misled so many intelligent authors, had\r\nthey not been influenced at the same time by the popular notion, that as the\r\nquantity of silver naturally increases in every country with the increase of\r\nwealth, so its value diminishes as its quantity increases. This notion,\r\nhowever, seems to be altogether groundless.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of the precious metals may increase in any country from two\r\ndifferent causes; either, first, from the increased abundance of the mines\r\nwhich supply it; or, secondly, from the increased wealth of the people, from\r\nthe increased produce of their annual labour. The first of these causes is no\r\ndoubt necessarily connected with the diminution of the value of the precious\r\nmetals; but the second is not.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen more abundant mines are discovered, a greater quantity of the precious\r\nmetals is brought to market; and the quantity of the necessaries and\r\nconveniencies of life for which they must be exchanged being the same as\r\nbefore, equal quantities of the metals must be exchanged for smaller quantities\r\nof commodities. So far, therefore, as the increase of the quantity of the\r\nprecious metals in any country arises from the increased abundance of the\r\nmines, it is necessarily connected with some diminution of their value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, on the contrary, the wealth of any country increases, when the annual\r\nproduce of its labour becomes gradually greater and greater, a greater quantity\r\nof coin becomes necessary in order to circulate a greater quantity of\r\ncommodities: and the people, as they can afford it, as they have more\r\ncommodities to give for it, will naturally purchase a greater and a greater\r\nquantity of plate. The quantity of their coin will increase from necessity; the\r\nquantity of their plate from vanity and ostentation, or from the same reason\r\nthat the quantity of fine statues, pictures, and of every other luxury and\r\ncuriosity, is likely to increase among them. But as statuaries and painters are\r\nnot likely to be worse rewarded in times of wealth and prosperity, than in\r\ntimes of poverty and depression, so gold and silver are not likely to be worse\r\npaid for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of gold and silver, when the accidental discovery of more abundant\r\nmines does not keep it down, as it naturally rises with the wealth of every\r\ncountry, so, whatever be the state of the mines, it is at all times naturally\r\nhigher in a rich than in a poor country. Gold and silver, like all other\r\ncommodities, naturally seek the market where the best price is given for them,\r\nand the best price is commonly given for every thing in the country which can\r\nbest afford it. Labour, it must be remembered, is the ultimate price which is\r\npaid for every thing; and in countries where labour is equally well rewarded,\r\nthe money price of labour will be in proportion to that of the subsistence of\r\nthe labourer. But gold and silver will naturally exchange for a greater\r\nquantity of subsistence in a rich than in a poor country; in a country which\r\nabounds with subsistence, than in one which is but indifferently supplied with\r\nit. If the two countries are at a great distance, the difference may be very\r\ngreat; because, though the metals naturally fly from the worse to the better\r\nmarket, yet it may be difficult to transport them in such quantities as to\r\nbring their price nearly to a level in both. If the countries are near, the\r\ndifference will be smaller, and may sometimes be scarce perceptible; because in\r\nthis case the transportation will be easy. China is a much richer country than\r\nany part of Europe, and the difference between the price of subsistence in\r\nChina and in Europe is very great. Rice in China is much cheaper than wheat is\r\nany where in Europe. England is a much richer country than Scotland, but the\r\ndifference between the money price of corn in those two countries is much\r\nsmaller, and is but just perceptible. In proportion to the quantity or measure,\r\nScotch corn generally appears to be a good deal cheaper than English; but, in\r\nproportion to its quality, it is certainly somewhat dearer. Scotland receives\r\nalmost every year very large supplies from England, and every commodity must\r\ncommonly be somewhat dearer in the country to which it is brought than in that\r\nfrom which it comes. English corn, therefore, must be dearer in Scotland than\r\nin England; and yet in proportion to its quality, or to the quantity and\r\ngoodness of the flour or meal which can be made from it, it cannot commonly be\r\nsold higher there than the Scotch corn which comes to market in competition\r\nwith it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe difference between the money price of labour in China and in Europe, is\r\nstill greater than that between the money price of subsistence; because the\r\nreal recompence of labour is higher in Europe than in China, the greater part\r\nof Europe being in an improving state, while China seems to be standing still.\r\nThe money price of labour is lower in Scotland than in England, because the\r\nreal recompence of labour is much lower: Scotland, though advancing to greater\r\nwealth, advances much more slowly than England. The frequency of emigration\r\nfrom Scotland, and the rarity of it from England, sufficiently prove that the\r\ndemand for labour is very different in the two countries. The proportion\r\nbetween the real recompence of labour in different countries, it must be\r\nremembered, is naturally regulated, not by their actual wealth or poverty, but\r\nby their advancing, stationary, or declining condition.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGold and silver, as they are naturally of the greatest value among the richest,\r\nso they are naturally of the least value among the poorest nations. Among\r\nsavages, the poorest of all nations, they are scarce of any value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn great towns, corn is always dearer than in remote parts of the country.\r\nThis, however, is the effect, not of the real cheapness of silver, but of the\r\nreal dearness of corn. It does not cost less labour to bring silver to the\r\ngreat town than to the remote parts of the country; but it costs a great deal\r\nmore to bring corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some very rich and commercial countries, such as Holland and the territory\r\nof Genoa, corn is dear for the same reason that it is dear in great towns. They\r\ndo not produce enough to maintain their inhabitants. They are rich in the\r\nindustry and skill of their artificers and manufacturers, in every sort of\r\nmachinery which can facilitate and abridge labour; in shipping, and in all the\r\nother instruments and means of carriage and commerce: but they are poor in\r\ncorn, which, as it must be brought to them from distant countries, must, by an\r\naddition to its price, pay for the carriage from those countries. It does not\r\ncost less labour to bring silver to Amsterdam than to Dantzic; but it costs a\r\ngreat deal more to bring corn. The real cost of silver must be nearly the same\r\nin both places; but that of corn must be very different. Diminish the real\r\nopulence either of Holland or of the territory of Genoa, while the number of\r\ntheir inhabitants remains the same; diminish their power of supplying\r\nthemselves from distant countries; and the price of corn, instead of sinking\r\nwith that diminution in the quantity of their silver, which must necessarily\r\naccompany this declension, either as its cause or as its effect, will rise to\r\nthe price of a famine. When we are in want of necessaries, we must part with\r\nall superfluities, of which the value, as it rises in times of opulence and\r\nprosperity, so it sinks in times of poverty and distress. It is otherwise with\r\nnecessaries. Their real price, the quantity of labour which they can purchase\r\nor command, rises in times of poverty and distress, and sinks in times of\r\nopulence and prosperity, which are always times of great abundance; for they\r\ncould not otherwise be times of opulence and prosperity. Corn is a necessary,\r\nsilver is only a superfluity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever, therefore, may have been the increase in the quantity of the precious\r\nmetals, which, during the period between the middle of the fourteenth and that\r\nof the sixteenth century, arose from the increase of wealth and improvement, it\r\ncould have no tendency to diminish their value, either in Great Britain, or in\r\nmy other part of Europe. If those who have collected the prices of things in\r\nancient times, therefore, had, during this period, no reason to infer the\r\ndiminution of the value of silver from any observations which they had made\r\nupon the prices either of corn, or of other commodities, they had still less\r\nreason to infer it from any supposed increase of wealth and improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecond Period.—But how various soever may have been the opinions of the\r\nlearned concerning the progress of the value of silver during the first period,\r\nthey are unanimous concerning it during the second.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom about 1570 to about 1640, during a period of about seventy years, the\r\nvariation in the proportion between the value of silver and that of corn held a\r\nquite opposite course. Silver sunk in its real value, or would exchange for a\r\nsmaller quantity of labour than before; and corn rose in its nominal price,\r\nand, instead of being commonly sold for about two ounces of silver the quarter,\r\nor about ten shillings of our present money, came to be sold for six and eight\r\nounces of silver the quarter, or about thirty and forty shillings of our\r\npresent money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discovery of the abundant mines of America seems to have been the sole\r\ncause of this diminution in the value of silver, in proportion to that of corn.\r\nIt is accounted for, accordingly, in the same manner by every body; and there\r\nnever has been any dispute, either about the fact, or about the cause of it.\r\nThe greater part of Europe was, during this period, advancing in industry and\r\nimprovement, and the demand for silver must consequently have been increasing;\r\nbut the increase of the supply had, it seems, so far exceeded that of the\r\ndemand, that the value of that metal sunk considerably. The discovery of the\r\nmines of America, it is to be observed, does not seem to have had any very\r\nsensible effect upon the prices of things in England till after 1570; though\r\neven the mines of Potosi had been discovered more than twenty years before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom 1595 to 1620, both inclusive, the average price of the quarter of nine\r\nbushels of the best wheat, at Windsor market, appears, from the accounts of\r\nEton college, to have been £ 2:1:6 9/13. From which sum, neglecting the\r\nfraction, and deducting a ninth, or 4s. 7 1/3d., the price of the quarter of\r\neight bushels comes out to have been £ 1:16:10 2/3. And from this sum,\r\nneglecting likewise the fraction, and deducting a ninth, or 4s. 1 1/9d., for\r\nthe difference between the price of the best wheat and that of the middle\r\nwheat, the price of the middle wheat comes out to have been about £ 1:12:8 8/9,\r\nor about six ounces and one-third of an ounce of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom 1621 to 1636, both inclusive, the average price of the same measure of the\r\nbest wheat, at the same market, appears, from the same accounts, to have been £\r\n2:10s.; from which, making the like deductions as in the foregoing case, the\r\naverage price of the quarter of eight bushels of middle wheat comes out to have\r\nbeen £ 1:19:6, or about seven ounces and two-thirds of an ounce of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThird Period.—Between 1630 and 1640, or about 1636, the effect of the\r\ndiscovery of the mines of America, in reducing the value of silver, appears to\r\nhave been completed, and the value of that metal seems never to have sunk lower\r\nin proportion to that of corn than it was about that time. It seems to have\r\nrisen somewhat in the course of the present century, and it had probably begun\r\nto do so, even some time before the end of the last.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom 1637 to 1700, both inclusive, being the sixty-four last years of the last\r\ncentury the average price of the quarter of nine bushels of the best wheat, at\r\nWindsor market, appears, from the same accounts, to have been £ 2:11:0 1/3,\r\nwhich is only 1s. 0 1/3d. dearer than it had been during the sixteen years\r\nbefore. But, in the course of these sixty-four years, there happened two\r\nevents, which must have produced a much greater scarcity of corn than what the\r\ncourse of the seasons would otherwise have occasioned, and which, therefore,\r\nwithout supposing any further reduction in the value of silver, will much more\r\nthan account for this very small enhancement of price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first of these events was the civil war, which, by discouraging tillage and\r\ninterrupting commerce, must have raised the price of corn much above what the\r\ncourse of the seasons would otherwise have occasioned. It must have had this\r\neffect, more or less, at all the different markets in the kingdom, but\r\nparticularly at those in the neighbourhood of London, which require to be\r\nsupplied from the greatest distance. In 1648, accordingly, the price of the\r\nbest wheat, at Windsor market, appears, from the same accounts, to have been £\r\n4:5s., and, in 1649, to have been £ 4, the quarter of nine bushels. The excess\r\nof those two years above £ 2:10s. (the average price of the sixteen years\r\npreceding 1637) is £ 3:5s., which, divided among the sixty four last years of\r\nthe last century, will alone very nearly account for that small enhancement of\r\nprice which seems to have taken place in them. These, however, though the\r\nhighest, are by no means the only high prices which seem to have been\r\noccasioned by the civil wars.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second event was the bounty upon the exportation of corn, granted in 1688.\r\nThe bounty, it has been thought by many people, by encouraging tillage, may, in\r\na long course of years, have occasioned a greater abundance, and, consequently,\r\na greater cheapness of corn in the home market, than what would otherwise have\r\ntaken place there. How far the bounty could produce this effect at any time I\r\nshall examine hereafter: I shall only observe at present, that between 1688 and\r\n1700, it had not time to produce any such effect. During this short period, its\r\nonly effect must have been, by encouraging the exportation of the surplus\r\nproduce of every year, and thereby hindering the abundance of one year from\r\ncompensating the scarcity of another, to raise the price in the home market.\r\nThe scarcity which prevailed in England, from 1693 to 1699, both inclusive,\r\nthough no doubt principally owing to the badness of the seasons, and,\r\ntherefore, extending through a considerable part of Europe, must have been\r\nsomewhat enhanced by the bounty. In 1699, accordingly, the further exportation\r\nof corn was prohibited for nine months.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere was a third event which occurred in the course of the same period, and\r\nwhich, though it could not occasion any scarcity of corn, nor, perhaps, any\r\naugmentation in the real quantity of silver which was usually paid for it, must\r\nnecessarily have occasioned some augmentation in the nominal sum. This event\r\nwas the great debasement of the silver coin, by clipping and wearing. This evil\r\nhad begun in the reign of Charles II. and had gone on continually increasing\r\ntill 1695; at which time, as we may learn from Mr Lowndes, the current silver\r\ncoin was, at an average, near five-and-twenty per cent. below its standard\r\nvalue. But the nominal sum which constitutes the market price of every\r\ncommodity is necessarily regulated, not so much by the quantity of silver,\r\nwhich, according to the standard, ought to be contained in it, as by that\r\nwhich, it is found by experience, actually is contained in it. This nominal\r\nsum, therefore, is necessarily higher when the coin is much debased by clipping\r\nand wearing, than when near to its standard value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the course of the present century, the silver coin has not at any time been\r\nmore below its standard weight than it is at present. But though very much\r\ndefaced, its value has been kept up by that of the gold coin, for which it is\r\nexchanged. For though, before the late recoinage, the gold coin was a good deal\r\ndefaced too, it was less so than the silver. In 1695, on the contrary, the\r\nvalue of the silver coin was not kept up by the gold coin; a guinea then\r\ncommonly exchanging for thirty shillings of the worn and clipt silver. Before\r\nthe late recoinage of the gold, the price of silver bullion was seldom higher\r\nthan five shillings and sevenpence an ounce, which is but fivepence above the\r\nmint price. But in 1695, the common price of silver bullion was six shillings\r\nand fivepence an ounce, {Lowndes’s Essay on the Silver Coin, 68.} which\r\nis fifteen pence above the mint price. Even before the late recoinage of the\r\ngold, therefore, the coin, gold and silver together, when compared with silver\r\nbullion, was not supposed to be more than eight per cent. below its standard\r\nvalue, In 1695, on the contrary, it had been supposed to be near\r\nfive-and-twenty per cent. below that value. But in the beginning of the present\r\ncentury, that is, immediately after the great recoinage in King William’s\r\ntime, the greater part of the current silver coin must have been still nearer\r\nto its standard weight than it is at present. In the course of the present\r\ncentury, too, there has been no great public calamity, such as a civil war,\r\nwhich could either discourage tillage, or interrupt the interior commerce of\r\nthe country. And though the bounty which has taken place through the greater\r\npart of this century, must always raise the price of corn somewhat higher than\r\nit otherwise would be in the actual state of tillage; yet, as in the course of\r\nthis century, the bounty has had full time to produce all the good effects\r\ncommonly imputed to it to encourage tillage, and thereby to increase the\r\nquantity of corn in the home market, it may, upon the principles of a system\r\nwhich I shall explain and examine hereafter, be supposed to have done something\r\nto lower the price of that commodity the one way, as well as to raise it the\r\nother. It is by many people supposed to have done more. In the sixty-four years\r\nof the present century, accordingly, the average price of the quarter of nine\r\nbushels of the best wheat, at Windsor market, appears, by the accounts of Eton\r\ncollege, to have been £ 2:0:6 10/32, which is about ten shillings and sixpence,\r\nor more than five-and-twenty percent. cheaper than it had been during the\r\nsixty-four last years of the last century; and about nine shillings and\r\nsixpence cheaper than it had been during the sixteen years preceding 1636, when\r\nthe discovery of the abundant mines of America may be supposed to have produced\r\nits full effect; and about one shilling cheaper than it had been in the\r\ntwenty-six years preceding 1620, before that discovery can well be supposed to\r\nhave produced its full effect. According to this account, the average price of\r\nmiddle wheat, during these sixty-four first years of the present century, comes\r\nout to have been about thirty-two shillings the quarter of eight bushels.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of silver, therefore, seems to have risen somewhat in proportion to\r\nthat of corn during the course of the present century, and it had probably\r\nbegun to do so even some time before the end of the last.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1687, the price of the quarter of nine bushels of the best wheat, at Windsor\r\nmarket, was £ 1:5:2, the lowest price at which it had ever been from 1595.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1688, Mr Gregory King, a man famous for his knowledge in matters of this\r\nkind, estimated the average price of wheat, in years of moderate plenty, to be\r\nto the grower 3s. 6d. the bushel, or eight-and-twenty shillings the quarter.\r\nThe grower’s price I understand to be the same with what is sometimes\r\ncalled the contract price, or the price at which a farmer contracts for a\r\ncertain number of years to deliver a certain quantity of corn to a dealer. As a\r\ncontract of this kind saves the farmer the expense and trouble of marketing,\r\nthe contract price is generally lower than what is supposed to be the average\r\nmarket price. Mr King had judged eight-and-twenty shillings the quarter to be\r\nat that time the ordinary contract price in years of moderate plenty. Before\r\nthe scarcity occasioned by the late extraordinary course of bad seasons, it\r\nwas, I have been assured, the ordinary contract price in all common years.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1688 was granted the parliamentary bounty upon the exportation of corn. The\r\ncountry gentlemen, who then composed a still greater proportion of the\r\nlegislature than they do at present, had felt that the money price of corn was\r\nfalling. The bounty was an expedient to raise it artificially to the high price\r\nat which it had frequently been sold in the times of Charles I. and II. It was\r\nto take place, therefore, till wheat was so high as fortyeight shillings the\r\nquarter; that is, twenty shillings, or 5-7ths dearer than Mr King had, in that\r\nvery year, estimated the grower’s price to be in times of moderate\r\nplenty. If his calculations deserve any part of the reputation which they have\r\nobtained very universally, eight-and-forty shillings the quarter was a price\r\nwhich, without some such expedient as the bounty, could not at that time be\r\nexpected, except in years of extraordinary scarcity. But the government of King\r\nWilliam was not then fully settled. It was in no condition to refuse anything\r\nto the country gentlemen, from whom it was, at that very time, soliciting the\r\nfirst establishment of the annual land-tax.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of silver, therefore, in proportion to that of corn, had probably\r\nrisen somewhat before the end of the last century; and it seems to have\r\ncontinued to do so during the course of the greater part of the present, though\r\nthe necessary operation of the bounty must have hindered that rise from being\r\nso sensible as it otherwise would have been in the actual state of tillage.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn plentiful years, the bounty, by occasioning an extraordinary exportation,\r\nnecessarily raises the price of corn above what it otherwise would be in those\r\nyears. To encourage tillage, by keeping up the price of corn, even in the most\r\nplentiful years, was the avowed end of the institution.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn years of great scarcity, indeed, the bounty has generally been suspended. It\r\nmust, however, have had some effect upon the prices of many of those years. By\r\nthe extraordinary exportation which it occasions in years of plenty, it must\r\nfrequently hinder the plenty of one year from compensating the scarcity of\r\nanother.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth in years of plenty and in years of scarcity, therefore, the bounty raises\r\nthe price of corn above what it naturally would be in the actual state of\r\ntillage. If during the sixty-four first years of the present century,\r\ntherefore, the average price has been lower than during the sixty-four last\r\nyears of the last century, it must, in the same state of tillage, have been\r\nmuch more so, had it not been for this operation of the bounty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut, without the bounty, it may be said the state of tillage would not have\r\nbeen the same. What may have been the effects of this institution upon the\r\nagriculture of the country, I shall endeavour to explain hereafter, when I come\r\nto treat particularly of bounties. I shall only observe at present, that this\r\nrise in the value of silver, in proportion to that of corn, has not been\r\npeculiar to England. It has been observed to have taken place in France during\r\nthe same period, and nearly in the same proportion, too, by three very\r\nfaithful, diligent, and laborious collectors of the prices of corn, Mr Dupré de\r\nSt Maur, Mr Messance, and the author of the Essay on the Police of Grain. But\r\nin France, till 1764, the exportation of grain was by law prohibited; and it is\r\nsomewhat difficult to suppose, that nearly the same diminution of price which\r\ntook place in one country, notwithstanding this prohibition, should, in\r\nanother, be owing to the extraordinary encouragement given to exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt would be more proper, perhaps, to consider this variation in the average\r\nmoney price of corn as the effect rather of some gradual rise in the real value\r\nof silver in the European market, than of any fall in the real average value of\r\ncorn. Corn, it has already been observed, is, at distant periods of time, a\r\nmore accurate measure of value than either silver or, perhaps, any other\r\ncommodity. When, after the discovery of the abundant mines of America, corn\r\nrose to three and four times its former money price, this change was\r\nuniversally ascribed, not to any rise in the real value of corn, but to a fall\r\nin the real value of silver. If, during the sixty-four first years of the\r\npresent century, therefore, the average money price of corn has fallen somewhat\r\nbelow what it had been during the greater part of the last century, we should,\r\nin the same manner, impute this change, not to any fall in the real value of\r\ncorn, but to some rise in the real value of silver in the European market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe high price of corn during these ten or twelve years past, indeed, has\r\noccasioned a suspicion that the real value of silver still continues to fall in\r\nthe European market. This high price of corn, however, seems evidently to have\r\nbeen the effect of the extraordinary unfavourableness of the seasons, and\r\nought, therefore, to be regarded, not as a permanent, but as a transitory and\r\noccasional event. The seasons, for these ten or twelve years past, have been\r\nunfavourable through the greater part of Europe; and the disorders of Poland\r\nhave very much increased the scarcity in all those countries, which, in dear\r\nyears, used to be supplied from that market. So long a course of bad seasons,\r\nthough not a very common event, is by no means a singular one; and whoever has\r\ninquired much into the history of the prices of corn in former times, will be\r\nat no loss to recollect several other examples of the same kind. Ten years of\r\nextraordinary scarcity, besides, are not more wonderful than ten years of\r\nextraordinary plenty. The low price of corn, from 1741 to 1750, both inclusive,\r\nmay very well be set in opposition to its high price during these last eight or\r\nten years. From 1741 to 1750, the average price of the quarter of nine bushels\r\nof the best wheat, at Windsor market, it appears from the accounts of Eton\r\ncollege, was only £ 1:13:9 4/5, which is nearly 6s.3d. below the average price\r\nof the sixty-four first years of the present century. The average price of the\r\nquarter of eight bushels of middle wheat comes out, according to this account,\r\nto have been, during these ten years, only £ 1:6:8.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBetween 1741 and 1750, however, the bounty must have hindered the price of corn\r\nfrom falling so low in the home market as it naturally would have done. During\r\nthese ten years, the quantity of all sorts of grain exported, it appears from\r\nthe custom-house books, amounted to no less than 8,029,156 quarters, one\r\nbushel. The bounty paid for this amounted to £ 1,514,962:17:4 1/2. In 1749,\r\naccordingly, Mr Pelham, at that time prime minister, observed to the house of\r\ncommons, that, for the three years preceding, a very extraordinary sum had been\r\npaid as bounty for the exportation of corn. He had good reason to make this\r\nobservation, and in the following year he might have had still better. In that\r\nsingle year, the bounty paid amounted to no less than £ 324,176:10:6. {See\r\nTracts on the Corn Trade, Tract 3,} It is unnecessary to observe how much this\r\nforced exportation must have raised the price of corn above what it otherwise\r\nwould have been in the home market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt the end of the accounts annexed to this chapter the reader will find the\r\nparticular account of those ten years separated from the rest. He will find\r\nthere, too, the particular account of the preceding ten years, of which the\r\naverage is likewise below, though not so much below, the general average of the\r\nsixty-four first years of the century. The year 1740, however, was a year of\r\nextraordinary scarcity. These twenty years preceding 1750 may very well be set\r\nin opposition to the twenty preceding 1770. As the former were a good deal\r\nbelow the general average of the century, notwithstanding the intervention of\r\none or two dear years; so the latter have been a good deal above it,\r\nnotwithstanding the intervention of one or two cheap ones, of 1759, for\r\nexample. If the former have not been as much below the general average as the\r\nlatter have been above it, we ought probably to impute it to the bounty. The\r\nchange has evidently been too sudden to be ascribed to any change in the value\r\nof silver, which is always slow and gradual. The suddenness of the effect can\r\nbe accounted for only by a cause which can operate suddenly, the accidental\r\nvariations of the seasons.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe money price of labour in Great Britain has, indeed, risen during the course\r\nof the present century. This, however, seems to be the effect, not so much of\r\nany diminution in the value of silver in the European market, as of an increase\r\nin the demand for labour in Great Britain, arising from the great, and almost\r\nuniversal prosperity of the country. In France, a country not altogether so\r\nprosperous, the money price of labour has, since the middle of the last\r\ncentury, been observed to sink gradually with the average money price of corn.\r\nBoth in the last century and in the present, the day wages of common labour are\r\nthere said to have been pretty uniformly about the twentieth part of the\r\naverage price of the septier of wheat; a measure which contains a little more\r\nthan four Winchester bushels. In Great Britain, the real recompence of labour,\r\nit has already been shewn, the real quantities of the necessaries and\r\nconveniencies of life which are given to the labourer, has increased\r\nconsiderably during the course of the present century. The rise in its money\r\nprice seems to have been the effect, not of any diminution of the value of\r\nsilver in the general market of Europe, but of a rise in the real price of\r\nlabour, in the particular market of Great Britain, owing to the peculiarly\r\nhappy circumstances of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFor some time after the first discovery of America, silver would continue to\r\nsell at its former, or not much below its former price. The profits of mining\r\nwould for some time be very great, and much above their natural rate. Those who\r\nimported that metal into Europe, however, would soon find that the whole annual\r\nimportation could not be disposed of at this high price. Silver would gradually\r\nexchange for a smaller and a smaller quantity of goods. Its price would sink\r\ngradually lower and lower, till it fell to its natural price; or to what was\r\njust sufficient to pay, according to their natural rates, the wages of the\r\nlabour, the profits of the stock, and the rent of the land, which must be paid\r\nin order to bring it from the mine to the market. In the greater part of the\r\nsilver mines of Peru, the tax of the king of Spain, amounting to a tenth of the\r\ngross produce, eats up, it has already been observed, the whole rent of the\r\nland. This tax was originally a half; it soon afterwards fell to a third, then\r\nto a fifth, and at last to a tenth, at which late it still continues. In the\r\ngreater part of the silver mines of Peru, this, it seems, is all that remains,\r\nafter replacing the stock of the undertaker of the work, together with its\r\nordinary profits; and it seems to be universally acknowledged that these\r\nprofits, which were once very high, are now as low as they can well be,\r\nconsistently with carrying on the works.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tax of the king of Spain was reduced to a fifth of the registered silver in\r\n1504 {Solorzano, vol, ii.}, one-and-forty years before 1545, the date of the\r\ndiscovery of the mines of Potosi. In the course of ninety years, or before\r\n1636, these mines, the most fertile in all America, had time sufficient to\r\nproduce their full effect, or to reduce the value of silver in the European\r\nmarket as low as it could well fall, while it continued to pay this tax to the\r\nking of Spain. Ninety years is time sufficient to reduce any commodity, of\r\nwhich there is no monopoly, to its natural price, or to the lowest price at\r\nwhich, while it pays a particular tax, it can continue to be sold for any\r\nconsiderable time together.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of silver in the European market might, perhaps, have fallen still\r\nlower, and it might have become necessary either to reduce the tax upon it, not\r\nonly to one-tenth, as in 1736, but to one twentieth, in the same manner as that\r\nupon gold, or to give up working the greater part of the American mines which\r\nare now wrought. The gradual increase of the demand for silver, or the gradual\r\nenlargement of the market for the produce of the silver mines of America, is\r\nprobably the cause which has prevented this from happening, and which has not\r\nonly kept up the value of silver in the European market, but has perhaps even\r\nraised it somewhat higher than it was about the middle of the last century.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSince the first discovery of America, the market for the produce of its silver\r\nmines has been growing gradually more and more extensive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, the market of Europe has become gradually more and more extensive. Since\r\nthe discovery of America, the greater part of Europe has been much improved.\r\nEngland, Holland, France, and Germany; even Sweden, Denmark, and Russia, have\r\nall advanced considerably, both in agriculture and in manufactures. Italy seems\r\nnot to have gone backwards. The fall of Italy preceded the conquest of Peru.\r\nSince that time it seems rather to have recovered a little. Spain and Portugal,\r\nindeed, are supposed to have gone backwards. Portugal, however, is but a very\r\nsmall part of Europe, and the declension of Spain is not, perhaps, so great as\r\nis commonly imagined. In the beginning of the sixteenth century, Spain was a\r\nvery poor country, even in comparison with France, which has been so much\r\nimproved since that time. It was the well known remark of the emperor Charles\r\nV. who had travelled so frequently through both countries, that every thing\r\nabounded in France, but that every thing was wanting in Spain. The increasing\r\nproduce of the agriculture and manufactures of Europe must necessarily have\r\nrequired a gradual increase in the quantity of silver coin to circulate it; and\r\nthe increasing number of wealthy individuals must have required the like\r\nincrease in the quantity of their plate and other ornaments of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, America is itself a new market, for the produce of its own silver\r\nmines; and as its advances in agriculture, industry, and population, are much\r\nmore rapid than those of the most thriving countries in Europe, its demand must\r\nincrease much more rapidly. The English colonies are altogether a new market,\r\nwhich, partly for coin, and partly for plate, requires a continual augmenting\r\nsupply of silver through a great continent where there never was any demand\r\nbefore. The greater part, too, of the Spanish and Portuguese colonies, are\r\naltogether new markets. New Granada, the Yucatan, Paraguay, and the Brazils,\r\nwere, before discovered by the Europeans, inhabited by savage nations, who had\r\nneither arts nor agriculture. A considerable degree of both has now been\r\nintroduced into all of them. Even Mexico and Peru, though they cannot be\r\nconsidered as altogether new markets, are certainly much more extensive ones\r\nthan they ever were before. After all the wonderful tales which have been\r\npublished concerning the splendid state of those countries in ancient times,\r\nwhoever reads, with any degree of sober judgment, the history of their first\r\ndiscovery and conquest, will evidently discern that, in arts, agriculture, and\r\ncommerce, their inhabitants were much more ignorant than the Tartars of the\r\nUkraine are at present. Even the Peruvians, the more civilized nation of the\r\ntwo, though they made use of gold and silver as ornaments, had no coined money\r\nof any kind. Their whole commerce was carried on by barter, and there was\r\naccordingly scarce any division of labour among them. Those who cultivated the\r\nground, were obliged to build their own houses, to make their own household\r\nfurniture, their own clothes, shoes, and instruments of agriculture. The few\r\nartificers among them are said to have been all maintained by the sovereign,\r\nthe nobles, and the priests, and were probably their servants or slaves. All\r\nthe ancient arts of Mexico and Peru have never furnished one single manufacture\r\nto Europe. The Spanish armies, though they scarce ever exceeded five hundred\r\nmen, and frequently did not amount to half that number, found almost everywhere\r\ngreat difficulty in procuring subsistence. The famines which they are said to\r\nhave occasioned almost wherever they went, in countries, too, which at the same\r\ntime are represented as very populous and well cultivated, sufficiently\r\ndemonstrate that the story of this populousness and high cultivation is in a\r\ngreat measure fabulous. The Spanish colonies are under a government in many\r\nrespects less favourable to agriculture, improvement, and population, than that\r\nof the English colonies. They seem, however, to be advancing in all those much\r\nmore rapidly than any country in Europe. In a fertile soil and happy climate,\r\nthe great abundance and cheapness of land, a circumstance common to all new\r\ncolonies, is, it seems, so great an advantage, as to compensate many defects in\r\ncivil government. Frezier, who visited Peru in 1713, represents Lima as\r\ncontaining between twenty-five and twenty-eight thousand inhabitants. Ulloa,\r\nwho resided in the same country between 1740 and 1746, represents it as\r\ncontaining more than fifty thousand. The difference in their accounts of the\r\npopulousness of several other principal towns of Chili and Peru is nearly the\r\nsame; and as there seems to be no reason to doubt of the good information of\r\neither, it marks an increase which is scarce inferior to that of the English\r\ncolonies. America, therefore, is a new market for the produce of its own silver\r\nmines, of which the demand must increase much more rapidly than that of the\r\nmost thriving country in Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, the East Indies is another market for the produce of the silver mines\r\nof America, and a market which, from the time of the first discovery of those\r\nmines, has been continually taking off a greater and a greater quantity of\r\nsilver. Since that time, the direct trade between America and the East Indies,\r\nwhich is carried on by means of the Acapulco ships, has been continually\r\naugmenting, and the indirect intercourse by the way of Europe has been\r\naugmenting in a still greater proportion. During the sixteenth century, the\r\nPortuguese were the only European nation who carried on any regular trade to\r\nthe East Indies. In the last years of that century, the Dutch began to encroach\r\nupon this monopoly, and in a few years expelled them from their principal\r\nsettlements in India. During the greater part of the last century, those two\r\nnations divided the most considerable part of the East India trade between\r\nthem; the trade of the Dutch continually augmenting in a still greater\r\nproportion than that of the Portuguese declined. The English and French carried\r\non some trade with India in the last century, but it has been greatly augmented\r\nin the course of the present. The East India trade of the Swedes and Danes\r\nbegan in the course of the present century. Even the Muscovites now trade\r\nregularly with China, by a sort of caravans which go over land through Siberia\r\nand Tartary to Pekin. The East India trade of all these nations, if we except\r\nthat of the French, which the last war had well nigh annihilated, has been\r\nalmost continually augmenting. The increasing consumptions of East India goods\r\nin Europe is, it seems, so great, as to afford a gradual increase of employment\r\nto them all. Tea, for example, was a drug very little used in Europe, before\r\nthe middle of the last century. At present, the value of the tea annually\r\nimported by the English East India company, for the use of their own\r\ncountrymen, amounts to more than a million and a half a year; and even this is\r\nnot enough; a great deal more being constantly smuggled into the country from\r\nthe ports of Holland, from Gottenburgh in Sweden, and from the coast of France,\r\ntoo, as long as the French East India company was in prosperity. The\r\nconsumption of the porcelain of China, of the spiceries of the Moluccas, of the\r\npiece goods of Bengal, and of innumerable other articles, has increased very\r\nnearly in a like proportion. The tonnage, accordingly, of all the European\r\nshipping employed in the East India trade, at any one time during the last\r\ncentury, was not, perhaps, much greater than that of the English East India\r\ncompany before the late reduction of their shipping.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in the East Indies, particularly in China and Indostan, the value of the\r\nprecious metals, when the Europeans first began to trade to those countries,\r\nwas much higher than in Europe; and it still continues to be so. In rice\r\ncountries, which generally yield two, sometimes three crops in the year, each\r\nof them more plentiful than any common crop of corn, the abundance of food must\r\nbe much greater than in any corn country of equal extent. Such countries are\r\naccordingly much more populous. In them, too, the rich, having a greater\r\nsuperabundance of food to dispose of beyond what they themselves can consume,\r\nhave the means of purchasing a much greater quantity of the labour of other\r\npeople. The retinue of a grandee in China or Indostan accordingly is, by all\r\naccounts, much more numerous and splendid than that of the richest subjects in\r\nEurope. The same superabundance of food, of which they have the disposal,\r\nenables them to give a greater quantity of it for all those singular and rare\r\nproductions which nature furnishes but in very small quantities; such as the\r\nprecious metals and the precious stones, the great objects of the competition\r\nof the rich. Though the mines, therefore, which supplied the Indian market, had\r\nbeen as abundant as those which supplied the European, such commodities would\r\nnaturally exchange for a greater quantity of food in India than in Europe. But\r\nthe mines which supplied the Indian market with the precious metals seem to\r\nhave been a good deal less abundant, and those which supplied it with the\r\nprecious stones a good deal more so, than the mines which supplied the\r\nEuropean. The precious metals, therefore, would naturally exchange in India for\r\na somewhat greater quantity of the precious stones, and for a much greater\r\nquantity of food than in Europe. The money price of diamonds, the greatest of\r\nall superfluities, would be somewhat lower, and that of food, the first of all\r\nnecessaries, a great deal lower in the one country than in the other. But the\r\nreal price of labour, the real quantity of the necessaries of life which is\r\ngiven to the labourer, it has already been observed, is lower both in China and\r\nIndostan, the two great markets of India, than it is through the greater part\r\nof Europe. The wages of the labourer will there purchase a smaller quantity of\r\nfood: and as the money price of food is much lower in India than in Europe, the\r\nmoney price of labour is there lower upon a double account; upon account both\r\nof the small quantity of food which it will purchase, and of the low price of\r\nthat food. But in countries of equal art and industry, the money price of the\r\ngreater part of manufactures will be in proportion to the money price of\r\nlabour; and in manufacturing art and industry, China and Indostan, though\r\ninferior, seem not to be much inferior to any part of Europe. The money price\r\nof the greater part of manufactures, therefore, will naturally be much lower in\r\nthose great empires than it is anywhere in Europe. Through the greater part of\r\nEurope, too, the expense of land-carriage increases very much both the real and\r\nnominal price of most manufactures. It costs more labour, and therefore more\r\nmoney, to bring first the materials, and afterwards the complete manufacture to\r\nmarket. In China and Indostan, the extent and variety of inland navigations\r\nsave the greater part of this labour, and consequently of this money, and\r\nthereby reduce still lower both the real and the nominal price of the greater\r\npart of their manufactures. Upon all these accounts, the precious metals are a\r\ncommodity which it always has been, and still continues to be, extremely\r\nadvantageous to carry from Europe to India. There is scarce any commodity which\r\nbrings a better price there; or which, in proportion to the quantity of labour\r\nand commodities which it costs in Europe, will purchase or command a greater\r\nquantity of labour and commodities in India. It is more advantageous, too, to\r\ncarry silver thither than gold; because in China, and the greater part of the\r\nother markets of India, the proportion between fine silver and fine gold is but\r\nas ten, or at most as twelve to one; whereas in Europe it is as fourteen or\r\nfifteen to one. In China, and the greater part of the other markets of India,\r\nten, or at most twelve ounces of silver, will purchase an ounce of gold; in\r\nEurope, it requires from fourteen to fifteen ounces. In the cargoes, therefore,\r\nof the greater part of European ships which sail to India, silver has generally\r\nbeen one of the most valuable articles. It is the most valuable article in the\r\nAcapulco ships which sail to Manilla. The silver of the new continent seems, in\r\nthis manner, to be one of the principal commodities by which the commerce\r\nbetween the two extremities of the old one is carried on; and it is by means of\r\nit, in a great measure, that those distant parts of the world are connected\r\nwith one another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to supply so very widely extended a market, the quantity of silver\r\nannually brought from the mines must not only be sufficient to support that\r\ncontinued increase, both of coin and of plate, which is required in all\r\nthriving countries; but to repair that continual waste and consumption of\r\nsilver which takes place in all countries where that metal is used.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe continual consumption of the precious metals in coin by wearing, and in\r\nplate both by wearing and cleaning, is very sensible; and in commodities of\r\nwhich the use is so very widely extended, would alone require a very great\r\nannual supply. The consumption of those metals in some particular manufactures,\r\nthough it may not perhaps be greater upon the whole than this gradual\r\nconsumption, is, however, much more sensible, as it is much more rapid. In the\r\nmanufactures of Birmingham alone, the quantity of gold and silver annually\r\nemployed in gilding and plating, and thereby disqualified from ever afterwards\r\nappearing in the shape of those metals, is said to amount to more than fifty\r\nthousand pounds sterling. We may from thence form some notion how great must be\r\nthe annual consumption in all the different parts of the world, either in\r\nmanufactures of the same kind with those of Birmingham, or in laces,\r\nembroideries, gold and silver stuffs, the gilding of books, furniture, etc. A\r\nconsiderable quantity, too, must be annually lost in transporting those metals\r\nfrom one place to another both by sea and by land. In the greater part of the\r\ngovernments of Asia, besides, the almost universal custom of concealing\r\ntreasures in the bowels of the earth, of which the knowledge frequently dies\r\nwith the person who makes the concealment, must occasion the loss of a still\r\ngreater quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of gold and silver imported at both Cadiz and Lisbon (including\r\nnot only what comes under register, but what may be supposed to be smuggled)\r\namounts, according to the best accounts, to about six millions sterling a-year.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAccording to Mr Meggens {Postscript to the Universal Merchant p. 15 and 16.\r\nThis postscript was not printed till 1756, three years after the publication of\r\nthe book, which has never had a second edition. The postscript is, therefore,\r\nto be found in few copies; it corrects several errors in the book.}, the annual\r\nimportation of the precious metals into Spain, at an average of six years, viz.\r\nfrom 1748 to 1753, both inclusive, and into Portugal, at an average of seven\r\nyears, viz. from 1747 to 1753, both inclusive, amounted in silver to 1,101,107\r\npounds weight, and in gold to 49,940 pounds weight. The silver, at sixty two\r\nshillings the pound troy, amounts to £ 3,413,431:10s. sterling. The gold, at\r\nforty-four guineas and a half the pound troy, amounts to £ 2,333,446:14s.\r\nsterling. Both together amount to £ 5,746,878:4s. sterling. The account of what\r\nwas imported under register, he assures us, is exact. He gives us the detail of\r\nthe particular places from which the gold and silver were brought, and of the\r\nparticular quantity of each metal, which, according to the register, each of\r\nthem afforded. He makes an allowance, too, for the quantity of each metal\r\nwhich, he supposes, may have been smuggled. The great experience of this\r\njudicious merchant renders his opinion of considerable weight.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAccording to the eloquent, and sometimes well-informed, author of the\r\nPhilosophical and Political History of the Establishment of the Europeans in\r\nthe two Indies, the annual importation of registered gold and silver into\r\nSpain, at an average of eleven years, viz. from 1754 to 1764, both inclusive,\r\namounted to 13,984,185 3/5 piastres of ten reals. On account of what may have\r\nbeen smuggled, however, the whole annual importation, he supposes, may have\r\namounted to seventeen millions of piastres, which, at 4s. 6d. the piastre, is\r\nequal to £ 3,825,000 sterling. He gives the detail, too, of the particular\r\nplaces from which the gold and silver were brought, and of the particular\r\nquantities of each metal, which according to the register, each of them\r\nafforded. He informs us, too, that if we were to judge of the quantity of gold\r\nannually imported from the Brazils to Lisbon, by the amount of the tax paid to\r\nthe king of Portugal, which it seems, is one-fifth of the standard metal, we\r\nmight value it at eighteen millions of cruzadoes, or forty-five millions of\r\nFrench livres, equal to about twenty millions sterling. On account of what may\r\nhave been smuggled, however, we may safely, he says, add to this sum an eighth\r\nmore, or £ 250,000 sterling, so that the whole will amount to £ 2,250,000\r\nsterling. According to this account, therefore, the whole annual importation of\r\nthe precious metals into both Spain and Portugal, mounts to about £ 6,075,000\r\nsterling.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSeveral other very well authenticated, though manuscript accounts, I have been\r\nassured, agree in making this whole annual importation amount, at an average,\r\nto about six millions sterling; sometimes a little more, sometimes a little\r\nless.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe annual importation of the precious metals into Cadiz and Lisbon, indeed, is\r\nnot equal to the whole annual produce of the mines of America. Some part is\r\nsent annually by the Acapulco ships to Manilla; some part is employed in a\r\ncontraband trade, which the Spanish colonies carry on with those of other\r\nEuropean nations; and some part, no doubt, remains in the country. The mines of\r\nAmerica, besides, are by no means the only gold and silver mines in the world.\r\nThey, are, however, by far the most abundant. The produce of all the other\r\nmines which are known is insignificant, it is acknowledged, in comparison with\r\ntheirs; and the far greater part of their produce, it is likewise acknowledged,\r\nis annually imported into Cadiz and Lisbon. But the consumption of Birmingham\r\nalone, at the rate of fifty thousand pounds a-year, is equal to the\r\nhundred-and-twentieth part of this annual importation, at the rate of six\r\nmillions a-year. The whole annual consumption of gold and silver, therefore, in\r\nall the different countries of the world where those metals are used, may,\r\nperhaps, be nearly equal to the whole annual produce. The remainder may be no\r\nmore than sufficient to supply the increasing demand of all thriving countries.\r\nIt may even have fallen so far short of this demand, as somewhat to raise the\r\nprice of those metals in the European market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of brass and iron annually brought from the mine to the market, is\r\nout of all proportion greater than that of gold and silver. We do not, however,\r\nupon this account, imagine that those coarse metals are likely to multiply\r\nbeyond the demand, or to become gradually cheaper and cheaper. Why should we\r\nimagine that the precious metals are likely to do so? The coarse metals,\r\nindeed, though harder, are put to much harder uses, and, as they are of less\r\nvalue, less care is employed in their preservation. The precious metals,\r\nhowever, are not necessarily immortal any more than they, but are liable, too,\r\nto be lost, wasted, and consumed, in a great variety of ways.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of all metals, though liable to slow and gradual variations, varies\r\nless from year to year than that of almost any other part of the rude produce\r\nof land: and the price of the precious metals is even less liable to sudden\r\nvariations than that of the coarse ones. The durableness of metals is the\r\nfoundation of this extraordinary steadiness of price. The corn which was\r\nbrought to market last year will be all, or almost all, consumed, long before\r\nthe end of this year. But some part of the iron which was brought from the mine\r\ntwo or three hundred years ago, may be still in use, and, perhaps, some part of\r\nthe gold which was brought from it two or three thousand years ago. The\r\ndifferent masses of corn, which, in different years, must supply the\r\nconsumption of the world, will always be nearly in proportion to the respective\r\nproduce of those different years. But the proportion between the different\r\nmasses of iron which may be in use in two different years, will be very little\r\naffected by any accidental difference in the produce of the iron mines of those\r\ntwo years; and the proportion between the masses of gold will be still less\r\naffected by any such difference in the produce of the gold mines. Though the\r\nproduce of the greater part of metallic mines, therefore, varies, perhaps,\r\nstill more from year to year than that of the greater part of corn fields,\r\nthose variations have not the same effect upon the price of the one species of\r\ncommodities as upon that of the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n\u003ci\u003eVariations in the Proportion between the respective Values of Gold and\r\nSilver.\u003c/i\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the discovery of the mines of America, the value of fine gold to fine\r\nsilver was regulated in the different mines of Europe, between the proportions\r\nof one to ten and one to twelve; that is, an ounce of fine gold was supposed to\r\nbe worth from ten to twelve ounces of fine silver. About the middle of the last\r\ncentury, it came to be regulated, between the proportions of one to fourteen\r\nand one to fifteen; that is, an ounce of fine gold came to be supposed worth\r\nbetween fourteen and fifteen ounces of fine silver. Gold rose in its nominal\r\nvalue, or in the quantity of silver which was given for it. Both metals sunk in\r\ntheir real value, or in the quantity of labour which they could purchase; but\r\nsilver sunk more than gold. Though both the gold and silver mines of America\r\nexceeded in fertility all those which had ever been known before, the fertility\r\nof the silver mines had, it seems, been proportionally still greater than that\r\nof the gold ones.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great quantities of silver carried annually from Europe to India, have, in\r\nsome of the English settlements, gradually reduced the value of that metal in\r\nproportion to gold. In the mint of Calcutta, an ounce of fine gold is supposed\r\nto be worth fifteen ounces of fine silver, in the same manner as in Europe. It\r\nis in the mint, perhaps, rated too high for the value which it bears in the\r\nmarket of Bengal. In China, the proportion of gold to silver still continues as\r\none to ten, or one to twelve. In Japan, it is said to be as one to eight.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion between the quantities of gold and silver annually imported into\r\nEurope, according to Mr Meggens’ account, is as one to twenty-two nearly;\r\nthat is, for one ounce of gold there are imported a little more than twenty-two\r\nounces of silver. The great quantity of silver sent annually to the East Indies\r\nreduces, he supposes, the quantities of those metals which remain in Europe to\r\nthe proportion of one to fourteen or fifteen, the proportion of their values.\r\nThe proportion between their values, he seems to think, must necessarily be the\r\nsame as that between their quantities, and would therefore be as one to\r\ntwenty-two, were it not for this greater exportation of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the ordinary proportion between the respective values of two commodities is\r\nnot necessarily the same as that between the quantities of them which are\r\ncommonly in the market. The price of an ox, reckoned at ten guineas, is about\r\nthree score times the price of a lamb, reckoned at 3s. 6d. It would be absurd,\r\nhowever, to infer from thence, that there are commonly in the market three\r\nscore lambs for one ox; and it would be just as absurd to infer, because an\r\nounce of gold will commonly purchase from fourteen or fifteen ounces of silver,\r\nthat there are commonly in the market only fourteen or fifteen ounces of silver\r\nfor one ounce of gold.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of silver commonly in the market, it is probable, is much greater\r\nin proportion to that of gold, than the value of a certain quantity of gold is\r\nto that of an equal quantity of silver. The whole quantity of a cheap commodity\r\nbrought to market is commonly not only greater, but of greater value, than the\r\nwhole quantity of a dear one. The whole quantity of bread annually brought to\r\nmarket, is not only greater, but of greater value, than the whole quantity of\r\nbutcher’s meat; the whole quantity of butcher’s meat, than the\r\nwhole quantity of poultry; and the whole quantity of poultry, than the whole\r\nquantity of wild fowl. There are so many more purchasers for the cheap than for\r\nthe dear commodity, that, not only a greater quantity of it, but a greater\r\nvalue can commonly be disposed of. The whole quantity, therefore, of the cheap\r\ncommodity, must commonly be greater in proportion to the whole quantity of the\r\ndear one, than the value of a certain quantity of the dear one, is to the value\r\nof an equal quantity of the cheap one. When we compare the precious metals with\r\none another, silver is a cheap, and gold a dear commodity. We ought naturally\r\nto expect, therefore, that there should always be in the market, not only a\r\ngreater quantity, but a greater value of silver than of gold. Let any man, who\r\nhas a little of both, compare his own silver with his gold plate, and he will\r\nprobably find, that not only the quantity, but the value of the former, greatly\r\nexceeds that of the latter. Many people, besides, have a good deal of silver\r\nwho have no gold plate, which, even with those who have it, is generally\r\nconfined to watch-cases, snuff-boxes, and such like trinkets, of which the\r\nwhole amount is seldom of great value. In the British coin, indeed, the value\r\nof the gold preponderates greatly, but it is not so in that of all countries.\r\nIn the coin of some countries, the value of the two metals is nearly equal. In\r\nthe Scotch coin, before the union with England, the gold preponderated very\r\nlittle, though it did somewhat {See Ruddiman’s Preface to\r\nAnderson’s Diplomata, etc. Scotiae.}, as it appears by the accounts of\r\nthe mint. In the coin of many countries the silver preponderates. In France,\r\nthe largest sums are commonly paid in that metal, and it is there difficult to\r\nget more gold than what is necessary to carry about in your pocket. The\r\nsuperior value, however, of the silver plate above that of the gold, which\r\ntakes place in all countries, will much more than compensate the preponderancy\r\nof the gold coin above the silver, which takes place only in some countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough, in one sense of the word, silver always has been, and probably always\r\nwill be, much cheaper than gold; yet, in another sense, gold may perhaps, in\r\nthe present state of the Spanish market, be said to be somewhat cheaper than\r\nsilver. A commodity may be said to be dear or cheap not only according to the\r\nabsolute greatness or smallness of its usual price, but according as that price\r\nis more or less above the lowest for which it is possible to bring it to market\r\nfor any considerable time together. This lowest price is that which barely\r\nreplaces, with a moderate profit, the stock which must be employed in bringing\r\nthe commodity thither. It is the price which affords nothing to the landlord,\r\nof which rent makes not any component part, but which resolves itself\r\naltogether into wages and profit. But, in the present state of the Spanish\r\nmarket, gold is certainly somewhat nearer to this lowest price than silver. The\r\ntax of the king of Spain upon gold is only one-twentieth part of the standard\r\nmetal, or five per cent.; whereas his tax upon silver amounts to one-tenth part\r\nof it, or to ten per cent. In these taxes, too, it has already been observed,\r\nconsists the whole rent of the greater part of the gold and silver mines of\r\nSpanish America; and that upon gold is still worse paid than that upon silver.\r\nThe profits of the undertakers of gold mines, too, as they more rarely make a\r\nfortune, must, in general, be still more moderate than those of the undertakers\r\nof silver mines. The price of Spanish gold, therefore, as it affords both less\r\nrent and less profit, must, in the Spanish market, be somewhat nearer to the\r\nlowest price for which it is possible to bring it thither, than the price of\r\nSpanish silver. When all expenses are computed, the whole quantity of the one\r\nmetal, it would seem, cannot, in the Spanish market, be disposed of so\r\nadvantageously as the whole quantity of the other. The tax, indeed, of the king\r\nof Portugal upon the gold of the Brazils, is the same with the ancient tax of\r\nthe king of Spain upon the silver of Mexico and Peru; or one-fifth part of the\r\nstandard metal. It may therefore be uncertain, whether, to the general market\r\nof Europe, the whole mass of American gold comes at a price nearer to the\r\nlowest for which it is possible to bring it thither, than the whole mass of\r\nAmerican silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of diamonds and other precious stones may, perhaps, be still nearer\r\nto the lowest price at which it is possible to bring them to market, than even\r\nthe price of gold.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough it is not very probable that any part of a tax, which is not only\r\nimposed upon one of the most proper subjects of taxation, a mere luxury and\r\nsuperfluity, but which affords so very important a revenue as the tax upon\r\nsilver, will ever be given up as long as it is possible to pay it; yet the same\r\nimpossibility of paying it, which, in 1736. made it necessary to reduce it from\r\none-fifth to one-tenth, may in time make it necessary to reduce it still\r\nfurther; in the same manner as it made it necessary to reduce the tax upon gold\r\nto one-twentieth. That the silver mines of Spanish America, like all other\r\nmines, become gradually more expensive in the working, on account of the\r\ngreater depths at which it is necessary to carry on the works, and of the\r\ngreater expense of drawing out the water, and of supplying them with fresh air\r\nat those depths, is acknowledged by everybody who has inquired into the state\r\nof those mines.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese causes, which are equivalent to a growing scarcity of silver (for a\r\ncommodity may be said to grow scarcer when it becomes more difficult and\r\nexpensive to collect a certain quantity of it), must, in time, produce one or\r\nother of the three following events: The increase of the expense must either,\r\nfirst, be compensated altogether by a proportionable increase in the price of\r\nthe metal; or, secondly, it must be compensated altogether by a proportionable\r\ndiminution of the tax upon silver; or, thirdly, it must be compensated partly\r\nby the one and partly by the other of those two expedients. This third event is\r\nvery possible. As gold rose in its price in proportion to silver,\r\nnotwithstanding a great diminution of the tax upon gold, so silver might rise\r\nin its price in proportion to labour and commodities, notwithstanding an equal\r\ndiminution of the tax upon silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch successive reductions of the tax, however, though they may not prevent\r\naltogether, must certainly retard, more or less, the rise of the value of\r\nsilver in the European market. In consequence of such reductions, many mines\r\nmay be wrought which could not be wrought before, because they could not afford\r\nto pay the old tax; and the quantity of silver annually brought to market, must\r\nalways be somewhat greater, and, therefore, the value of any given quantity\r\nsomewhat less, than it otherwise would have been. In consequence of the\r\nreduction in 1736, the value of silver in the European market, though it may\r\nnot at this day be lower than before that reduction, is, probably, at least ten\r\nper cent. lower than it would have been, had the court of Spain continued to\r\nexact the old tax. That, notwithstanding this reduction, the value of silver\r\nhas, during the course of the present century, begun to rise somewhat in the\r\nEuropean market, the facts and arguments which have been alleged above, dispose\r\nme to believe, or more properly to suspect and conjecture; for the best opinion\r\nwhich I can form upon this subject, scarce, perhaps, deserves the name of\r\nbelief. The rise, indeed, supposing there has been any, has hitherto been so\r\nvery small, that after all that has been said, it may, perhaps, appear to many\r\npeople uncertain, not only whether this event has actually taken place, but\r\nwhether the contrary may not have taken place, or whether the value of silver\r\nmay not still continue to fall in the European market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt must be observed, however, that whatever may be the supposed annual\r\nimportation of gold and silver, there must be a certain period at which the\r\nannual consumption of those metals will be equal to that annual importation.\r\nTheir consumption must increase as their mass increases, or rather in a much\r\ngreater proportion. As their mass increases, their value diminishes. They are\r\nmore used, and less cared for, and their consumption consequently increases in\r\na greater proportion than their mass. After a certain period, therefore, the\r\nannual consumption of those metals must, in this manner, become equal to their\r\nannual importation, provided that importation is not continually increasing;\r\nwhich, in the present times, is not supposed to be the case.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, when the annual consumption has become equal to the annual importation, the\r\nannual importation should gradually diminish, the annual consumption may, for\r\nsome time, exceed the annual importation. The mass of those metals may\r\ngradually and insensibly diminish, and their value gradually and insensibly\r\nrise, till the annual importation becoming again stationary, the annual\r\nconsumption will gradually and insensibly accommodate itself to what that\r\nannual importation can maintain.\r\n\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n\u003ci\u003eGrounds of the suspicion that the Value of Silver still continues to\r\ndecrease.\u003c/i\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe increase of the wealth of Europe, and the popular notion, that as the\r\nquantity of the precious metals naturally increases with the increase of\r\nwealth, so their value diminishes as their quantity increases, may, perhaps,\r\ndispose many people to believe that their value still continues to fall in the\r\nEuropean market; and the still gradually increasing price of many parts of the\r\nrude produce of land may confirm them still farther in this opinion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat that increase in the quantity of the precious metals, which arises in any\r\ncountry from the increase of wealth, has no tendency to diminish their value, I\r\nhave endeavoured to shew already. Gold and silver naturally resort to a rich\r\ncountry, for the same reason that all sorts of luxuries and curiosities resort\r\nto it; not because they are cheaper there than in poorer countries, but because\r\nthey are dearer, or because a better price is given for them. It is the\r\nsuperiority of price which attracts them; and as soon as that superiority\r\nceases, they necessarily cease to go thither.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf you except corn, and such other vegetables as are raised altogether by human\r\nindustry, that all other sorts of rude produce, cattle, poultry, game of all\r\nkinds, the useful fossils and minerals of the earth, etc. naturally grow\r\ndearer, as the society advances in wealth and improvement, I have endeavoured\r\nto shew already. Though such commodities, therefore, come to exchange for a\r\ngreater quantity of silver than before, it will not from thence follow that\r\nsilver has become really cheaper, or will purchase less labour than before; but\r\nthat such commodities have become really dearer, or will purchase more labour\r\nthan before. It is not their nominal price only, but their real price, which\r\nrises in the progress of improvement. The rise of their nominal price is the\r\neffect, not of any degradation of the value of silver, but of the rise in their\r\nreal price.\r\n\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n\u003ci\u003eDifferent Effects of the Progress of Improvement upon three different sorts\r\nof rude Produce.\u003c/i\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese different sorts of rude produce may be divided into three classes. The\r\nfirst comprehends those which it is scarce in the power of human industry to\r\nmultiply at all. The second, those which it can multiply in proportion to the\r\ndemand. The third, those in which the efficacy of industry is either limited or\r\nuncertain. In the progress of wealth and improvement, the real price of the\r\nfirst may rise to any degree of extravagance, and seems not to be limited by\r\nany certain boundary. That of the second, though it may rise greatly, has,\r\nhowever, a certain boundary, beyond which it cannot well pass for any\r\nconsiderable time together. That of the third, though its natural tendency is\r\nto rise in the progress of improvement, yet in the same degree of improvement\r\nit may sometimes happen even to fall, sometimes to continue the same, and\r\nsometimes to rise more or less, according as different accidents render the\r\nefforts of human industry, in multiplying this sort of rude produce, more or\r\nless successful.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst Sort.—The first sort of rude produce, of which the price rises in\r\nthe progress of improvement, is that which it is scarce in the power of human\r\nindustry to multiply at all. It consists in those things which nature produces\r\nonly in certain quantities, and which being of a very perishable nature, it is\r\nimpossible to accumulate together the produce of many different seasons. Such\r\nare the greater part of rare and singular birds and fishes, many different\r\nsorts of game, almost all wild-fowl, all birds of passage in particular, as\r\nwell as many other things. When wealth, and the luxury which accompanies it,\r\nincrease, the demand for these is likely to increase with them, and no effort\r\nof human industry may be able to increase the supply much beyond what it was\r\nbefore this increase of the demand. The quantity of such commodities,\r\ntherefore, remaining the same, or nearly the same, while the competition to\r\npurchase them is continually increasing, their price may rise to any degree of\r\nextravagance, and seems not to be limited by any certain boundary. If woodcocks\r\nshould become so fashionable as to sell for twenty guineas a-piece, no effort\r\nof human industry could increase the number of those brought to market, much\r\nbeyond what it is at present. The high price paid by the Romans, in the time of\r\ntheir greatest grandeur, for rare birds and fishes, may in this manner easily\r\nbe accounted for. These prices were not the effects of the low value of silver\r\nin those times, but of the high value of such rarities and curiosities as human\r\nindustry could not multiply at pleasure. The real value of silver was higher at\r\nRome, for sometime before, and after the fall of the republic, than it is\r\nthrough the greater part of Europe at present. Three sestertii equal to about\r\nsixpence sterling, was the price which the republic paid for the modius or peck\r\nof the tithe wheat of Sicily. This price, however, was probably below the\r\naverage market price, the obligation to deliver their wheat at this rate being\r\nconsidered as a tax upon the Sicilian farmers. When the Romans, therefore, had\r\noccasion to order more corn than the tithe of wheat amounted to, they were\r\nbound by capitulation to pay for the surplus at the rate of four sestertii, or\r\neightpence sterling the peck; and this had probably been reckoned the moderate\r\nand reasonable, that is, the ordinary or average contract price of those times;\r\nit is equal to about one-and-twenty shillings the quarter. Eight-and-twenty\r\nshillings the quarter was, before the late years of scarcity, the ordinary\r\ncontract price of English wheat, which in quality is inferior to the Sicilian,\r\nand generally sells for a lower price in the European market. The value of\r\nsilver, therefore, in those ancient times, must have been to its value in the\r\npresent, as three to four inversely; that is, three ounces of silver would then\r\nhave purchased the same quantity of labour and commodities which four ounces\r\nwill do at present. When we read in Pliny, therefore, that Seius {Lib. X, c.\r\n29.} bought a white nightingale, as a present for the empress Agrippina, at the\r\nprice of six thousand sestertii, equal to about fifty pounds of our present\r\nmoney; and that Asinius Celer {Lib. IX, c. 17.} purchased a surmullet at the\r\nprice of eight thousand sestertii, equal to about sixty-six pounds thirteen\r\nshillings and fourpence of our present money; the extravagance of those prices,\r\nhow much soever it may surprise us, is apt, notwithstanding, to appear to us\r\nabout one third less than it really was. Their real price, the quantity of\r\nlabour and subsistence which was given away for them, was about one-third more\r\nthan their nominal price is apt to express to us in the present times. Seius\r\ngave for the nightingale the command of a quantity of labour and subsistence,\r\nequal to what £ 66:13: 4d. would purchase in the present times; and Asinius\r\nCeler gave for a surmullet the command of a quantity equal to what £ 88:17: 9d.\r\nwould purchase. What occasioned the extravagance of those high prices was, not\r\nso much the abundance of silver, as the abundance of labour and subsistence, of\r\nwhich those Romans had the disposal, beyond what was necessary for their own\r\nuse. The quantity of silver, of which they had the disposal, was a good deal\r\nless than what the command of the same quantity of labour and subsistence would\r\nhave procured to them in the present times.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecond sort.—The second sort of rude produce, of which the price rises in\r\nthe progress of improvement, is that which human industry can multiply in\r\nproportion to the demand. It consists in those useful plants and animals,\r\nwhich, in uncultivated countries, nature produces with such profuse abundance,\r\nthat they are of little or no value, and which, as cultivation advances, are\r\ntherefore forced to give place to some more profitable produce. During a long\r\nperiod in the progress of improvement, the quantity of these is continually\r\ndiminishing, while, at the same time, the demand for them is continually\r\nincreasing. Their real value, therefore, the real quantity of labour which they\r\nwill purchase or command, gradually rises, till at last it gets so high as to\r\nrender them as profitable a produce as any thing else which human industry can\r\nraise upon the most fertile and best cultivated land. When it has got so high,\r\nit cannot well go higher. If it did, more land and more industry would soon be\r\nemployed to increase their quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the price of cattle, for example, rises so high, that it is as profitable\r\nto cultivate land in order to raise food for them as in order to raise food for\r\nman, it cannot well go higher. If it did, more corn land would soon be turned\r\ninto pasture. The extension of tillage, by diminishing the quantity of wild\r\npasture, diminishes the quantity of butcher’s meat, which the country\r\nnaturally produces without labour or cultivation; and, by increasing the number\r\nof those who have either corn, or, what comes to the same thing, the price of\r\ncorn, to give in exchange for it, increases the demand. The price of\r\nbutcher’s meat, therefore, and, consequently, of cattle, must gradually\r\nrise, till it gets so high, that it becomes as profitable to employ the most\r\nfertile and best cultivated lands in raising food for them as in raising corn.\r\nBut it must always be late in the progress of improvement before tillage can be\r\nso far extended as to raise the price of cattle to this height; and, till it\r\nhas got to this height, if the country is advancing at all, their price must be\r\ncontinually rising. There are, perhaps, some parts of Europe in which the price\r\nof cattle has not yet got to this height. It had not got to this height in any\r\npart of Scotland before the Union. Had the Scotch cattle been always confined\r\nto the market of Scotland, in a country in which the quantity of land, which\r\ncan be applied to no other purpose but the feeding of cattle, is so great in\r\nproportion to what can be applied to other purposes, it is scarce possible,\r\nperhaps, that their price could ever have risen so high as to render it\r\nprofitable to cultivate land for the sake of feeding them. In England, the\r\nprice of cattle, it has already been observed, seems, in the neighbourhood of\r\nLondon, to have got to this height about the beginning of the last century; but\r\nit was much later, probably, before it got through the greater part of the\r\nremoter counties, in some of which, perhaps, it may scarce yet have got to it.\r\nOf all the different substances, however, which compose this second sort of\r\nrude produce, cattle is, perhaps, that of which the price, in the progress of\r\nimprovement, rises first to this height.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTill the price of cattle, indeed, has got to this height, it seems scarce\r\npossible that the greater part, even of those lands which are capable of the\r\nhighest cultivation, can be completely cultivated. In all farms too distant\r\nfrom any town to carry manure from it, that is, in the far greater part of\r\nthose of every extensive country, the quantity of well cultivated land must be\r\nin proportion to the quantity of manure which the farm itself produces; and\r\nthis, again, must be in proportion to the stock of cattle which are maintained\r\nupon it. The land is manured, either by pasturing the cattle upon it, or by\r\nfeeding them in the stable, and from thence carrying out their dung to it. But\r\nunless the price of the cattle be sufficient to pay both the rent and profit of\r\ncultivated land, the farmer cannot afford to pasture them upon it; and he can\r\nstill less afford to feed them in the stable. It is with the produce of\r\nimproved and cultivated land only that cattle can be fed in the stable;\r\nbecause, to collect the scanty and scattered produce of waste and unimproved\r\nlands, would require too much labour, and be too expensive. If the price of the\r\ncattle, therefore, is not sufficient to pay for the produce of improved and\r\ncultivated land, when they are allowed to pasture it, that price will be still\r\nless sufficient to pay for that produce, when it must be collected with a good\r\ndeal of additional labour, and brought into the stable to them. In these\r\ncircumstances, therefore, no more cattle can with profit be fed in the stable\r\nthan what are necessary for tillage. But these can never afford manure enough\r\nfor keeping constantly in good condition all the lands which they are capable\r\nof cultivating. What they afford, being insufficient for the whole farm, will\r\nnaturally be reserved for the lands to which it can be most advantageously or\r\nconveniently applied; the most fertile, or those, perhaps, in the neighbourhood\r\nof the farm-yard. These, therefore, will be kept constantly in good condition,\r\nand fit for tillage. The rest will, the greater part of them, be allowed to lie\r\nwaste, producing scarce any thing but some miserable pasture, just sufficient\r\nto keep alive a few straggling, half-starved cattle; the farm, though much\r\noverstocked in proportion to what would be necessary for its complete\r\ncultivation, being very frequently overstocked in proportion to its actual\r\nproduce. A portion of this waste land, however, after having been pastured in\r\nthis wretched manner for six or seven years together, may be ploughed up, when\r\nit will yield, perhaps, a poor crop or two of bad oats, or of some other coarse\r\ngrain; and then, being entirely exhausted, it must be rested and pastured again\r\nas before, and another portion ploughed up, to be in the same manner exhausted\r\nand rested again in its turn. Such, accordingly, was the general system of\r\nmanagement all over the low country of Scotland before the Union. The lands\r\nwhich were kept constantly well manured and in good condition seldom exceeded a\r\nthird or fourth part of the whole farm, and sometimes did not amount to a fifth\r\nor a sixth part of it. The rest were never manured, but a certain portion of\r\nthem was in its turn, notwithstanding, regularly cultivated and exhausted.\r\nUnder this system of management, it is evident, even that part of the lands of\r\nScotland which is capable of good cultivation, could produce but little in\r\ncomparison of what it may be capable of producing. But how disadvantageous\r\nsoever this system may appear, yet, before the Union, the low price of cattle\r\nseems to have rendered it almost unavoidable. If, notwithstanding a great rise\r\nin the price, it still continues to prevail through a considerable part of the\r\ncountry, it is owing in many places, no doubt, to ignorance and attachment to\r\nold customs, but, in most places, to the unavoidable obstructions which the\r\nnatural course of things opposes to the immediate or speedy establishment of a\r\nbetter system: first, to the poverty of the tenants, to their not having yet\r\nhad time to acquire a stock of cattle sufficient to cultivate their lands more\r\ncompletely, the same rise of price, which would render it advantageous for them\r\nto maintain a greater stock, rendering it more difficult for them to acquire\r\nit; and, secondly, to their not having yet had time to put their lands in\r\ncondition to maintain this greater stock properly, supposing they were capable\r\nof acquiring it. The increase of stock and the improvement of land are two\r\nevents which must go hand in hand, and of which the one can nowhere much outrun\r\nthe other. Without some increase of stock, there can be scarce any improvement\r\nof land, but there can be no considerable increase of stock, but in consequence\r\nof a considerable improvement of land; because otherwise the land could not\r\nmaintain it. These natural obstructions to the establishment of a better\r\nsystem, cannot be removed but by a long course of frugality and industry; and\r\nhalf a century or a century more, perhaps, must pass away before the old\r\nsystem, which is wearing out gradually, can be completely abolished through all\r\nthe different parts of the country. Of all the commercial advantages, however,\r\nwhich Scotland has derived from the Union with England, this rise in the price\r\nof cattle is, perhaps, the greatest. It has not only raised the value of all\r\nhighland estates, but it has, perhaps, been the principal cause of the\r\nimprovement of the low country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all new colonies, the great quantity of waste land, which can for many years\r\nbe applied to no other purpose but the feeding of cattle, soon renders them\r\nextremely abundant; and in every thing great cheapness is the necessary\r\nconsequence of great abundance. Though all the cattle of the European colonies\r\nin America were originally carried from Europe, they soon multiplied so much\r\nthere, and became of so little value, that even horses were allowed to run wild\r\nin the woods, without any owner thinking it worth while to claim them. It must\r\nbe a long time after the first establishment of such colonies, before it can\r\nbecome profitable to feed cattle upon the produce of cultivated land. The same\r\ncauses, therefore, the want of manure, and the disproportion between the stock\r\nemployed in cultivation and the land which it is destined to cultivate, are\r\nlikely to introduce there a system of husbandry, not unlike that which still\r\ncontinues to take place in so many parts of Scotland. Mr Kalm, the Swedish\r\ntraveller, when he gives an account of the husbandry of some of the English\r\ncolonies in North America, as he found it in 1749, observes, accordingly, that\r\nhe can with difficulty discover there the character of the English nation, so\r\nwell skilled in all the different branches of agriculture. They make scarce any\r\nmanure for their corn fields, he says; but when one piece of ground has been\r\nexhausted by continual cropping, they clear and cultivate another piece of\r\nfresh land; and when that is exhausted, proceed to a third. Their cattle are\r\nallowed to wander through the woods and other uncultivated grounds, where they\r\nare half-starved; having long ago extirpated almost all the annual grasses, by\r\ncropping them too early in the spring, before they had time to form their\r\nflowers, or to shed their seeds. {Kalm’s Travels, vol 1, pp. 343, 344.}\r\nThe annual grasses were, it seems, the best natural grasses in that part of\r\nNorth America; and when the Europeans first settled there, they used to grow\r\nvery thick, and to rise three or four feet high. A piece of ground which, when\r\nhe wrote, could not maintain one cow, would in former times, he was assured,\r\nhave maintained four, each of which would have given four times the quantity of\r\nmilk which that one was capable of giving. The poorness of the pasture had, in\r\nhis opinion, occasioned the degradation of their cattle, which degenerated\r\nsensibly from one generation to another. They were probably not unlike that\r\nstunted breed which was common all over Scotland thirty or forty years ago, and\r\nwhich is now so much mended through the greater part of the low country, not so\r\nmuch by a change of the breed, though that expedient has been employed in some\r\nplaces, as by a more plentiful method of feeding them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough it is late, therefore, in the progress of improvement, before cattle can\r\nbring such a price as to render it profitable to cultivate land for the sake of\r\nfeeding them; yet of all the different parts which compose this second sort of\r\nrude produce, they are perhaps the first which bring this price; because, till\r\nthey bring it, it seems impossible that improvement can be brought near even to\r\nthat degree of perfection to which it has arrived in many parts of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs cattle are among the first, so perhaps venison is among the last parts of\r\nthis sort of rude produce which bring this price. The price of venison in Great\r\nBritain, how extravagant soever it may appear, is not near sufficient to\r\ncompensate the expense of a deer park, as is well known to all those who have\r\nhad any experience in the feeding of deer. If it was otherwise, the feeding of\r\ndeer would soon become an article of common farming, in the same manner as the\r\nfeeding of those small birds, called turdi, was among the ancient Romans. Varro\r\nand Columella assure us, that it was a most profitable article. The fattening\r\nof ortolans, birds of passage which arrive lean in the country, is said to be\r\nso in some parts of France. If venison continues in fashion, and the wealth and\r\nluxury of Great Britain increase as they have done for some time past, its\r\nprice may very probably rise still higher than it is at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBetween that period in the progress of improvement, which brings to its height\r\nthe price of so necessary an article as cattle, and that which brings to it the\r\nprice of such a superfluity as venison, there is a very long interval, in the\r\ncourse of which many other sorts of rude produce gradually arrive at their\r\nhighest price, some sooner and some later, according to different\r\ncircumstances.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, in every farm, the offals of the barn and stable will maintain a certain\r\nnumber of poultry. These, as they are fed with what would otherwise be lost,\r\nare a mere save-all; and as they cost the farmer scarce any thing, so he can\r\nafford to sell them for very little. Almost all that he gets is pure gain, and\r\ntheir price can scarce be so low as to discourage him from feeding this number.\r\nBut in countries ill cultivated, and therefore but thinly inhabited, the\r\npoultry, which are thus raised without expense, are often fully sufficient to\r\nsupply the whole demand. In this state of things, therefore, they are often as\r\ncheap as butcher’s meat, or any other sort of animal food. But the whole\r\nquantity of poultry which the farm in this manner produces without expense,\r\nmust always be much smaller than the whole quantity of butcher’s meat\r\nwhich is reared upon it; and in times of wealth and luxury, what is rare, with\r\nonly nearly equal merit, is always preferred to what is common. As wealth and\r\nluxury increase, therefore, in consequence of improvement and cultivation, the\r\nprice of poultry gradually rises above that of butcher’s meat, till at\r\nlast it gets so high, that it becomes profitable to cultivate land for the sake\r\nof feeding them. When it has got to this height, it cannot well go higher. If\r\nit did, more land would soon be turned to this purpose. In several provinces of\r\nFrance, the feeding of poultry is considered as a very important article in\r\nrural economy, and sufficiently profitable to encourage the farmer to raise a\r\nconsiderable quantity of Indian corn and buckwheat for this purpose. A middling\r\nfarmer will there sometimes have four hundred fowls in his yard. The feeding of\r\npoultry seems scarce yet to be generally considered as a matter of so much\r\nimportance in England. They are certainly, however, dearer in England than in\r\nFrance, as England receives considerable supplies from France. In the progress\r\nof improvements, the period at which every particular sort of animal food is\r\ndearest, must naturally be that which immediately precedes the general practice\r\nof cultivating land for the sake of raising it. For some time before this\r\npractice becomes general, the scarcity must necessarily raise the price. After\r\nit has become general, new methods of feeding are commonly fallen upon, which\r\nenable the farmer to raise upon the same quantity of ground a much greater\r\nquantity of that particular sort of animal food. The plenty not only obliges\r\nhim to sell cheaper, but, in consequence of these improvements, he can afford\r\nto sell cheaper; for if he could not afford it, the plenty would not be of long\r\ncontinuance. It has been probably in this manner that the introduction of\r\nclover, turnips, carrots, cabbages, etc. has contributed to sink the common\r\nprice of butcher’s meat in the London market, somewhat below what it was\r\nabout the beginning of the last century.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe hog, that finds his food among ordure, and greedily devours many things\r\nrejected by every other useful animal, is, like poultry, originally kept as a\r\nsave-all. As long as the number of such animals, which can thus be reared at\r\nlittle or no expense, is fully sufficient to supply the demand, this sort of\r\nbutcher’s meat comes to market at a much lower price than any other. But\r\nwhen the demand rises beyond what this quantity can supply, when it becomes\r\nnecessary to raise food on purpose for feeding and fattening hogs, in the same\r\nmanner as for feeding and fattening other cattle, the price necessarily rises,\r\nand becomes proportionably either higher or lower than that of other\r\nbutcher’s meat, according as the nature of the country, and the state of\r\nits agriculture, happen to render the feeding of hogs more or less expensive\r\nthan that of other cattle. In France, according to Mr Buffon, the price of pork\r\nis nearly equal to that of beef. In most parts of Great Britain it is at\r\npresent somewhat higher.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great rise in the price both of hogs and poultry, has, in Great Britain,\r\nbeen frequently imputed to the diminution of the number of cottagers and other\r\nsmall occupiers of land; an event which has in every part of Europe been the\r\nimmediate forerunner of improvement and better cultivation, but which at the\r\nsame time may have contributed to raise the price of those articles, both\r\nsomewhat sooner and somewhat faster than it would otherwise have risen. As the\r\npoorest family can often maintain a cat or a dog without any expense, so the\r\npoorest occupiers of land can commonly maintain a few poultry, or a sow and a\r\nfew pigs, at very little. The little offals of their own table, their whey,\r\nskimmed milk, and butter milk, supply those animals with a part of their food,\r\nand they find the rest in the neighbouring fields, without doing any sensible\r\ndamage to any body. By diminishing the number of those small occupiers,\r\ntherefore, the quantity of this sort of provisions, which is thus produced at\r\nlittle or no expense, must certainly have been a good deal diminished, and\r\ntheir price must consequently have been raised both sooner and faster than it\r\nwould otherwise have risen. Sooner or later, however, in the progress of\r\nimprovement, it must at any rate have risen to the utmost height to which it is\r\ncapable of rising; or to the price which pays the labour and expense of\r\ncultivating the land which furnishes them with food, as well as these are paid\r\nupon the greater part of other cultivated land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe business of the dairy, like the feeding of hogs and poultry, is originally\r\ncarried on as a save-all. The cattle necessarily kept upon the farm produce\r\nmore milk than either the rearing of their own young, or the consumption of the\r\nfarmer’s family requires; and they produce most at one particular season.\r\nBut of all the productions of land, milk is perhaps the most perishable. In the\r\nwarm season, when it is most abundant, it will scarce keep four-and-twenty\r\nhours. The farmer, by making it into fresh butter, stores a small part of it\r\nfor a week; by making it into salt butter, for a year; and by making it into\r\ncheese, he stores a much greater part of it for several years. Part of all\r\nthese is reserved for the use of his own family; the rest goes to market, in\r\norder to find the best price which is to be had, and which can scarce be so low\r\nis to discourage him from sending thither whatever is over and above the use of\r\nhis own family. If it is very low indeed, he will be likely to manage his dairy\r\nin a very slovenly and dirty manner, and will scarce, perhaps, think it worth\r\nwhile to have a particular room or building on purpose for it, but will suffer\r\nthe business to be carried on amidst the smoke, filth, and nastiness of his own\r\nkitchen, as was the case of almost all the farmers’ dairies in Scotland\r\nthirty or forty years ago, and as is the case of many of them still. The same\r\ncauses which gradually raise the price of butcher’s meat, the increase of\r\nthe demand, and, in consequence of the improvement of the country, the\r\ndiminution of the quantity which can be fed at little or no expense, raise, in\r\nthe same manner, that of the produce of the dairy, of which the price naturally\r\nconnects with that of butcher’s meat, or with the expense of feeding\r\ncattle. The increase of price pays for more labour, care, and cleanliness. The\r\ndairy becomes more worthy of the farmer’s attention, and the quality of\r\nits produce gradually improves. The price at last gets so high, that it becomes\r\nworth while to employ some of the most fertile and best cultivated lands in\r\nfeeding cattle merely for the purpose of the dairy; and when it has got to this\r\nheight, it cannot well go higher. If it did, more land would soon be turned to\r\nthis purpose. It seems to have got to this height through the greater part of\r\nEngland, where much good land is commonly employed in this manner. If you\r\nexcept the neighbourhood of a few considerable towns, it seems not yet to have\r\ngot to this height anywhere in Scotland, where common farmers seldom employ\r\nmuch good land in raising food for cattle, merely for the purpose of the dairy.\r\nThe price of the produce, though it has risen very considerably within these\r\nfew years, is probably still too low to admit of it. The inferiority of the\r\nquality, indeed, compared with that of the produce of English dairies, is fully\r\nequal to that of the price. But this inferiority of quality is, perhaps, rather\r\nthe effect of this lowness of price, than the cause of it. Though the quality\r\nwas much better, the greater part of what is brought to market could not, I\r\napprehend, in the present circumstances of the country, be disposed of at a\r\nmuch better price; and the present price, it is probable, would not pay the\r\nexpense of the land and labour necessary for producing a much better quality.\r\nThrough the greater part of England, notwithstanding the superiority of price,\r\nthe dairy is not reckoned a more profitable employment of land than the raising\r\nof corn, or the fattening of cattle, the two great objects of agriculture.\r\nThrough the greater part of Scotland, therefore, it cannot yet be even so\r\nprofitable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe lands of no country, it is evident, can ever be completely cultivated and\r\nimproved, till once the price of every produce, which human industry is obliged\r\nto raise upon them, has got so high as to pay for the expense of complete\r\nimprovement and cultivation. In order to do this, the price of each particular\r\nproduce must be sufficient, first, to pay the rent of good corn land, as it is\r\nthat which regulates the rent of the greater part of other cultivated land;\r\nand, secondly, to pay the labour and expense of the farmer, as well as they are\r\ncommonly paid upon good corn land; or, in other words, to replace with the\r\nordinary profits the stock which he employs about it. This rise in the price of\r\neach particular produce; must evidently be previous to the improvement and\r\ncultivation of the land which is destined for raising it. Gain is the end of\r\nall improvement; and nothing could deserve that name, of which loss was to be\r\nthe necessary consequence. But loss must be the necessary consequence of\r\nimproving land for the sake of a produce of which the price could never bring\r\nback the expense. If the complete improvement and cultivation of the country\r\nbe, as it most certainly is, the greatest of all public advantages, this rise\r\nin the price of all those different sorts of rude produce, instead of being\r\nconsidered as a public calamity, ought to be regarded as the necessary\r\nforerunner and attendant of the greatest of all public advantages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis rise, too, in the nominal or money price of all those different sorts of\r\nrude produce, has been the effect, not of any degradation in the value of\r\nsilver, but of a rise in their real price. They have become worth, not only a\r\ngreater quantity of silver, but a greater quantity of labour and subsistence\r\nthan before. As it costs a greater quantity of labour and subsistence to bring\r\nthem to market, so, when they are brought thither they represent, or are\r\nequivalent to a greater quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThird Sort.—The third and last sort of rude produce, of which the price\r\nnaturally rises in the progress of improvement, is that in which the efficacy\r\nof human industry, in augmenting the quantity, is either limited or uncertain.\r\nThough the real price of this sort of rude produce, therefore, naturally tends\r\nto rise in the progress of improvement, yet, according as different accidents\r\nhappen to render the efforts of human industry more or less successful in\r\naugmenting the quantity, it may happen sometimes even to fall, sometimes to\r\ncontinue the same, in very different periods of improvement, and sometimes to\r\nrise more or less in the same period.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are some sorts of rude produce which nature has rendered a kind of\r\nappendages to other sorts; so that the quantity of the one which any country\r\ncan afford, is necessarily limited by that of the other. The quantity of wool\r\nor of raw hides, for example, which any country can afford, is necessarily\r\nlimited by the number of great and small cattle that are kept in it. The state\r\nof its improvement, and the nature of its agriculture, again necessarily\r\ndetermine this number.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same causes which, in the progress of improvement, gradually raise the\r\nprice of butcher’s meat, should have the same effect, it may be thought,\r\nupon the prices of wool and raw hides, and raise them, too, nearly in the same\r\nproportion. It probably would be so, if, in the rude beginnings of improvement,\r\nthe market for the latter commodities was confined within as narrow bounds as\r\nthat for the former. But the extent of their respective markets is commonly\r\nextremely different.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe market for butcher’s meat is almost everywhere confined to the\r\ncountry which produces it. Ireland, and some part of British America, indeed,\r\ncarry on a considerable trade in salt provisions; but they are, I believe, the\r\nonly countries in the commercial world which do so, or which export to other\r\ncountries any considerable part of their butcher’s meat.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe market for wool and raw hides, on the contrary, is, in the rude beginnings\r\nof improvement, very seldom confined to the country which produces them. They\r\ncan easily be transported to distant countries; wool without any preparation,\r\nand raw hides with very little; and as they are the materials of many\r\nmanufactures, the industry of other countries may occasion a demand for them,\r\nthough that of the country which produces them might not occasion any.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries ill cultivated, and therefore but thinly inhabited, the price of\r\nthe wool and the hide bears always a much greater proportion to that of the\r\nwhole beast, than in countries where, improvement and population being further\r\nadvanced, there is more demand for butcher’s meat. Mr Hume observes, that\r\nin the Saxon times, the fleece was estimated at two-fifths of the value of the\r\nwhole sheep and that this was much above the proportion of its present\r\nestimation. In some provinces of Spain, I have been assured, the sheep is\r\nfrequently killed merely for the sake of the fleece and the tallow. The carcase\r\nis often left to rot upon the ground, or to be devoured by beasts and birds of\r\nprey. If this sometimes happens even in Spain, it happens almost constantly in\r\nChili, at Buenos Ayres, and in many other parts of Spanish America, where the\r\nhorned cattle are almost constantly killed merely for the sake of the hide and\r\nthe tallow. This, too, used to happen almost constantly in Hispaniola, while it\r\nwas infested by the buccaneers, and before the settlement, improvement, and\r\npopulousness of the French plantations ( which now extend round the coast of\r\nalmost the whole western half of the island) had given some value to the cattle\r\nof the Spaniards, who still continue to possess, not only the eastern part of\r\nthe coast, but the whole inland mountainous part of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough, in the progress of improvement and population, the price of the whole\r\nbeast necessarily rises, yet the price of the carcase is likely to be much more\r\naffected by this rise than that of the wool and the hide. The market for the\r\ncarcase being in the rude state of society confined always to the country which\r\nproduces it, must necessarily be extended in proportion to the improvement and\r\npopulation of that country. But the market for the wool and the hides, even of\r\na barbarous country, often extending to the whole commercial world, it can very\r\nseldom be enlarged in the same proportion. The state of the whole commercial\r\nworld can seldom be much affected by the improvement of any particular country;\r\nand the market for such commodities may remain the same, or very nearly the\r\nsame, after such improvements, as before. It should, however, in the natural\r\ncourse of things, rather, upon the whole, be somewhat extended in consequence\r\nof them. If the manufactures, especially, of which those commodities are the\r\nmaterials, should ever come to flourish in the country, the market, though it\r\nmight not be much enlarged, would at least be brought much nearer to the place\r\nof growth than before; and the price of those materials might at least be\r\nincreased by what had usually been the expense of transporting them to distant\r\ncountries. Though it might not rise, therefore, in the same proportion as that\r\nof butcher’s meat, it ought naturally to rise somewhat, and it ought\r\ncertainly not to fall.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, however, notwithstanding the flourishing state of its woollen\r\nmanufacture, the price of English wool has fallen very considerably since the\r\ntime of Edward III. There are many authentic records which demonstrate that,\r\nduring the reign of that prince (towards the middle of the fourteenth century,\r\nor about 1339), what was reckoned the moderate and reasonable price of the tod,\r\nor twenty-eight pounds of English wool, was not less than ten shillings of the\r\nmoney of those times {See Smith’s Memoirs of Wool, vol. i c. 5, 6, 7.\r\nalso vol. ii.}, containing, at the rate of twenty-pence the ounce, six ounces\r\nof silver, Tower weight, equal to about thirty shillings of our present money.\r\nIn the present times, one-and-twenty shillings the tod may be reckoned a good\r\nprice for very good English wool. The money price of wool, therefore, in the\r\ntime of Edward III. was to its money price in the present times as ten to\r\nseven. The superiority of its real price was still greater. At the rate of six\r\nshillings and eightpence the quarter, ten shillings was in those ancient times\r\nthe price of twelve bushels of wheat. At the rate of twenty-eight shillings the\r\nquarter, one-and-twenty shillings is in the present times the price of six\r\nbushels only. The proportion between the real price of ancient and modern\r\ntimes, therefore, is as twelve to six, or as two to one. In those ancient\r\ntimes, a tod of wool would have purchased twice the quantity of subsistence\r\nwhich it will purchase at present, and consequently twice the quantity of\r\nlabour, if the real recompence of labour had been the same in both periods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis degradation, both in the real and nominal value of wool, could never have\r\nhappened in consequence of the natural course of things. It has accordingly\r\nbeen the effect of violence and artifice. First, of the absolute prohibition of\r\nexporting wool from England: secondly, of the permission of importing it from\r\nSpain, duty free: thirdly, of the prohibition of exporting it from Ireland to\r\nanother country but England. In consequence of these regulations, the market\r\nfor English wool, instead of being somewhat extended, in consequence of the\r\nimprovement of England, has been confined to the home market, where the wool of\r\nseveral other countries is allowed to come into competition with it, and where\r\nthat of Ireland is forced into competition with it. As the woollen\r\nmanufactures, too, of Ireland, are fully as much discouraged as is consistent\r\nwith justice and fair dealing, the Irish can work up but a smaller part of\r\ntheir own wool at home, and are therefore obliged to send a greater proportion\r\nof it to Great Britain, the only market they are allowed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI have not been able to find any such authentic records concerning the price of\r\nraw hides in ancient times. Wool was commonly paid as a subsidy to the king,\r\nand its valuation in that subsidy ascertains, at least in some degree, what was\r\nits ordinary price. But this seems not to have been the case with raw hides.\r\nFleetwood, however, from an account in 1425, between the prior of Burcester\r\nOxford and one of his canons, gives us their price, at least as it was stated\r\nupon that particular occasion, viz. five ox hides at twelve shillings; five cow\r\nhides at seven shillings and threepence; thirtysix sheep skins of two years old\r\nat nine shillings; sixteen calf skins at two shillings. In 1425, twelve\r\nshillings contained about the same quantity of silver as four-and-twenty\r\nshillings of our present money. An ox hide, therefore, was in this account\r\nvalued at the same quantity of silver as 4s. 4/5ths of our present money. Its\r\nnominal price was a good deal lower than at present. But at the rate of six\r\nshillings and eightpence the quarter, twelve shillings would in those times\r\nhave purchased fourteen bushels and four-fifths of a bushel of wheat, which, at\r\nthree and sixpence the bushel, would in the present times cost 51s. 4d. An ox\r\nhide, therefore, would in those times have purchased as much corn as ten\r\nshillings and threepence would purchase at present. Its real value was equal to\r\nten shillings and threepence of our present money. In those ancient times, when\r\nthe cattle were half starved during the greater part of the winter, we cannot\r\nsuppose that they were of a very large size. An ox hide which weighs four stone\r\nof sixteen pounds of avoirdupois, is not in the present times reckoned a bad\r\none; and in those ancient times would probably have been reckoned a very good\r\none. But at half-a-crown the stone, which at this moment (February 1773) I\r\nunderstand to be the common price, such a hide would at present cost only ten\r\nshillings. Through its nominal price, therefore, is higher in the present than\r\nit was in those ancient times, its real price, the real quantity of subsistence\r\nwhich it will purchase or command, is rather somewhat lower. The price of cow\r\nhides, as stated in the above account, is nearly in the common proportion to\r\nthat of ox hides. That of sheep skins is a good deal above it. They had\r\nprobably been sold with the wool. That of calves skins, on the contrary, is\r\ngreatly below it. In countries where the price of cattle is very low, the\r\ncalves, which are not intended to be reared in order to keep up the stock, are\r\ngenerally killed very young, as was the case in Scotland twenty or thirty years\r\nago. It saves the milk, which their price would not pay for. Their skins,\r\ntherefore, are commonly good for little.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe price of raw hides is a good deal lower at present than it was a few years\r\nago; owing probably to the taking off the duty upon seal skins, and to the\r\nallowing, for a limited time, the importation of raw hides from Ireland, and\r\nfrom the plantations, duty free, which was done in 1769. Take the whole of the\r\npresent century at an average, their real price has probably been somewhat\r\nhigher than it was in those ancient times. The nature of the commodity renders\r\nit not quite so proper for being transported to distant markets as wool. It\r\nsuffers more by keeping. A salted hide is reckoned inferior to a fresh one, and\r\nsells for a lower price. This circumstance must necessarily have some tendency\r\nto sink the price of raw hides produced in a country which does not manufacture\r\nthem, but is obliged to export them, and comparatively to raise that of those\r\nproduced in a country which does manufacture them. It must have some tendency\r\nto sink their price in a barbarous, and to raise it in an improved and\r\nmanufacturing country. It must have had some tendency, therefore, to sink it in\r\nancient, and to raise it in modern times. Our tanners, besides, have not been\r\nquite so successful as our clothiers, in convincing the wisdom of the nation,\r\nthat the safety of the commonwealth depends upon the prosperity of their\r\nparticular manufacture. They have accordingly been much less favoured. The\r\nexportation of raw hides has, indeed, been prohibited, and declared a nuisance;\r\nbut their importation from foreign countries has been subjected to a duty; and\r\nthough this duty has been taken off from those of Ireland and the plantations\r\n(for the limited time of five years only), yet Ireland has not been confined to\r\nthe market of Great Britain for the sale of its surplus hides, or of those\r\nwhich are not manufactured at home. The hides of common cattle have, but within\r\nthese few years, been put among the enumerated commodities which the\r\nplantations can send nowhere but to the mother country; neither has the\r\ncommerce of Ireland been in this case oppressed hitherto, in order to support\r\nthe manufactures of Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever regulations tend to sink the price, either of wool or of raw hides,\r\nbelow what it naturally would be, must, in an improved and cultivated country,\r\nhave some tendency to raise the price of butcher’s meat. The price both\r\nof the great and small cattle, which are fed on improved and cultivated land,\r\nmust be sufficient to pay the rent which the landlord, and the profit which the\r\nfarmer, has reason to expect from improved and cultivated land. If it is not,\r\nthey will soon cease to feed them. Whatever part of this price, therefore, is\r\nnot paid by the wool and the hide, must be paid by the carcase. The less there\r\nis paid for the one, the more must be paid for the other. In what manner this\r\nprice is to be divided upon the different parts of the beast, is indifferent to\r\nthe landlords and farmers, provided it is all paid to them. In an improved and\r\ncultivated country, therefore, their interest as landlords and farmers cannot\r\nbe much affected by such regulations, though their interest as consumers may,\r\nby the rise in the price of provisions. It would be quite otherwise, however,\r\nin an unimproved and uncultivated country, where the greater part of the lands\r\ncould be applied to no other purpose but the feeding of cattle, and where the\r\nwool and the hide made the principal part of the value of those cattle. Their\r\ninterest as landlords and farmers would in this case be very deeply affected by\r\nsuch regulations, and their interest as consumers very little. The fall in the\r\nprice of the wool and the hide would not in this case raise the price of the\r\ncarcase; because the greater part of the lands of the country being applicable\r\nto no other purpose but the feeding of cattle, the same number would still\r\ncontinue to be fed. The same quantity of butcher’s meat would still come\r\nto market. The demand for it would be no greater than before. Its price,\r\ntherefore, would be the same as before. The whole price of cattle would fall,\r\nand along with it both the rent and the profit of all those lands of which\r\ncattle was the principal produce, that is, of the greater part of the lands of\r\nthe country. The perpetual prohibition of the exportation of wool, which is\r\ncommonly, but very falsely, ascribed to Edward III., would, in the then\r\ncircumstances of the country, have been the most destructive regulation which\r\ncould well have been thought of. It would not only have reduced the actual\r\nvalue of the greater part of the lands in the kingdom, but by reducing the\r\nprice of the most important species of small cattle, it would have retarded\r\nvery much its subsequent improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wool of Scotland fell very considerably in its price in consequence of the\r\nunion with England, by which it was excluded from the great market of Europe,\r\nand confined to the narrow one of Great Britain. The value of the greater part\r\nof the lands in the southern counties of Scotland, which are chiefly a sheep\r\ncountry, would have been very deeply affected by this event, had not the rise\r\nin the price of butcher’s meat fully compensated the fall in the price of\r\nwool.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the efficacy of human industry, in increasing the quantity either of wool or\r\nof raw hides, is limited, so far as it depends upon the produce of the country\r\nwhere it is exerted; so it is uncertain so far as it depends upon the produce\r\nof other countries. It so far depends not so much upon the quantity which they\r\nproduce, as upon that which they do not manufacture; and upon the restraints\r\nwhich they may or may not think proper to impose upon the exportation of this\r\nsort of rude produce. These circumstances, as they are altogether independent\r\nof domestic industry, so they necessarily render the efficacy of its efforts\r\nmore or less uncertain. In multiplying this sort of rude produce, therefore,\r\nthe efficacy of human industry is not only limited, but uncertain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn multiplying another very important sort of rude produce, the quantity of\r\nfish that is brought to market, it is likewise both limited and uncertain. It\r\nis limited by the local situation of the country, by the proximity or distance\r\nof its different provinces from the sea, by the number of its lakes and rivers,\r\nand by what may be called the fertility or barrenness of those seas, lakes, and\r\nrivers, as to this sort of rude produce. As population increases, as the annual\r\nproduce of the land and labour of the country grows greater and greater, there\r\ncome to be more buyers of fish; and those buyers, too, have a greater quantity\r\nand variety of other goods, or, what is the same thing, the price of a greater\r\nquantity and variety of other goods, to buy with. But it will generally be\r\nimpossible to supply the great and extended market, without employing a\r\nquantity of labour greater than in proportion to what had been requisite for\r\nsupplying the narrow and confined one. A market which, from requiring only one\r\nthousand, comes to require annually ten thousand ton of fish, can seldom be\r\nsupplied, without employing more than ten times the quantity of labour which\r\nhad before been sufficient to supply it. The fish must generally be sought for\r\nat a greater distance, larger vessels must be employed, and more expensive\r\nmachinery of every kind made use of. The real price of this commodity,\r\ntherefore, naturally rises in the progress of improvement. It has accordingly\r\ndone so, I believe, more or less in every country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the success of a particular day’s fishing may be a very uncertain\r\nmatter, yet the local situation of the country being supposed, the general\r\nefficacy of industry in bringing a certain quantity of fish to market, taking\r\nthe course of a year, or of several years together, it may, perhaps, be thought\r\nis certain enough; and it, no doubt, is so. As it depends more, however, upon\r\nthe local situation of the country, than upon the state of its wealth and\r\nindustry; as upon this account it may in different countries be the same in\r\nvery different periods of improvement, and very different in the same period;\r\nits connection with the state of improvement is uncertain; and it is of this\r\nsort of uncertainty that I am here speaking.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn increasing the quantity of the different minerals and metals which are drawn\r\nfrom the bowels of the earth, that of the more precious ones particularly, the\r\nefficacy of human industry seems not to be limited, but to be altogether\r\nuncertain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of the precious metals which is to be found in any country, is not\r\nlimited by any thing in its local situation, such as the fertility or\r\nbarrenness of its own mines. Those metals frequently abound in countries which\r\npossess no mines. Their quantity, in every particular country, seems to depend\r\nupon two different circumstances; first, upon its power of purchasing, upon the\r\nstate of its industry, upon the annual produce of its land and labour, in\r\nconsequence of which it can afford to employ a greater or a smaller quantity of\r\nlabour and subsistence, in bringing or purchasing such superfluities as gold\r\nand silver, either from its own mines, or from those of other countries; and,\r\nsecondly, upon the fertility or barrenness of the mines which may happen at any\r\nparticular time to supply the commercial world with those metals. The quantity\r\nof those metals in the countries most remote from the mines, must be more or\r\nless affected by this fertility or barrenness, on account of the easy and cheap\r\ntransportation of those metals, of their small bulk and great value. Their\r\nquantity in China and Indostan must have been more or less affected by the\r\nabundance of the mines of America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far as their quantity in any particular country depends upon the former of\r\nthose two circumstances (the power of purchasing), their real price, like that\r\nof all other luxuries and superfluities, is likely to rise with the wealth and\r\nimprovement of the country, and to fall with its poverty and depression.\r\nCountries which have a great quantity of labour and subsistence to spare, can\r\nafford to purchase any particular quantity of those metals at the expense of a\r\ngreater quantity of labour and subsistence, than countries which have less to\r\nspare.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far as their quantity in any particular country depends upon the latter of\r\nthose two circumstances (the fertility or barrenness of the mines which happen\r\nto supply the commercial world), their real price, the real quantity of labour\r\nand subsistence which they will purchase or exchange for, will, no doubt, sink\r\nmore or less in proportion to the fertility, and rise in proportion to the\r\nbarrenness of those mines.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fertility or barrenness of the mines, however, which may happen at any\r\nparticular time to supply the commercial world, is a circumstance which, it is\r\nevident, may have no sort of connection with the state of industry in a\r\nparticular country. It seems even to have no very necessary connection with\r\nthat of the world in general. As arts and commerce, indeed, gradually spread\r\nthemselves over a greater and a greater part of the earth, the search for new\r\nmines, being extended over a wider surface, may have somewhat a better chance\r\nfor being successful than when confined within narrower bounds. The discovery\r\nof new mines, however, as the old ones come to be gradually exhausted, is a\r\nmatter of the greatest uncertainty, and such as no human skill or industry can\r\ninsure. All indications, it is acknowledged, are doubtful; and the actual\r\ndiscovery and successful working of a new mine can alone ascertain the reality\r\nof its value, or even of its existence. In this search there seem to be no\r\ncertain limits, either to the possible success, or to the possible\r\ndisappointment of human industry. In the course of a century or two, it is\r\npossible that new mines may be discovered, more fertile than any that have ever\r\nyet been known; and it is just equally possible, that the most fertile mine\r\nthen known may be more barren than any that was wrought before the discovery of\r\nthe mines of America. Whether the one or the other of those two events may\r\nhappen to take place, is of very little importance to the real wealth and\r\nprosperity of the world, to the real value of the annual produce of the land\r\nand labour of mankind. Its nominal value, the quantity of gold and silver by\r\nwhich this annual produce could be expressed or represented, would, no doubt,\r\nbe very different; but its real value, the real quantity of labour which it\r\ncould purchase or command, would be precisely the same. A shilling might, in\r\nthe one case, represent no more labour than a penny does at present; and a\r\npenny, in the other, might represent as much as a shilling does now. But in the\r\none case, he who had a shilling in his pocket would be no richer than he who\r\nhas a penny at present; and in the other, he who had a penny would be just as\r\nrich as he who has a shilling now. The cheapness and abundance of gold and\r\nsilver plate would be the sole advantage which the world could derive from the\r\none event; and the dearness and scarcity of those trifling superfluities, the\r\nonly inconveniency it could suffer from the other.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003eConclusion of the Digression concerning the Variations in the Value of\r\nSilver.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe greater part of the writers who have collected the money price of things in\r\nancient times, seem to have considered the low money price of corn, and of\r\ngoods in general, or, in other words, the high value of gold and silver, as a\r\nproof, not only of the scarcity of those metals, but of the poverty and\r\nbarbarism of the country at the time when it took place. This notion is\r\nconnected with the system of political economy, which represents national\r\nwealth as consisting in the abundance and national poverty in the scarcity, of\r\ngold and silver; a system which I shall endeavour to explain and examine at\r\ngreat length in the fourth book of this Inquiry. I shall only observe at\r\npresent, that the high value of the precious metals can be no proof of the\r\npoverty or barbarism of any particular country at the time when it took place.\r\nIt is a proof only of the barrenness of the mines which happened at that time\r\nto supply the commercial world. A poor country, as it cannot afford to buy\r\nmore, so it can as little afford to pay dearer for gold and silver than a rich\r\none; and the value of those metals, therefore, is not likely to be higher in\r\nthe former than in the latter. In China, a country much richer than any part of\r\nEurope, the value of the precious metals is much higher than in any part of\r\nEurope. As the wealth of Europe, indeed, has increased greatly since the\r\ndiscovery of the mines of America, so the value of gold and silver has\r\ngradually diminished. This diminution of their value, however, has not been\r\nowing to the increase of the real wealth of Europe, of the annual produce of\r\nits land and labour, but to the accidental discovery of more abundant mines\r\nthan any that were known before. The increase of the quantity of gold and\r\nsilver in Europe, and the increase of its manufactures and agriculture, are two\r\nevents which, though they have happened nearly about the same time, yet have\r\narisen from very different causes, and have scarce any natural connection with\r\none another. The one has arisen from a mere accident, in which neither prudence\r\nnor policy either had or could have any share; the other, from the fall of the\r\nfeudal system, and from the establishment of a government which afforded to\r\nindustry the only encouragement which it requires, some tolerable security that\r\nit shall enjoy the fruits of its own labour. Poland, where the feudal system\r\nstill continues to take place, is at this day as beggarly a country as it was\r\nbefore the discovery of America. The money price of corn, however, has risen;\r\nthe real value of the precious metals has fallen in Poland, in the same manner\r\nas in other parts of Europe. Their quantity, therefore, must have increased\r\nthere as in other places, and nearly in the same proportion to the annual\r\nproduce of its land and labour. This increase of the quantity of those metals,\r\nhowever, has not, it seems, increased that annual produce, has neither improved\r\nthe manufactures and agriculture of the country, nor mended the circumstances\r\nof its inhabitants. Spain and Portugal, the countries which possess the mines,\r\nare, after Poland, perhaps the two most beggarly countries in Europe. The value\r\nof the precious metals, however, must be lower in Spain and Portugal than in\r\nany other part of Europe, as they come from those countries to all other parts\r\nof Europe, loaded, not only with a freight and an insurance, but with the\r\nexpense of smuggling, their exportation being either prohibited or subjected to\r\na duty. In proportion to the annual produce of the land and labour, therefore,\r\ntheir quantity must be greater in those countries than in any other part of\r\nEurope; those countries, however, are poorer than the greater part of Europe.\r\nThough the feudal system has been abolished in Spain and Portugal, it has not\r\nbeen succeeded by a much better.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the low value of gold and silver, therefore, is no proof of the wealth and\r\nflourishing state of the country where it takes place; so neither is their high\r\nvalue, or the low money price either of goods in general, or of corn in\r\nparticular, any proof of its poverty and barbarism.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the low money price, either of goods in general, or of corn in\r\nparticular, be no proof of the poverty or barbarism of the times, the low money\r\nprice of some particular sorts of goods, such as cattle, poultry, game of all\r\nkinds, etc. in proportion to that of corn, is a most decisive one. It clearly\r\ndemonstrates, first, their great abundance in proportion to that of corn, and,\r\nconsequently, the great extent of the land which they occupied in proportion to\r\nwhat was occupied by corn; and, secondly, the low value of this land in\r\nproportion to that of corn land, and, consequently, the uncultivated and\r\nunimproved state of the far greater part of the lands of the country. It\r\nclearly demonstrates, that the stock and population of the country did not bear\r\nthe same proportion to the extent of its territory, which they commonly do in\r\ncivilized countries; and that society was at that time, and in that country,\r\nbut in its infancy. From the high or low money price, either of goods in\r\ngeneral, or of corn in particular, we can infer only, that the mines, which at\r\nthat time happened to supply the commercial world with gold and silver, were\r\nfertile or barren, not that the country was rich or poor. But from the high or\r\nlow money price of some sorts of goods in proportion to that of others, we can\r\ninfer, with a degree of probability that approaches almost to certainty, that\r\nit was rich or poor, that the greater part of its lands were improved or\r\nunimproved, and that it was either in a more or less barbarous state, or in a\r\nmore or less civilized one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAny rise in the money price of goods which proceeded altogether from the\r\ndegradation of the value of silver, would affect all sorts of goods equally,\r\nand raise their price universally, a third, or a fourth, or a fifth part\r\nhigher, according as silver happened to lose a third, or a fourth, or a fifth\r\npart of its former value. But the rise in the price of provisions, which has\r\nbeen the subject of so much reasoning and conversation, does not affect all\r\nsorts of provisions equally. Taking the course of the present century at an\r\naverage, the price of corn, it is acknowledged, even by those who account for\r\nthis rise by the degradation of the value of silver, has risen much less than\r\nthat of some other sorts of provisions. The rise in the price of those other\r\nsorts of provisions, therefore, cannot be owing altogether to the degradation\r\nof the value of silver. Some other causes must be taken into the account; and\r\nthose which have been above assigned, will, perhaps, without having recourse to\r\nthe supposed degradation of the value of silver, sufficiently explain this rise\r\nin those particular sorts of provisions, of which the price has actually risen\r\nin proportion to that of corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs to the price of corn itself, it has, during the sixty-four first years of\r\nthe present century, and before the late extraordinary course of bad seasons,\r\nbeen somewhat lower than it was during the sixty-four last years of the\r\npreceding century. This fact is attested, not only by the accounts of Windsor\r\nmarket, but by the public fiars of all the different counties of Scotland, and\r\nby the accounts of several different markets in France, which have been\r\ncollected with great diligence and fidelity by Mr Messance, and by Mr Dupré de\r\nSt Maur. The evidence is more complete than could well have been expected in a\r\nmatter which is naturally so very difficult to be ascertained.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs to the high price of corn during these last ten or twelve years, it can be\r\nsufficiently accounted for from the badness of the seasons, without supposing\r\nany degradation in the value of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe opinion, therefore, that silver is continually sinking in its value, seems\r\nnot to be founded upon any good observations, either upon the prices of corn,\r\nor upon those of other provisions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same quantity of silver, it may perhaps be said, will, in the present\r\ntimes, even according to the account which has been here given, purchase a much\r\nsmaller quantity of several sorts of provisions than it would have done during\r\nsome part of the last century; and to ascertain whether this change be owing to\r\na rise in the value of those goods, or to a fall in the value of silver, is\r\nonly to establish a vain and useless distinction, which can be of no sort of\r\nservice to the man who has only a certain quantity of silver to go to market\r\nwith, or a certain fixed revenue in money. I certainly do not pretend that the\r\nknowledge of this distinction will enable him to buy cheaper. It may not,\r\nhowever, upon that account be altogether useless.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt may be of some use to the public, by affording an easy proof of the\r\nprosperous condition of the country. If the rise in the price of some sorts of\r\nprovisions be owing altogether to a fall in the value of silver, it is owing to\r\na circumstance, from which nothing can be inferred but the fertility of the\r\nAmerican mines. The real wealth of the country, the annual produce of its land\r\nand labour, may, notwithstanding this circumstance, be either gradually\r\ndeclining, as in Portugal and Poland; or gradually advancing, as in most other\r\nparts of Europe. But if this rise in the price of some sorts of provisions be\r\nowing to a rise in the real value of the land which produces them, to its\r\nincreased fertility, or, in consequence of more extended improvement and good\r\ncultivation, to its having been rendered fit for producing corn; it is owing to\r\na circumstance which indicates, in the clearest manner, the prosperous and\r\nadvancing state of the country. The land constitutes by far the greatest, the\r\nmost important, and the most durable part of the wealth of every extensive\r\ncountry. It may surely be of some use, or, at least, it may give some\r\nsatisfaction to the public, to have so decisive a proof of the increasing value\r\nof by far the greatest, the most important, and the most durable part of its\r\nwealth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt may, too, be of some use to the public, in regulating the pecuniary reward\r\nof some of its inferior servants. If this rise in the price of some sorts of\r\nprovisions be owing to a fall in the value of silver, their pecuniary reward,\r\nprovided it was not too large before, ought certainly to be augmented in\r\nproportion to the extent of this fall. If it is not augmented, their real\r\nrecompence will evidently be so much diminished. But if this rise of price is\r\nowing to the increased value, in consequence of the improved fertility of the\r\nland which produces such provisions, it becomes a much nicer matter to judge,\r\neither in what proportion any pecuniary reward ought to be augmented, or\r\nwhether it ought to be augmented at all. The extension of improvement and\r\ncultivation, as it necessarily raises more or less, in proportion to the price\r\nof corn, that of every sort of animal food, so it as necessarily lowers that\r\nof, I believe, every sort of vegetable food. It raises the price of animal\r\nfood; because a great part of the land which produces it, being rendered fit\r\nfor producing corn, must afford to the landlord and farmer the rent and profit\r\nof corn land. It lowers the price of vegetable food; because, by increasing the\r\nfertility of the land, it increases its abundance. The improvements of\r\nagriculture, too, introduce many sorts of vegetable food, which requiring less\r\nland, and not more labour than corn, come much cheaper to market. Such are\r\npotatoes and maize, or what is called Indian corn, the two most important\r\nimprovements which the agriculture of Europe, perhaps, which Europe itself, has\r\nreceived from the great extension of its commerce and navigation. Many sorts of\r\nvegetable food, besides, which in the rude state of agriculture are confined to\r\nthe kitchen-garden, and raised only by the spade, come, in its improved state,\r\nto be introduced into common fields, and to be raised by the plough; such as\r\nturnips, carrots, cabbages, etc. If, in the progress of improvement, therefore,\r\nthe real price of one species of food necessarily rises, that of another as\r\nnecessarily falls; and it becomes a matter of more nicety to judge how far the\r\nrise in the one may be compensated by the fall in the other. When the real\r\nprice of butcher’s meat has once got to its height (which, with regard to\r\nevery sort, except perhaps that of hogs flesh, it seems to have done through a\r\ngreat part of England more than a century ago), any rise which can afterwards\r\nhappen in that of any other sort of animal food, cannot much affect the\r\ncircumstances of the inferior ranks of people. The circumstances of the poor,\r\nthrough a great part of England, cannot surely be so much distressed by any\r\nrise in the price of poultry, fish, wild-fowl, or venison, as they must be\r\nrelieved by the fall in that of potatoes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the present season of scarcity, the high price of corn no doubt distresses\r\nthe poor. But in times of moderate plenty, when corn is at its ordinary or\r\naverage price, the natural rise in the price of any other sort of rude produce\r\ncannot much affect them. They suffer more, perhaps, by the artificial rise\r\nwhich has been occasioned by taxes in the price of some manufactured\r\ncommodities, as of salt, soap, leather, candles, malt, beer, ale, etc.\r\n\u003c/p\u003e\r\n\r\n\u003cp class=\"center\"\u003e\r\n\u003ci\u003eEffects of the Progress of Improvement upon the real Price of\r\nManufactures.\u003c/i\u003e\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is the natural effect of improvement, however, to diminish gradually the\r\nreal price of almost all manufactures. That of the manufacturing workmanship\r\ndiminishes, perhaps, in all of them without exception. In consequence of better\r\nmachinery, of greater dexterity, and of a more proper division and distribution\r\nof work, all of which are the natural effects of improvement, a much smaller\r\nquantity of labour becomes requisite for executing any particular piece of\r\nwork; and though, in consequence of the flourishing circumstances of the\r\nsociety, the real price of labour should rise very considerably, yet the great\r\ndiminution of the quantity will generally much more than compensate the\r\ngreatest rise which can happen in the price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are, indeed, a few manufactures, in which the necessary rise in the real\r\nprice of the rude materials will more than compensate all the advantages which\r\nimprovement can introduce into the execution of the work. In carpenters’\r\nand joiners’ work, and in the coarser sort of cabinet work, the necessary\r\nrise in the real price of barren timber, in consequence of the improvement of\r\nland, will more than compensate all the advantages which can be derived from\r\nthe best machinery, the greatest dexterity, and the most proper division and\r\ndistribution of work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in all cases in which the real price of the rude material either does not\r\nrise at all, or does not rise very much, that of the manufactured commodity\r\nsinks very considerably.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis diminution of price has, in the course of the present and preceding\r\ncentury, been most remarkable in those manufactures of which the materials are\r\nthe coarser metals. A better movement of a watch, than about the middle of the\r\nlast century could have been bought for twenty pounds, may now perhaps be had\r\nfor twenty shillings. In the work of cutlers and locksmiths, in all the toys\r\nwhich are made of the coarser metals, and in all those goods which are commonly\r\nknown by the name of Birmingham and Sheffield ware, there has been, during the\r\nsame period, a very great reduction of price, though not altogether so great as\r\nin watch-work. It has, however, been sufficient to astonish the workmen of\r\nevery other part of Europe, who in many cases acknowledge that they can produce\r\nno work of equal goodness for double or even for triple the price. There are\r\nperhaps no manufactures, in which the division of labour can be carried\r\nfurther, or in which the machinery employed admits of a greater variety of\r\nimprovements, than those of which the materials are the coarser metals.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the clothing manufacture there has, during the same period, been no such\r\nsensible reduction of price. The price of superfine cloth, I have been assured,\r\non the contrary, has, within these five-and-twenty or thirty years, risen\r\nsomewhat in proportion to its quality, owing, it was said, to a considerable\r\nrise in the price of the material, which consists altogether of Spanish wool.\r\nThat of the Yorkshire cloth, which is made altogether of English wool, is said,\r\nindeed, during the course of the present century, to have fallen a good deal in\r\nproportion to its quality. Quality, however, is so very disputable a matter,\r\nthat I look upon all information of this kind as somewhat uncertain. In the\r\nclothing manufacture, the division of labour is nearly the same now as it was a\r\ncentury ago, and the machinery employed is not very different. There may,\r\nhowever, have been some small improvements in both, which may have occasioned\r\nsome reduction of price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the reduction will appear much more sensible and undeniable, if we compare\r\nthe price of this manufacture in the present times with what it was in a much\r\nremoter period, towards the end of the fifteenth century, when the labour was\r\nprobably much less subdivided, and the machinery employed much more imperfect,\r\nthan it is at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1487, being the 4th of Henry VII., it was enacted, that “whosoever\r\nshall sell by retail a broad yard of the finest scarlet grained, or of other\r\ngrained cloth of the finest making, above sixteen shillings, shall forfeit\r\nforty shillings for every yard so sold.” Sixteen shillings, therefore,\r\ncontaining about the same quantity of silver as four-and-twenty shillings of\r\nour present money, was, at that time, reckoned not an unreasonable price for a\r\nyard of the finest cloth; and as this is a sumptuary law, such cloth, it is\r\nprobable, had usually been sold somewhat dearer. A guinea may be reckoned the\r\nhighest price in the present times. Even though the quality of the cloths,\r\ntherefore, should be supposed equal, and that of the present times is most\r\nprobably much superior, yet, even upon this supposition, the money price of the\r\nfinest cloth appears to have been considerably reduced since the end of the\r\nfifteenth century. But its real price has been much more reduced. Six shillings\r\nand eightpence was then, and long afterwards, reckoned the average price of a\r\nquarter of wheat. Sixteen shillings, therefore, was the price of two quarters\r\nand more than three bushels of wheat. Valuing a quarter of wheat in the present\r\ntimes at eight-and-twenty shillings, the real price of a yard of fine cloth\r\nmust, in those times, have been equal to at least three pounds six shillings\r\nand sixpence of our present money. The man who bought it must have parted with\r\nthe command of a quantity of labour and subsistence equal to what that sum\r\nwould purchase in the present times.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe reduction in the real price of the coarse manufacture, though considerable,\r\nhas not been so great as in that of the fine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1463, being the 3rd of Edward IV. it was enacted, that “no servant in\r\nhusbandry nor common labourer, nor servant to any artificer inhabiting out of a\r\ncity or burgh, shall use or wear in their clothing any cloth above two\r\nshillings the broad yard.” In the 3rd of Edward IV., two shillings\r\ncontained very nearly the same quantity of silver as four of our present money.\r\nBut the Yorkshire cloth which is now sold at four shillings the yard, is\r\nprobably much superior to any that was then made for the wearing of the very\r\npoorest order of common servants. Even the money price of their clothing,\r\ntherefore, may, in proportion to the quality, be somewhat cheaper in the\r\npresent than it was in those ancient times. The real price is certainly a good\r\ndeal cheaper. Tenpence was then reckoned what is called the moderate and\r\nreasonable price of a bushel of wheat. Two shillings, therefore, was the price\r\nof two bushels and near two pecks of wheat, which in the present times, at\r\nthree shillings and sixpence the bushel, would be worth eight shillings and\r\nninepence. For a yard of this cloth the poor servant must have parted with the\r\npower of purchasing a quantity of subsistence equal to what eight shillings and\r\nninepence would purchase in the present times. This is a sumptuary law, too,\r\nrestraining the luxury and extravagance of the poor. Their clothing, therefore,\r\nhad commonly been much more expensive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same order of people are, by the same law, prohibited from wearing hose, of\r\nwhich the price should exceed fourteen-pence the pair, equal to about\r\neight-and-twenty pence of our present money. But fourteen-pence was in those\r\ntimes the price of a bushel and near two pecks of wheat; which in the present\r\ntimes, at three and sixpence the bushel, would cost five shillings and\r\nthreepence. We should in the present times consider this as a very high price\r\nfor a pair of stockings to a servant of the poorest and lowest order. He must\r\nhowever, in those times, have paid what was really equivalent to this price for\r\nthem.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the time of Edward IV. the art of knitting stockings was probably not known\r\nin any part of Europe. Their hose were made of common cloth, which may have\r\nbeen one of the causes of their dearness. The first person that wore stockings\r\nin England is said to have been Queen Elizabeth. She received them as a present\r\nfrom the Spanish ambassador.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth in the coarse and in the fine woollen manufacture, the machinery employed\r\nwas much more imperfect in those ancient, than it is in the present times. It\r\nhas since received three very capital improvements, besides, probably, many\r\nsmaller ones, of which it may be difficult to ascertain either the number or\r\nthe importance. The three capital improvements are, first, the exchange of the\r\nrock and spindle for the spinning-wheel, which, with the same quantity of\r\nlabour, will perform more than double the quantity of work. Secondly, the use\r\nof several very ingenious machines, which facilitate and abridge, in a still\r\ngreater proportion, the winding of the worsted and woollen yarn, or the proper\r\narrangement of the warp and woof before they are put into the loom; an\r\noperation which, previous to the invention of those machines, must have been\r\nextremely tedious and troublesome. Thirdly, the employment of the fulling-mill\r\nfor thickening the cloth, instead of treading it in water. Neither wind nor\r\nwater mills of any kind were known in England so early as the beginning of the\r\nsixteenth century, nor, so far as I know, in any other part of Europe north of\r\nthe Alps. They had been introduced into Italy some time before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe consideration of these circumstances may, perhaps, in some measure, explain\r\nto us why the real price both of the coarse and of the fine manufacture was so\r\nmuch higher in those ancient than it is in the present times. It cost a greater\r\nquantity of labour to bring the goods to market. When they were brought\r\nthither, therefore, they must have purchased, or exchanged for the price of, a\r\ngreater quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe coarse manufacture probably was, in those ancient times, carried on in\r\nEngland in the same manner as it always has been in countries where arts and\r\nmanufactures are in their infancy. It was probably a household manufacture, in\r\nwhich every different part of the work was occasionally performed by all the\r\ndifferent members of almost every private family, but so as to be their work\r\nonly when they had nothing else to do, and not to be the principal business\r\nfrom which any of them derived the greater part of their subsistence. The work\r\nwhich is performed in this manner, it has already been observed, comes always\r\nmuch cheaper to market than that which is the principal or sole fund of the\r\nworkman’s subsistence. The fine manufacture, on the other hand, was not,\r\nin those times, carried on in England, but in the rich and commercial country\r\nof Flanders; and it was probably conducted then, in the same manner as now, by\r\npeople who derived the whole, or the principal part of their subsistence from\r\nit. It was, besides, a foreign manufacture, and must have paid some duty, the\r\nancient custom of tonnage and poundage at least, to the king. This duty,\r\nindeed, would not probably be very great. It was not then the policy of Europe\r\nto restrain, by high duties, the importation of foreign manufactures, but\r\nrather to encourage it, in order that merchants might be enabled to supply, at\r\nas easy a rate as possible, the great men with the conveniencies and luxuries\r\nwhich they wanted, and which the industry of their own country could not afford\r\nthem.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe consideration of these circumstances may, perhaps, in some measure explain\r\nto us why, in those ancient times, the real price of the coarse manufacture\r\nwas, in proportion to that of the fine, so much lower than in the present\r\ntimes.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003eConclusion of the Chapter.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nI shall conclude this very long chapter with observing, that every improvement\r\nin the circumstances of the society tends, either directly or indirectly, to\r\nraise the real rent of land to increase the real wealth of the landlord, his\r\npower of purchasing the labour, or the produce of the labour of other people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe extension of improvement and cultivation tends to raise it directly. The\r\nlandlord’s share of the produce necessarily increases with the increase\r\nof the produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat rise in the real price of those parts of the rude produce of land, which\r\nis first the effect of the extended improvement and cultivation, and afterwards\r\nthe cause of their being still further extended, the rise in the price of\r\ncattle, for example, tends, too, to raise the rent of land directly, and in a\r\nstill greater proportion. The real value of the landlord’s share, his\r\nreal command of the labour of other people, not only rises with the real value\r\nof the produce, but the proportion of his share to the whole produce rises with\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat produce, after the rise in its real price, requires no more labour to\r\ncollect it than before. A smaller proportion of it will, therefore, be\r\nsufficient to replace, with the ordinary profit, the stock which employs that\r\nlabour. A greater proportion of it must consequently belong to the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll those improvements in the productive powers of labour, which tend directly\r\nto reduce the rent price of manufactures, tend indirectly to raise the real\r\nrent of land. The landlord exchanges that part of his rude produce, which is\r\nover and above his own consumption, or, what comes to the same thing, the price\r\nof that part of it, for manufactured produce. Whatever reduces the real price\r\nof the latter, raises that of the former. An equal quantity of the former\r\nbecomes thereby equivalent to a greater quantity of the latter; and the\r\nlandlord is enabled to purchase a greater quantity of the conveniencies,\r\nornaments, or luxuries which he has occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery increase in the real wealth of the society, every increase in the\r\nquantity of useful labour employed within it, tends indirectly to raise the\r\nreal rent of land. A certain proportion of this labour naturally goes to the\r\nland. A greater number of men and cattle are employed in its cultivation, the\r\nproduce increases with the increase of the stock which is thus employed in\r\nraising it, and the rent increases with the produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe contrary circumstances, the neglect of cultivation and improvement, the\r\nfall in the real price of any part of the rude produce of land, the rise in the\r\nreal price of manufactures from the decay of manufacturing art and industry,\r\nthe declension of the real wealth of the society, all tend, on the other hand,\r\nto lower the real rent of land, to reduce the real wealth of the landlord, to\r\ndiminish his power of purchasing either the labour, or the produce of the\r\nlabour, of other people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole annual produce of the land and labour of every country, or, what\r\ncomes to the same thing, the whole price of that annual produce, naturally\r\ndivides itself, it has already been observed, into three parts; the rent of\r\nland, the wages of labour, and the profits of stock; and constitutes a revenue\r\nto three different orders of people; to those who live by rent, to those who\r\nlive by wages, and to those who live by profit. These are the three great,\r\noriginal, and constituent, orders of every civilized society, from whose\r\nrevenue that of every other order is ultimately derived.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe interest of the first of those three great orders, it appears from what has\r\nbeen just now said, is strictly and inseparably connected with the general\r\ninterest of the society. Whatever either promotes or obstructs the one,\r\nnecessarily promotes or obstructs the other. When the public deliberates\r\nconcerning any regulation of commerce or police, the proprietors of land never\r\ncan mislead it, with a view to promote the interest of their own particular\r\norder; at least, if they have any tolerable knowledge of that interest. They\r\nare, indeed, too often defective in this tolerable knowledge. They are the only\r\none of the three orders whose revenue costs them neither labour nor care, but\r\ncomes to them, as it were, of its own accord, and independent of any plan or\r\nproject of their own. That indolence which is the natural effect of the ease\r\nand security of their situation, renders them too often, not only ignorant, but\r\nincapable of that application of mind, which is necessary in order to foresee\r\nand understand the consequence of any public regulation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe interest of the second order, that of those who live by wages, is as\r\nstrictly connected with the interest of the society as that of the first. The\r\nwages of the labourer, it has already been shewn, are never so high as when the\r\ndemand for labour is continually rising, or when the quantity employed is every\r\nyear increasing considerably. When this real wealth of the society becomes\r\nstationary, his wages are soon reduced to what is barely enough to enable him\r\nto bring up a family, or to continue the race of labourers. When the society\r\ndeclines, they fall even below this. The order of proprietors may perhaps gain\r\nmore by the prosperity of the society than that of labourers; but there is no\r\norder that suffers so cruelly from its decline. But though the interest of the\r\nlabourer is strictly connected with that of the society, he is incapable either\r\nof comprehending that interest, or of understanding its connexion with his own.\r\nHis condition leaves him no time to receive the necessary information, and his\r\neducation and habits are commonly such as to render him unfit to judge, even\r\nthough he was fully informed. In the public deliberations, therefore, his voice\r\nis little heard, and less regarded; except upon particular occasions, when his\r\nclamour is animated, set on, and supported by his employers, not for his, but\r\ntheir own particular purposes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHis employers constitute the third order, that of those who live by profit. It\r\nis the stock that is employed for the sake of profit, which puts into motion\r\nthe greater part of the useful labour of every society. The plans and projects\r\nof the employers of stock regulate and direct all the most important operation\r\nof labour, and profit is the end proposed by all those plans and projects. But\r\nthe rate of profit does not, like rent and wages, rise with the prosperity, and\r\nfall with the declension of the society. On the contrary, it is naturally low\r\nin rich, and high in poor countries, and it is always highest in the countries\r\nwhich are going fastest to ruin. The interest of this third order, therefore,\r\nhas not the same connexion with the general interest of the society, as that of\r\nthe other two. Merchants and master manufacturers are, in this order, the two\r\nclasses of people who commonly employ the largest capitals, and who by their\r\nwealth draw to themselves the greatest share of the public consideration. As\r\nduring their whole lives they are engaged in plans and projects, they have\r\nfrequently more acuteness of understanding than the greater part of country\r\ngentlemen. As their thoughts, however, are commonly exercised rather about the\r\ninterest of their own particular branch of business. than about that of the\r\nsociety, their judgment, even when given with the greatest candour (which it\r\nhas not been upon every occasion), is much more to be depended upon with regard\r\nto the former of those two objects, than with regard to the latter. Their\r\nsuperiority over the country gentleman is, not so much in their knowledge of\r\nthe public interest, as in their having a better knowledge of their own\r\ninterest than he has of his. It is by this superior knowledge of their own\r\ninterest that they have frequently imposed upon his generosity, and persuaded\r\nhim to give up both his own interest and that of the public, from a very simple\r\nbut honest conviction, that their interest, and not his, was the interest of\r\nthe public. The interest of the dealers, however, in any particular branch of\r\ntrade or manufactures, is always in some respects different from, and even\r\nopposite to, that of the public. To widen the market, and to narrow the\r\ncompetition, is always the interest of the dealers. To widen the market may\r\nfrequently be agreeable enough to the interest of the public; but to narrow the\r\ncompetition must always be against it, and can only serve to enable the\r\ndealers, by raising their profits above what they naturally would be, to levy,\r\nfor their own benefit, an absurd tax upon the rest of their fellow-citizens.\r\nThe proposal of any new law or regulation of commerce which comes from this\r\norder, ought always to be listened to with great precaution, and ought never to\r\nbe adopted till after having been long and carefully examined, not only with\r\nthe most scrupulous, but with the most suspicious attention. It comes from an\r\norder of men, whose interest is never exactly the same with that of the public,\r\nwho have generally an interest to deceive and even to oppress the public, and\r\nwho accordingly have, upon many occasions, both deceived and oppressed it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n# PRICES OF WHEAT\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n Year Prices/Quarter Average of different Average prices of\r\n in each year prices in one year each year in money\r\n of 1776\r\n\r\n £ s d £ s d £ s d\r\n 1202 0 12 0 1 16 0\r\n 1205 0 12 0\r\n 0 13 4 0 13 5 2 0 3\r\n 0 15 0\r\n 1223 0 12 0 1 16 0\r\n 1237 0 3 4 0 10 0\r\n 1243 0 2 0 0 6 0\r\n 1244 0 2 0 0 6 0\r\n 1246 0 16 0 2 8 0\r\n 1247 0 13 5 2 0 0\r\n 1257 1 4 0 3 12 0\r\n 1258 1 0 0\r\n 0 15 0 0 17 0 2 11 0\r\n 0 16 0\r\n 1270 4 16 0\r\n 6 8 0 5 12 0 16 16 0\r\n 1286 0 2 8\r\n 0 16 0 0 9 4 1 8 0\r\n Total 35 9 3\r\n Average 2 19 1¼\r\n\r\n 1287 0 3 4 0 10 0\r\n 1288 0 0 8\r\n 0 1 0\r\n 0 1 4\r\n 0 1 6\r\n 0 1 8 0 3 0¼ 0 9 1¾\r\n 0 2 0\r\n 0 3 4\r\n 0 9 4\r\n 1289 0 12 0\r\n 0 6 0\r\n 0 2 0 0 10 1½ 1 10 4½\r\n 0 10 8\r\n 1 0 0\r\n 1290 0 16 0 2 8 0\r\n 1294 0 16 0 2 8 0\r\n 1302 0 4 0 0 12 0\r\n 1309 0 7 2 1 1 6\r\n 1315 1 0 0 3 0 0\r\n 1316 1 0 0\r\n 1 10 0 1 10 6 4 11 6\r\n 1 12 0\r\n 2 0 0\r\n 1317 2 4 0\r\n 0 14 0\r\n 2 13 0 1 19 6 5 18 6\r\n 4 0 0\r\n 0 6 8\r\n 1336 0 2 0 0 6 0\r\n 1338 0 3 4 0 10 0\r\n Total 23 4 11¼\r\n Average 1 18 8\r\n\r\n 1339 0 9 0 1 7 0\r\n 1349 0 2 0 0 5 2\r\n 1359 1 6 8 3 2 2\r\n 1361 0 2 0 0 4 8\r\n 1363 0 15 0 1 15 0\r\n 1369 1 0 0\r\n 1 4 0 1 2 0 2 9 4\r\n 1379 0 4 0 0 9 4\r\n 1387 0 2 0 0 4 8\r\n 1390 0 13 4\r\n 0 14 0 0 14 5 1 13 7\r\n 0 16 0\r\n 1401 0 16 0 1 17 6\r\n 1407 0 4 4¾\r\n 0 3 4 0 3 10 0 8 10\r\n 1416 0 16 0 1 12 0\r\n Total 15 9 4\r\n Average 1 5 9½\r\n\r\n 1423 0 8 0 0\r\n 1425 0 4 0 0\r\n 1434 1 6 8 4\r\n 1435 0 5 4 8\r\n 1439 1 0 0\r\n 1 6 8 1 3 4 2 6 8\r\n 1440 1 4 0 2 8 0\r\n 1444 0 4 4 0 4 2 0 4 8\r\n 0 4 0\r\n 1445 0 4 6 0 9 0\r\n 1447 0 8 0 0 16 0\r\n 1448 0 6 8 0 13 4\r\n 1449 0 5 0 0 10 0\r\n 1451 0 8 0 0 16 0\r\n Total 12 15 4\r\n Average 1 1 3¹/³\r\n\r\n 1453 0 5 4 0 10 8\r\n 1455 0 1 2 0 2 4\r\n 1457 0 7 8 1 15 4\r\n 1459 0 5 0 0 10 0\r\n 1460 0 8 0 0 16 0\r\n 1463 0 2 0 0 1 10 0 3 8\r\n 0 1 8\r\n 1464 0 6 8 0 10 0\r\n 1486 1 4 0 1 17 0\r\n 1491 0 14 8 1 2 0\r\n 1494 0 4 0 0 6 0\r\n 1495 0 3 4 0 5 0\r\n 1497 1 0 0 1 11 0\r\n Total 8 9 0\r\n Average 0 14 1\r\n\r\n 1499 0 4 0 0 6 0\r\n 1504 0 5 8 0 8 6\r\n 1521 1 0 0 1 10 0\r\n 1551 0 8 0 0 8 0\r\n 1553 0 8 0 0 8 0\r\n 1554 0 8 0 0 8 0\r\n 1555 0 8 0 0 8 0\r\n 1556 0 8 0 0 8 0\r\n 1557 0 8 0\r\n 0 4 0 0 17 8½ 0 17 8½\r\n 0 5 0\r\n 2 13 4\r\n 1558 0 8 0 0 8 0\r\n 1559 0 8 0 0 8 0\r\n 1560 0 8 0 0 8 0\r\n Total 6 0 2½\r\n Average 0 10 0½\r\n\r\n 1561 0 8 0 0 8 0\r\n 1562 0 8 0 0 8 0\r\n 1574 2 16 0\r\n 1 4 0 2 0 0 2 0 0\r\n 1587 3 4 0 3 4 0\r\n 1594 2 16 0 2 16 0\r\n 1595 2 13 0 2 13 0\r\n 1596 4 0 0 4 0 0\r\n 1597 5 4 0\r\n 4 0 0 4 12 0 4 12 0\r\n 1598 2 16 8 2 16 8\r\n 1599 1 19 2 1 19 8\r\n 1600 1 17 8 1 17 8\r\n 1601 1 14 10 1 14 10\r\n Total 28 9 4\r\n Average 2 7 5½\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nPRICES OF THE QUARTER OF NINE BUSHELS OF THE BEST OR HIGHEST PRICED WHEAT AT\r\nWINDSOR MARKET, ON LADY DAY AND MICHAELMAS, FROM 1595 TO 1764 BOTH INCLUSIVE;\r\nTHE PRICE OF EACH YEAR BEING THE MEDIUM BETWEEN THE HIGHEST PRICES OF THESE TWO\r\nMARKET DAYS.\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n £ s d\r\n 1595 2 0 0\r\n 1596 2 8 0\r\n 1597 3 9 6\r\n 1598 2 16 8\r\n 1599 1 19 2\r\n 1600 1 17 8\r\n 1601 1 14 10\r\n 1602 1 9 4\r\n 1603 1 15 4\r\n 1604 1 10 8\r\n 1605 1 15 10\r\n 1606 1 13 0\r\n 1607 1 16 8\r\n 1608 2 16 8\r\n 1609 2 10 0\r\n 1610 1 15 10\r\n 1611 1 18 8\r\n 1612 2 2 4\r\n 1613 2 8 8\r\n 1614 2 1 8½\r\n 1615 1 18 8\r\n 1616 2 0 4\r\n 1617 2 8 8\r\n 1618 2 6 8\r\n 1619 1 15 4\r\n 1620 1 10 4\r\n 26)54 0 6½\r\n Average 2 1 6¾\r\n\r\n 1621 1 10 4\r\n 1622 2 18 8\r\n 1623 2 12 0\r\n 1624 2 8 0\r\n 1625 2 12 0\r\n 1626 2 9 4\r\n 1627 1 16 0\r\n 1628 1 8 0\r\n 1629 2 2 0\r\n 1630 2 15 8\r\n 1631 3 8 0\r\n 1632 2 13 4\r\n 1633 2 18 0\r\n 1634 2 16 0\r\n 1635 2 16 0\r\n 1636 2 16 8\r\n 16)40 0 0\r\n Average 2 10 0\r\n\r\n 1637 2 13 0\r\n 1638 2 17 4\r\n 1639 2 4 10\r\n 1640 2 4 8\r\n 1641 2 8 0\r\n 1646 2 8 0\r\n 1647 3 13 0\r\n 1648 4 5 0\r\n 1649 4 0 0\r\n 1650 3 16 8\r\n 1651 3 13 4\r\n 1652 2 9 6\r\n 1653 1 15 6\r\n 1654 1 6 0\r\n 1655 1 13 4\r\n 1656 2 3 0\r\n 1657 2 6 8\r\n 1658 3 5 0\r\n 1659 3 6 0\r\n 1660 2 16 6\r\n 1661 3 10 0\r\n 1662 3 14 0\r\n 1663 2 17 0\r\n 1664 2 0 6\r\n 1665 2 9 4\r\n 1666 1 16 0\r\n 1667 1 16 0\r\n 1668 2 0 0\r\n 1669 2 4 4\r\n 1670 2 1 8\r\n 1671 2 2 0\r\n 1672 2 1 0\r\n 1673 2 6 8\r\n 1674 3 8 8\r\n 1675 3 4 8\r\n 1676 1 18 0\r\n 1677 2 2 0\r\n 1678 2 19 0\r\n 1679 3 0 0\r\n 1680 2 5 0\r\n 1681 2 6 8\r\n 1682 2 4 0\r\n 1683 2 0 0\r\n 1684 2 4 0\r\n 1685 2 6 8\r\n 1686 1 14 0\r\n 1687 1 5 2\r\n 1688 2 6 0\r\n 1689 1 10 0\r\n 1690 1 14 8\r\n 1691 1 14 0\r\n 1692 2 6 8\r\n 1693 3 7 8\r\n 1694 3 4 0\r\n 1695 2 13 0\r\n 1696 3 11 0\r\n 1697 3 0 0\r\n 1698 3 8 4\r\n 1699 3 4 0\r\n 1700 2 0 0\r\n 60) 153 1 8\r\n Average 2 11 0¹/³\r\n\r\n 1701 1 17 8\r\n 1702 1 9 6\r\n 1703 1 16 0\r\n 1704 2 6 6\r\n 1705 1 10 0\r\n 1706 1 6 0\r\n 1707 1 8 6\r\n 1708 2 1 6\r\n 1709 3 18 6\r\n 1710 3 18 0\r\n 1711 2 14 0\r\n 1712 2 6 4\r\n 1713 2 11 0\r\n 1714 2 10 4\r\n 1715 2 3 0\r\n 1716 2 8 0\r\n 1717 2 5 8\r\n 1718 1 18 10\r\n 1719 1 15 0\r\n 1720 1 17 0\r\n 1721 1 17 6\r\n 1722 1 16 0\r\n 1723 1 14 8\r\n 1724 1 17 0\r\n 1725 2 8 6\r\n 1726 2 6 0\r\n 1727 2 2 0\r\n 1728 2 14 6\r\n 1729 2 6 10\r\n 1730 1 16 6\r\n 1731 1 12 10 1 12 10\r\n 1732 1 6 8 1 6 8\r\n 1733 1 8 4 1 8 4\r\n 1734 1 18 10 1 18 10\r\n 1735 2 3 0 2 3 0\r\n 1736 2 0 4 2 0 4\r\n 1737 1 18 0 1 18 0\r\n 1738 1 15 6 1 15 6\r\n 1739 1 18 6 1 18 6\r\n 1740 2 10 8 2 10 8\r\n 10) 18 12 8\r\n 1 17 3½\r\n\r\n 1741 2 6 8 2 6 8\r\n 1742 1 14 0 1 14 0\r\n 1743 1 4 10 1 4 10\r\n 1744 1 4 10 1 4 10\r\n 1745 1 7 6 1 7 6\r\n 1746 1 19 0 1 19 0\r\n 1747 1 14 10 1 14 10\r\n 1748 1 17 0 1 17 0\r\n 1749 1 17 0 1 17 0\r\n 1750 1 12 6 1 12 6\r\n 10) 16 18 2\r\n 1 13 9¾\r\n\r\n 1751 1 18 6\r\n 1752 2 1 10\r\n 1753 2 4 8\r\n 1754 1 13 8\r\n 1755 1 14 10\r\n 1756 2 5 3\r\n 1757 3 0 0\r\n 1758 2 10 0\r\n 1759 1 19 10\r\n 1760 1 16 6\r\n 1761 1 10 3\r\n 1762 1 19 0\r\n 1763 2 0 9\r\n 1764 2 6 9\r\n 64) 129 13 6\r\n Average 2 0 6¾\r\n\u003c/div\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap14\"\u003e\u003c/a\u003eBOOK II.\u003cbr\u003e\r\nOF THE NATURE, ACCUMULATION, AND EMPLOYMENT OF STOCK.\u003c/h2\u003e\r\n\r\n\u003ch3\u003eINTRODUCTION.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nIn that rude state of society, in which there is no division of labour, in\r\nwhich exchanges are seldom made, and in which every man provides every thing\r\nfor himself, it is not necessary that any stock should be accumulated, or\r\nstored up before-hand, in order to carry on the business of the society. Every\r\nman endeavours to supply, by his own industry, his own occasional wants, as\r\nthey occur. When he is hungry, he goes to the forest to hunt; when his coat is\r\nworn out, he clothes himself with the skin of the first large animal he kills:\r\nand when his hut begins to go to ruin, he repairs it, as well as he can, with\r\nthe trees and the turf that are nearest it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when the division of labour has once been thoroughly introduced, the\r\nproduce of a man’s own labour can supply but a very small part of his\r\noccasional wants. The far greater part of them are supplied by the produce of\r\nother men’s labour, which he purchases with the produce, or, what is the\r\nsame thing, with the price of the produce, of his own. But this purchase cannot\r\nbe made till such time as the produce of his own labour has not only been\r\ncompleted, but sold. A stock of goods of different kinds, therefore, must be\r\nstored up somewhere, sufficient to maintain him, and to supply him with the\r\nmaterials and tools of his work, till such time at least as both these events\r\ncan be brought about. A weaver cannot apply himself entirely to his peculiar\r\nbusiness, unless there is before-hand stored up somewhere, either in his own\r\npossession, or in that of some other person, a stock sufficient to maintain\r\nhim, and to supply him with the materials and tools of his work, till he has\r\nnot only completed, but sold his web. This accumulation must evidently be\r\nprevious to his applying his industry for so long a time to such a peculiar\r\nbusiness.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the accumulation of stock must, in the nature of things, be previous to the\r\ndivision of labour, so labour can be more and more subdivided in proportion\r\nonly as stock is previously more and more accumulated. The quantity of\r\nmaterials which the same number of people can work up, increases in a great\r\nproportion as labour comes to be more and more subdivided; and as the\r\noperations of each workman are gradually reduced to a greater degree of\r\nsimplicity, a variety of new machines come to be invented for facilitating and\r\nabridging those operations. As the division of labour advances, therefore, in\r\norder to give constant employment to an equal number of workmen, an equal stock\r\nof provisions, and a greater stock of materials and tools than what would have\r\nbeen necessary in a ruder state of things, must be accumulated before-hand. But\r\nthe number of workmen in every branch of business generally increases with the\r\ndivision of labour in that branch; or rather it is the increase of their number\r\nwhich enables them to class and subdivide themselves in this manner.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the accumulation of stock is previously necessary for carrying on this great\r\nimprovement in the productive powers of labour, so that accumulation naturally\r\nleads to this improvement. The person who employs his stock in maintaining\r\nlabour, necessarily wishes to employ it in such a manner as to produce as great\r\na quantity of work as possible. He endeavours, therefore, both to make among\r\nhis workmen the most proper distribution of employment, and to furnish them\r\nwith the best machines which he can either invent or afford to purchase. His\r\nabilities, in both these respects, are generally in proportion to the extent of\r\nhis stock, or to the number of people whom it can employ. The quantity of\r\nindustry, therefore, not only increases in every country with the increase of\r\nthe stock which employs it, but, in consequence of that increase, the same\r\nquantity of industry produces a much greater quantity of work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch are in general the effects of the increase of stock upon industry and its\r\nproductive powers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the following book, I have endeavoured to explain the nature of stock, the\r\neffects of its accumulation into capital of different kinds, and the effects of\r\nthe different employments of those capitals. This book is divided into five\r\nchapters. In the first chapter, I have endeavoured to shew what are the\r\ndifferent parts or branches into which the stock, either of an individual, or\r\nof a great society, naturally divides itself. In the second, I have endeavoured\r\nto explain the nature and operation of money, considered as a particular branch\r\nof the general stock of the society. The stock which is accumulated into a\r\ncapital, may either be employed by the person to whom it belongs, or it may be\r\nlent to some other person. In the third and fourth chapters, I have endeavoured\r\nto examine the manner in which it operates in both these situations. The fifth\r\nand last chapter treats of the different effects which the different\r\nemployments of capital immediately produce upon the quantity, both of national\r\nindustry, and of the annual produce of land and labour.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap15\"\u003e\u003c/a\u003eCHAPTER I.\u003cbr\u003e\r\nOF THE DIVISION OF STOCK.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nWhen the stock which a man possesses is no more than sufficient to maintain him\r\nfor a few days or a few weeks, he seldom thinks of deriving any revenue from\r\nit. He consumes it as sparingly as he can, and endeavours, by his labour, to\r\nacquire something which may supply its place before it be consumed altogether.\r\nHis revenue is, in this case, derived from his labour only. This is the state\r\nof the greater part of the labouring poor in all countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when he possesses stock sufficient to maintain him for months or years, he\r\nnaturally endeavours to derive a revenue from the greater part of it, reserving\r\nonly so much for his immediate consumption as may maintain him till this\r\nrevenue begins to come in. His whole stock, therefore, is distinguished into\r\ntwo parts. That part which he expects is to afford him this revenue is called\r\nhis capital. The other is that which supplies his immediate consumption, and\r\nwhich consists either, first, in that portion of his whole stock which was\r\noriginally reserved for this purpose; or, secondly, in his revenue, from\r\nwhatever source derived, as it gradually comes in; or, thirdly, in such things\r\nas had been purchased by either of these in former years, and which are not yet\r\nentirely consumed, such as a stock of clothes, household furniture, and the\r\nlike. In one or other, or all of these three articles, consists the stock which\r\nmen commonly reserve for their own immediate consumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are two different ways in which a capital may be employed so as to yield\r\na revenue or profit to its employer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, it may be employed in raising, manufacturing, or purchasing goods, and\r\nselling them again with a profit. The capital employed in this manner yields no\r\nrevenue or profit to its employer, while it either remains in his possession,\r\nor continues in the same shape. The goods of the merchant yield him no revenue\r\nor profit till he sells them for money, and the money yields him as little till\r\nit is again exchanged for goods. His capital is continually going from him in\r\none shape, and returning to him in another; and it is only by means of such\r\ncirculation, or successive changes, that it can yield him any profit. Such\r\ncapitals, therefore, may very properly be called circulating capitals.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, it may be employed in the improvement of land, in the purchase of\r\nuseful machines and instruments of trade, or in such like things as yield a\r\nrevenue or profit without changing masters, or circulating any further. Such\r\ncapitals, therefore, may very properly be called fixed capitals.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDifferent occupations require very different proportions between the fixed and\r\ncirculating capitals employed in them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital of a merchant, for example, is altogether a circulating capital. He\r\nhas occasion for no machines or instruments of trade, unless his shop or\r\nwarehouse be considered as such.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome part of the capital of every master artificer or manufacturer must be\r\nfixed in the instruments of his trade. This part, however, is very small in\r\nsome, and very great in others, A master tailor requires no other instruments\r\nof trade but a parcel of needles. Those of the master shoemaker are a little,\r\nthough but a very little, more expensive. Those of the weaver rise a good deal\r\nabove those of the shoemaker. The far greater part of the capital of all such\r\nmaster artificers, however, is circulated either in the wages of their workmen,\r\nor in the price of their materials, and repaid, with a profit, by the price of\r\nthe work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn other works a much greater fixed capital is required. In a great iron-work,\r\nfor example, the furnace for melting the ore, the forge, the slit-mill, are\r\ninstruments of trade which cannot be erected without a very great expense. In\r\ncoal works, and mines of every kind, the machinery necessary, both for drawing\r\nout the water, and for other purposes, is frequently still more expensive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat part of the capital of the farmer which is employed in the instruments of\r\nagriculture is a fixed, that which is employed in the wages and maintenance of\r\nhis labouring servants is a circulating capital. He makes a profit of the one\r\nby keeping it in his own possession, and of the other by parting with it. The\r\nprice or value of his labouring cattle is a fixed capital, in the same manner\r\nas that of the instruments of husbandry; their maintenance is a circulating\r\ncapital, in the same manner as that of the labouring servants. The farmer makes\r\nhis profit by keeping the labouring cattle, and by parting with their\r\nmaintenance. Both the price and the maintenance of the cattle which are bought\r\nin and fattened, not for labour, but for sale, are a circulating capital. The\r\nfarmer makes his profit by parting with them. A flock of sheep or a herd of\r\ncattle, that, in a breeding country, is brought in neither for labour nor for\r\nsale, but in order to make a profit by their wool, by their milk, and by their\r\nincrease, is a fixed capital. The profit is made by keeping them. Their\r\nmaintenance is a circulating capital. The profit is made by parting with it;\r\nand it comes back with both its own profit and the profit upon the whole price\r\nof the cattle, in the price of the wool, the milk, and the increase. The whole\r\nvalue of the seed, too, is properly a fixed capital. Though it goes backwards\r\nand forwards between the ground and the granary, it never changes masters, and\r\ntherefore does not properly circulate. The farmer makes his profit, not by its\r\nsale, but by its increase.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe general stock of any country or society is the same with that of all its\r\ninhabitants or members; and, therefore, naturally divides itself into the same\r\nthree portions, each of which has a distinct function or office.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first is that portion which is reserved for immediate consumption, and of\r\nwhich the characteristic is, that it affords no revenue or profit. It consists\r\nin the stock of food, clothes, household furniture, etc. which have been\r\npurchased by their proper consumers, but which are not yet entirely consumed.\r\nThe whole stock of mere dwelling-houses, too, subsisting at any one time in the\r\ncountry, make a part of this first portion. The stock that is laid out in a\r\nhouse, if it is to be the dwelling-house of the proprietor, ceases from that\r\nmoment to serve in the function of a capital, or to afford any revenue to its\r\nowner. A dwelling-house, as such, contributes nothing to the revenue of its\r\ninhabitant; and though it is, no doubt, extremely useful to him, it is as his\r\nclothes and household furniture are useful to him, which, however, make a part\r\nof his expense, and not of his revenue. If it is to be let to a tenant for\r\nrent, as the house itself can produce nothing, the tenant must always pay the\r\nrent out of some other revenue, which he derives, either from labour, or stock,\r\nor land. Though a house, therefore, may yield a revenue to its proprietor, and\r\nthereby serve in the function of a capital to him, it cannot yield any to the\r\npublic, nor serve in the function of a capital to it, and the revenue of the\r\nwhole body of the people can never be in the smallest degree increased by it.\r\nClothes and household furniture, in the same manner, sometimes yield a revenue,\r\nand thereby serve in the function of a capital to particular persons. In\r\ncountries where masquerades are common, it is a trade to let out masquerade\r\ndresses for a night. Upholsterers frequently let furniture by the month or by\r\nthe year. Undertakers let the furniture of funerals by the day and by the week.\r\nMany people let furnished houses, and get a rent, not only for the use of the\r\nhouse, but for that of the furniture. The revenue, however, which is derived\r\nfrom such things, must always be ultimately drawn from some other source of\r\nrevenue. Of all parts of the stock, either of an individual or of a society,\r\nreserved for immediate consumption, what is laid out in houses is most slowly\r\nconsumed. A stock of clothes may last several years; a stock of furniture half\r\na century or a century; but a stock of houses, well built and properly taken\r\ncare of, may last many centuries. Though the period of their total consumption,\r\nhowever, is more distant, they are still as really a stock reserved for\r\nimmediate consumption as either clothes or household furniture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second of the three portions into which the general stock of the society\r\ndivides itself, is the fixed capital; of which the characteristic is, that it\r\naffords a revenue or profit without circulating or changing masters. It\r\nconsists chiefly of the four following articles.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, of all useful machines and instruments of trade, which facilitate and\r\nabridge labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, of all those profitable buildings which are the means of procuring a\r\nrevenue, not only to the proprietor who lets them for a rent, but to the person\r\nwho possesses them, and pays that rent for them; such as shops, warehouses,\r\nwork-houses, farm-houses, with all their necessary buildings, stables,\r\ngranaries, etc. These are very different from mere dwelling-houses. They are a\r\nsort of instruments of trade, and may be considered in the same light.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, of the improvements of land, of what has been profitably laid out in\r\nclearing, draining, inclosing, manuring, and reducing it into the condition\r\nmost proper for tillage and culture. An improved farm may very justly be\r\nregarded in the same light as those useful machines which facilitate and\r\nabridge labour, and by means of which an equal circulating capital can afford a\r\nmuch greater revenue to its employer. An improved farm is equally advantageous\r\nand more durable than any of those machines, frequently requiring no other\r\nrepairs than the most profitable application of the farmer’s capital\r\nemployed in cultivating it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, of the acquired and useful abilities of all the inhabitants and\r\nmembers of the society. The acquisition of such talents, by the maintenance of\r\nthe acquirer during his education, study, or apprenticeship, always costs a\r\nreal expense, which is a capital fixed and realized, as it were, in his person.\r\nThose talents, as they make a part of his fortune, so do they likewise that of\r\nthe society to which he belongs. The improved dexterity of a workman may be\r\nconsidered in the same light as a machine or instrument of trade which\r\nfacilitates and abridges labour, and which, though it costs a certain expense,\r\nrepays that expense with a profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe third and last of the three portions into which the general stock of the\r\nsociety naturally divides itself, is the circulating capital, of which the\r\ncharacteristic is, that it affords a revenue only by circulating or changing\r\nmasters. It is composed likewise of four parts.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, of the money, by means of which all the other three are circulated and\r\ndistributed to their proper consumers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, of the stock of provisions which are in the possession of the\r\nbutcher, the grazier, the farmer, the corn-merchant, the brewer, etc. and from\r\nthe sale of which they expect to derive a profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, of the materials, whether altogether rude, or more or less\r\nmanufactured, of clothes, furniture, and building which are not yet made up\r\ninto any of those three shapes, but which remain in the hands of the growers,\r\nthe manufacturers, the mercers, and drapers, the timber-merchants, the\r\ncarpenters and joiners, the brick-makers, etc.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, and lastly, of the work which is made up and completed, but which is\r\nstill in the hands of the merchant and manufacturer, and not yet disposed of or\r\ndistributed to the proper consumers; such as the finished work which we\r\nfrequently find ready made in the shops of the smith, the cabinet-maker, the\r\ngoldsmith, the jeweller, the china-merchant, etc. The circulating capital\r\nconsists, in this manner, of the provisions, materials, and finished work of\r\nall kinds that are in the hands of their respective dealers, and of the money\r\nthat is necessary for circulating and distributing them to those who are\r\nfinally to use or to consume them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf these four parts, three—provisions, materials, and finished work, are\r\neither annually or in a longer or shorter period, regularly withdrawn from it,\r\nand placed either in the fixed capital, or in the stock reserved for immediate\r\nconsumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery fixed capital is both originally derived from, and requires to be\r\ncontinually supported by, a circulating capital. All useful machines and\r\ninstruments of trade are originally derived from a circulating capital, which\r\nfurnishes the materials of which they are made, and the maintenance of the\r\nworkmen who make them. They require, too, a capital of the same kind to keep\r\nthem in constant repair.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo fixed capital can yield any revenue but by means of a circulating capital.\r\nThe most useful machines and instruments of trade will produce nothing, without\r\nthe circulating capital, which affords the materials they are employed upon,\r\nand the maintenance of the workmen who employ them. Land, however improved,\r\nwill yield no revenue without a circulating capital, which maintains the\r\nlabourers who cultivate and collect its produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo maintain and augment the stock which may be reserved for immediate\r\nconsumption, is the sole end and purpose both of the fixed and circulating\r\ncapitals. It is this stock which feeds, clothes, and lodges the people. Their\r\nriches or poverty depend upon the abundant or sparing supplies which those two\r\ncapitals can afford to the stock reserved for immediate consumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo great a part of the circulating capital being continually withdrawn from it,\r\nin order to be placed in the other two branches of the general stock of the\r\nsociety, it must in its turn require continual supplies without which it would\r\nsoon cease to exist. These supplies are principally drawn from three sources;\r\nthe produce of land, of mines, and of fisheries. These afford continual\r\nsupplies of provisions and materials, of which part is afterwards wrought up\r\ninto finished work and by which are replaced the provisions, materials, and\r\nfinished work, continually withdrawn from the circulating capital. From mines,\r\ntoo, is drawn what is necessary for maintaining and augmenting that part of it\r\nwhich consists in money. For though, in the ordinary course of business, this\r\npart is not, like the other three, necessarily withdrawn from it, in order to\r\nbe placed in the other two branches of the general stock of the society, it\r\nmust, however, like all other things, be wasted and worn out at last, and\r\nsometimes, too, be either lost or sent abroad, and must, therefore, require\r\ncontinual, though no doubt much smaller supplies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLand, mines, and fisheries, require all both a fixed and circulating capital\r\nto cultivate them; and their produce replaces, with a profit not only those\r\ncapitals, but all the others in the society. Thus the farmer annually replaces\r\nto the manufacturer the provisions which he had consumed, and the materials\r\nwhich he had wrought up the year before; and the manufacturer replaces to the\r\nfarmer the finished work which he had wasted and worn out in the same time.\r\nThis is the real exchange that is annually made between those two orders of\r\npeople, though it seldom happens that the rude produce of the one, and the\r\nmanufactured produce of the other, are directly bartered for one another;\r\nbecause it seldom happens that the farmer sells his corn and his cattle, his\r\nflax and his wool, to the very same person of whom he chuses to purchase the\r\nclothes, furniture, and instruments of trade, which he wants. He sells,\r\ntherefore, his rude produce for money, with which he can purchase, wherever it\r\nis to be had, the manufactured produce he has occasion for. Land even replaces,\r\nin part at least, the capitals with which fisheries and mines are cultivated.\r\nIt is the produce of land which draws the fish from the waters; and it is the\r\nproduce of the surface of the earth which extracts the minerals from its\r\nbowels.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of land, mines, and fisheries, when their natural fertility is\r\nequal, is in proportion to the extent and proper application of the capitals\r\nemployed about them. When the capitals are equal, and equally well applied, it\r\nis in proportion to their natural fertility.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all countries where there is a tolerable security, every man of common\r\nunderstanding will endeavour to employ whatever stock he can command, in\r\nprocuring either present enjoyment or future profit. If it is employed in\r\nprocuring present enjoyment, it is a stock reserved for immediate consumption.\r\nIf it is employed in procuring future profit, it must procure this profit\r\neither by staying with him, or by going from him. In the one case it is a\r\nfixed, in the other it is a circulating capital. A man must be perfectly crazy,\r\nwho, where there is a tolerable security, does not employ all the stock which\r\nhe commands, whether it be his own, or borrowed of other people, in some one or\r\nother of those three ways.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn those unfortunate countries, indeed, where men are continually afraid of the\r\nviolence of their superiors, they frequently bury or conceal a great part of\r\ntheir stock, in order to have it always at hand to carry with them to some\r\nplace of safety, in case of their being threatened with any of those disasters\r\nto which they consider themselves at all times exposed. This is said to be a\r\ncommon practice in Turkey, in Indostan, and, I believe, in most other\r\ngovernments of Asia. It seems to have been a common practice among our\r\nancestors during the violence of the feudal government. Treasure-trove was, in\r\nthose times, considered as no contemptible part of the revenue of the greatest\r\nsovereigns in Europe. It consisted in such treasure as was found concealed in\r\nthe earth, and to which no particular person could prove any right. This was\r\nregarded, in those times, as so important an object, that it was always\r\nconsidered as belonging to the sovereign, and neither to the finder nor to the\r\nproprietor of the land, unless the right to it had been conveyed to the latter\r\nby an express clause in his charter. It was put upon the same footing with gold\r\nand silver mines, which, without a special clause in the charter, were never\r\nsupposed to be comprehended in the general grant of the lands, though mines of\r\nlead, copper, tin, and coal were, as things of smaller consequence.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap16\"\u003e\u003c/a\u003eCHAPTER II.\u003cbr\u003e\r\nOF MONEY, CONSIDERED AS A PARTICULAR BRANCH OF THE GENERAL STOCK OF THE\r\nSOCIETY, OR OF THE EXPENSE OF MAINTAINING THE NATIONAL CAPITAL.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nIt has been shown in the First Book, that the price of the greater part of\r\ncommodities resolves itself into three parts, of which one pays the wages of\r\nthe labour, another the profits of the stock, and a third the rent of the land\r\nwhich had been employed in producing and bringing them to market: that there\r\nare, indeed, some commodities of which the price is made up of two of those\r\nparts only, the wages of labour, and the profits of stock; and a very few in\r\nwhich it consists altogether in one, the wages of labour; but that the price of\r\nevery commodity necessarily resolves itself into some one or other, or all, of\r\nthose three parts; every part of it which goes neither to rent nor to wages,\r\nbeing necessarily profit to some body.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSince this is the case, it has been observed, with regard to every particular\r\ncommodity, taken separately, it must be so with regard to all the commodities\r\nwhich compose the whole annual produce of the land and labour of every country,\r\ntaken complexly. The whole price or exchangeable value of that annual produce\r\nmust resolve itself into the same three parts, and be parcelled out among the\r\ndifferent inhabitants of the country, either as the wages of their labour, the\r\nprofits of their stock, or the rent of their land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the whole value of the annual produce of the land and labour of\r\nevery country, is thus divided among, and constitutes a revenue to, its\r\ndifferent inhabitants; yet, as in the rent of a private estate, we distinguish\r\nbetween the gross rent and the neat rent, so may we likewise in the revenue of\r\nall the inhabitants of a great country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gross rent of a private estate comprehends whatever is paid by the farmer;\r\nthe neat rent, what remains free to the landlord, after deducting the expense\r\nof management, of repairs, and all other necessary charges; or what, without\r\nhurting his estate, he can afford to place in his stock reserved for immediate\r\nconsumption, or to spend upon his table, equipage, the ornaments of his house\r\nand furniture, his private enjoyments and amusements. His real wealth is in\r\nproportion, not to his gross, but to his neat rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gross revenue of all the inhabitants of a great country comprehends the\r\nwhole annual produce of their land and labour; the neat revenue, what remains\r\nfree to them, after deducting the expense of maintaining first, their fixed,\r\nand, secondly, their circulating capital, or what, without encroaching upon\r\ntheir capital, they can place in their stock reserved for immediate\r\nconsumption, or spend upon their subsistence, conveniencies, and amusements.\r\nTheir real wealth, too, is in proportion, not to their gross, but to their neat\r\nrevenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole expense of maintaining the fixed capital must evidently be excluded\r\nfrom the neat revenue of the society. Neither the materials necessary for\r\nsupporting their useful machines and instruments of trade, their profitable\r\nbuildings, etc. nor the produce of the labour necessary for fashioning those\r\nmaterials into the proper form, can ever make any part of it. The price of that\r\nlabour may indeed make a part of it; as the workmen so employed may place the\r\nwhole value of their wages in their stock reserved for immediate consumption.\r\nBut in other sorts of labour, both the price and the produce go to this stock;\r\nthe price to that of the workmen, the produce to that of other people, whose\r\nsubsistence, conveniencies, and amusements, are augmented by the labour of\r\nthose workmen.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe intention of the fixed capital is to increase the productive powers of\r\nlabour, or to enable the same number of labourers to perform a much greater\r\nquantity of work. In a farm where all the necessary buildings, fences, drains,\r\ncommunications, etc. are in the most perfect good order, the same number of\r\nlabourers and labouring cattle will raise a much greater produce, than in one\r\nof equal extent and equally good ground, but not furnished with equal\r\nconveniencies. In manufactures, the same number of hands, assisted with the\r\nbest machinery, will work up a much greater quantity of goods than with more\r\nimperfect instruments of trade. The expense which is properly laid out upon a\r\nfixed capital of any kind, is always repaid with great profit, and increases\r\nthe annual produce by a much greater value than that of the support which such\r\nimprovements require. This support, however, still requires a certain portion\r\nof that produce. A certain quantity of materials, and the labour of a certain\r\nnumber of workmen, both of which might have been immediately employed to\r\naugment the food, clothing, and lodging, the subsistence and conveniencies of\r\nthe society, are thus diverted to another employment, highly advantageous\r\nindeed, but still different from this one. It is upon this account that all\r\nsuch improvements in mechanics, as enable the same number of workmen to perform\r\nan equal quantity of work with cheaper and simpler machinery than had been\r\nusual before, are always regarded as advantageous to every society. A certain\r\nquantity of materials, and the labour of a certain number of workmen, which had\r\nbefore been employed in supporting a more complex and expensive machinery, can\r\nafterwards be applied to augment the quantity of work which that or any other\r\nmachinery is useful only for performing. The undertaker of some great\r\nmanufactory, who employs a thousand a-year in the maintenance of his machinery,\r\nif he can reduce this expense to five hundred, will naturally employ the other\r\nfive hundred in purchasing an additional quantity of materials, to be wrought\r\nup by an additional number of workmen. The quantity of that work, therefore,\r\nwhich his machinery was useful only for performing, will naturally be\r\naugmented, and with it all the advantage and conveniency which the society can\r\nderive from that work.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of maintaining the fixed capital in a great country, may very\r\nproperly be compared to that of repairs in a private estate. The expense of\r\nrepairs may frequently be necessary for supporting the produce of the estate,\r\nand consequently both the gross and the neat rent of the landlord. When by a\r\nmore proper direction, however, it can be diminished without occasioning any\r\ndiminution of produce, the gross rent remains at least the same as before, and\r\nthe neat rent is necessarily augmented.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the whole expense of maintaining the fixed capital is thus\r\nnecessarily excluded from the neat revenue of the society, it is not the same\r\ncase with that of maintaining the circulating capital. Of the four parts of\r\nwhich this latter capital is composed, money, provisions, materials, and\r\nfinished work, the three last, it has already been observed, are regularly\r\nwithdrawn from it, and placed either in the fixed capital of the society, or in\r\ntheir stock reserved for immediate consumption. Whatever portion of those\r\nconsumable goods is not employed in maintaining the former, goes all to the\r\nlatter, and makes a part of the neat revenue of the society. The maintenance of\r\nthose three parts of the circulating capital, therefore, withdraws no portion\r\nof the annual produce from the neat revenue of the society, besides what is\r\nnecessary for maintaining the fixed capital.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe circulating capital of a society is in this respect different from that of\r\nan individual. That of an individual is totally excluded from making any part\r\nof his neat revenue, which must consist altogether in his profits. But though\r\nthe circulating capital of every individual makes a part of that of the society\r\nto which he belongs, it is not upon that account totally excluded from making a\r\npart likewise of their neat revenue. Though the whole goods in a\r\nmerchant’s shop must by no means be placed in his own stock reserved for\r\nimmediate consumption, they may in that of other people, who, from a revenue\r\nderived from other funds, may regularly replace their value to him, together\r\nwith its profits, without occasioning any diminution either of his capital or\r\nof theirs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMoney, therefore, is the only part of the circulating capital of a society, of\r\nwhich the maintenance can occasion any diminution in their neat revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fixed capital, and that part of the circulating capital which consists in\r\nmoney, so far as they affect the revenue of the society, bear a very great\r\nresemblance to one another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, as those machines and instruments of trade, etc. require a certain\r\nexpense, first to erect them, and afterwards to support them, both which\r\nexpenses, though they make a part of the gross, are deductions from the neat\r\nrevenue of the society; so the stock of money which circulates in any country\r\nmust require a certain expense, first to collect it, and afterwards to support\r\nit; both which expenses, though they make a part of the gross, are, in the same\r\nmanner, deductions from the neat revenue of the society. A certain quantity of\r\nvery valuable materials, gold and silver, and of very curious labour, instead\r\nof augmenting the stock reserved for immediate consumption, the subsistence,\r\nconveniencies, and amusements of individuals, is employed in supporting that\r\ngreat but expensive instrument of commerce, by means of which every individual\r\nin the society has his subsistence, conveniencies, and amusements, regularly\r\ndistributed to him in their proper proportions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, as the machines and instruments of trade, etc. which compose the\r\nfixed capital either of an individual or of a society, make no part either of\r\nthe gross or of the neat revenue of either; so money, by means of which the\r\nwhole revenue of the society is regularly distributed among all its different\r\nmembers, makes itself no part of that revenue. The great wheel of circulation\r\nis altogether different from the goods which are circulated by means of it. The\r\nrevenue of the society consists altogether in those goods, and not in the wheel\r\nwhich circulates them. In computing either the gross or the neat revenue of any\r\nsociety, we must always, from the whole annual circulation of money and goods,\r\ndeduct the whole value of the money, of which not a single farthing can ever\r\nmake any part of either.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is the ambiguity of language only which can make this proposition appear\r\neither doubtful or paradoxical. When properly explained and understood, it is\r\nalmost self-evident.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen we talk of any particular sum of money, we sometimes mean nothing but the\r\nmetal pieces of which it is composed, and sometimes we include in our meaning\r\nsome obscure reference to the goods which can be had in exchange for it, or to\r\nthe power of purchasing which the possession of it conveys. Thus, when we say\r\nthat the circulating money of England has been computed at eighteen millions,\r\nwe mean only to express the amount of the metal pieces, which some writers have\r\ncomputed, or rather have supposed, to circulate in that country. But when we\r\nsay that a man is worth fifty or a hundred pounds a-year, we mean commonly to\r\nexpress, not only the amount of the metal pieces which are annually paid to\r\nhim, but the value of the goods which he can annually purchase or consume; we\r\nmean commonly to ascertain what is or ought to be his way of living, or the\r\nquantity and quality of the necessaries and conveniencies of life in which he\r\ncan with propriety indulge himself.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, by any particular sum of money, we mean not only to express the amount of\r\nthe metal pieces of which it is composed, but to include in its signification\r\nsome obscure reference to the goods which can be had in exchange for them, the\r\nwealth or revenue which it in this case denotes, is equal only to one of the\r\ntwo values which are thus intimated somewhat ambiguously by the same word, and\r\nto the latter more properly than to the former, to the money’s worth more\r\nproperly than to the money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, if a guinea be the weekly pension of a particular person, he can in the\r\ncourse of the week purchase with it a certain quantity of subsistence,\r\nconveniencies, and amusements. In proportion as this quantity is great or\r\nsmall, so are his real riches, his real weekly revenue. His weekly revenue is\r\ncertainly not equal both to the guinea and to what can be purchased with it,\r\nbut only to one or other of those two equal values, and to the latter more\r\nproperly than to the former, to the guinea’s worth rather than to the\r\nguinea.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the pension of such a person was paid to him, not in gold, but in a weekly\r\nbill for a guinea, his revenue surely would not so properly consist in the\r\npiece of paper, as in what he could get for it. A guinea may be considered as a\r\nbill for a certain quantity of necessaries and conveniencies upon all the\r\ntradesmen in the neighbourhood. The revenue of the person to whom it is paid,\r\ndoes not so properly consist in the piece of gold, as in what he can get for\r\nit, or in what he can exchange it for. If it could be exchanged for nothing, it\r\nwould, like a bill upon a bankrupt, be of no more value than the most useless\r\npiece of paper.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the weekly or yearly revenue of all the different inhabitants of any\r\ncountry, in the same manner, may be, and in reality frequently is, paid to them\r\nin money, their real riches, however, the real weekly or yearly revenue of all\r\nof them taken together, must always be great or small, in proportion to the\r\nquantity of consumable goods which they can all of them purchase with this\r\nmoney. The whole revenue of all of them taken together is evidently not equal\r\nto both the money and the consumable goods, but only to one or other of those\r\ntwo values, and to the latter more properly than to the former.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough we frequently, therefore, express a person’s revenue by the metal\r\npieces which are annually paid to him, it is because the amount of those pieces\r\nregulates the extent of his power of purchasing, or the value of the goods\r\nwhich he can annually afford to consume. We still consider his revenue as\r\nconsisting in this power of purchasing or consuming, and not in the pieces\r\nwhich convey it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if this is sufficiently evident, even with regard to an individual, it is\r\nstill more so with regard to a society. The amount of the metal pieces which\r\nare annually paid to an individual, is often precisely equal to his revenue,\r\nand is upon that account the shortest and best expression of its value. But the\r\namount of the metal pieces which circulate in a society, can never be equal to\r\nthe revenue of all its members. As the same guinea which pays the weekly\r\npension of one man to-day, may pay that of another to-morrow, and that of a\r\nthird the day thereafter, the amount of the metal pieces which annually\r\ncirculate in any country, must always be of much less value than the whole\r\nmoney pensions annually paid with them. But the power of purchasing, or the\r\ngoods which can successively be bought with the whole of those money pensions,\r\nas they are successively paid, must always be precisely of the same value with\r\nthose pensions; as must likewise be the revenue of the different persons to\r\nwhom they are paid. That revenue, therefore, cannot consist in those metal\r\npieces, of which the amount is so much inferior to its value, but in the power\r\nof purchasing, in the goods which can successively be bought with them as they\r\ncirculate from hand to hand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMoney, therefore, the great wheel of circulation, the great instrument of\r\ncommerce, like all other instruments of trade, though it makes a part, and a\r\nvery valuable part, of the capital, makes no part of the revenue of the society\r\nto which it belongs; and though the metal pieces of which it is composed, in\r\nthe course of their annual circulation, distribute to every man the revenue\r\nwhich properly belongs to him, they make themselves no part of that revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, and lastly, the machines and instruments of trade, etc. which compose\r\nthe fixed capital, bear this further resemblance to that part of the\r\ncirculating capital which consists in money; that as every saving in the\r\nexpense of erecting and supporting those machines, which does not diminish the\r\nintroductive powers of labour, is an improvement of the neat revenue of the\r\nsociety; so every saving in the expense of collecting and supporting that part\r\nof the circulating capital which consists in money is an improvement of exactly\r\nthe same kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is sufficiently obvious, and it has partly, too, been explained already, in\r\nwhat manner every saving in the expense of supporting the fixed capital is an\r\nimprovement of the neat revenue of the society. The whole capital of the\r\nundertaker of every work is necessarily divided between his fixed and his\r\ncirculating capital. While his whole capital remains the same, the smaller the\r\none part, the greater must necessarily be the other. It is the circulating\r\ncapital which furnishes the materials and wages of labour, and puts industry\r\ninto motion. Every saving, therefore, in the expense of maintaining the fixed\r\ncapital, which does not diminish the productive powers of labour, must increase\r\nthe fund which puts industry into motion, and consequently the annual produce\r\nof land and labour, the real revenue of every society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe substitution of paper in the room of gold and silver money, replaces a very\r\nexpensive instrument of commerce with one much less costly, and sometimes\r\nequally convenient. Circulation comes to be carried on by a new wheel, which it\r\ncosts less both to erect and to maintain than the old one. But in what manner\r\nthis operation is performed, and in what manner it tends to increase either the\r\ngross or the neat revenue of the society, is not altogether so obvious, and may\r\ntherefore require some further explication.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are several different sorts of paper money; but the circulating notes of\r\nbanks and bankers are the species which is best known, and which seems best\r\nadapted for this purpose.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the people of any particular country have such confidence in the fortune,\r\nprobity and prudence of a particular banker, as to believe that he is always\r\nready to pay upon demand such of his promissory notes as are likely to be at\r\nany time presented to him, those notes come to have the same currency as gold\r\nand silver money, from the confidence that such money can at any time be had\r\nfor them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA particular banker lends among his customers his own promissory notes, to the\r\nextent, we shall suppose, of a hundred thousand pounds. As those notes serve\r\nall the purposes of money, his debtors pay him the same interest as if he had\r\nlent them so much money. This interest is the source of his gain. Though some\r\nof those notes are continually coming back upon him for payment, part of them\r\ncontinue to circulate for months and years together. Though he has generally in\r\ncirculation, therefore, notes to the extent of a hundred thousand pounds,\r\ntwenty thousand pounds in gold and silver may, frequently, be a sufficient\r\nprovision for answering occasional demands. By this operation, therefore,\r\ntwenty thousand pounds in gold and silver perform all the functions which a\r\nhundred thousand could otherwise have performed. The same exchanges may be\r\nmade, the same quantity of consumable goods may be circulated and distributed\r\nto their proper consumers, by means of his promissory notes, to the value of a\r\nhundred thousand pounds, as by an equal value of gold and silver money. Eighty\r\nthousand pounds of gold and silver, therefore, can in this manner be spared\r\nfrom the circulation of the country; and if different operations of the same\r\nkind should, at the same time, be carried on by many different banks and\r\nbankers, the whole circulation may thus be conducted with a fifth part only of\r\nthe gold and silver which would otherwise have been requisite.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLet us suppose, for example, that the whole circulating money of some\r\nparticular country amounted, at a particular time, to one million sterling,\r\nthat sum being then sufficient for circulating the whole annual produce of\r\ntheir land and labour; let us suppose, too, that some time thereafter,\r\ndifferent banks and bankers issued promissory notes payable to the bearer, to\r\nthe extent of one million, reserving in their different coffers two hundred\r\nthousand pounds for answering occasional demands; there would remain,\r\ntherefore, in circulation, eight hundred thousand pounds in gold and silver,\r\nand a million of bank notes, or eighteen hundred thousand pounds of paper and\r\nmoney together. But the annual produce of the land and labour of the country\r\nhad before required only one million to circulate and distribute it to its\r\nproper consumers, and that annual produce cannot be immediately augmented by\r\nthose operations of banking. One million, therefore, will be sufficient to\r\ncirculate it after them. The goods to be bought and sold being precisely the\r\nsame as before, the same quantity of money will be sufficient for buying and\r\nselling them. The channel of circulation, if I may be allowed such an\r\nexpression, will remain precisely the same as before. One million we have\r\nsupposed sufficient to fill that channel. Whatever, therefore, is poured into\r\nit beyond this sum, cannot run into it, but must overflow. One million eight\r\nhundred thousand pounds are poured into it. Eight hundred thousand pounds,\r\ntherefore, must overflow, that sum being over and above what can be employed in\r\nthe circulation of the country. But though this sum cannot be employed at home,\r\nit is too valuable to be allowed to lie idle. It will, therefore, be sent\r\nabroad, in order to seek that profitable employment which it cannot find at\r\nhome. But the paper cannot go abroad; because at a distance from the banks\r\nwhich issue it, and from the country in which payment of it can be exacted by\r\nlaw, it will not be received in common payments. Gold and silver, therefore, to\r\nthe amount of eight hundred thousand pounds, will be sent abroad, and the\r\nchannel of home circulation will remain filled with a million of paper instead\r\nof a million of those metals which filled it before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though so great a quantity of gold and silver is thus sent abroad, we must\r\nnot imagine that it is sent abroad for nothing, or that its proprietors make a\r\npresent of it to foreign nations. They will exchange it for foreign goods of\r\nsome kind or another, in order to supply the consumption either of some other\r\nforeign country, or of their own.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf they employ it in purchasing goods in one foreign country, in order to\r\nsupply the consumption of another, or in what is called the carrying trade,\r\nwhatever profit they make will be in addition to the neat revenue of their own\r\ncountry. It is like a new fund, created for carrying on a new trade; domestic\r\nbusiness being now transacted by paper, and the gold and silver being converted\r\ninto a fund for this new trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf they employ it in purchasing foreign goods for home consumption, they may\r\neither, first, purchase such goods as are likely to be consumed by idle people,\r\nwho produce nothing, such as foreign wines, foreign silks, etc.; or, secondly,\r\nthey may purchase an additional stock of materials, tools, and provisions, in\r\norder to maintain and employ an additional number of industrious people, who\r\nreproduce, with a profit, the value of their annual consumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far as it is employed in the first way, it promotes prodigality, increases\r\nexpense and consumption, without increasing production, or establishing any\r\npermanent fund for supporting that expense, and is in every respect hurtful to\r\nthe society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far as it is employed in the second way, it promotes industry; and though it\r\nincreases the consumption of the society, it provides a permanent fund for\r\nsupporting that consumption; the people who consume reproducing, with a profit,\r\nthe whole value of their annual consumption. The gross revenue of the society,\r\nthe annual produce of their land and labour, is increased by the whole value\r\nwhich the labour of those workmen adds to the materials upon which they are\r\nemployed, and their neat revenue by what remains of this value, after deducting\r\nwhat is necessary for supporting the tools and instruments of their trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the greater part of the gold and silver which being forced abroad by those\r\noperations of banking, is employed in purchasing foreign goods for home\r\nconsumption, is, and must be, employed in purchasing those of this second kind,\r\nseems not only probable, but almost unavoidable. Though some particular men may\r\nsometimes increase their expense very considerably, though their revenue does\r\nnot increase at all, we maybe assured that no class or order of men ever does\r\nso; because, though the principles of common prudence do not always govern the\r\nconduct of every individual, they always influence that of the majority of\r\nevery class or order. But the revenue of idle people, considered as a class or\r\norder, cannot, in the smallest degree, be increased by those operations of\r\nbanking. Their expense in general, therefore, cannot be much increased by them,\r\nthough that of a few individuals among them may, and in reality sometimes is.\r\nThe demand of idle people, therefore, for foreign goods, being the same, or\r\nvery nearly the same as before, a very small part of the money which, being\r\nforced abroad by those operations of banking, is employed in purchasing foreign\r\ngoods for home consumption, is likely to be employed in purchasing those for\r\ntheir use. The greater part of it will naturally be destined for the employment\r\nof industry, and not for the maintenance of idleness.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen we compute the quantity of industry which the circulating capital of any\r\nsociety can employ, we must always have regard to those parts of it only which\r\nconsist in provisions, materials, and finished work; the other, which consists\r\nin money, and which serves only to circulate those three, must always be\r\ndeducted. In order to put industry into motion, three things are requisite;\r\nmaterials to work upon, tools to work with, and the wages or recompence for the\r\nsake of which the work is done. Money is neither a material to work upon, nor a\r\ntool to work with; and though the wages of the workman are commonly paid to him\r\nin money, his real revenue, like that of all other men, consists, not in the\r\nmoney, but in the money’s worth; not in the metal pieces, but in what can\r\nbe got for them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of industry which any capital can employ, must evidently be equal\r\nto the number of workmen whom it can supply with materials, tools, and a\r\nmaintenance suitable to the nature of the work. Money may be requisite for\r\npurchasing the materials and tools of the work, as well as the maintenance of\r\nthe workmen; but the quantity of industry which the whole capital can employ,\r\nis certainly not equal both to the money which purchases, and to the materials,\r\ntools, and maintenance, which are purchased with it, but only to one or other\r\nof those two values, and to the latter more properly than to the former.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen paper is substituted in the room of gold and silver money, the quantity of\r\nthe materials, tools, and maintenance, which the whole circulating capital can\r\nsupply, may be increased by the whole value of gold and silver which used to be\r\nemployed in purchasing them. The whole value of the great wheel of circulation\r\nand distribution is added to the goods which are circulated and distributed by\r\nmeans of it. The operation, in some measure, resembles that of the undertaker\r\nof some great work, who, in consequence of some improvement in mechanics, takes\r\ndown his old machinery, and adds the difference between its price and that of\r\nthe new to his circulating capital, to the fund from which he furnishes\r\nmaterials and wages to his workmen.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is the proportion which the circulating money of any country bears to the\r\nwhole value of the annual produce circulated by means of it, it is perhaps\r\nimpossible to determine. It has been computed by different authors at a fifth,\r\nat a tenth, at a twentieth, and at a thirtieth, part of that value. But how\r\nsmall soever the proportion which the circulating money may bear to the whole\r\nvalue of the annual produce, as but a part, and frequently but a small part, of\r\nthat produce, is ever destined for the maintenance of industry, it must always\r\nbear a very considerable proportion to that part. When, therefore, by the\r\nsubstitution of paper, the gold and silver necessary for circulation is reduced\r\nto, perhaps, a fifth part of the former quantity, if the value of only the\r\ngreater part of the other four-fifths be added to the funds which are destined\r\nfor the maintenance of industry, it must make a very considerable addition to\r\nthe quantity of that industry, and, consequently, to the value of the annual\r\nproduce of land and labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn operation of this kind has, within these five-and-twenty or thirty years,\r\nbeen performed in Scotland, by the erection of new banking companies in almost\r\nevery considerable town, and even in some country villages. The effects of it\r\nhave been precisely those above described. The business of the country is\r\nalmost entirely carried on by means of the paper of those different banking\r\ncompanies, with which purchases and payments of all kinds are commonly made.\r\nSilver very seldom appears, except in the change of a twenty shilling bank\r\nnote, and gold still seldomer. But though the conduct of all those different\r\ncompanies has not been unexceptionable, and has accordingly required an act of\r\nparliament to regulate it, the country, notwithstanding, has evidently derived\r\ngreat benefit from their trade. I have heard it asserted, that the trade of the\r\ncity of Glasgow doubled in about fifteen years after the first erection of the\r\nbanks there; and that the trade of Scotland has more than quadrupled since the\r\nfirst erection of the two public banks at Edinburgh; of which the one, called\r\nthe Bank of Scotland, was established by act of parliament in 1695, and the\r\nother, called the Royal Bank, by royal charter in 1727. Whether the trade,\r\neither of Scotland in general, or of the city of Glasgow in particular, has\r\nreally increased in so great a proportion, during so short a period, I do not\r\npretend to know. If either of them has increased in this proportion, it seems\r\nto be an effect too great to be accounted for by the sole operation of this\r\ncause. That the trade and industry of Scotland, however, have increased very\r\nconsiderably during this period, and that the banks have contributed a good\r\ndeal to this increase, cannot be doubted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of the silver money which circulated in Scotland before the Union in\r\n1707, and which, immediately after it, was brought into the Bank of Scotland,\r\nin order to be recoined, amounted to £411,117: 10: 9 sterling. No account has\r\nbeen got of the gold coin; but it appears from the ancient accounts of the mint\r\nof Scotland, that the value of the gold annually coined somewhat exceeded that\r\nof the silver. There were a good many people, too, upon this occasion, who,\r\nfrom a diffidence of repayment, did not bring their silver into the Bank of\r\nScotland; and there was, besides, some English coin, which was not called in.\r\nThe whole value of the gold and silver, therefore, which circulated in Scotland\r\nbefore the Union, cannot be estimated at less than a million sterling. It seems\r\nto have constituted almost the whole circulation of that country; for though\r\nthe circulation of the Bank of Scotland, which had then no rival, was\r\nconsiderable, it seems to have made but a very small part of the whole. In the\r\npresent times, the whole circulation of Scotland cannot be estimated at less\r\nthan two millions, of which that part which consists in gold and silver, most\r\nprobably, does not amount to half a million. But though the circulating gold\r\nand silver of Scotland have suffered so great a diminution during this period,\r\nits real riches and prosperity do not appear to have suffered any. Its\r\nagriculture, manufactures, and trade, on the contrary, the annual produce of\r\nits land and labour, have evidently been augmented.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is chiefly by discounting bills of exchange, that is, by advancing money\r\nupon them before they are due, that the greater part of banks and bankers issue\r\ntheir promissory notes. They deduct always, upon whatever sum they advance, the\r\nlegal interest till the bill shall become due. The payment of the bill, when it\r\nbecomes due, replaces to the bank the value of what had been advanced, together\r\nwith a clear profit of the interest. The banker, who advances to the merchant\r\nwhose bill he discounts, not gold and silver, but his own promissory notes, has\r\nthe advantage of being able to discount to a greater amount by the whole value\r\nof his promissory notes, which he finds, by experience, are commonly in\r\ncirculation. He is thereby enabled to make his clear gain of interest on so\r\nmuch a larger sum.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe commerce of Scotland, which at present is not very great, was still more\r\ninconsiderable when the two first banking companies were established; and those\r\ncompanies would have had but little trade, had they confined their business to\r\nthe discounting of bills of exchange. They invented, therefore, another method\r\nof issuing their promissory notes; by granting what they call cash accounts,\r\nthat is, by giving credit, to the extent of a certain sum (two or three\r\nthousand pounds for example), to any individual who could procure two persons\r\nof undoubted credit and good landed estate to become surety for him, that\r\nwhatever money should be advanced to him, within the sum for which the credit\r\nhad been given, should be repaid upon demand, together with the legal interest.\r\nCredits of this kind are, I believe, commonly granted by banks and bankers in\r\nall different parts of the world. But the easy terms upon which the Scotch\r\nbanking companies accept of repayment are, so far as I know, peculiar to them,\r\nand have perhaps been the principal cause, both of the great trade of those\r\ncompanies, and of the benefit which the country has received from it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhoever has a credit of this kind with one of those companies, and borrows a\r\nthousand pounds upon it, for example, may repay this sum piece-meal, by twenty\r\nand thirty pounds at a time, the company discounting a proportionable part of\r\nthe interest of the great sum, from the day on which each of those small sums\r\nis paid in, till the whole be in this manner repaid. All merchants, therefore,\r\nand almost all men of business, find it convenient to keep such cash accounts\r\nwith them, and are thereby interested to promote the trade of those companies,\r\nby readily receiving their notes in all payments, and by encouraging all those\r\nwith whom they have any influence to do the same. The banks, when their\r\ncustomers apply to them for money, generally advance it to them in their own\r\npromissory notes. These the merchants pay away to the manufacturers for goods,\r\nthe manufacturers to the farmers for materials and provisions, the farmers to\r\ntheir landlords for rent; the landlords repay them to the merchants for the\r\nconveniencies and luxuries with which they supply them, and the merchants again\r\nreturn them to the banks, in order to balance their cash accounts, or to\r\nreplace what they may have borrowed of them; and thus almost the whole money\r\nbusiness of the country is transacted by means of them. Hence the great trade\r\nof those companies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy means of those cash accounts, every merchant can, without imprudence, carry\r\non a greater trade than he otherwise could do. If there are two merchants, one\r\nin London and the other in Edinburgh, who employ equal stocks in the same\r\nbranch of trade, the Edinburgh merchant can, without imprudence, carry on a\r\ngreater trade, and give employment to a greater number of people, than the\r\nLondon merchant. The London merchant must always keep by him a considerable sum\r\nof money, either in his own coffers, or in those of his banker, who gives him\r\nno interest for it, in order to answer the demands continually coming upon him\r\nfor payment of the goods which he purchases upon credit. Let the ordinary\r\namount of this sum be supposed five hundred pounds; the value of the goods in\r\nhis warehouse must always be less, by five hundred pounds, than it would have\r\nbeen, had he not been obliged to keep such a sum unemployed. Let us suppose\r\nthat he generally disposes of his whole stock upon hand, or of goods to the\r\nvalue of his whole stock upon hand, once in the year. By being obliged to keep\r\nso great a sum unemployed, he must sell in a year five hundred pounds worth\r\nless goods than he might otherwise have done. His annual profits must be less\r\nby all that he could have made by the sale of five hundred pounds worth more\r\ngoods; and the number of people employed in preparing his goods for the market\r\nmust be less by all those that five hundred pounds more stock could have\r\nemployed. The merchant in Edinburgh, on the other hand, keeps no money\r\nunemployed for answering such occasional demands. When they actually come upon\r\nhim, he satisfies them from his cash account with the bank, and gradually\r\nreplaces the sum borrowed with the money or paper which comes in from the\r\noccasional sales of his goods. With the same stock, therefore, he can, without\r\nimprudence, have at all times in his warehouse a larger quantity of goods than\r\nthe London merchant; and can thereby both make a greater profit himself, and\r\ngive constant employment to a greater number of industrious people who prepare\r\nthose goods for the market. Hence the great benefit which the country has\r\nderived from this trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe facility of discounting bills of exchange, it may be thought, indeed, gives\r\nthe English merchants a conveniency equivalent to the cash accounts of the\r\nScotch merchants. But the Scotch merchants, it must be remembered, can discount\r\ntheir bills of exchange as easily as the English merchants; and have, besides,\r\nthe additional conveniency of their cash accounts.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole paper money of every kind which can easily circulate in any country,\r\nnever can exceed the value of the gold and silver, of which it supplies the\r\nplace, or which (the commerce being supposed the same) would circulate there,\r\nif there was no paper money. If twenty shilling notes, for example, are the\r\nlowest paper money current in Scotland, the whole of that currency which can\r\neasily circulate there, cannot exceed the sum of gold and silver which would be\r\nnecessary for transacting the annual exchanges of twenty shillings value and\r\nupwards usually transacted within that country. Should the circulating paper at\r\nany time exceed that sum, as the excess could neither be sent abroad nor be\r\nemployed in the circulation of the country, it must immediately return upon the\r\nbanks, to be exchanged for gold and silver. Many people would immediately\r\nperceive that they had more of this paper than was necessary for transacting\r\ntheir business at home; and as they could not send it abroad, they would\r\nimmediately demand payment for it from the banks. When this superfluous paper\r\nwas converted into gold and silver, they could easily find a use for it, by\r\nsending it abroad; but they could find none while it remained in the shape of\r\npaper. There would immediately, therefore, be a run upon the banks to the whole\r\nextent of this superfluous paper, and if they showed any difficulty or\r\nbackwardness in payment, to a much greater extent; the alarm which this would\r\noccasion necessarily increasing the run.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOver and above the expenses which are common to every branch of trade, such as\r\nthe expense of house-rent, the wages of servants, clerks, accountants, etc. the\r\nexpenses peculiar to a bank consist chiefly in two articles: first, in the\r\nexpense of keeping at all times in its coffers, for answering the occasional\r\ndemands of the holders of its notes, a large sum of money, of which it loses\r\nthe interest; and, secondly, in the expense of replenishing those coffers as\r\nfast as they are emptied by answering such occasional demands.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA banking company which issues more paper than can be employed in the\r\ncirculation of the country, and of which the excess is continually returning\r\nupon them for payment, ought to increase the quantity of gold and silver which\r\nthey keep at all times in their coffers, not only in proportion to this\r\nexcessive increase of their circulation, but in a much greater proportion;\r\ntheir notes returning upon them much faster than in proportion to the excess of\r\ntheir quantity. Such a company, therefore, ought to increase the first article\r\nof their expense, not only in proportion to this forced increase of their\r\nbusiness, but in a much greater proportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe coffers of such a company, too, though they ought to be filled much fuller,\r\nyet must empty themselves much faster than if their business was confined\r\nwithin more reasonable bounds, and must require not only a more violent, but a\r\nmore constant and uninterrupted exertion of expense, in order to replenish\r\nthem, The coin, too, which is thus continually drawn in such large quantities\r\nfrom their coffers, cannot be employed in the circulation of the country. It\r\ncomes in place of a paper which is over and above what can be employed in that\r\ncirculation, and is, therefore, over and above what can be employed in it too.\r\nBut as that coin will not be allowed to lie idle, it must, in one shape or\r\nanother, be sent abroad, in order to find that profitable employment which it\r\ncannot find at home; and this continual exportation of gold and silver, by\r\nenhancing the difficulty, must necessarily enhance still farther the expense of\r\nthe bank, in finding new gold and silver in order to replenish those coffers,\r\nwhich empty themselves so very rapidly. Such a company, therefore, must in\r\nproportion to this forced increase of their business, increase the second\r\narticle of their expense still more than the first.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLet us suppose that all the paper of a particular bank, which the circulation\r\nof the country can easily absorb and employ, amounts exactly to forty thousand\r\npounds, and that, for answering occasional demands, this bank is obliged to\r\nkeep at all times in its coffers ten thousand pounds in gold and silver. Should\r\nthis bank attempt to circulate forty-four thousand pounds, the four thousand\r\npounds which are over and above what the circulation can easily absorb and\r\nemploy, will return upon it almost as fast as they are issued. For answering\r\noccasional demands, therefore, this bank ought to keep at all times in its\r\ncoffers, not eleven thousand pounds only, but fourteen thousand pounds. It will\r\nthus gain nothing by the interest of the four thousand pounds excessive\r\ncirculation; and it will lose the whole expense of continually collecting four\r\nthousand pounds in gold and silver, which will be continually going out of its\r\ncoffers as fast as they are brought into them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHad every particular banking company always understood and attended to its own\r\nparticular interest, the circulation never could have been overstocked with\r\npaper money. But every particular banking company has not always understood or\r\nattended to its own particular interest, and the circulation has frequently\r\nbeen overstocked with paper money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy issuing too great a quantity of paper, of which the excess was continually\r\nreturning, in order to be exchanged for gold and silver, the Bank of England\r\nwas for many years together obliged to coin gold to the extent of between eight\r\nhundred thousand pounds and a million a-year; or, at an average, about eight\r\nhundred and fifty thousand pounds. For this great coinage, the bank\r\n(in consequence of the worn and degraded state into which the gold coin had\r\nfallen a few years ago) was frequently obliged to purchase gold bullion at the\r\nhigh price of four pounds an ounce, which it soon after issued in coin at\r\n£3:17:10 1/2 an ounce, losing in this manner between two and a half and three\r\nper cent. upon the coinage of so very large a sum. Though the bank, therefore,\r\npaid no seignorage, though the government was properly at the expense of this\r\ncoinage, this liberality of government did not prevent altogether the expense\r\nof the bank.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Scotch banks, in consequence of an excess of the same kind, were all\r\nobliged to employ constantly agents at London to collect money for them, at an\r\nexpense which was seldom below one and a half or two per cent. This money was\r\nsent down by the waggon, and insured by the carriers at an additional expense\r\nof three quarters per cent. or fifteen shillings on the hundred pounds. Those\r\nagents were not always able to replenish the coffers of their employers so fast\r\nas they were emptied. In this case, the resource of the banks was, to draw upon\r\ntheir correspondents in London bills of exchange, to the extent of the sum\r\nwhich they wanted. When those correspondents afterwards drew upon them for the\r\npayment of this sum, together with the interest and commission, some of those\r\nbanks, from the distress into which their excessive circulation had thrown\r\nthem, had sometimes no other means of satisfying this draught, but by drawing a\r\nsecond set of bills, either upon the same, or upon some other correspondents in\r\nLondon; and the same sum, or rather bills for the same sum, would in this\r\nmanner make sometimes more than two or three journeys; the debtor bank paying\r\nalways the interest and commission upon the whole accumulated sum. Even those\r\nScotch banks which never distinguished themselves by their extreme imprudence,\r\nwere sometimes obliged to employ this ruinous resource.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gold coin which was paid out, either by the Bank of England or by the\r\nScotch banks, in exchange for that part of their paper which was over and above\r\nwhat could be employed in the circulation of the country, being likewise over\r\nand above what could be employed in that circulation, was sometimes sent abroad\r\nin the shape of coin, sometimes melted down and sent abroad in the shape of\r\nbullion, and sometimes melted down and sold to the Bank of England at the high\r\nprice of four pounds an ounce. It was the newest, the heaviest, and the best\r\npieces only, which were carefully picked out of the whole coin, and either sent\r\nabroad or melted down. At home, and while they remained in the shape of coin,\r\nthose heavy pieces were of no more value than the light; but they were of more\r\nvalue abroad, or when melted down into bullion at home. The Bank of England,\r\nnotwithstanding their great annual coinage, found, to their astonishment, that\r\nthere was every year the same scarcity of coin as there had been the year\r\nbefore; and that, notwithstanding the great quantity of good and new coin which\r\nwas every year issued from the bank, the state of the coin, instead of growing\r\nbetter and better, became every year worse and worse. Every year they found\r\nthemselves under the necessity of coining nearly the same quantity of gold as\r\nthey had coined the year before; and from the continual rise in the price of\r\ngold bullion, in consequence of the continual wearing and clipping of the coin,\r\nthe expense of this great annual coinage became, every year, greater and\r\ngreater. The Bank of England, it is to be observed, by supplying its own\r\ncoffers with coin, is indirectly obliged to supply the whole kingdom, into\r\nwhich coin is continually flowing from those coffers in a great variety of\r\nways. Whatever coin, therefore, was wanted to support this excessive\r\ncirculation both of Scotch and English paper money, whatever vacuities this\r\nexcessive circulation occasioned in the necessary coin of the kingdom, the Bank\r\nof England was obliged to supply them. The Scotch banks, no doubt, paid all of\r\nthem very dearly for their own imprudence and inattention: but the Bank of\r\nEngland paid very dearly, not only for its own imprudence, but for the much\r\ngreater imprudence of almost all the Scotch banks.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe over-trading of some bold projectors in both parts of the united kingdom,\r\nwas the original cause of this excessive circulation of paper money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat a bank can with propriety advance to a merchant or undertaker of any kind,\r\nis not either the whole capital with which he trades, or even any considerable\r\npart of that capital; but that part of it only which he would otherwise be\r\nobliged to keep by him unemployed and in ready money, for answering occasional\r\ndemands. If the paper money which the bank advances never exceeds this value,\r\nit can never exceed the value of the gold and silver which would necessarily\r\ncirculate in the country if there was no paper money; it can never exceed the\r\nquantity which the circulation of the country can easily absorb and employ.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a bank discounts to a merchant a real bill of exchange, drawn by a real\r\ncreditor upon a real debtor, and which, as soon as it becomes due, is really\r\npaid by that debtor; it only advances to him a part of the value which he would\r\notherwise be obliged to keep by him unemployed and in ready money, for\r\nanswering occasional demands. The payment of the bill, when it becomes due,\r\nreplaces to the bank the value of what it had advanced, together with the\r\ninterest. The coffers of the bank, so far as its dealings are confined to such\r\ncustomers, resemble a water-pond, from which, though a stream is continually\r\nrunning out, yet another is continually running in, fully equal to that which\r\nruns out; so that, without any further care or attention, the pond keeps always\r\nequally, or very near equally full. Little or no expense can ever be necessary\r\nfor replenishing the coffers of such a bank.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA merchant, without over-trading, may frequently have occasion for a sum of\r\nready money, even when he has no bills to discount. When a bank, besides\r\ndiscounting his bills, advances him likewise, upon such occasions, such sums\r\nupon his cash account, and accepts of a piece-meal repayment, as the money\r\ncomes in from the occasional sale of his goods, upon the easy terms of the\r\nbanking companies of Scotland; it dispenses him entirely from the necessity of\r\nkeeping any part of his stock by him unemployed and in ready money for\r\nanswering occasional demands. When such demands actually come upon him, he can\r\nanswer them sufficiently from his cash account. The bank, however, in dealing\r\nwith such customers, ought to observe with great attention, whether, in the\r\ncourse of some short period (of four, five, six, or eight months, for example),\r\nthe sum of the repayments which it commonly receives from them, is, or is not,\r\nfully equal to that of the advances which it commonly makes to them. If, within\r\nthe course of such short periods, the sum of the repayments from certain\r\ncustomers is, upon most occasions, fully equal to that of the advances, it may\r\nsafely continue to deal with such customers. Though the stream which is in this\r\ncase continually running out from its coffers may be very large, that which is\r\ncontinually running into them must be at least equally large, so that, without\r\nany further care or attention, those coffers are likely to be always equally or\r\nvery near equally full, and scarce ever to require any extraordinary expense to\r\nreplenish them. If, on the contrary, the sum of the repayments from certain\r\nother customers, falls commonly very much short of the advances which it makes\r\nto them, it cannot with any safety continue to deal with such customers, at\r\nleast if they continue to deal with it in this manner. The stream which is in\r\nthis case continually running out from its coffers, is necessarily much larger\r\nthan that which is continually running in; so that, unless they are replenished\r\nby some great and continual effort of expense, those coffers must soon be\r\nexhausted altogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe banking companies of Scotland, accordingly, were for a long time very\r\ncareful to require frequent and regular repayments from all their customers,\r\nand did not care to deal with any person, whatever might be his fortune or\r\ncredit, who did not make, what they called, frequent and regular operations\r\nwith them. By this attention, besides saving almost entirely the extraordinary\r\nexpense of replenishing their coffers, they gained two other very considerable\r\nadvantages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, by this attention they were enabled to make some tolerable judgment\r\nconcerning the thriving or declining circumstances of their debtors, without\r\nbeing obliged to look out for any other evidence besides what their own books\r\nafforded them; men being, for the most part, either regular or irregular in\r\ntheir repayments, according as their circumstances are either thriving or\r\ndeclining. A private man who lends out his money to perhaps half a dozen or a\r\ndozen of debtors, may, either by himself or his agents, observe and inquire\r\nboth constantly and carefully into the conduct and situation of each of them.\r\nBut a banking company, which lends money to perhaps five hundred different\r\npeople, and of which the attention is continually occupied by objects of a very\r\ndifferent kind, can have no regular information concerning the conduct and\r\ncircumstances of the greater part of its debtors, beyond what its own books\r\nafford it. In requiring frequent and regular repayments from all their\r\ncustomers, the banking companies of Scotland had probably this advantage in\r\nview.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, by this attention they secured themselves from the possibility of\r\nissuing more paper money than what the circulation of the country could easily\r\nabsorb and employ. When they observed, that within moderate periods of time,\r\nthe repayments of a particular customer were, upon most occasions, fully equal\r\nto the advances which they had made to him, they might be assured that the\r\npaper money which they had advanced to him had not, at any time, exceeded the\r\nquantity of gold and silver which he would otherwise have been obliged to keep\r\nby him for answering occasional demands; and that, consequently, the paper\r\nmoney, which they had circulated by his means, had not at any time exceeded the\r\nquantity of gold and silver which would have circulated in the country, had\r\nthere been no paper money. The frequency, regularity, and amount of his\r\nrepayments, would sufficiently demonstrate that the amount of their advances\r\nhad at no time exceeded that part of his capital which he would otherwise have\r\nbeen obliged to keep by him unemployed, and in ready money, for answering\r\noccasional demands; that is, for the purpose of keeping the rest of his capital\r\nin constant employment. It is this part of his capital only which, within\r\nmoderate periods of time, is continually returning to every dealer in the shape\r\nof money, whether paper or coin, and continually going from him in the same\r\nshape. If the advances of the bank had commonly exceeded this part of his\r\ncapital, the ordinary amount of his repayments could not, within moderate\r\nperiods of time, have equalled the ordinary amount of its advances. The stream\r\nwhich, by means of his dealings, was continually running into the coffers of\r\nthe bank, could not have been equal to the stream which, by means of the same\r\ndealings was continually running out. The advances of the bank paper, by\r\nexceeding the quantity of gold and silver which, had there been no such\r\nadvances, he would have been obliged to keep by him for answering occasional\r\ndemands, might soon come to exceed the whole quantity of gold and silver which\r\n( the commerce being supposed the same ) would have circulated in the country,\r\nhad there been no paper money; and, consequently, to exceed the quantity which\r\nthe circulation of the country could easily absorb and employ; and the excess\r\nof this paper money would immediately have returned upon the bank, in order to\r\nbe exchanged for gold and silver. This second advantage, though equally real,\r\nwas not, perhaps, so well understood by all the different banking companies in\r\nScotland as the first.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, partly by the conveniency of discounting bills, and partly by that of\r\ncash accounts, the creditable traders of any country can be dispensed from the\r\nnecessity of keeping any part of their stock by them unemployed, and in ready\r\nmoney, for answering occasional demands, they can reasonably expect no farther\r\nassistance from hanks and bankers, who, when they have gone thus far, cannot,\r\nconsistently with their own interest and safety, go farther. A bank cannot,\r\nconsistently with its own interest, advance to a trader the whole, or even the\r\ngreater part of the circulating capital with which he trades; because, though\r\nthat capital is continually returning to him in the shape of money, and going\r\nfrom him in the same shape, yet the whole of the returns is too distant from\r\nthe whole of the outgoings, and the sum of his repayments could not equal the\r\nsum of his advances within such moderate periods of time as suit the\r\nconveniency of a bank. Still less could a bank afford to advance him any\r\nconsiderable part of his fixed capital; of the capital which the undertaker of\r\nan iron forge, for example, employs in erecting his forge and smelting-houses,\r\nhis work-houses, and warehouses, the dwelling-houses of his workmen, etc.; of\r\nthe capital which the undertaker of a mine employs in sinking his shafts, in\r\nerecting engines for drawing out the water, in making roads and waggon-ways,\r\netc.; of the capital which the person who undertakes to improve land employs in\r\nclearing, draining, inclosing, manuring, and ploughing waste and uncultivated\r\nfields; in building farmhouses, with all their necessary appendages of stables,\r\ngranaries, etc. The returns of the fixed capital are, in almost all cases, much\r\nslower than those of the circulating capital: and such expenses, even when laid\r\nout with the greatest prudence and judgment, very seldom return to the\r\nundertaker till after a period of many years, a period by far too distant to\r\nsuit the conveniency of a bank. Traders and other undertakers may, no doubt\r\nwith great propriety, carry on a very considerable part of their projects with\r\nborrowed money. In justice to their creditors, however, their own capital ought\r\nin this case to be sufficient to insure, if I may say so, the capital of those\r\ncreditors; or to render it extremely improbable that those creditors should\r\nincur any loss, even though the success of the project should fall very much\r\nshort of the expectation of the projectors. Even with this precaution, too, the\r\nmoney which is borrowed, and which it is meant should not be repaid till after\r\na period of several years, ought not to be borrowed of a bank, but ought to be\r\nborrowed upon bond or mortgage, of such private people as propose to live upon\r\nthe interest of their money, without taking the trouble themselves to employ\r\nthe capital, and who are, upon that account, willing to lend that capital to\r\nsuch people of good credit as are likely to keep it for several years. A bank,\r\nindeed, which lends its money without the expense of stamped paper, or of\r\nattorneys’ fees for drawing bonds and mortgages, and which accepts of\r\nrepayment upon the easy terms of the banking companies of Scotland, would, no\r\ndoubt, be a very convenient creditor to such traders and undertakers. But such\r\ntraders and undertakers would surely be most inconvenient debtors to such a\r\nbank.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is now more than five and twenty years since the paper money issued by the\r\ndifferent banking companies of Scotland was fully equal, or rather was somewhat\r\nmore than fully equal, to what the circulation of the country could easily\r\nabsorb and employ. Those companies, therefore, had so long ago given all the\r\nassistance to the traders and other undertakers of Scotland which it is\r\npossible for banks and bankers, consistently with their own interest, to give.\r\nThey had even done somewhat more. They had over-traded a little, and had\r\nbrought upon themselves that loss, or at least that diminution of profit,\r\nwhich, in this particular business, never fails to attend the smallest degree\r\nof over-trading. Those traders and other undertakers, having got so much\r\nassistance from banks and bankers, wished to get still more. The banks, they\r\nseem to have thought, could extend their credits to whatever sum might be\r\nwanted, without incurring any other expense besides that of a few reams of\r\npaper. They complained of the contracted views and dastardly spirit of the\r\ndirectors of those banks, which did not, they said, extend their credits in\r\nproportion to the extension of the trade of the country; meaning, no doubt, by\r\nthe extension of that trade, the extension of their own projects beyond what\r\nthey could carry on either with their own capital, or with what they had credit\r\nto borrow of private people in the usual way of bond or mortgage. The banks,\r\nthey seem to have thought, were in honour bound to supply the deficiency, and\r\nto provide them with all the capital which they wanted to trade with. The\r\nbanks, however, were of a different opinion; and upon their refusing to extend\r\ntheir credits, some of those traders had recourse to an expedient which, for a\r\ntime, served their purpose, though at a much greater expense, yet as\r\neffectually as the utmost extension of bank credits could have done. This\r\nexpedient was no other than the well known shift of drawing and redrawing; the\r\nshift to which unfortunate traders have sometimes recourse, when they are upon\r\nthe brink of bankruptcy. The practice of raising money in this manner had been\r\nlong known in England; and, during the course of the late war, when the high\r\nprofits of trade afforded a great temptation to over-trading, is said to have\r\nbeen carried on to a very great extent. From England it was brought into\r\nScotland, where, in proportion to the very limited commerce, and to the very\r\nmoderate capital of the country, it was soon carried on to a much greater\r\nextent than it ever had been in England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe practice of drawing and redrawing is so well known to all men of business,\r\nthat it may, perhaps, be thought unnecessary to give any account of it. But as\r\nthis book may come into the hands of many people who are not men of business,\r\nand as the effects of this practice upon the banking trade are not, perhaps,\r\ngenerally understood, even by men of business themselves, I shall endeavour to\r\nexplain it as distinctly as I can.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe customs of merchants, which were established when the barbarous laws of\r\nEurope did not enforce the performance of their contracts, and which, during\r\nthe course of the two last centuries, have been adopted into the laws of all\r\nEuropean nations, have given such extraordinary privileges to bills of\r\nexchange, that money is more readily advanced upon them than upon any other\r\nspecies of obligation; especially when they are made payable within so short a\r\nperiod as two or three months after their date. If, when the bill becomes due,\r\nthe acceptor does not pay it as soon as it is presented, he becomes from that\r\nmoment a bankrupt. The bill is protested, and returns upon the drawer, who, if\r\nhe does not immediately pay it, becomes likewise a bankrupt. If, before it came\r\nto the person who presents it to the acceptor for payment, it had passed\r\nthrough the hands of several other persons, who had successively advanced to\r\none another the contents of it, either in money or goods, and who, to express\r\nthat each of them had in his turn received those contents, had all of them in\r\ntheir order indorsed, that is, written their names upon the back of the bill;\r\neach indorser becomes in his turn liable to the owner of the bill for those\r\ncontents, and, if he fails to pay, he becomes too, from that moment, a\r\nbankrupt. Though the drawer, acceptor, and indorsers of the bill, should all of\r\nthem be persons of doubtful credit; yet, still the shortness of the date gives\r\nsome security to the owner of the bill. Though all of them may be very likely\r\nto become bankrupts, it is a chance if they all become so in so short a time.\r\nThe house is crazy, says a weary traveller to himself, and will not stand very\r\nlong; but it is a chance if it falls to-night, and I will venture, therefore,\r\nto sleep in it to-night.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trader A in Edinburgh, we shall suppose, draws a bill upon B in London,\r\npayable two months after date. In reality B in London owes nothing to A in\r\nEdinburgh; but he agrees to accept of A’s bill, upon condition, that\r\nbefore the term of payment he shall redraw upon A in Edinburgh for the same\r\nsum, together with the interest and a commission, another bill, payable\r\nlikewise two months after date. B accordingly, before the expiration of the\r\nfirst two months, redraws this bill upon A in Edinburgh; who, again before the\r\nexpiration of the second two months, draws a second bill upon B in London,\r\npayable likewise two months after date; and before the expiration of the third\r\ntwo months, B in London redraws upon A in Edinburgh another bill payable also\r\ntwo months after date. This practice has sometimes gone on, not only for\r\nseveral months, but for several years together, the bill always returning upon\r\nA in Edinburgh with the accumulated interest and commission of all the former\r\nbills. The interest was five per cent. in the year, and the commission was\r\nnever less than one half per cent. on each draught. This commission being\r\nrepeated more than six times in the year, whatever money A might raise by this\r\nexpedient might necessarily have cost him something more than eight per cent.\r\nin the year and sometimes a great deal more, when either the price of the\r\ncommission happened to rise, or when he was obliged to pay compound interest\r\nupon the interest and commission of former bills. This practice was called\r\nraising money by circulation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country where the ordinary profits of stock, in the greater part of\r\nmercantile projects, are supposed to run between six and ten per cent. it must\r\nhave been a very fortunate speculation, of which the returns could not only\r\nrepay the enormous expense at which the money was thus borrowed for carrying it\r\non, but afford, besides, a good surplus profit to the projector. Many vast and\r\nextensive projects, however, were undertaken, and for several years carried on,\r\nwithout any other fund to support them besides what was raised at this enormous\r\nexpense. The projectors, no doubt, had in their golden dreams the most distinct\r\nvision of this great profit. Upon their awakening, however, either at the end\r\nof their projects, or when they were no longer able to carry them on, they very\r\nseldom, I believe, had the good fortune to find it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n{The method described in the text was by no means either the most common or the\r\nmost expensive one in which those adventurers sometimes raised money by\r\ncirculation. It frequently happened, that A in Edinburgh would enable B in\r\nLondon to pay the first bill of exchange, by drawing, a few days before it\r\nbecame due, a second bill at three months date upon the same B in London. This\r\nbill, being payable to his own order, A sold in Edinburgh at par; and with its\r\ncontents purchased bills upon London, payable at sight to the order of B, to\r\nwhom he sent them by the post. Towards the end of the late war, the exchange\r\nbetween Edinburgh and London was frequently three per cent. against Edinburgh,\r\nand those bills at sight must frequently have cost A that premium. This\r\ntransaction, therefore, being repeated at least four times in the year, and\r\nbeing loaded with a commission of at least one half per cent. upon each\r\nrepetition, must at that period have cost A, at least, fourteen per cent. in\r\nthe year. At other times A would enable to discharge the first bill of\r\nexchange, by drawing, a few days before it became due, a second bill at two\r\nmonths date, not upon B, but upon some third person, C, for example, in London.\r\nThis other bill was made payable to the order of B, who, upon its being\r\naccepted by C, discounted it with some banker in London; and A enabled C to\r\ndischarge it, by drawing, a few day’s before it became due, a third bill\r\nlikewise at two months date, sometimes upon his first correspondent B, and\r\nsometimes upon some fourth or fifth person, D or E, for example. This third\r\nbill was made payable to the order of C, who, as soon as it was accepted,\r\ndiscounted it in the same manner with some banker in London. Such operations\r\nbeing repeated at least six times in the year, and being loaded with a\r\ncommission of at least one half per cent. upon each repetition, together with\r\nthe legal interest of five per cent. this method of raising money, in the same\r\nmanner as that described in the text, must have cost A something more than\r\neight per cent. By saving, however, the exchange between Edinburgh and London,\r\nit was less expensive than that mentioned in the foregoing part of this note;\r\nbut then it required an established credit with more houses than one in London,\r\nan advantage which many of these adventurers could not always find it easy to\r\nprocure.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bills which A in Edinburgh drew upon B in London, he regularly discounted\r\ntwo months before they were due, with some bank or banker in Edinburgh; and the\r\nbills which B in London redrew upon A in Edinburgh, he as regularly discounted,\r\neither with the Bank of England, or with some other banker in London. Whatever\r\nwas advanced upon such circulating bills was in Edinburgh advanced in the paper\r\nof the Scotch banks; and in London, when they were discounted at the Bank of\r\nEngland in the paper of that bank. Though the bills upon which this paper had\r\nbeen advanced were all of them repaid in their turn as soon as they became due,\r\nyet the value which had been really advanced upon the first bill was never\r\nreally returned to the banks which advanced it; because, before each bill\r\nbecame due, another bill was always drawn to somewhat a greater amount than the\r\nbill which was soon to be paid: and the discounting of this other bill was\r\nessentially necessary towards the payment of that which was soon to be due.\r\nThis payment, therefore, was altogether fictitious. The stream which, by means\r\nof those circulating bills of exchange, had once been made to run out from the\r\ncoffers of the banks, was never replaced by any stream which really ran into\r\nthem.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe paper which was issued upon those circulating bills of exchange amounted,\r\nupon many occasions, to the whole fund destined for carrying on some vast and\r\nextensive project of agriculture, commerce, or manufactures; and not merely to\r\nthat part of it which, had there been no paper money, the projector would have\r\nbeen obliged to keep by him unemployed, and in ready money, for answering\r\noccasional demands. The greater part of this paper was, consequently, over and\r\nabove the value of the gold and silver which would have circulated in the\r\ncountry, had there been no paper money. It was over and above, therefore, what\r\nthe circulation of the country could easily absorb and employ, and upon that\r\naccount, immediately returned upon the banks, in order to be exchanged for gold\r\nand silver, which they were to find as they could. It was a capital which those\r\nprojectors had very artfully contrived to draw from those banks, not only\r\nwithout their knowledge or deliberate consent, but for some time, perhaps,\r\nwithout their having the most distant suspicion that they had really advanced\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen two people, who are continually drawing and redrawing upon one another,\r\ndiscount their bills always with the same banker, he must immediately discover\r\nwhat they are about, and see clearly that they are trading, not with any\r\ncapital of their own, but with the capital which he advances to them. But this\r\ndiscovery is not altogether so easy when they discount their bills sometimes\r\nwith one banker, and sometimes with another, and when the two same persons do\r\nnot constantly draw and redraw upon one another, but occasionally run the round\r\nof a great circle of projectors, who find it for their interest to assist one\r\nanother in this method of raising money and to render it, upon that account, as\r\ndifficult as possible to distinguish between a real and a fictitious bill of\r\nexchange, between a bill drawn by a real creditor upon a real debtor, and a\r\nbill for which there was properly no real creditor but the bank which\r\ndiscounted it, nor any real debtor but the projector who made use of the money.\r\nWhen a banker had even made this discovery, he might sometimes make it too\r\nlate, and might find that he had already discounted the bills of those\r\nprojectors to so great an extent, that, by refusing to discount any more, he\r\nwould necessarily make them all bankrupts; and thus by ruining them, might\r\nperhaps ruin himself. For his own interest and safety, therefore, he might find\r\nit necessary, in this very perilous situation, to go on for some time,\r\nendeavouring, however, to withdraw gradually, and, upon that account, making\r\nevery day greater and greater difficulties about discounting, in order to force\r\nthese projectors by degrees to have recourse, either to other bankers, or to\r\nother methods of raising money: so as that he himself might, as soon as\r\npossible, get out of the circle. The difficulties, accordingly, which the Bank\r\nof England, which the principal bankers in London, and which even the more\r\nprudent Scotch banks began, after a certain time, and when all of them had\r\nalready gone too far, to make about discounting, not only alarmed, but enraged,\r\nin the highest degree, those projectors. Their own distress, of which this\r\nprudent and necessary reserve of the banks was, no doubt, the immediate\r\noccasion, they called the distress of the country; and this distress of the\r\ncountry, they said, was altogether owing to the ignorance, pusillanimity, and\r\nbad conduct of the banks, which did not give a sufficiently liberal aid to the\r\nspirited undertakings of those who exerted themselves in order to beautify,\r\nimprove, and enrich the country. It was the duty of the banks, they seemed to\r\nthink, to lend for as long a time, and to as great an extent, as they might\r\nwish to borrow. The banks, however, by refusing in this manner to give more\r\ncredit to those to whom they had already given a great deal too much, took the\r\nonly method by which it was now possible to save either their own credit, or\r\nthe public credit of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the midst of this clamour and distress, a new bank was established in\r\nScotland, for the express purpose of relieving the distress of the country. The\r\ndesign was generous; but the execution was imprudent, and the nature and causes\r\nof the distress which it meant to relieve, were not, perhaps, well understood.\r\nThis bank was more liberal than any other had ever been, both in granting\r\ncash-accounts, and in discounting bills of exchange. With regard to the latter,\r\nit seems to have made scarce any distinction between real and circulating\r\nbills, but to have discounted all equally. It was the avowed principle of this\r\nbank to advance upon any reasonable security, the whole capital which was to be\r\nemployed in those improvements of which the returns are the most slow and\r\ndistant, such as the improvements of land. To promote such improvements was\r\neven said to be the chief of the public-spirited purposes for which it was\r\ninstituted. By its liberality in granting cash-accounts, and in discounting\r\nbills of exchange, it, no doubt, issued great quantities of its bank notes. But\r\nthose bank notes being, the greater part of them, over and above what the\r\ncirculation of the country could easily absorb and employ, returned upon it, in\r\norder to be exchanged for gold and silver, as fast as they were issued. Its\r\ncoffers were never well filled. The capital which had been subscribed to this\r\nbank, at two different subscriptions, amounted to one hundred and sixty\r\nthousand pounds, of which eighty per cent. only was paid up. This sum ought to\r\nhave been paid in at several different instalments. A great part of the\r\nproprietors, when they paid in their first instalment, opened a cash-account\r\nwith the bank; and the directors, thinking themselves obliged to treat their\r\nown proprietors with the same liberality with which they treated all other men,\r\nallowed many of them to borrow upon this cash-account what they paid in upon\r\nall their subsequent instalments. Such payments, therefore, only put into one\r\ncoffer what had the moment before been taken out of another. But had the\r\ncoffers of this bank been filled ever so well, its excessive circulation must\r\nhave emptied them faster than they could have been replenished by any other\r\nexpedient but the ruinous one of drawing upon London; and when the bill became\r\ndue, paying it, together with interest and commission, by another draught upon\r\nthe same place. Its coffers having been filled so very ill, it is said to have\r\nbeen driven to this resource within a very few months after it began to do\r\nbusiness. The estates of the proprietors of this bank were worth several\r\nmillions, and, by their subscription to the original bond or contract of the\r\nbank, were really pledged for answering all its engagements. By means of the\r\ngreat credit which so great a pledge necessarily gave it, it was,\r\nnotwithstanding its too liberal conduct, enabled to carry on business for more\r\nthan two years. When it was obliged to stop, it had in the circulation about\r\ntwo hundred thousand pounds in bank notes. In order to support the circulation\r\nof those notes, which were continually returning upon it as fast as they were\r\nissued, it had been constantly in the practice of drawing bills of exchange\r\nupon London, of which the number and value were continually increasing, and,\r\nwhen it stopt, amounted to upwards of six hundred thousand pounds. This bank,\r\ntherefore, had, in little more than the course of two years, advanced to\r\ndifferent people upwards of eight hundred thousand pounds at five per cent.\r\nUpon the two hundred thousand pounds which it circulated in bank notes, this\r\nfive per cent. might perhaps be considered as a clear gain, without any other\r\ndeduction besides the expense of management. But upon upwards of six hundred\r\nthousand pounds, for which it was continually drawing bills of exchange upon\r\nLondon, it was paying, in the way of interest and commission, upwards of eight\r\nper cent. and was consequently losing more than three per cent. upon more than\r\nthree fourths of all its dealings.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe operations of this bank seem to have produced effects quite opposite to\r\nthose which were intended by the particular persons who planned and directed\r\nit. They seem to have intended to support the spirited undertakings, for as\r\nsuch they considered them, which were at that time carrying on in different\r\nparts of the country; and, at the same time, by drawing the whole banking\r\nbusiness to themselves, to supplant all the other Scotch banks, particularly\r\nthose established at Edinburgh, whose backwardness in discounting bills of\r\nexchange had given some offence. This bank, no doubt, gave some temporary\r\nrelief to those projectors, and enabled them to carry on their projects for\r\nabout two years longer than they could otherwise have done. But it thereby only\r\nenabled them to get so much deeper into debt; so that, when ruin came, it fell\r\nso much the heavier both upon them and upon their creditors. The operations of\r\nthis bank, therefore, instead of relieving, in reality aggravated in the\r\nlong-run the distress which those projectors had brought both upon themselves\r\nand upon their country. It would have been much better for themselves, their\r\ncreditors, and their country, had the greater part of them been obliged to stop\r\ntwo years sooner than they actually did. The temporary relief, however, which\r\nthis bank afforded to those projectors, proved a real and permanent relief to\r\nthe other Scotch banks. All the dealers in circulating bills of exchange, which\r\nthose other banks had become so backward in discounting, had recourse to this\r\nnew bank, where they were received with open arms. Those other banks,\r\ntherefore, were enabled to get very easily out of that fatal circle, from which\r\nthey could not otherwise have disengaged themselves without incurring a\r\nconsiderable loss, and perhaps, too, even some degree of discredit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the long-run, therefore, the operations of this bank increased the real\r\ndistress of the country, which it meant to relieve; and effectually relieved,\r\nfrom a very great distress, those rivals whom it meant to supplant.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt the first setting out of this bank, it was the opinion of some people, that\r\nhow fast soever its coffers might be emptied, it might easily replenish them,\r\nby raising money upon the securities of those to whom it had advanced its\r\npaper. Experience, I believe, soon convinced them that this method of raising\r\nmoney was by much too slow to answer their purpose; and that coffers which\r\noriginally were so ill filled, and which emptied themselves so very fast, could\r\nbe replenished by no other expedient but the ruinous one of drawing bills upon\r\nLondon, and when they became due, paying them by other draughts on the same\r\nplace, with accumulated interest and commission. But though they had been able\r\nby this method to raise money as fast as they wanted it, yet, instead of making\r\na profit, they must have suffered a loss of every such operation; so that in\r\nthe long-run they must have ruined themselves as a mercantile company, though\r\nperhaps not so soon as by the more expensive practice of drawing and redrawing.\r\nThey could still have made nothing by the interest of the paper, which, being\r\nover and above what the circulation of the country could absorb and employ,\r\nreturned upon them in order to be exchanged for gold and silver, as fast as\r\nthey issued it; and for the payment of which they were themselves continually\r\nobliged to borrow money. On the contrary, the whole expense of this borrowing,\r\nof employing agents to look out for people who had money to lend, of\r\nnegotiating with those people, and of drawing the proper bond or assignment,\r\nmust have fallen upon them, and have been so much clear loss upon the balance\r\nof their accounts. The project of replenishing their coffers in this manner may\r\nbe compared to that of a man who had a water-pond from which a stream was\r\ncontinually running out, and into which no stream was continually running, but\r\nwho proposed to keep it always equally full, by employing a number of people to\r\ngo continually with buckets to a well at some miles distance, in order to bring\r\nwater to replenish it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though this operation had proved not only practicable, but profitable to\r\nthe bank, as a mercantile company; yet the country could have derived no\r\nbenefit front it, but, on the contrary, must have suffered a very considerable\r\nloss by it. This operation could not augment, in the smallest degree, the\r\nquantity of money to be lent. It could only have erected this bank into a sort\r\nof general loan office for the whole country. Those who wanted to borrow must\r\nhave applied to this bank, instead of applying to the private persons who had\r\nlent it their money. But a bank which lends money, perhaps to five hundred\r\ndifferent people, the greater part of whom its directors can know very little\r\nabout, is not likely to be more judicious in the choice of its debtors than a\r\nprivate person who lends out his money among a few people whom he knows, and in\r\nwhose sober and frugal conduct he thinks he has good reason to confide. The\r\ndebtors of such a bank as that whose conduct I have been giving some account of\r\nwere likely, the greater part of them, to be chimerical projectors, the drawers\r\nand redrawers of circulating bills of exchange, who would employ the money in\r\nextravagant undertakings, which, with all the assistance that could be given\r\nthem, they would probably never be able to complete, and which, if they should\r\nbe completed, would never repay the expense which they had really cost, would\r\nnever afford a fund capable of maintaining a quantity of labour equal to that\r\nwhich had been employed about them. The sober and frugal debtors of private\r\npersons, on the contrary, would be more likely to employ the money borrowed in\r\nsober undertakings which were proportioned to their capitals, and which, though\r\nthey might have less of the grand and the marvellous, would have more of the\r\nsolid and the profitable; which would repay with a large profit whatever had\r\nbeen laid out upon them, and which would thus afford a fund capable of\r\nmaintaining a much greater quantity of labour than that which had been employed\r\nabout them. The success of this operation, therefore, without increasing in the\r\nsmallest degree the capital of the country, would only have transferred a great\r\npart of it from prudent and profitable to imprudent and unprofitable\r\nundertakings.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the industry of Scotland languished for want of money to employ it, was\r\nthe opinion of the famous Mr Law. By establishing a bank of a particular kind,\r\nwhich he seems to have imagined might issue paper to the amount of the whole\r\nvalue of all the lands in the country, he proposed to remedy this want of\r\nmoney. The parliament of Scotland, when he first proposed his project, did not\r\nthink proper to adopt it. It was afterwards adopted, with some variations, by\r\nthe Duke of Orleans, at that time regent of France. The idea of the possibility\r\nof multiplying paper money to almost any extent was the real foundation of what\r\nis called the Mississippi scheme, the most extravagant project, both of banking\r\nand stock-jobbing, that perhaps the world ever saw. The different operations of\r\nthis scheme are explained so fully, so clearly, and with so much order and\r\ndistinctness, by Mr Du Verney, in his Examination of the Political Reflections\r\nupon commerce and finances of Mr Du Tot, that I shall not give any account of\r\nthem. The principles upon which it was founded are explained by Mr Law himself,\r\nin a discourse concerning money and trade, which he published in Scotland when\r\nhe first proposed his project. The splendid but visionary ideas which are set\r\nforth in that and some other works upon the same principles, still continue to\r\nmake an impression upon many people, and have, perhaps, in part, contributed to\r\nthat excess of banking, which has of late been complained of, both in Scotland\r\nand in other places.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Bank of England is the greatest bank of circulation in Europe. It was\r\nincorporated, in pursuance of an act of parliament, by a charter under the\r\ngreat seal, dated the 27th of July 1694. It at that time advanced to government\r\nthe sum of £1,200,000 for an annuity of £100,000, or for £ 96,000 a-year,\r\ninterest at the rate of eight per cent. and £4,000 a-year for the expense of\r\nmanagement. The credit of the new government, established by the Revolution, we\r\nmay believe, must have been very low, when it was obliged to borrow at so high\r\nan interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1697, the bank was allowed to enlarge its capital stock, by an ingraftment\r\nof £1,001,171:10s. Its whole capital stock, therefore, amounted at this time to\r\n£2,201,171: 10s. This ingraftment is said to have been for the support of\r\npublic credit. In 1696, tallies had been at forty, and fifty, and sixty, per\r\ncent. discount, and bank notes at twenty per cent. {James Postlethwaite’s\r\nHistory of the Public Revenue, p.301.} During the great re-coinage of the\r\nsilver, which was going on at this time, the bank had thought proper to\r\ndiscontinue the payment of its notes, which necessarily occasioned their\r\ndiscredit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn pursuance of the 7th Anne, c. 7, the bank advanced and paid into the\r\nexchequer the sum of £400,000; making in all the sum of £1,600,000, which it\r\nhad advanced upon its original annuity of £96,000 interest, and £4,000 for\r\nexpense of management. In 1708, therefore, the credit of government was as good\r\nas that of private persons, since it could borrow at six per cent. interest,\r\nthe common legal and market rate of those times. In pursuance of the same act,\r\nthe bank cancelled exchequer bills to the amount of £ 1,775,027: 17s: 10½d. at\r\nsix per cent. interest, and was at the same time allowed to take in\r\nsubscriptions for doubling its capital. In 1703, therefore, the capital of the\r\nbank amounted to £4,402,343; and it had advanced to government the sum of\r\n£3,375,027:17:10½d.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy a call of fifteen per cent. in 1709, there was paid in, and made stock, £\r\n656,204:1:9d.; and by another of ten per cent. in 1710, £501,448:12:11d. In\r\nconsequence of those two calls, therefore, the bank capital amounted to £\r\n5,559,995:14:8d.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn pursuance of the 3rd George I. c.8, the bank delivered up two millions of\r\nexchequer Bills to be cancelled. It had at this time, therefore, advanced to\r\ngovernment £5,375,027:17 10d. In pursuance of the 8th George I. c.21, the bank\r\npurchased of the South-sea company, stock to the amount of £4,000,000: and in\r\n1722, in consequence of the subscriptions which it had taken in for enabling it\r\nto make this purchase, its capital stock was increased by £ 3,400,000. At this\r\ntime, therefore, the bank had advanced to the public £ 9,375,027 17s. 10½d.;\r\nand its capital stock amounted only to £ 8,959,995:14:8d. It was upon this\r\noccasion that the sum which the bank had advanced to the public, and for which\r\nit received interest, began first to exceed its capital stock, or the sum for\r\nwhich it paid a dividend to the proprietors of bank stock; or, in other words,\r\nthat the bank began to have an undivided capital, over and above its divided\r\none. It has continued to have an undivided capital of the same kind ever since.\r\nIn 1746, the bank had, upon different occasions, advanced to the public\r\n£11,686,800, and its divided capital had been raised by different calls and\r\nsubscriptions to £ 10,780,000. The state of those two sums has continued to be\r\nthe same ever since. In pursuance of the 4th of George III. c.25, the bank\r\nagreed to pay to government for the renewal of its charter £110,000, without\r\ninterest or re-payment. This sum, therefore did not increase either of those\r\ntwo other sums.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe dividend of the bank has varied according to the variations in the rate of\r\nthe interest which it has, at different times, received for the money it had\r\nadvanced to the public, as well as according to other circumstances. This rate\r\nof interest has gradually been reduced from eight to three per cent. For some\r\nyears past, the bank dividend has been at five and a half per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe stability of the bank of England is equal to that of the British\r\ngovernment. All that it has advanced to the public must be lost before its\r\ncreditors can sustain any loss. No other banking company in England can be\r\nestablished by act of parliament, or can consist of more than six members. It\r\nacts, not only as an ordinary bank, but as a great engine of state. It receives\r\nand pays the greater part of the annuities which are due to the creditors of\r\nthe public; it circulates exchequer bills; and it advances to government the\r\nannual amount of the land and malt taxes, which are frequently not paid up till\r\nsome years thereafter. In these different operations, its duty to the public\r\nmay sometimes have obliged it, without any fault of its directors, to overstock\r\nthe circulation with paper money. It likewise discounts merchants’ bills,\r\nand has, upon several different occasions, supported the credit of the\r\nprincipal houses, not only of England, but of Hamburgh and Holland. Upon one\r\noccasion, in 1763, it is said to have advanced for this purpose, in one week,\r\nabout £1,600,000, a great part of it in bullion. I do not, however, pretend to\r\nwarrant either the greatness of the sum, or the shortness of the time. Upon\r\nother occasions, this great company has been reduced to the necessity of paying\r\nin sixpences.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not by augmenting the capital of the country, but by rendering a greater\r\npart of that capital active and productive than would otherwise be so, that the\r\nmost judicious operations of banking can increase the industry of the country.\r\nThat part of his capital which a dealer is obliged to keep by him unemployed\r\nand in ready money, for answering occasional demands, is so much dead stock,\r\nwhich, so long as it remains in this situation, produces nothing, either to him\r\nor to his country. The judicious operations of banking enable him to convert\r\nthis dead stock into active and productive stock; into materials to work upon;\r\ninto tools to work with; and into provisions and subsistence to work for; into\r\nstock which produces something both to himself and to his country. The gold and\r\nsilver money which circulates in any country, and by means of which, the\r\nproduce of its land and labour is annually circulated and distributed to the\r\nproper consumers, is, in the same manner as the ready money of the dealer, all\r\ndead stock. It is a very valuable part of the capital of the country, which\r\nproduces nothing to the country. The judicious operations of banking, by\r\nsubstituting paper in the room of a great part of this gold and silver, enable\r\nthe country to convert a great part of this dead stock into active and\r\nproductive stock; into stock which produces something to the country. The gold\r\nand silver money which circulates in any country may very properly be compared\r\nto a highway, which, while it circulates and carries to market all the grass\r\nand corn of the country, produces itself not a single pile of either. The\r\njudicious operations of banking, by providing, if I may be allowed so violent a\r\nmetaphor, a sort of waggon-way through the air, enable the country to convert,\r\nas it were, a great part of its highways into good pastures, and corn fields,\r\nand thereby to increase, very considerably, the annual produce of its land and\r\nlabour. The commerce and industry of the country, however, it must be\r\nacknowledged, though they may be somewhat augmented, cannot be altogether so\r\nsecure, when they are thus, as it were, suspended upon the Daedalian wings of\r\npaper money, as when they travel about upon the solid ground of gold and\r\nsilver. Over and above the accidents to which they are exposed from the\r\nunskilfulness of the conductors of this paper money, they are liable to several\r\nothers, from which no prudence or skill of those conductors can guard them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn unsuccessful war, for example, in which the enemy got possession of the\r\ncapital, and consequently of that treasure which supported the credit of the\r\npaper money, would occasion a much greater confusion in a country where the\r\nwhole circulation was carried on by paper, than in one where the greater part\r\nof it was carried on by gold and silver. The usual instrument of commerce\r\nhaving lost its value, no exchanges could be made but either by barter or upon\r\ncredit. All taxes having been usually paid in paper money, the prince would not\r\nhave wherewithal either to pay his troops, or to furnish his magazines; and the\r\nstate of the country would be much more irretrievable than if the greater part\r\nof its circulation had consisted in gold and silver. A prince, anxious to\r\nmaintain his dominions at all times in the state in which he can most easily\r\ndefend them, ought upon this account to guard not only against that excessive\r\nmultiplication of paper money which ruins the very banks which issue it, but\r\neven against that multiplication of it which enables them to fill the greater\r\npart of the circulation of the country with it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe circulation of every country may be considered as divided into two\r\ndifferent branches; the circulation of the dealers with one another, and the\r\ncirculation between the dealers and the consumers. Though the same pieces of\r\nmoney, whether paper or metal, may be employed sometimes in the one circulation\r\nand sometimes in the other; yet as both are constantly going on at the same\r\ntime, each requires a certain stock of money, of one kind or another, to carry\r\nit on. The value of the goods circulated between the different dealers never\r\ncan exceed the value of those circulated between the dealers and the consumers;\r\nwhatever is bought by the dealers being ultimately destined to be sold to the\r\nconsumers. The circulation between the dealers, as it is carried on by\r\nwholesale, requires generally a pretty large sum for every particular\r\ntransaction. That between the dealers and the consumers, on the contrary, as it\r\nis generally carried on by retail, frequently requires but very small ones, a\r\nshilling, or even a halfpenny, being often sufficient. But small sums circulate\r\nmuch faster than large ones. A shilling changes masters more frequently than a\r\nguinea, and a halfpenny more frequently than a shilling. Though the annual\r\npurchases of all the consumers, therefore, are at least equal in value to those\r\nof all the dealers, they can generally be transacted with a much smaller\r\nquantity of money; the same pieces, by a more rapid circulation, serving as the\r\ninstrument of many more purchases of the one kind than of the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPaper money may be so regulated as either to confine itself very much to the\r\ncirculation between the different dealers, or to extend itself likewise to a\r\ngreat part of that between the dealers and the consumers. Where no bank notes\r\nare circulated under £10 value, as in London, paper money confines itself very\r\nmuch to the circulation between the dealers. When a ten pound bank note comes\r\ninto the hands of a consumer, he is generally obliged to change it at the first\r\nshop where he has occasion to purchase five shillings worth of goods; so that\r\nit often returns into the hands of a dealer before the consumer has spent the\r\nfortieth part of the money. Where bank notes are issued for so small sums as\r\n20s. as in Scotland, paper money extends itself to a considerable part of the\r\ncirculation between dealers and consumers. Before the Act of parliament which\r\nput a stop to the circulation of ten and five shilling notes, it filled a still\r\ngreater part of that circulation. In the currencies of North America, paper was\r\ncommonly issued for so small a sum as a shilling, and filled almost the whole\r\nof that circulation. In some paper currencies of Yorkshire, it was issued even\r\nfor so small a sum as a sixpence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhere the issuing of bank notes for such very small sums is allowed, and\r\ncommonly practised, many mean people are both enabled and encouraged to become\r\nbankers. A person whose promissory note for £5, or even for 20s. would be\r\nrejected by every body, will get it to be received without scruple when it is\r\nissued for so small a sum as a sixpence. But the frequent bankruptcies to which\r\nsuch beggarly bankers must be liable, may occasion a very considerable\r\ninconveniency, and sometimes even a very great calamity, to many poor people\r\nwho had received their notes in payment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt were better, perhaps, that no bank notes were issued in any part of the\r\nkingdom for a smaller sum than £5. Paper money would then, probably, confine\r\nitself, in every part of the kingdom, to the circulation between the different\r\ndealers, as much as it does at present in London, where no bank notes are\r\nissued under £10 value; £5 being, in most part of the kingdom, a sum which,\r\nthough it will purchase, perhaps, little more than half the quantity of goods,\r\nis as much considered, and is as seldom spent all at once, as £10 are amidst\r\nthe profuse expense of London.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhere paper money, it is to be observed, is pretty much confined to the\r\ncirculation between dealers and dealers, as at London, there is always plenty\r\nof gold and silver. Where it extends itself to a considerable part of the\r\ncirculation between dealers and consumers, as in Scotland, and still more in\r\nNorth America, it banishes gold and silver almost entirely from the country;\r\nalmost all the ordinary transactions of its interior commerce being thus\r\ncarried on by paper. The suppression of ten and five shilling bank notes,\r\nsomewhat relieved the scarcity of gold and silver in Scotland; and the\r\nsuppression of twenty shilling notes will probably relieve it still more. Those\r\nmetals are said to have become more abundant in America, since the suppression\r\nof some of their paper currencies. They are said, likewise, to have been more\r\nabundant before the institution of those currencies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough paper money should be pretty much confined to the circulation between\r\ndealers and dealers, yet banks and bankers might still be able to give nearly\r\nthe same assistance to the industry and commerce of the country, as they had\r\ndone when paper money filled almost the whole circulation. The ready money\r\nwhich a dealer is obliged to keep by him, for answering occasional demands, is\r\ndestined altogether for the circulation between himself and other dealers of\r\nwhom he buys goods. He has no occasion to keep any by him for the circulation\r\nbetween himself and the consumers, who are his customers, and who bring ready\r\nmoney to him, instead of taking any from him. Though no paper money, therefore,\r\nwas allowed to be issued, but for such sums as would confine it pretty much to\r\nthe circulation between dealers and dealers; yet partly by discounting real\r\nbills of exchange, and partly by lending upon cash-accounts, banks and bankers\r\nmight still be able to relieve the greater part of those dealers from the\r\nnecessity of keeping any considerable part of their stock by them unemployed,\r\nand in ready money, for answering occasional demands. They might still be able\r\nto give the utmost assistance which banks and bankers can with propriety give\r\nto traders of every kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo restrain private people, it may be said, from receiving in payment the\r\npromissory notes of a banker for any sum, whether great or small, when they\r\nthemselves are willing to receive them; or, to restrain a banker from issuing\r\nsuch notes, when all his neighbours are willing to accept of them, is a\r\nmanifest violation of that natural liberty, which it is the proper business of\r\nlaw not to infringe, but to support. Such regulations may, no doubt, be\r\nconsidered as in some respect a violation of natural liberty. But those\r\nexertions of the natural liberty of a few individuals, which might endanger the\r\nsecurity of the whole society, are, and ought to be, restrained by the laws of\r\nall governments; of the most free, as well as or the most despotical. The\r\nobligation of building party walls, in order to prevent the communication of\r\nfire, is a violation of natural liberty, exactly of the same kind with the\r\nregulations of the banking trade which are here proposed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA paper money, consisting in bank notes, issued by people of undoubted credit,\r\npayable upon demand, without any condition, and, in fact, always readily paid\r\nas soon as presented, is, in every respect, equal in value to gold and silver\r\nmoney, since gold and silver money can at anytime be had for it. Whatever is\r\neither bought or sold for such paper, must necessarily be bought or sold as\r\ncheap as it could have been for gold and silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe increase of paper money, it has been said, by augmenting the quantity, and\r\nconsequently diminishing the value, of the whole currency, necessarily augments\r\nthe money price of commodities. But as the quantity of gold and silver, which\r\nis taken from the currency, is always equal to the quantity of paper which is\r\nadded to it, paper money does not necessarily increase the quantity of the\r\nwhole currency. From the beginning of the last century to the present time,\r\nprovisions never were cheaper in Scotland than in 1759, though, from the\r\ncirculation of ten and five shilling bank notes, there was then more paper\r\nmoney in the country than at present. The proportion between the price of\r\nprovisions in Scotland and that in England is the same now as before the great\r\nmultiplication of banking companies in Scotland. Corn is, upon most occasions,\r\nfully as cheap in England as in France, though there is a great deal of paper\r\nmoney in England, and scarce any in France. In 1751 and 1752, when Mr Hume\r\npublished his Political Discourses, and soon after the great multiplication of\r\npaper money in Scotland, there was a very sensible rise in the price of\r\nprovisions, owing, probably, to the badness of the seasons, and not to the\r\nmultiplication of paper money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt would be otherwise, indeed, with a paper money, consisting in promissory\r\nnotes, of which the immediate payment depended, in any respect, either upon the\r\ngood will of those who issued them, or upon a condition which the holder of the\r\nnotes might not always have it in his power to fulfil, or of which the payment\r\nwas not exigible till after a certain number of years, and which, in the mean\r\ntime, bore no interest. Such a paper money would, no doubt, fall more or less\r\nbelow the value of gold and silver, according as the difficulty or uncertainty\r\nof obtaining immediate payment was supposed to be greater or less, or according\r\nto the greater or less distance of time at which payment was exigible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome years ago the different banking companies of Scotland were in the practice\r\nof inserting into their bank notes, what they called an optional clause; by\r\nwhich they promised payment to the bearer, either as soon as the note should be\r\npresented, or, in the option of the directors, six months after such\r\npresentment, together with the legal interest for the said six months. The\r\ndirectors of some of those banks sometimes took advantage of this optional\r\nclause, and sometimes threatened those who demanded gold and silver in exchange\r\nfor a considerable number of their notes, that they would take advantage of it,\r\nunless such demanders would content themselves with a part of what they\r\ndemanded. The promissory notes of those banking companies constituted, at that\r\ntime, the far greater part of the currency of Scotland, which this uncertainty\r\nof payment necessarily degraded below value of gold and silver money. During\r\nthe continuance of this abuse (which prevailed chiefly in 1762, 1763, and\r\n1764), while the exchange between London and Carlisle was at par, that between\r\nLondon and Dumfries would sometimes be four per cent. against Dumfries, though\r\nthis town is not thirty miles distant from Carlisle. But at Carlisle, bills\r\nwere paid in gold and silver; whereas at Dumfries they were paid in Scotch bank\r\nnotes; and the uncertainty of getting these bank notes exchanged for gold and\r\nsilver coin, had thus degraded them four per cent. below the value of that\r\ncoin. The same act of parliament which suppressed ten and five shilling bank\r\nnotes, suppressed likewise this optional clause, and thereby restored the\r\nexchange between England and Scotland to its natural rate, or to what the\r\ncourse of trade and remittances might happen to make it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the paper currencies of Yorkshire, the payment of so small a sum as 6d.\r\nsometimes depended upon the condition, that the holder of the note should bring\r\nthe change of a guinea to the person who issued it; a condition which the\r\nholders of such notes might frequently find it very difficult to fulfil, and\r\nwhich must have degraded this currency below the value of gold and silver\r\nmoney. An act of parliament, accordingly, declared all such clauses unlawful,\r\nand suppressed, in the same manner as in Scotland, all promissory notes,\r\npayable to the bearer, under 20s. value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe paper currencies of North America consisted, not in bank notes payable to\r\nthe bearer on demand, but in a government paper, of which the payment was not\r\nexigible till several years after it was issued; and though the colony\r\ngovernments paid no interest to the holders of this paper, they declared it to\r\nbe, and in fact rendered it, a legal tender of payment for the full value for\r\nwhich it was issued. But allowing the colony security to be perfectly good,\r\n£100, payable fifteen years hence, for example, in a country where interest is\r\nat six per cent., is worth little more than £40 ready money. To oblige a\r\ncreditor, therefore, to accept of this as full payment for a debt of £100,\r\nactually paid down in ready money, was an act of such violent injustice, as has\r\nscarce, perhaps, been attempted by the government of any other country which\r\npretended to be free. It bears the evident marks of having originally been,\r\nwhat the honest and downright Doctor Douglas assures us it was, a scheme of\r\nfraudulent debtors to cheat their creditors. The government of Pennsylvania,\r\nindeed, pretended, upon their first emission of paper money, in 1722, to render\r\ntheir paper of equal value with gold and silver, by enacting penalties against\r\nall those who made any difference in the price of their goods when they sold\r\nthem for a colony paper, and when they sold them for gold and silver, a\r\nregulation equally tyrannical, but much less, effectual, than that which it was\r\nmeant to support. A positive law may render a shilling a legal tender for a\r\nguinea, because it may direct the courts of justice to discharge the debtor who\r\nhas made that tender; but no positive law can oblige a person who sells goods,\r\nand who is at liberty to sell or not to sell as he pleases, to accept of a\r\nshilling as equivalent to a guinea in the price of them. Notwithstanding any\r\nregulation of this kind, it appeared, by the course of exchange with Great\r\nBritain, that £100 sterling was occasionally considered as equivalent, in some\r\nof the colonies, to £130, and in others to so great a sum as £1100 currency;\r\nthis difference in the value arising from the difference in the quantity of\r\npaper emitted in the different colonies, and in the distance and probability of\r\nthe term of its final discharge and redemption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo law, therefore, could be more equitable than the act of parliament, so\r\nunjustly complained of in the colonies, which declared, that no paper currency\r\nto be emitted there in time coming, should be a legal tender of payment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPennsylvania was always more moderate in its emissions of paper money than any\r\nother of our colonies. Its paper currency, accordingly, is said never to have\r\nsunk below the value of the gold and silver which was current in the colony\r\nbefore the first emission of its paper money. Before that emission, the colony\r\nhad raised the denomination of its coin, and had, by act of assembly, ordered\r\n5s. sterling to pass in the colonies for 6s:3d., and afterwards for 6s:8d. A\r\npound, colony currency, therefore, even when that currency was gold and silver,\r\nwas more than thirty per cent. below the value of £1 sterling; and when that\r\ncurrency was turned into paper, it was seldom much more than thirty per cent.\r\nbelow that value. The pretence for raising the denomination of the coin was to\r\nprevent the exportation of gold and silver, by making equal quantities of those\r\nmetals pass for greater sums in the colony than they did in the mother country.\r\nIt was found, however, that the price of all goods from the mother country rose\r\nexactly in proportion as they raised the denomination of their coin, so that\r\ntheir gold and silver were exported as fast as ever.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe paper of each colony being received in the payment of the provincial taxes,\r\nfor the full value for which it had been issued, it necessarily derived from\r\nthis use some additional value, over and above what it would have had, from the\r\nreal or supposed distance of the term of its final discharge and redemption.\r\nThis additional value was greater or less, according as the quantity of paper\r\nissued was more or less above what could be employed in the payment of the\r\ntaxes of the particular colony which issued it. It was in all the colonies very\r\nmuch above what could be employed in this manner.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA prince, who should enact that a certain proportion of his taxes should be\r\npaid in a paper money of a certain kind, might thereby give a certain value to\r\nthis paper money, even though the term of its final discharge and redemption\r\nshould depend altogether upon the will of the prince. If the bank which issued\r\nthis paper was careful to keep the quantity of it always somewhat below what\r\ncould easily be employed in this manner, the demand for it might be such as to\r\nmake it even bear a premium, or sell for somewhat more in the market than the\r\nquantity of gold or silver currency for which it was issued. Some people\r\naccount in this manner for what is called the agio of the bank of Amsterdam, or\r\nfor the superiority of bank money over current money, though this bank money,\r\nas they pretend, cannot be taken out of the bank at the will of the owner. The\r\ngreater part of foreign bills of exchange must be paid in bank money, that is,\r\nby a transfer in the books of the bank; and the directors of the bank, they\r\nallege, are careful to keep the whole quantity of bank money always below what\r\nthis use occasions a demand for. It is upon this account, they say, the bank\r\nmoney sells for a premium, or bears an agio of four or five per cent. above the\r\nsame nominal sum of the gold and silver currency of the country. This account\r\nof the bank of Amsterdam, however, it will appear hereafter, is in a great\r\nmeasure chimerical.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA paper currency which falls below the value of gold and silver coin, does not\r\nthereby sink the value of those metals, or occasion equal quantities of them to\r\nexchange for a smaller quantity of goods of any other kind. The proportion\r\nbetween the value of gold and silver and that of goods of any other kind,\r\ndepends in all cases, not upon the nature and quantity of any particular paper\r\nmoney, which may be current in any particular country, but upon the richness or\r\npoverty of the mines, which happen at any particular time to supply the great\r\nmarket of the commercial world with those metals. It depends upon the\r\nproportion between the quantity of labour which is necessary in order to bring\r\na certain quantity of gold and silver to market, and that which is necessary in\r\norder to bring thither a certain quantity of any other sort of goods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf bankers are restrained from issuing any circulating bank notes, or notes\r\npayable to the bearer, for less than a certain sum; and if they are subjected\r\nto the obligation of an immediate and unconditional payment of such bank notes\r\nas soon as presented, their trade may, with safety to the public, be rendered\r\nin all other respects perfectly free. The late multiplication of banking\r\ncompanies in both parts of the united kingdom, an event by which many people\r\nhave been much alarmed, instead of diminishing, increases the security of the\r\npublic. It obliges all of them to be more circumspect in their conduct, and, by\r\nnot extending their currency beyond its due proportion to their cash, to guard\r\nthemselves against those malicious runs, which the rivalship of so many\r\ncompetitors is always ready to bring upon them. It restrains the circulation of\r\neach particular company within a narrower circle, and reduces their circulating\r\nnotes to a smaller number. By dividing the whole circulation into a greater\r\nnumber of parts, the failure of any one company, an accident which, in the\r\ncourse of things, must sometimes happen, becomes of less consequence to the\r\npublic. This free competition, too, obliges all bankers to be more liberal in\r\ntheir dealings with their customers, lest their rivals should carry them away.\r\nIn general, if any branch of trade, or any division of labour, be advantageous\r\nto the public, the freer and more general the competition, it will always be\r\nthe more so.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap17\"\u003e\u003c/a\u003eCHAPTER III.\u003cbr\u003e\r\nOF THE ACCUMULATION OF CAPITAL, OR OF PRODUCTIVE AND UNPRODUCTIVE LABOUR.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThere is one sort of labour which adds to the value of the subject upon which\r\nit is bestowed; there is another which has no such effect. The former as it\r\nproduces a value, may be called productive, the latter, unproductive labour.\r\n{Some French authors of great learning and ingenuity have used those words in a\r\ndifferent sense. In the last chapter of the fourth book, I shall endeavour to\r\nshew that their sense is an improper one.} Thus the labour of a manufacturer\r\nadds generally to the value of the materials which he works upon, that of his\r\nown maintenance, and of his master’s profit. The labour of a menial\r\nservant, on the contrary, adds to the value of nothing. Though the manufacturer\r\nhas his wages advanced to him by his master, he in reality costs him no\r\nexpense, the value of those wages being generally restored, together with a\r\nprofit, in the improved value of the subject upon which his labour is bestowed.\r\nBut the maintenance of a menial servant never is restored. A man grows rich by\r\nemploying a multitude of manufacturers; he grows poor by maintaining a\r\nmultitude or menial servants. The labour of the latter, however, has its value,\r\nand deserves its reward as well as that of the former. But the labour of the\r\nmanufacturer fixes and realizes itself in some particular subject or vendible\r\ncommodity, which lasts for some time at least after that labour is past. It is,\r\nas it were, a certain quantity of labour stocked and stored up, to be employed,\r\nif necessary, upon some other occasion. That subject, or, what is the same\r\nthing, the price of that subject, can afterwards, if necessary, put into motion\r\na quantity of labour equal to that which had originally produced it. The labour\r\nof the menial servant, on the contrary, does not fix or realize itself in any\r\nparticular subject or vendible commodity. His services generally perish in the\r\nvery instant of their performance, and seldom leave any trace of value behind\r\nthem, for which an equal quantity of service could afterwards be procured.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe labour of some of the most respectable orders in the society is, like that\r\nof menial servants, unproductive of any value, and does not fix or realize\r\nitself in any permanent subject, or vendible commodity, which endures after\r\nthat labour is past, and for which an equal quantity of labour could afterwards\r\nbe procured. The sovereign, for example, with all the officers both of justice\r\nand war who serve under him, the whole army and navy, are unproductive\r\nlabourers. They are the servants of the public, and are maintained by a part of\r\nthe annual produce of the industry of other people. Their service, how\r\nhonourable, how useful, or how necessary soever, produces nothing for which an\r\nequal quantity of service can afterwards be procured. The protection, security,\r\nand defence, of the commonwealth, the effect of their labour this year, will\r\nnot purchase its protection, security, and defence, for the year to come. In\r\nthe same class must be ranked, some both of the gravest and most important, and\r\nsome of the most frivolous professions; churchmen, lawyers, physicians, men of\r\nletters of all kinds; players, buffoons, musicians, opera-singers,\r\nopera-dancers, etc. The labour of the meanest of these has a certain value,\r\nregulated by the very same principles which regulate that of every other sort\r\nof labour; and that of the noblest and most useful, produces nothing which\r\ncould afterwards purchase or procure an equal quantity of labour. Like the\r\ndeclamation of the actor, the harangue of the orator, or the tune of the\r\nmusician, the work of all of them perishes in the very instant of its\r\nproduction.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth productive and unproductive labourers, and those who do not labour at all,\r\nare all equally maintained by the annual produce of the land and labour of the\r\ncountry. This produce, how great soever, can never be infinite, but must have\r\ncertain limits. According, therefore, as a smaller or greater proportion of it\r\nis in any one year employed in maintaining unproductive hands, the more in the\r\none case, and the less in the other, will remain for the productive, and the\r\nnext year’s produce will be greater or smaller accordingly; the whole\r\nannual produce, if we except the spontaneous productions of the earth, being\r\nthe effect of productive labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the whole annual produce of the land and labour of every country is no\r\ndoubt ultimately destined for supplying the consumption of its inhabitants, and\r\nfor procuring a revenue to them; yet when it first comes either from the\r\nground, or from the hands of the productive labourers, it naturally divides\r\nitself into two parts. One of them, and frequently the largest, is, in the\r\nfirst place, destined for replacing a capital, or for renewing the provisions,\r\nmaterials, and finished work, which had been withdrawn from a capital; the\r\nother for constituting a revenue either to the owner of this capital, as the\r\nprofit of his stock, or to some other person, as the rent of his land. Thus, of\r\nthe produce of land, one part replaces the capital of the farmer; the other\r\npays his profit and the rent of the landlord; and thus constitutes a revenue\r\nboth to the owner of this capital, as the profits of his stock, and to some\r\nother person as the rent of his land. Of the produce of a great manufactory, in\r\nthe same manner, one part, and that always the largest, replaces the capital of\r\nthe undertaker of the work; the other pays his profit, and thus constitutes a\r\nrevenue to the owner of this capital.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat part of the annual produce of the land and labour of any country which\r\nreplaces a capital, never is immediately employed to maintain any but\r\nproductive hands. It pays the wages of productive labour only. That which is\r\nimmediately destined for constituting a revenue, either as profit or as rent,\r\nmay maintain indifferently either productive or unproductive hands.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever part of his stock a man employs as a capital, he always expects it to\r\nbe replaced to him with a profit. He employs it, therefore, in maintaining\r\nproductive hands only; and after having served in the function of a capital to\r\nhim, it constitutes a revenue to them. Whenever he employs any part of it in\r\nmaintaining unproductive hands of any kind, that part is from that moment\r\nwithdrawn from his capital, and placed in his stock reserved for immediate\r\nconsumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnproductive labourers, and those who do not labour at all, are all maintained\r\nby revenue; either, first, by that part of the annual produce which is\r\noriginally destined for constituting a revenue to some particular persons,\r\neither as the rent of land, or as the profits of stock; or, secondly, by that\r\npart which, though originally destined for replacing a capital, and for\r\nmaintaining productive labourers only, yet when it comes into their hands,\r\nwhatever part of it is over and above their necessary subsistence, may be\r\nemployed in maintaining indifferently either productive or unproductive hands.\r\nThus, not only the great landlord or the rich merchant, but even the common\r\nworkman, if his wages are considerable, may maintain a menial servant; or he\r\nmay sometimes go to a play or a puppet-show, and so contribute his share\r\ntowards maintaining one set of unproductive labourers; or he may pay some\r\ntaxes, and thus help to maintain another set, more honourable and useful,\r\nindeed, but equally unproductive. No part of the annual produce, however, which\r\nhad been originally destined to replace a capital, is ever directed towards\r\nmaintaining unproductive hands, till after it has put into motion its full\r\ncomplement of productive labour, or all that it could put into motion in the\r\nway in which it was employed. The workman must have earned his wages by work\r\ndone, before he can employ any part of them in this manner. That part, too, is\r\ngenerally but a small one. It is his spare revenue only, of which productive\r\nlabourers have seldom a great deal. They generally have some, however; and in\r\nthe payment of taxes, the greatness of their number may compensate, in some\r\nmeasure, the smallness of their contribution. The rent of land and the profits\r\nof stock are everywhere, therefore, the principal sources from which\r\nunproductive hands derive their subsistence. These are the two sorts of revenue\r\nof which the owners have generally most to spare. They might both maintain\r\nindifferently, either productive or unproductive hands. They seem, however, to\r\nhave some predilection for the latter. The expense of a great lord feeds\r\ngenerally more idle than industrious people. The rich merchant, though with his\r\ncapital he maintains industrious people only, yet by his expense, that is, by\r\nthe employment of his revenue, he feeds commonly the very same sort as the\r\ngreat lord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion, therefore, between the productive and unproductive hands,\r\ndepends very much in every country upon the proportion between that part of the\r\nannual produce, which, as soon as it comes either from the ground, or from the\r\nhands of the productive labourers, is destined for replacing a capital, and\r\nthat which is destined for constituting a revenue, either as rent or as profit.\r\nThis proportion is very different in rich from what it is in poor countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, at present, in the opulent countries of Europe, a very large, frequently\r\nthe largest, portion of the produce of the land, is destined for replacing the\r\ncapital of the rich and independent farmer; the other for paying his profits,\r\nand the rent of the landlord. But anciently, during the prevalency of the\r\nfeudal government, a very small portion of the produce was sufficient to\r\nreplace the capital employed in cultivation. It consisted commonly in a few\r\nwretched cattle, maintained altogether by the spontaneous produce of\r\nuncultivated land, and which might, therefore, be considered as a part of that\r\nspontaneous produce. It generally, too, belonged to the landlord, and was by\r\nhim advanced to the occupiers of the land. All the rest of the produce properly\r\nbelonged to him too, either as rent for his land, or as profit upon this paltry\r\ncapital. The occupiers of land were generally bond-men, whose persons and\r\neffects were equally his property. Those who were not bond-men were tenants at\r\nwill; and though the rent which they paid was often nominally little more than\r\na quit-rent, it really amounted to the whole produce of the land. Their lord\r\ncould at all times command their labour in peace and their service in war.\r\nThough they lived at a distance from his house, they were equally dependent\r\nupon him as his retainers who lived in it. But the whole produce of the land\r\nundoubtedly belongs to him, who can dispose of the labour and service of all\r\nthose whom it maintains. In the present state of Europe, the share of the\r\nlandlord seldom exceeds a third, sometimes not a fourth part of the whole\r\nproduce of the land. The rent of land, however, in all the improved parts of\r\nthe country, has been tripled and quadrupled since those ancient times; and\r\nthis third or fourth part of the annual produce is, it seems, three or four\r\ntimes greater than the whole had been before. In the progress of improvement,\r\nrent, though it increases in proportion to the extent, diminishes in proportion\r\nto the produce of the land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the opulent countries of Europe, great capitals are at present employed in\r\ntrade and manufactures. In the ancient state, the little trade that was\r\nstirring, and the few homely and coarse manufactures that were carried on,\r\nrequired but very small capitals. These, however, must have yielded very large\r\nprofits. The rate of interest was nowhere less than ten per cent. and their\r\nprofits must have been sufficient to afford this great interest. At present,\r\nthe rate of interest, in the improved parts of Europe, is nowhere higher than\r\nsix per cent.; and in some of the most improved, it is so low as four, three,\r\nand two per cent. Though that part of the revenue of the inhabitants which is\r\nderived from the profits of stock, is always much greater in rich than in poor\r\ncountries, it is because the stock is much greater; in proportion to the stock,\r\nthe profits are generally much less.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat part of the annual produce, therefore, which, as soon as it comes either\r\nfrom the ground, or from the hands of the productive labourers, is destined for\r\nreplacing a capital, is not only much greater in rich than in poor countries,\r\nbut bears a much greater proportion to that which is immediately destined for\r\nconstituting a revenue either as rent or as profit. The funds destined for the\r\nmaintenance of productive labour are not only much greater in the former than\r\nin the latter, but bear a much greater proportion to those which, though they\r\nmay be employed to maintain either productive or unproductive hands, have\r\ngenerally a predilection for the latter.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion between those different funds necessarily determines in every\r\ncountry the general character of the inhabitants as to industry or idleness. We\r\nare more industrious than our forefathers, because, in the present times, the\r\nfunds destined for the maintenance of industry are much greater in proportion\r\nto those which are likely to be employed in the maintenance of idleness, than\r\nthey were two or three centuries ago. Our ancestors were idle for want of a\r\nsufficient encouragement to industry. It is better, says the proverb, to play\r\nfor nothing, than to work for nothing. In mercantile and manufacturing towns,\r\nwhere the inferior ranks of people are chiefly maintained by the employment of\r\ncapital, they are in general industrious, sober, and thriving; as in many\r\nEnglish, and in most Dutch towns. In those towns which are principally\r\nsupported by the constant or occasional residence of a court, and in which the\r\ninferior ranks of people are chiefly maintained by the spending of revenue,\r\nthey are in general idle, dissolute, and poor; as at Rome, Versailles,\r\nCompeigne, and Fontainbleau. If you except Rouen and Bourdeaux, there is little\r\ntrade or industry in any of the parliament towns of France; and the inferior\r\nranks of people, being chiefly maintained by the expense of the members of the\r\ncourts of justice, and of those who come to plead before them, are in general\r\nidle and poor. The great trade of Rouen and Bourdeaux seems to be altogether\r\nthe effect of their situation. Rouen is necessarily the entrepot of almost all\r\nthe goods which are brought either from foreign countries, or from the maritime\r\nprovinces of France, for the consumption of the great city of Paris. Bourdeaux\r\nis, in the same manner, the entrepot of the wines which grow upon the banks of\r\nthe Garronne, and of the rivers which run into it, one of the richest wine\r\ncountries in the world, and which seems to produce the wine fittest for\r\nexportation, or best suited to the taste of foreign nations. Such advantageous\r\nsituations necessarily attract a great capital by the great employment which\r\nthey afford it; and the employment of this capital is the cause of the industry\r\nof those two cities. In the other parliament towns of France, very little more\r\ncapital seems to be employed than what is necessary for supplying their own\r\nconsumption; that is, little more than the smallest capital which can be\r\nemployed in them. The same thing may be said of Paris, Madrid, and Vienna. Of\r\nthose three cities, Paris is by far the most industrious, but Paris itself is\r\nthe principal market of all the manufactures established at Paris, and its own\r\nconsumption is the principal object of all the trade which it carries on.\r\nLondon, Lisbon, and Copenhagen, are, perhaps, the only three cities in Europe,\r\nwhich are both the constant residence of a court, and can at the same time be\r\nconsidered as trading cities, or as cities which trade not only for their own\r\nconsumption, but for that of other cities and countries. The situation of all\r\nthe three is extremely advantageous, and naturally fits them to be the\r\nentrepots of a great part of the goods destined for the consumption of distant\r\nplaces. In a city where a great revenue is spent, to employ with advantage a\r\ncapital for any other purpose than for supplying the consumption of that city,\r\nis probably more difficult than in one in which the inferior ranks of people\r\nhave no other maintenance but what they derive from the employment of such a\r\ncapital. The idleness of the greater part of the people who are maintained by\r\nthe expense of revenue, corrupts, it is probable, the industry of those who\r\nought to be maintained by the employment of capital, and renders it less\r\nadvantageous to employ a capital there than in other places. There was little\r\ntrade or industry in Edinburgh before the Union. When the Scotch parliament was\r\nno longer to be assembled in it, when it ceased to be the necessary residence\r\nof the principal nobility and gentry of Scotland, it became a city of some\r\ntrade and industry. It still continues, however, to be the residence of the\r\nprincipal courts of justice in Scotland, of the boards of customs and excise,\r\netc. A considerable revenue, therefore, still continues to be spent in it. In\r\ntrade and industry, it is much inferior to Glasgow, of which the inhabitants\r\nare chiefly maintained by the employment of capital. The inhabitants of a large\r\nvillage, it has sometimes been observed, after having made considerable\r\nprogress in manufactures, have become idle and poor, in consequence of a great\r\nlord’s having taken up his residence in their neighbourhood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion between capital and revenue, therefore, seems everywhere to\r\nregulate the proportion between industry and idleness. Wherever capital\r\npredominates, industry prevails; wherever revenue, idleness. Every increase or\r\ndiminution of capital, therefore, naturally tends to increase or diminish the\r\nreal quantity of industry, the number of productive hands, and consequently the\r\nexchangeable value of the annual produce of the land and labour of the country,\r\nthe real wealth and revenue of all its inhabitants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCapitals are increased by parsimony, and diminished by prodigality and\r\nmisconduct.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever a person saves from his revenue he adds to his capital, and either\r\nemploys it himself in maintaining an additional number of productive hands, or\r\nenables some other person to do so, by lending it to him for an interest, that\r\nis, for a share of the profits. As the capital of an individual can be\r\nincreased only by what he saves from his annual revenue or his annual gains, so\r\nthe capital of a society, which is the same with that of all the individuals\r\nwho compose it, can be increased only in the same manner.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nParsimony, and not industry, is the immediate cause of the increase of capital.\r\nIndustry, indeed, provides the subject which parsimony accumulates; but\r\nwhatever industry might acquire, if parsimony did not save and store up, the\r\ncapital would never be the greater.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nParsimony, by increasing the fund which is destined for the maintenance of\r\nproductive hands, tends to increase the number of those hands whose labour adds\r\nto the value of the subject upon which it is bestowed. It tends, therefore, to\r\nincrease the exchangeable value of the annual produce of the land and labour of\r\nthe country. It puts into motion an additional quantity of industry, which\r\ngives an additional value to the annual produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is annually saved, is as regularly consumed as what is annually spent, and\r\nnearly in the same time too: but it is consumed by a different set of people.\r\nThat portion of his revenue which a rich man annually spends, is, in most\r\ncases, consumed by idle guests and menial servants, who leave nothing behind\r\nthem in return for their consumption. That portion which he annually saves, as,\r\nfor the sake of the profit, it is immediately employed as a capital, is\r\nconsumed in the same manner, and nearly in the same time too, but by a\r\ndifferent set of people: by labourers, manufacturers, and artificers, who\r\nreproduce, with a profit, the value of their annual consumption. His revenue,\r\nwe shall suppose, is paid him in money. Had he spent the whole, the food,\r\nclothing, and lodging, which the whole could have purchased, would have been\r\ndistributed among the former set of people. By saving a part of it, as that\r\npart is, for the sake of the profit, immediately employed as a capital, either\r\nby himself or by some other person, the food, clothing, and lodging, which may\r\nbe purchased with it, are necessarily reserved for the latter. The consumption\r\nis the same, but the consumers are different.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy what a frugal man annually saves, he not only affords maintenance to an\r\nadditional number of productive hands, for that of the ensuing year, but like\r\nthe founder of a public work-house he establishes, as it were, a perpetual fund\r\nfor the maintenance of an equal number in all times to come. The perpetual\r\nallotment and destination of this fund, indeed, is not always guarded by any\r\npositive law, by any trust-right or deed of mortmain. It is always guarded,\r\nhowever, by a very powerful principle, the plain and evident interest of every\r\nindividual to whom any share of it shall ever belong. No part of it can ever\r\nafterwards be employed to maintain any but productive hands, without an evident\r\nloss to the person who thus perverts it from its proper destination.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe prodigal perverts it in this manner: By not confining his expense within\r\nhis income, he encroaches upon his capital. Like him who perverts the revenues\r\nof some pious foundation to profane purposes, he pays the wages of idleness\r\nwith those funds which the frugality of his forefathers had, as it were,\r\nconsecrated to the maintenance of industry. By diminishing the funds destined\r\nfor the employment of productive labour, he necessarily diminishes, so far as\r\nit depends upon him, the quantity of that labour which adds a value to the\r\nsubject upon which it is bestowed, and, consequently, the value of the annual\r\nproduce of the land and labour of the whole country, the real wealth and\r\nrevenue of its inhabitants. If the prodigality of some were not compensated by\r\nthe frugality of others, the conduct of every prodigal, by feeding the idle\r\nwith the bread of the industrious, would tend not only to beggar himself, but\r\nto impoverish his country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the expense of the prodigal should be altogether in home made, and no\r\npart of it in foreign commodities, its effect upon the productive funds of the\r\nsociety would still be the same. Every year there would still be a certain\r\nquantity of food and clothing, which ought to have maintained productive,\r\nemployed in maintaining unproductive hands. Every year, therefore, there would\r\nstill be some diminution in what would otherwise have been the value of the\r\nannual produce of the land and labour of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis expense, it may be said, indeed, not being in foreign goods, and not\r\noccasioning any exportation of gold and silver, the same quantity of money\r\nwould remain in the country as before. But if the quantity of food and clothing\r\nwhich were thus consumed by unproductive, had been distributed among productive\r\nhands, they would have reproduced, together with a profit, the full value of\r\ntheir consumption. The same quantity of money would, in this case, equally have\r\nremained in the country, and there would, besides, have been a reproduction of\r\nan equal value of consumable goods. There would have been two values instead of\r\none.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same quantity of money, besides, can not long remain in any country in\r\nwhich the value of the annual produce diminishes. The sole use of money is to\r\ncirculate consumable goods. By means of it, provisions, materials, and finished\r\nwork, are bought and sold, and distributed to their proper consumers. The\r\nquantity of money, therefore, which can be annually employed in any country,\r\nmust be determined by the value of the consumable goods annually circulated\r\nwithin it. These must consist, either in the immediate produce of the land and\r\nlabour of the country itself, or in something which had been purchased with\r\nsome part of that produce. Their value, therefore, must diminish as the value\r\nof that produce diminishes, and along with it the quantity of money which can\r\nbe employed in circulating them. But the money which, by this annual diminution\r\nof produce, is annually thrown out of domestic circulation, will not be allowed\r\nto lie idle. The interest of whoever possesses it requires that it should be\r\nemployed; but having no employment at home, it will, in spite of all laws and\r\nprohibitions, be sent abroad, and employed in purchasing consumable goods,\r\nwhich may be of some use at home. Its annual exportation will, in this manner,\r\ncontinue for some time to add something to the annual consumption of the\r\ncountry beyond the value of its own annual produce. What in the days of its\r\nprosperity had been saved from that annual produce, and employed in purchasing\r\ngold and silver, will contribute, for some little time, to support its\r\nconsumption in adversity. The exportation of gold and silver is, in this case,\r\nnot the cause, but the effect of its declension, and may even, for some little\r\ntime, alleviate the misery of that declension.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of money, on the contrary, must in every country naturally\r\nincrease as the value of the annual produce increases. The value of the\r\nconsumable goods annually circulated within the society being greater, will\r\nrequire a greater quantity of money to circulate them. A part of the increased\r\nproduce, therefore, will naturally be employed in purchasing, wherever it is to\r\nbe had, the additional quantity of gold and silver necessary for circulating\r\nthe rest. The increase of those metals will, in this case, be the effect, not\r\nthe cause, of the public prosperity. Gold and silver are purchased everywhere\r\nin the same manner. The food, clothing, and lodging, the revenue and\r\nmaintenance, of all those whose labour or stock is employed in bringing them\r\nfrom the mine to the market, is the price paid for them in Peru as well as in\r\nEngland. The country which has this price to pay, will never belong without the\r\nquantity of those metals which it has occasion for; and no country will ever\r\nlong retain a quantity which it has no occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever, therefore, we may imagine the real wealth and revenue of a country to\r\nconsist in, whether in the value of the annual produce of its land and labour,\r\nas plain reason seems to dictate, or in the quantity of the precious metals\r\nwhich circulate within it, as vulgar prejudices suppose; in either view of the\r\nmatter, every prodigal appears to be a public enemy, and every frugal man a\r\npublic benefactor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe effects of misconduct are often the same as those of prodigality. Every\r\ninjudicious and unsuccessful project in agriculture, mines, fisheries, trade,\r\nor manufactures, tends in the same manner to diminish the funds destined for\r\nthe maintenance of productive labour. In every such project, though the capital\r\nis consumed by productive hands only, yet as, by the injudicious manner in\r\nwhich they are employed, they do not reproduce the full value of their\r\nconsumption, there must always be some diminution in what would otherwise have\r\nbeen the productive funds of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt can seldom happen, indeed, that the circumstances of a great nation can be\r\nmuch affected either by the prodigality or misconduct of individuals; the\r\nprofusion or imprudence of some being always more than compensated by the\r\nfrugality and good conduct of others.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWith regard to profusion, the principle which prompts to expense is the passion\r\nfor present enjoyment; which, though sometimes violent and very difficult to be\r\nrestrained, is in general only momentary and occasional. But the principle\r\nwhich prompts to save, is the desire of bettering our condition; a desire\r\nwhich, though generally calm and dispassionate, comes with us from the womb,\r\nand never leaves us till we go into the grave. In the whole interval which\r\nseparates those two moments, there is scarce, perhaps, a single instance, in\r\nwhich any man is so perfectly and completely satisfied with his situation, as\r\nto be without any wish of alteration or improvement of any kind. An\r\naugmentation of fortune is the means by which the greater part of men propose\r\nand wish to better their condition. It is the means the most vulgar and the\r\nmost obvious; and the most likely way of augmenting their fortune, is to save\r\nand accumulate some part of what they acquire, either regularly and annually,\r\nor upon some extraordinary occasion. Though the principle of expense,\r\ntherefore, prevails in almost all men upon some occasions, and in some men upon\r\nalmost all occasions; yet in the greater part of men, taking the whole course\r\nof their life at an average, the principle of frugality seems not only to\r\npredominate, but to predominate very greatly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWith regard to misconduct, the number of prudent and successful undertakings is\r\neverywhere much greater than that of injudicious and unsuccessful ones. After\r\nall our complaints of the frequency of bankruptcies, the unhappy men who fall\r\ninto this misfortune, make but a very small part of the whole number engaged in\r\ntrade, and all other sorts of business; not much more, perhaps, than one in a\r\nthousand. Bankruptcy is, perhaps, the greatest and most humiliating calamity\r\nwhich can befal an innocent man. The greater part of men, therefore, are\r\nsufficiently careful to avoid it. Some, indeed, do not avoid it; as some do not\r\navoid the gallows.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGreat nations are never impoverished by private, though they sometimes are by\r\npublic prodigality and misconduct. The whole, or almost the whole public\r\nrevenue is, in most countries, employed in maintaining unproductive hands. Such\r\nare the people who compose a numerous and splendid court, a great\r\necclesiastical establishment, great fleets and armies, who in time of peace\r\nproduce nothing, and in time of war acquire nothing which can compensate the\r\nexpense of maintaining them, even while the war lasts. Such people, as they\r\nthemselves produce nothing, are all maintained by the produce of other\r\nmen’s labour. When multiplied, therefore, to an unnecessary number, they\r\nmay in a particular year consume so great a share of this produce, as not to\r\nleave a sufficiency for maintaining the productive labourers, who should\r\nreproduce it next year. The next year’s produce, therefore, will be less\r\nthan that of the foregoing; and if the same disorder should continue, that of\r\nthe third year will be still less than that of the second. Those unproductive\r\nhands who should be maintained by a part only of the spare revenue of the\r\npeople, may consume so great a share of their whole revenue, and thereby oblige\r\nso great a number to encroach upon their capitals, upon the funds destined for\r\nthe maintenance of productive labour, that all the frugality and good conduct\r\nof individuals may not be able to compensate the waste and degradation of\r\nproduce occasioned by this violent and forced encroachment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis frugality and good conduct, however, is, upon most occasions, it appears\r\nfrom experience, sufficient to compensate, not only the private prodigality and\r\nmisconduct of individuals, but the public extravagance of government. The\r\nuniform, constant, and uninterrupted effort of every man to better his\r\ncondition, the principle from which public and national, as well as private\r\nopulence is originally derived, is frequently powerful enough to maintain the\r\nnatural progress of things towards improvement, in spite both of the\r\nextravagance of government, and of the greatest errors of administration. Like\r\nthe unknown principle of animal life, it frequently restores health and vigour\r\nto the constitution, in spite not only of the disease, but of the absurd\r\nprescriptions of the doctor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe annual produce of the land and labour of any nation can be increased in its\r\nvalue by no other means, but by increasing either the number of its productive\r\nlabourers, or the productive powers of those labourers who had before been\r\nemployed. The number of its productive labourers, it is evident, can never be\r\nmuch increased, but in consequence of an increase of capital, or of the funds\r\ndestined for maintaining them. The productive powers of the same number of\r\nlabourers cannot be increased, but in consequence either of some addition and\r\nimprovement to those machines and instruments which facilitate and abridge\r\nlabour, or of more proper division and distribution of employment. In either\r\ncase, an additional capital is almost always required. It is by means of an\r\nadditional capital only, that the undertaker of any work can either provide his\r\nworkmen with better machinery, or make a more proper distribution of employment\r\namong them. When the work to be done consists of a number of parts, to keep\r\nevery man constantly employed in one way, requires a much greater capital than\r\nwhere every man is occasionally employed in every different part of the work.\r\nWhen we compare, therefore, the state of a nation at two different periods, and\r\nfind that the annual produce of its land and labour is evidently greater at the\r\nlatter than at the former, that its lands are better cultivated, its\r\nmanufactures more numerous and more flourishing, and its trade more extensive;\r\nwe may be assured that its capital must have increased during the interval\r\nbetween those two periods, and that more must have been added to it by the good\r\nconduct of some, than had been taken from it either by the private misconduct\r\nof others, or by the public extravagance of government. But we shall find this\r\nto have been the case of almost all nations, in all tolerably quiet and\r\npeaceable times, even of those who have not enjoyed the most prudent and\r\nparsimonious governments. To form a right judgment of it, indeed, we must\r\ncompare the state of the country at periods somewhat distant from one another.\r\nThe progress is frequently so gradual, that, at near periods, the improvement\r\nis not only not sensible, but, from the declension either of certain branches\r\nof industry, or of certain districts of the country, things which sometimes\r\nhappen, though the country in general is in great prosperity, there frequently\r\narises a suspicion, that the riches and industry of the whole are decaying.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe annual produce of the land and labour of England, for example, is certainly\r\nmuch greater than it was a little more than a century ago, at the restoration\r\nof Charles II. Though at present few people, I believe, doubt of this, yet\r\nduring this period five years have seldom passed away, in which some book or\r\npamphlet has not been published, written, too, with such abilities as to gain\r\nsome authority with the public, and pretending to demonstrate that the wealth\r\nof the nation was fast declining; that the country was depopulated, agriculture\r\nneglected, manufactures decaying, and trade undone. Nor have these publications\r\nbeen all party pamphlets, the wretched offspring of falsehood and venality.\r\nMany of them have been written by very candid and very intelligent people, who\r\nwrote nothing but what they believed, and for no other reason but because they\r\nbelieved it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe annual produce of the land and labour of England, again, was certainly much\r\ngreater at the Restoration than we can suppose it to have been about a hundred\r\nyears before, at the accession of Elizabeth. At this period, too, we have all\r\nreason to believe, the country was much more advanced in improvement, than it\r\nhad been about a century before, towards the close of the dissensions between\r\nthe houses of York and Lancaster. Even then it was, probably, in a better\r\ncondition than it had been at the Norman conquest: and at the Norman conquest,\r\nthan during the confusion of the Saxon heptarchy. Even at this early period, it\r\nwas certainly a more improved country than at the invasion of Julius Caesar,\r\nwhen its inhabitants were nearly in the same state with the savages in North\r\nAmerica.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn each of those periods, however, there was not only much private and public\r\nprofusion, many expensive and unnecessary wars, great perversion of the annual\r\nproduce from maintaining productive to maintain unproductive hands; but\r\nsometimes, in the confusion of civil discord, such absolute waste and\r\ndestruction of stock, as might be supposed, not only to retard, as it certainly\r\ndid, the natural accumulation of riches, but to have left the country, at the\r\nend of the period, poorer than at the beginning. Thus, in the happiest and most\r\nfortunate period of them all, that which has passed since the Restoration, how\r\nmany disorders and misfortunes have occurred, which, could they have been\r\nforeseen, not only the impoverishment, but the total ruin of the country would\r\nhave been expected from them? The fire and the plague of London, the two Dutch\r\nwars, the disorders of the revolution, the war in Ireland, the four expensive\r\nFrench wars of 1688, 1701, 1742, and 1756, together with the two rebellions of\r\n1715 and 1745. In the course of the four French wars, the nation has contracted\r\nmore than £145,000,000 of debt, over and above all the other extraordinary\r\nannual expense which they occasioned; so that the whole cannot be computed at\r\nless than £200,000,000. So great a share of the annual produce of the land and\r\nlabour of the country, has, since the Revolution, been employed upon different\r\noccasions, in maintaining an extraordinary number of unproductive hands. But\r\nhad not those wars given this particular direction to so large a capital, the\r\ngreater part of it would naturally have been employed in maintaining productive\r\nhands, whose labour would have replaced, with a profit, the whole value of\r\ntheir consumption. The value of the annual produce of the land and labour of\r\nthe country would have been considerably increased by it every year, and every\r\nyears increase would have augmented still more that of the following year. More\r\nhouses would have been built, more lands would have been improved, and those\r\nwhich had been improved before would have been better cultivated; more\r\nmanufactures would have been established, and those which had been established\r\nbefore would have been more extended; and to what height the real wealth and\r\nrevenue of the country might by this time have been raised, it is not perhaps\r\nvery easy even to imagine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the profusion of government must undoubtedly have retarded the\r\nnatural progress of England towards wealth and improvement, it has not been\r\nable to stop it. The annual produce of its land and labour is undoubtedly much\r\ngreater at present than it was either at the Restoration or at the Revolution.\r\nThe capital, therefore, annually employed in cultivating this land, and in\r\nmaintaining this labour, must likewise be much greater. In the midst of all the\r\nexactions of government, this capital has been silently and gradually\r\naccumulated by the private frugality and good conduct of individuals, by their\r\nuniversal, continual, and uninterrupted effort to better their own condition.\r\nIt is this effort, protected by law, and allowed by liberty to exert itself in\r\nthe manner that is most advantageous, which has maintained the progress of\r\nEngland towards opulence and improvement in almost all former times, and which,\r\nit is to be hoped, will do so in all future times. England, however, as it has\r\nnever been blessed with a very parsimonious government, so parsimony has at no\r\ntime been the characteristic virtue of its inhabitants. It is the highest\r\nimpertinence and presumption, therefore, in kings and ministers to pretend to\r\nwatch over the economy of private people, and to restrain their expense, either\r\nby sumptuary laws, or by prohibiting the importation of foreign luxuries. They\r\nare themselves always, and without any exception, the greatest spendthrifts in\r\nthe society. Let them look well after their own expense, and they may safely\r\ntrust private people with theirs. If their own extravagance does not ruin the\r\nstate, that of the subject never will.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs frugality increases, and prodigality diminishes, the public capital, so the\r\nconduct of those whose expense just equals their revenue, without either\r\naccumulating or encroaching, neither increases nor diminishes it. Some modes of\r\nexpense, however, seem to contribute more to the growth of public opulence than\r\nothers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue of an individual may be spent, either in things which are consumed\r\nimmediately, and in which one day’s expense can neither alleviate nor\r\nsupport that of another; or it may be spent in things mere durable, which can\r\ntherefore be accumulated, and in which every day’s expense may, as he\r\nchooses, either alleviate, or support and heighten, the effect of that of the\r\nfollowing day. A man of fortune, for example, may either spend his revenue in a\r\nprofuse and sumptuous table, and in maintaining a great number of menial\r\nservants, and a multitude of dogs and horses; or, contenting himself with a\r\nfrugal table, and few attendants, he may lay out the greater part of it in\r\nadorning his house or his country villa, in useful or ornamental buildings, in\r\nuseful or ornamental furniture, in collecting books, statues, pictures; or in\r\nthings more frivolous, jewels, baubles, ingenious trinkets of different kinds;\r\nor, what is most trifling of all, in amassing a great wardrobe of fine clothes,\r\nlike the favourite and minister of a great prince who died a few years ago.\r\nWere two men of equal fortune to spend their revenue, the one chiefly in the\r\none way, the other in the other, the magnificence of the person whose expense\r\nhad been chiefly in durable commodities, would be continually increasing, every\r\nday’s expense contributing something to support and heighten the effect\r\nof that of the following day; that of the other, on the contrary, would be no\r\ngreater at the end of the period than at the beginning. The former too would,\r\nat the end of the period, be the richer man of the two. He would have a stock\r\nof goods of some kind or other, which, though it might not be worth all that it\r\ncost, would always be worth something. No trace or vestige of the expense of\r\nthe latter would remain, and the effects of ten or twenty years’\r\nprofusion would be as completely annihilated as if they had never existed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the one mode of expense is more favourable than the other to the opulence of\r\nan individual, so is it likewise to that of a nation. The houses, the\r\nfurniture, the clothing of the rich, in a little time, become useful to the\r\ninferior and middling ranks of people. They are able to purchase them when\r\ntheir superiors grow weary of them; and the general accommodation of the whole\r\npeople is thus gradually improved, when this mode of expense becomes universal\r\namong men of fortune. In countries which have long been rich, you will\r\nfrequently find the inferior ranks of people in possession both of houses and\r\nfurniture perfectly good and entire, but of which neither the one could have\r\nbeen built, nor the other have been made for their use. What was formerly a\r\nseat of the family of Seymour, is now an inn upon the Bath road. The\r\nmarriage-bed of James I. of Great Britain, which his queen brought with her\r\nfrom Denmark, as a present fit for a sovereign to make to a sovereign, was, a\r\nfew years ago, the ornament of an alehouse at Dunfermline. In some ancient\r\ncities, which either have been long stationary, or have gone somewhat to decay,\r\nyou will sometimes scarce find a single house which could have been built for\r\nits present inhabitants. If you go into those houses, too, you will frequently\r\nfind many excellent, though antiquated pieces of furniture, which are still\r\nvery fit for use, and which could as little have been made for them. Noble\r\npalaces, magnificent villas, great collections of books, statues, pictures, and\r\nother curiosities, are frequently both an ornament and an honour, not only to\r\nthe neighbourhood, but to the whole country to which they belong. Versailles is\r\nan ornament and an honour to France, Stowe and Wilton to England. Italy still\r\ncontinues to command some sort of veneration, by the number of monuments of\r\nthis kind which it possesses, though the wealth which produced them has\r\ndecayed, and though the genius which planned them seems to be extinguished,\r\nperhaps from not having the same employment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense, too, which is laid out in durable commodities, is favourable not\r\nonly to accumulation, but to frugality. If a person should at any time exceed\r\nin it, he can easily reform without exposing himself to the censure of the\r\npublic. To reduce very much the number of his servants, to reform his table\r\nfrom great profusion to great frugality, to lay down his equipage after he has\r\nonce set it up, are changes which cannot escape the observation of his\r\nneighbours, and which are supposed to imply some acknowledgment of preceding\r\nbad conduct. Few, therefore, of those who have once been so unfortunate as to\r\nlaunch out too far into this sort of expense, have afterwards the courage to\r\nreform, till ruin and bankruptcy oblige them. But if a person has, at any time,\r\nbeen at too great an expense in building, in furniture, in books, or pictures,\r\nno imprudence can be inferred from his changing his conduct. These are things\r\nin which further expense is frequently rendered unnecessary by former expense;\r\nand when a person stops short, he appears to do so, not because he has exceeded\r\nhis fortune, but because he has satisfied his fancy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense, besides, that is laid out in durable commodities, gives\r\nmaintenance, commonly, to a greater number of people than that which is\r\nemployed in the most profuse hospitality. Of two or three hundred weight of\r\nprovisions, which may sometimes be served up at a great festival, one half,\r\nperhaps, is thrown to the dunghill, and there is always a great deal wasted and\r\nabused. But if the expense of this entertainment had been employed in setting\r\nto work masons, carpenters, upholsterers, mechanics, etc. a quantity of\r\nprovisions of equal value would have been distributed among a still greater\r\nnumber of people, who would have bought them in pennyworths and pound weights,\r\nand not have lost or thrown away a single ounce of them. In the one way,\r\nbesides, this expense maintains productive, in the other unproductive hands. In\r\nthe one way, therefore, it increases, in the other it does not increase the\r\nexchangeable value of the annual produce of the land and labour of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI would not, however, by all this, be understood to mean, that the one species\r\nof expense always betokens a more liberal or generous spirit than the other.\r\nWhen a man of fortune spends his revenue chiefly in hospitality, he shares the\r\ngreater part of it with his friends and companions; but when he employs it in\r\npurchasing such durable commodities, he often spends the whole upon his own\r\nperson, and gives nothing to any body without an equivalent. The latter species\r\nof expense, therefore, especially when directed towards frivolous objects, the\r\nlittle ornaments of dress and furniture, jewels, trinkets, gew-gaws, frequently\r\nindicates, not only a trifling, but a base and selfish disposition. All that I\r\nmean is, that the one sort of expense, as it always occasions some accumulation\r\nof valuable commodities, as it is more favourable to private frugality, and,\r\nconsequently, to the increase of the public capital, and as it maintains\r\nproductive rather than unproductive hands, conduces more than the other to the\r\ngrowth of public opulence.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap18\"\u003e\u003c/a\u003eCHAPTER IV.\u003cbr\u003e\r\nOF STOCK LENT AT INTEREST.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe stock which is lent at interest is always considered as a capital by the\r\nlender. He expects that in due time it is to be restored to him, and that, in\r\nthe mean time, the borrower is to pay him a certain annual rent for the use of\r\nit. The borrower may use it either as a capital, or as a stock reserved for\r\nimmediate consumption. If he uses it as a capital, he employs it in the\r\nmaintenance of productive labourers, who reproduce the value, with a profit. He\r\ncan, in this case, both restore the capital, and pay the interest, without\r\nalienating or encroaching upon any other source of revenue. If he uses it as a\r\nstock reserved for immediate consumption, he acts the part of a prodigal, and\r\ndissipates, in the maintenance of the idle, what was destined for the support\r\nof the industrious. He can, in this case, neither restore the capital nor pay\r\nthe interest, without either alienating or encroaching upon some other source\r\nof revenue, such as the property or the rent of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe stock which is lent at interest is, no doubt, occasionally employed in both\r\nthese ways, but in the former much more frequently than in the latter. The man\r\nwho borrows in order to spend will soon be ruined, and he who lends to him will\r\ngenerally have occasion to repent of his folly. To borrow or to lend for such a\r\npurpose, therefore, is, in all cases, where gross usury is out of the question,\r\ncontrary to the interest of both parties; and though it no doubt happens\r\nsometimes, that people do both the one and the other, yet, from the regard that\r\nall men have for their own interest, we may be assured, that it cannot happen\r\nso very frequently as we are sometimes apt to imagine. Ask any rich man of\r\ncommon prudence, to which of the two sorts of people he has lent the greater\r\npart of his stock, to those who he thinks will employ it profitably, or to\r\nthose who will spend it idly, and he will laugh at you for proposing the\r\nquestion. Even among borrowers, therefore, not the people in the world most\r\nfamous for frugality, the number of the frugal and industrious surpasses\r\nconsiderably that of the prodigal and idle.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe only people to whom stock is commonly lent, without their being expected to\r\nmake any very profitable use of it, are country gentlemen, who borrow upon\r\nmortgage. Even they scarce ever borrow merely to spend. What they borrow, one\r\nmay say, is commonly spent before they borrow it. They have generally consumed\r\nso great a quantity of goods, advanced to them upon credit by shop-keepers and\r\ntradesmen, that they find it necessary to borrow at interest, in order to pay\r\nthe debt. The capital borrowed replaces the capitals of those shop-keepers and\r\ntradesmen which the country gentlemen could not have replaced from the rents of\r\ntheir estates. It is not properly borrowed in order to be spent, but in order\r\nto replace a capital which had been spent before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAlmost all loans at interest are made in money, either of paper, or of gold and\r\nsilver; but what the borrower really wants, and what the lender readily\r\nsupplies him with, is not the money, but the money’s worth, or the goods\r\nwhich it can purchase. If he wants it as a stock for immediate consumption, it\r\nis those goods only which he can place in that stock. If he wants it as a\r\ncapital for employing industry, it is from those goods only that the\r\nindustrious can be furnished with the tools, materials, and maintenance\r\nnecessary for carrying on their work. By means of the loan, the lender, as it\r\nwere, assigns to the borrower his right to a certain portion of the annual\r\nproduce of the land and labour of the country, to be employed as the borrower\r\npleases.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of stock, therefore, or, as it is commonly expressed, of money,\r\nwhich can be lent at interest in any country, is not regulated by the value of\r\nthe money, whether paper or coin, which serves as the instrument of the\r\ndifferent loans made in that country, but by the value of that part of the\r\nannual produce, which, as soon as it comes either from the ground, or from the\r\nhands of the productive labourers, is destined, not only for replacing a\r\ncapital, but such a capital as the owner does not care to be at the trouble of\r\nemploying himself. As such capitals are commonly lent out and paid back in\r\nmoney, they constitute what is called the monied interest. It is distinct, not\r\nonly from the landed, but from the trading and manufacturing interests, as in\r\nthese last the owners themselves employ their own capitals. Even in the monied\r\ninterest, however, the money is, as it were, but the deed of assignment, which\r\nconveys from one hand to another those capitals which the owners do not care to\r\nemploy themselves. Those capitals may be greater, in almost any proportion,\r\nthan the amount of the money which serves as the instrument of their\r\nconveyance; the same pieces of money successively serving for many different\r\nloans, as well as for many different purchases. A, for example, lends to W\r\n£1000, with which W immediately purchases of B £1000 worth of goods. B having\r\nno occasion for the money himself, lends the identical pieces to X, with which\r\nX immediately purchases of C another £1000 worth of goods. C, in the same\r\nmanner, and for the same reason, lends them to Y, who again purchases goods\r\nwith them of D. In this manner, the same pieces, either of coin or of paper,\r\nmay, in the course of a few days, serve as the Instrument of three different\r\nloans, and of three different purchases, each of which is, in value, equal to\r\nthe whole amount of those pieces. What the three monied men, A, B, and C,\r\nassigned to the three borrowers, W, X, and Y, is the power of making those\r\npurchases. In this power consist both the value and the use of the loans. The\r\nstock lent by the three monied men is equal to the value of the goods which can\r\nbe purchased with it, and is three times greater than that of the money with\r\nwhich the purchases are made. Those loans, however, may be all perfectly well\r\nsecured, the goods purchased by the different debtors being so employed as, in\r\ndue time, to bring back, with a profit, an equal value either of coin or of\r\npaper. And as the same pieces of money can thus serve as the instrument of\r\ndifferent loans to three, or, for the same reason, to thirty times their value,\r\nso they may likewise successively serve as the instrument of repayment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA capital lent at interest may, in this manner, be considered as an assignment,\r\nfrom the lender to the borrower, of a certain considerable portion of the\r\nannual produce, upon condition that the burrower in return shall, during the\r\ncontinuance of the loan, annually assign to the lender a small portion, called\r\nthe interest; and, at the end of it, a portion equally considerable with that\r\nwhich had originally been assigned to him, called the repayment. Though money,\r\neither coin or paper, serves generally as the deed of assignment, both to the\r\nsmaller and to the more considerable portion, it is itself altogether different\r\nfrom what is assigned by it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn proportion as that share of the annual produce which, as soon as it comes\r\neither from the ground, or from the hands of the productive labourers, is\r\ndestined for replacing a capital, increases in any country, what is called the\r\nmonied interest naturally increases with it. The increase of those particular\r\ncapitals from which the owners wish to derive a revenue, without being at the\r\ntrouble of employing them themselves, naturally accompanies the general\r\nincrease of capitals; or, in other words, as stock increases, the quantity of\r\nstock to be lent at interest grows gradually greater and greater.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the quantity of stock to be lent at interest increases, the interest, or the\r\nprice which must be paid for the use of that stock, necessarily diminishes, not\r\nonly from those general causes which make the market price of things commonly\r\ndiminish as their quantity increases, but from other causes which are peculiar\r\nto this particular case. As capitals increase in any country, the profits which\r\ncan be made by employing them necessarily diminish. It becomes gradually more\r\nand more difficult to find within the country a profitable method of employing\r\nany new capital. There arises, in consequence, a competition between different\r\ncapitals, the owner of one endeavouring to get possession of that employment\r\nwhich is occupied by another; but, upon most occasions, he can hope to justle\r\nthat other out of this employment by no other means but by dealing upon more\r\nreasonable terms. He must not only sell what he deals in somewhat cheaper, but,\r\nin order to get it to sell, he must sometimes, too, buy it dearer. The demand\r\nfor productive labour, by the increase of the funds which are destined for\r\nmaintaining it, grows every day greater and greater. Labourers easily find\r\nemployment; but the owners of capitals find it difficult to get labourers to\r\nemploy. Their competition raises the wages of labour, and sinks the profits of\r\nstock. But when the profits which can be made by the use of a capital are in\r\nthis manner diminished, as it were, at both ends, the price which can be paid\r\nfor the use of it, that is, the rate of interest, must necessarily be\r\ndiminished with them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMr Locke, Mr Lawe, and Mr Montesquieu, as well as many other writers, seem to\r\nhave imagined that the increase of the quantity of gold and silver, in\r\nconsequence of the discovery of the Spanish West Indies, was the real cause of\r\nthe lowering of the rate of interest through the greater part of Europe. Those\r\nmetals, they say, having become of less value themselves, the use of any\r\nparticular portion of them necessarily became of less value too, and,\r\nconsequently, the price which could be paid for it. This notion, which at first\r\nsight seems so plausible, has been so fully exposed by Mr Hume, that it is,\r\nperhaps, unnecessary to say any thing more about it. The following very short\r\nand plain argument, however, may serve to explain more distinctly the fallacy\r\nwhich seems to have misled those gentlemen.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the discovery of the Spanish West Indies, ten per cent. seems to have\r\nbeen the common rate of interest through the greater part of Europe. It has\r\nsince that time, in different countries, sunk to six, five, four, and three per\r\ncent. Let us suppose, that in every particular country the value of silver has\r\nsunk precisely in the same proportion as the rate of interest; and that in\r\nthose countries, for example, where interest has been reduced from ten to five\r\nper cent. the same quantity of silver can now purchase just half the quantity\r\nof goods which it could have purchased before. This supposition will not, I\r\nbelieve, be found anywhere agreeable to the truth; but it is the most\r\nfavourable to the opinion which we are going to examine; and, even upon this\r\nsupposition, it is utterly impossible that the lowering of the value of silver\r\ncould have the smallest tendency to lower the rate of interest. If £100 are in\r\nthose countries now of no more value than £50 were then, £10 must now be of no\r\nmore value than £5 were then. Whatever were the causes which lowered the value\r\nof the capital, the same must necessarily have lowered that of the interest,\r\nand exactly in the same proportion. The proportion between the value of the\r\ncapital and that of the interest must have remained the same, though the rate\r\nhad never been altered. By altering the rate, on the contrary, the proportion\r\nbetween those two values is necessarily altered. If £100 now are worth no more\r\nthan £50 were then, £5 now can be worth no more than £2:10s. were then. By\r\nreducing the rate of interest, therefore, from ten to five per cent. we give\r\nfor the use of a capital, which is supposed to be equal to one half of its\r\nformer value, an interest which is equal to one fourth only of the value of the\r\nformer interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn increase in the quantity of silver, while that of the commodities circulated\r\nby means of it remained the same, could have no other effect than to diminish\r\nthe value of that metal. The nominal value of all sorts of goods would be\r\ngreater, but their real value would be precisely the same as before. They would\r\nbe exchanged for a greater number of pieces of silver; but the quantity of\r\nlabour which they could command, the number of people whom they could maintain\r\nand employ, would be precisely the same. The capital of the country would be\r\nthe same, though a greater number of pieces might be requisite for conveying\r\nany equal portion of it from one hand to another. The deeds of assignment, like\r\nthe conveyances of a verbose attorney, would be more cumbersome; but the thing\r\nassigned would be precisely the same as before, and could produce only the same\r\neffects. The funds for maintaining productive labour being the same, the demand\r\nfor it would be the same. Its price or wages, therefore, though nominally\r\ngreater, would really be the same. They would be paid in a greater number of\r\npieces of silver, but they would purchase only the same quantity of goods. The\r\nprofits of stock would be the same, both nominally and really. The wages of\r\nlabour are commonly computed by the quantity of silver which is paid to the\r\nlabourer. When that is increased, therefore, his wages appear to be increased,\r\nthough they may sometimes be no greater than before. But the profits of stock\r\nare not computed by the number of pieces of silver with which they are paid,\r\nbut by the proportion which those pieces bear to the whole capital employed.\r\nThus, in a particular country, 5s. a-week are said to be the common wages of\r\nlabour, and ten per cent. the common profits of stock; but the whole capital of\r\nthe country being the same as before, the competition between the different\r\ncapitals of individuals into which it was divided would likewise be the same.\r\nThey would all trade with the same advantages and disadvantages. The common\r\nproportion between capital and profit, therefore, would be the same, and\r\nconsequently the common interest of money; what can commonly be given for the\r\nuse of money being necessarily regulated by what can commonly be made by the\r\nuse of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAny increase in the quantity of commodities annually circulated within the\r\ncountry, while that of the money which circulated them remained the same,\r\nwould, on the contrary, produce many other important effects, besides that of\r\nraising the value of the money. The capital of the country, though it might\r\nnominally be the same, would really be augmented. It might continue to be\r\nexpressed by the same quantity of money, but it would command a greater\r\nquantity of labour. The quantity of productive labour which it could maintain\r\nand employ would be increased, and consequently the demand for that labour. Its\r\nwages would naturally rise with the demand, and yet might appear to sink. They\r\nmight be paid with a smaller quantity of money, but that smaller quantity might\r\npurchase a greater quantity of goods than a greater had done before. The\r\nprofits of stock would be diminished, both really and in appearance. The whole\r\ncapital of the country being augmented, the competition between the different\r\ncapitals of which it was composed would naturally be augmented along with it.\r\nThe owners of those particular capitals would be obliged to content themselves\r\nwith a smaller proportion of the produce of that labour which their respective\r\ncapitals employed. The interest of money, keeping pace always with the profits\r\nof stock, might, in this manner, be greatly diminished, though the value of\r\nmoney, or the quantity of goods which any particular sum could purchase, was\r\ngreatly augmented.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some countries the interest of money has been prohibited by law. But as\r\nsomething can everywhere be made by the use of money, something ought\r\neverywhere to be paid for the use of it. This regulation, instead of\r\npreventing, has been found from experience to increase the evil of usury. The\r\ndebtor being obliged to pay, not only for the use of the money, but for the\r\nrisk which his creditor runs by accepting a compensation for that use, he is\r\nobliged, if one may say so, to insure his creditor from the penalties of usury.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries where interest is permitted, the law in order to prevent the\r\nextortion of usury, generally fixes the highest rate which can be taken without\r\nincurring a penalty. This rate ought always to be somewhat above the lowest\r\nmarket price, or the price which is commonly paid for the use of money by those\r\nwho can give the most undoubted security. If this legal rate should be fixed\r\nbelow the lowest market rate, the effects of this fixation must be nearly the\r\nsame as those of a total prohibition of interest. The creditor will not lend\r\nhis money for less than the use of it is worth, and the debtor must pay him for\r\nthe risk which he runs by accepting the full value of that use. If it is fixed\r\nprecisely at the lowest market price, it ruins, with honest people who respect\r\nthe laws of their country, the credit of all those who cannot give the very\r\nbest security, and obliges them to have recourse to exorbitant usurers. In a\r\ncountry such as Great Britain, where money is lent to government at three per\r\ncent. and to private people, upon good security, at four and four and a-half,\r\nthe present legal rate, five per cent. is perhaps as proper as any.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe legal rate, it is to be observed, though it ought to be somewhat above,\r\nought not to be much above the lowest market rate. If the legal rate of\r\ninterest in Great Britain, for example, was fixed so high as eight or ten per\r\ncent. the greater part of the money which was to be lent, would be lent to\r\nprodigals and projectors, who alone would be willing to give this high\r\ninterest. Sober people, who will give for the use of money no more than a part\r\nof what they are likely to make by the use of it, would not venture into the\r\ncompetition. A great part of the capital of the country would thus be kept out\r\nof the hands which were most likely to make a profitable and advantageous use\r\nof it, and thrown into those which were most likely to waste and destroy it.\r\nWhere the legal rate of interest, on the contrary, is fixed but a very little\r\nabove the lowest market rate, sober people are universally preferred, as\r\nborrowers, to prodigals and projectors. The person who lends money gets nearly\r\nas much interest from the former as he dares to take from the latter, and his\r\nmoney is much safer in the hands of the one set of people than in those of the\r\nother. A great part of the capital of the country is thus thrown into the hands\r\nin which it is most likely to be employed with advantage.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo law can reduce the common rate of interest below the lowest ordinary market\r\nrate at the time when that law is made. Notwithstanding the edict of 1766, by\r\nwhich the French king attempted to reduce the rate of interest from five to\r\nfour per cent. money continued to be lent in France at five per cent. the law\r\nbeing evaded in several different ways.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ordinary market price of land, it is to be observed, depends everywhere\r\nupon the ordinary market rate of interest. The person who has a capital from\r\nwhich he wishes to derive a revenue, without taking the trouble to employ it\r\nhimself, deliberates whether he should buy land with it, or lend it out at\r\ninterest. The superior security of land, together with some other advantages\r\nwhich almost everywhere attend upon this species of property, will generally\r\ndispose him to content himself with a smaller revenue from land, than what he\r\nmight have by lending out his money at interest. These advantages are\r\nsufficient to compensate a certain difference of revenue; but they will\r\ncompensate a certain difference only; and if the rent of land should fall short\r\nof the interest of money by a greater difference, nobody would buy land, which\r\nwould soon reduce its ordinary price. On the contrary, if the advantages should\r\nmuch more than compensate the difference, everybody would buy land, which again\r\nwould soon raise its ordinary price. When interest was at ten per cent. land\r\nwas commonly sold for ten or twelve years purchase. As interest sunk to six,\r\nfive, and four per cent. the price of land rose to twenty, five-and-twenty, and\r\nthirty years purchase. The market rate of interest is higher in France than in\r\nEngland, and the common price of land is lower. In England it commonly sells at\r\nthirty, in France at twenty years purchase.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap19\"\u003e\u003c/a\u003eCHAPTER V.\u003cbr\u003e\r\nOF THE DIFFERENT EMPLOYMENTS OF CAPITALS.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThough all capitals are destined for the maintenance of productive labour only,\r\nyet the quantity of that labour which equal capitals are capable of putting\r\ninto motion, varies extremely according to the diversity of their employment;\r\nas does likewise the value which that employment adds to the annual produce of\r\nthe land and labour of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA capital may be employed in four different ways; either, first, in procuring\r\nthe rude produce annually required for the use and consumption of the society;\r\nor, secondly, in manufacturing and preparing that rude produce for immediate\r\nuse and consumption; or, thirdly in transporting either the rude or\r\nmanufactured produce from the places where they abound to those where they are\r\nwanted; or, lastly, in dividing particular portions of either into such small\r\nparcels as suit the occasional demands of those who want them. In the first way\r\nare employed the capitals of all those who undertake improvement or cultivation\r\nof lands, mines, or fisheries; in the second, those of all master\r\nmanufacturers; in the third, those of all wholesale merchants; and in the\r\nfourth, those of all retailers. It is difficult to conceive that a capital\r\nshould be employed in any way which may not be classed under some one or other\r\nof those four.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEach of those four methods of employing a capital is essentially necessary,\r\neither to the existence or extension of the other three, or to the general\r\nconveniency of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnless a capital was employed in furnishing rude produce to a certain degree of\r\nabundance, neither manufactures nor trade of any kind could exist.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnless a capital was employed in manufacturing that part of the rude produce\r\nwhich requires a good deal of preparation before it can be fit for use and\r\nconsumption, it either would never be produced, because there could be no\r\ndemand for it; or if it was produced spontaneously, it would be of no value in\r\nexchange, and could add nothing to the wealth of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnless a capital was employed in transporting either the rude or manufactured\r\nproduce from the places where it abounds to those where it is wanted, no more\r\nof either could be produced than was necessary for the consumption of the\r\nneighbourhood. The capital of the merchant exchanges the surplus produce of one\r\nplace for that of another, and thus encourages the industry, and increases the\r\nenjoyments of both.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnless a capital was employed in breaking and dividing certain portions either\r\nof the rude or manufactured produce into such small parcels as suit the\r\noccasional demands of those who want them, every man would be obliged to\r\npurchase a greater quantity of the goods he wanted than his immediate occasions\r\nrequired. If there was no such trade as a butcher, for example, every man would\r\nbe obliged to purchase a whole ox or a whole sheep at a time. This would\r\ngenerally be inconvenient to the rich, and much more so to the poor. If a poor\r\nworkman was obliged to purchase a month’s or six months’ provisions\r\nat a time, a great part of the stock which he employs as a capital in the\r\ninstruments of his trade, or in the furniture of his shop, and which yields him\r\na revenue, he would be forced to place in that part of his stock which is\r\nreserved for immediate consumption, and which yields him no revenue. Nothing\r\ncan be more convenient for such a person than to be able to purchase his\r\nsubsistence from day to day, or even from hour to hour, as he wants it. He is\r\nthereby enabled to employ almost his whole stock as a capital. He is thus\r\nenabled to furnish work to a greater value; and the profit which he makes by it\r\nin this way much more than compensates the additional price which the profit of\r\nthe retailer imposes upon the goods. The prejudices of some political writers\r\nagainst shopkeepers and tradesmen are altogether without foundation. So far is\r\nit from being necessary either to tax them, or to restrict their numbers, that\r\nthey can never be multiplied so as to hurt the public, though they may so as to\r\nhurt one another. The quantity of grocery goods, for example, which can be sold\r\nin a particular town, is limited by the demand of that town and its\r\nneighbourhood. The capital, therefore, which can be employed in the grocery\r\ntrade, cannot exceed what is sufficient to purchase that quantity. If this\r\ncapital is divided between two different grocers, their competition will tend\r\nto make both of them sell cheaper than if it were in the hands of one only; and\r\nif it were divided among twenty, their competition would be just so much the\r\ngreater, and the chance of their combining together, in order to raise the\r\nprice, just so much the less. Their competition might, perhaps, ruin some of\r\nthemselves; but to take care of this, is the business of the parties concerned,\r\nand it may safely be trusted to their discretion. It can never hurt either the\r\nconsumer or the producer; on the contrary, it must tend to make the retailers\r\nboth sell cheaper and buy dearer, than if the whole trade was monopolised by\r\none or two persons. Some of them, perhaps, may sometimes decoy a weak customer\r\nto buy what he has no occasion for. This evil, however, is of too little\r\nimportance to deserve the public attention, nor would it necessarily be\r\nprevented by restricting their numbers. It is not the multitude of alehouses,\r\nto give the must suspicious example, that occasions a general disposition to\r\ndrunkenness among the common people; but that disposition, arising from other\r\ncauses, necessarily gives employment to a multitude of alehouses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe persons whose capitals are employed in any of those four ways, are\r\nthemselves productive labourers. Their labour, when properly directed, fixes\r\nand realizes itself in the subject or vendible commodity upon which it is\r\nbestowed, and generally adds to its price the value at least of their own\r\nmaintenance and consumption. The profits of the farmer, of the manufacturer, of\r\nthe merchant, and retailer, are all drawn from the price of the goods which the\r\ntwo first produce, and the two last buy and sell. Equal capitals, however,\r\nemployed in each of those four different ways, will immediately put into motion\r\nvery different quantities of productive labour; and augment, too, in very\r\ndifferent proportions, the value of the annual produce of the land and labour\r\nof the society to which they belong.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital of the retailer replaces, together with its profits, that of the\r\nmerchant of whom he purchases goods, and thereby enables him to continue his\r\nbusiness. The retailer himself is the only productive labourer whom it\r\nimmediately employs. In his profit consists the whole value which its\r\nemployment adds to the annual produce of the land and labour of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital of the wholesale merchant replaces, together with their profits,\r\nthe capitals of the farmers and manufacturers of whom he purchases the rude and\r\nmanufactured produce which he deals in, and thereby enables them to continue\r\ntheir respective trades. It is by this service chiefly that he contributes\r\nindirectly to support the productive labour of the society, and to increase the\r\nvalue of its annual produce. His capital employs, too, the sailors and carriers\r\nwho transport his goods from one place to another; and it augments the price of\r\nthose goods by the value, not only of his profits, but of their wages. This is\r\nall the productive labour which it immediately puts into motion, and all the\r\nvalue which it immediately adds to the annual produce. Its operation in both\r\nthese respects is a good deal superior to that of the capital of the retailer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPart of the capital of the master manufacturer is employed as a fixed capital\r\nin the instruments of his trade, and replaces, together with its profits, that\r\nof some other artificer of whom he purchases them. Part of his circulating\r\ncapital is employed in purchasing materials, and replaces, with their profits,\r\nthe capitals of the farmers and miners of whom he purchases them. But a great\r\npart of it is always, either annually, or in a much shorter period, distributed\r\namong the different workmen whom he employs. It augments the value of those\r\nmaterials by their wages, and by their masters’ profits upon the whole\r\nstock of wages, materials, and instruments of trade employed in the business.\r\nIt puts immediately into motion, therefore, a much greater quantity of\r\nproductive labour, and adds a much greater value to the annual produce of the\r\nland and labour of the society, than an equal capital in the hands of any\r\nwholesale merchant.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo equal capital puts into motion a greater quantity of productive labour than\r\nthat of the farmer. Not only his labouring servants, but his labouring cattle,\r\nare productive labourers. In agriculture, too, Nature labours along with man;\r\nand though her labour costs no expense, its produce has its value, as well as\r\nthat of the most expensive workmen. The most important operations of\r\nagriculture seem intended, not so much to increase, though they do that too, as\r\nto direct the fertility of Nature towards the production of the plants most\r\nprofitable to man. A field overgrown with briars and brambles, may frequently\r\nproduce as great a quantity of vegetables as the best cultivated vineyard or\r\ncorn field. Planting and tillage frequently regulate more than they animate the\r\nactive fertility of Nature; and after all their labour, a great part of the\r\nwork always remains to be done by her. The labourers and labouring cattle,\r\ntherefore, employed in agriculture, not only occasion, like the workmen in\r\nmanufactures, the reproduction of a value equal to their own consumption, or to\r\nthe capital which employs them, together with its owner’s profits, but of\r\na much greater value. Over and above the capital of the farmer, and all its\r\nprofits, they regularly occasion the reproduction of the rent of the landlord.\r\nThis rent may be considered as the produce of those powers of Nature, the use\r\nof which the landlord lends to the farmer. It is greater or smaller, according\r\nto the supposed extent of those powers, or, in other words, according to the\r\nsupposed natural or improved fertility of the land. It is the work of Nature\r\nwhich remains, after deducting or compensating every thing which can be\r\nregarded as the work of man. It is seldom less than a fourth, and frequently\r\nmore than a third, of the whole produce. No equal quantity of productive labour\r\nemployed in manufactures, can ever occasion so great reproduction. In them\r\nNature does nothing; man does all; and the reproduction must always be in\r\nproportion to the strength of the agents that occasion it. The capital employed\r\nin agriculture, therefore, not only puts into motion a greater quantity of\r\nproductive labour than any equal capital employed in manufactures; but in\r\nproportion, too, to the quantity of productive labour which it employs, it adds\r\na much greater value to the annual produce of the land and labour of the\r\ncountry, to the real wealth and revenue of its inhabitants. Of all the ways in\r\nwhich a capital can be employed, it is by far the most advantageous to society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capitals employed in the agriculture and in the retail trade of any\r\nsociety, must always reside within that society. Their employment is confined\r\nalmost to a precise spot, to the farm, and to the shop of the retailer. They\r\nmust generally, too, though there are some exceptions to this, belong to\r\nresident members of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital of a wholesale merchant, on the contrary, seems to have no fixed or\r\nnecessary residence anywhere, but may wander about from place to place,\r\naccording as it can either buy cheap or sell dear.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital of the manufacturer must, no doubt, reside where the manufacture is\r\ncarried on; but where this shall be, is not always necessarily determined. It\r\nmay frequently be at a great distance, both from the place where the materials\r\ngrow, and from that where the complete manufacture is consumed. Lyons is very\r\ndistant, both from the places which afford the materials of its manufactures,\r\nand from those which consume them. The people of fashion in Sicily are clothed\r\nin silks made in other countries, from the materials which their own produces.\r\nPart of the wool of Spain is manufactured in Great Britain, and some part of\r\nthat cloth is afterwards sent back to Spain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhether the merchant whose capital exports the surplus produce of any society,\r\nbe a native or a foreigner, is of very little importance. If he is a foreigner,\r\nthe number of their productive labourers is necessarily less than if he had\r\nbeen a native, by one man only; and the value of their annual produce, by the\r\nprofits of that one man. The sailors or carriers whom he employs, may still\r\nbelong indifferently either to his country, or to their country, or to some\r\nthird country, in the same manner as if he had been a native. The capital of a\r\nforeigner gives a value to their surplus produce equally with that of a native,\r\nby exchanging it for something for which there is a demand at home. It as\r\neffectually replaces the capital of the person who produces that surplus, and\r\nas effectually enables him to continue his business, the service by which the\r\ncapital of a wholesale merchant chiefly contributes to support the productive\r\nlabour, and to augment the value of the annual produce of the society to which\r\nhe belongs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is of more consequence that the capital of the manufacturer should reside\r\nwithin the country. It necessarily puts into motion a greater quantity of\r\nproductive labour, and adds a greater value to the annual produce of the land\r\nand labour of the society. It may, however, be very useful to the country,\r\nthough it should not reside within it. The capitals of the British\r\nmanufacturers who work up the flax and hemp annually imported from the coasts\r\nof the Baltic, are surely very useful to the countries which produce them.\r\nThose materials are a part of the surplus produce of those countries, which,\r\nunless it was annually exchanged for something which is in demand there, would\r\nbe of no value, and would soon cease to be produced. The merchants who export\r\nit, replace the capitals of the people who produce it, and thereby encourage\r\nthem to continue the production; and the British manufacturers replace the\r\ncapitals of those merchants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA particular country, in the same manner as a particular person, may frequently\r\nnot have capital sufficient both to improve and cultivate all its lands, to\r\nmanufacture and prepare their whole rude produce for immediate use and\r\nconsumption, and to transport the surplus part either of the rude or\r\nmanufactured produce to those distant markets, where it can be exchanged for\r\nsomething for which there is a demand at home. The inhabitants of many\r\ndifferent parts of Great Britain have not capital sufficient to improve and\r\ncultivate all their lands. The wool of the southern counties of Scotland is, a\r\ngreat part of it, after a long land carriage through very bad roads,\r\nmanufactured in Yorkshire, for want of a capital to manufacture it at home.\r\nThere are many little manufacturing towns in Great Britain, of which the\r\ninhabitants have not capital sufficient to transport the produce of their own\r\nindustry to those distant markets where there is demand and consumption for it.\r\nIf there are any merchants among them, they are, properly, only the agents of\r\nwealthier merchants who reside in some of the great commercial cities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the capital of any country is not sufficient for all those three purposes,\r\nin proportion as a greater share of it is employed in agriculture, the greater\r\nwill be the quantity of productive labour which it puts into motion within the\r\ncountry; as will likewise be the value which its employment adds to the annual\r\nproduce of the land and labour of the society. After agriculture, the capital\r\nemployed in manufactures puts into motion the greatest quantity of productive\r\nlabour, and adds the greatest value to the annual produce. That which is\r\nemployed in the trade of exportation has the least effect of any of the three.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe country, indeed, which has not capital sufficient for all those three\r\npurposes, has not arrived at that degree of opulence for which it seems\r\nnaturally destined. To attempt, however, prematurely, and with an insufficient\r\ncapital, to do all the three, is certainly not the shortest way for a society,\r\nno more than it would be for an individual, to acquire a sufficient one. The\r\ncapital of all the individuals of a nation has its limits, in the same manner\r\nas that of a single individual, and is capable of executing only certain\r\npurposes. The capital of all the individuals of a nation is increased in the\r\nsame manner as that of a single individual, by their continually accumulating\r\nand adding to it whatever they save out of their revenue. It is likely to\r\nincrease the fastest, therefore, when it is employed in the way that affords\r\nthe greatest revenue to all the inhabitants or the country, as they will thus\r\nbe enabled to make the greatest savings. But the revenue of all the inhabitants\r\nof the country is necessarily in proportion to the value of the annual produce\r\nof their land and labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been the principal cause of the rapid progress of our American colonies\r\ntowards wealth and greatness, that almost their whole capitals have hitherto\r\nbeen employed in agriculture. They have no manufactures, those household and\r\ncoarser manufactures excepted, which necessarily accompany the progress of\r\nagriculture, and which are the work of the women and children in every private\r\nfamily. The greater part, both of the exportation and coasting trade of\r\nAmerica, is carried on by the capitals of merchants who reside in Great\r\nBritain. Even the stores and warehouses from which goods are retailed in some\r\nprovinces, particularly in Virginia and Maryland, belong many of them to\r\nmerchants who reside in the mother country, and afford one of the few instances\r\nof the retail trade of a society being carried on by the capitals of those who\r\nare not resident members of it. Were the Americans, either by combination, or\r\nby any other sort of violence, to stop the importation of European\r\nmanufactures, and, by thus giving a monopoly to such of their own countrymen as\r\ncould manufacture the like goods, divert any considerable part of their capital\r\ninto this employment, they would retard, instead of accelerating, the further\r\nincrease in the value of their annual produce, and would obstruct, instead of\r\npromoting, the progress of their country towards real wealth and greatness.\r\nThis would be still more the case, were they to attempt, in the same manner, to\r\nmonopolize to themselves their whole exportation trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe course of human prosperity, indeed, seems scarce ever to have been of so\r\nlong continuance as to enable any great country to acquire capital sufficient\r\nfor all those three purposes; unless, perhaps, we give credit to the wonderful\r\naccounts of the wealth and cultivation of China, of those of ancient Egypt, and\r\nof the ancient state of Indostan. Even those three countries, the wealthiest,\r\naccording to all accounts, that ever were in the world, are chiefly renowned\r\nfor their superiority in agriculture and manufactures. They do not appear to\r\nhave been eminent for foreign trade. The ancient Egyptians had a superstitious\r\nantipathy to the sea; a superstition nearly of the same kind prevails among the\r\nIndians; and the Chinese have never excelled in foreign commerce. The greater\r\npart of the surplus produce of all those three countries seems to have been\r\nalways exported by foreigners, who gave in exchange for it something else, for\r\nwhich they found a demand there, frequently gold and silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that the same capital will in any country put into motion a greater\r\nor smaller quantity of productive labour, and add a greater or smaller value to\r\nthe annual produce of its land and labour, according to the different\r\nproportions in which it is employed in agriculture, manufactures, and wholesale\r\ntrade. The difference, too, is very great, according to the different sorts of\r\nwholesale trade in which any part of it is employed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll wholesale trade, all buying in order to sell again by wholesale, maybe\r\nreduced to three different sorts: the home trade, the foreign trade of\r\nconsumption, and the carrying trade. The home trade is employed in purchasing\r\nin one part of the same country, and selling in another, the produce of the\r\nindustry of that country. It comprehends both the inland and the coasting\r\ntrade. The foreign trade of consumption is employed in purchasing foreign goods\r\nfor home consumption. The carrying trade is employed in transacting the\r\ncommerce of foreign countries, or in carrying the surplus produce of one to\r\nanother.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital which is employed in purchasing in one part of the country, in\r\norder to sell in another, the produce of the industry of that country,\r\ngenerally replaces, by every such operation, two distinct capitals, that had\r\nboth been employed in the agriculture or manufactures of that country, and\r\nthereby enables them to continue that employment. When it sends out from the\r\nresidence of the merchant a certain value of commodities, it generally brings\r\nback in return at least an equal value of other commodities. When both are the\r\nproduce of domestic industry, it necessarily replaces, by every such operation,\r\ntwo distinct capitals, which had both been employed in supporting productive\r\nlabour, and thereby enables them to continue that support. The capital which\r\nsends Scotch manufactures to London, and brings back English corn and\r\nmanufactures to Edinburgh, necessarily replaces, by every such operation, two\r\nBritish capitals, which had both been employed in the agriculture or\r\nmanufactures of Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital employed in purchasing foreign goods for home consumption, when\r\nthis purchase is made with the produce of domestic industry, replaces, too, by\r\nevery such operation, two distinct capitals; but one of them only is employed\r\nin supporting domestic industry. The capital which sends British goods to\r\nPortugal, and brings back Portuguese goods to Great Britain, replaces, by every\r\nsuch operation, only one British capital. The other is a Portuguese one. Though\r\nthe returns, therefore, of the foreign trade of consumption, should be as quick\r\nas those of the home trade, the capital employed in it will give but one half\r\nof the encouragement to the industry or productive labour of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the returns of the foreign trade of consumption are very seldom so quick as\r\nthose of the home trade. The returns of the home trade generally come in before\r\nthe end of the year, and sometimes three or four times in the year. The returns\r\nof the foreign trade of consumption seldom come in before the end of the year,\r\nand sometimes not till after two or three years. A capital, therefore, employed\r\nin the home trade, will sometimes make twelve operations, or be sent out and\r\nreturned twelve times, before a capital employed in the foreign trade of\r\nconsumption has made one. If the capitals are equal, therefore, the one will\r\ngive four-and-twenty times more encouragement and support to the industry of\r\nthe country than the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe foreign goods for home consumption may sometimes be purchased, not with the\r\nproduce of domestic industry but with some other foreign goods. These last,\r\nhowever, must have been purchased, either immediately with the produce of\r\ndomestic industry, or with something else that had been purchased with it; for,\r\nthe case of war and conquest excepted, foreign goods can never be acquired, but\r\nin exchange for something that had been produced at home, either immediately,\r\nor after two or more different exchanges. The effects, therefore, of a capital\r\nemployed in such a round-about foreign trade of consumption, are, in every\r\nrespect, the same as those of one employed in the most direct trade of the same\r\nkind, except that the final returns are likely to be still more distant, as\r\nthey must depend upon the returns of two or three distinct foreign trades. If\r\nthe hemp and flax of Riga are purchased with the tobacco of Virginia, which had\r\nbeen purchased with British manufactures, the merchant must wait for the\r\nreturns of two distinct foreign trades, before he can employ the same capital\r\nin repurchasing a like quantity of British manufactures. If the tobacco of\r\nVirginia had been purchased, not with British manufactures, but with the sugar\r\nand rum of Jamaica, which had been purchased with those manufactures, he must\r\nwait for the returns of three. If those two or three distinct foreign trades\r\nshould happen to be carried on by two or three distinct merchants, of whom the\r\nsecond buys the goods imported by the first, and the third buys those imported\r\nby the second, in order to export them again, each merchant, indeed, will, in\r\nthis case, receive the returns of his own capital more quickly; but the final\r\nreturns of the whole capital employed in the trade will be just as slow as\r\never. Whether the whole capital employed in such a round about trade belong to\r\none merchant or to three, can make no difference with regard to the country,\r\nthough it may with regard to the particular merchants. Three times a greater\r\ncapital must in both cases be employed, in order to exchange a certain value of\r\nBritish manufactures for a certain quantity of flax and hemp, than would have\r\nbeen necessary, had the manufactures and the flax and hemp been directly\r\nexchanged for one another. The whole capital employed, therefore, in such a\r\nround-about foreign trade of consumption, will generally give less\r\nencouragement and support to the productive labour of the country, than an\r\nequal capital employed in a more direct trade of the same kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever be the foreign commodity with which the foreign goods for home\r\nconsumption are purchased, it can occasion no essential difference, either in\r\nthe nature of the trade, or in the encouragement and support which it can give\r\nto the productive labour of the country from which it is carried on. If they\r\nare purchased with the gold of Brazil, for example, or with the silver of Peru,\r\nthis gold and silver, like the tobacco of Virginia, must have been purchased\r\nwith something that either was the produce of the industry of the country, or\r\nthat had been purchased with something else that was so. So far, therefore, as\r\nthe productive labour of the country is concerned, the foreign trade of\r\nconsumption, which is carried on by means of gold and silver, has all the\r\nadvantages and all the inconveniencies of any other equally round-about foreign\r\ntrade of consumption; and will replace, just as fast, or just as slow, the\r\ncapital which is immediately employed in supporting that productive labour. It\r\nseems even to have one advantage over any other equally round-about foreign\r\ntrade. The transportation of those metals from one place to another, on account\r\nof their small bulk and great value, is less expensive than that of almost any\r\nother foreign goods of equal value. Their freight is much less, and their\r\ninsurance not greater; and no goods, besides, are less liable to suffer by the\r\ncarriage. An equal quantity of foreign goods, therefore, may frequently be\r\npurchased with a smaller quantity of the produce of domestic industry, by the\r\nintervention of gold and silver, than by that of any other foreign goods. The\r\ndemand of the country may frequently, in this manner, be supplied more\r\ncompletely, and at a smaller expense, than in any other. Whether, by the\r\ncontinual exportation of those metals, a trade of this kind is likely to\r\nimpoverish the country from which it is carried on in any other way, I shall\r\nhave occasion to examine at great length hereafter.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat part of the capital of any country which is employed in the carrying\r\ntrade, is altogether withdrawn from supporting the productive labour of that\r\nparticular country, to support that of some foreign countries. Though it may\r\nreplace, by every operation, two distinct capitals, yet neither of them belongs\r\nto that particular country. The capital of the Dutch merchant, which carries\r\nthe corn of Poland to Portugal, and brings back the fruits and wines of\r\nPortugal to Poland, replaces by every such operation two capitals, neither of\r\nwhich had been employed in supporting the productive labour of Holland; but one\r\nof them in supporting that of Poland, and the other that of Portugal. The\r\nprofits only return regularly to Holland, and constitute the whole addition\r\nwhich this trade necessarily makes to the annual produce of the land and labour\r\nof that country. When, indeed, the carrying trade of any particular country is\r\ncarried on with the ships and sailors of that country, that part of the capital\r\nemployed in it which pays the freight is distributed among, and puts into\r\nmotion, a certain number of productive labourers of that country. Almost all\r\nnations that have had any considerable share of the carrying trade have, in\r\nfact, carried it on in this manner. The trade itself has probably derived its\r\nname from it, the people of such countries being the carriers to other\r\ncountries. It does not, however, seem essential to the nature of the trade that\r\nit should be so. A Dutch merchant may, for example, employ his capital in\r\ntransacting the commerce of Poland and Portugal, by carrying part of the\r\nsurplus produce of the one to the other, not in Dutch, but in British bottoms.\r\nIt maybe presumed, that he actually does so upon some particular occasions. It\r\nis upon this account, however, that the carrying trade has been supposed\r\npeculiarly advantageous to such a country as Great Britain, of which the\r\ndefence and security depend upon the number of its sailors and shipping. But\r\nthe same capital may employ as many sailors and shipping, either in the foreign\r\ntrade of consumption, or even in the home trade, when carried on by coasting\r\nvessels, as it could in the carrying trade. The number of sailors and shipping\r\nwhich any particular capital can employ, does not depend upon the nature of the\r\ntrade, but partly upon the bulk of the goods, in proportion to their value, and\r\npartly upon the distance of the ports between which they are to be carried;\r\nchiefly upon the former of those two circumstances. The coal trade from\r\nNewcastle to London, for example, employs more shipping than all the carrying\r\ntrade of England, though the ports are at no great distance. To force,\r\ntherefore, by extraordinary encouragements, a larger share of the capital of\r\nany country into the carrying trade, than what would naturally go to it, will\r\nnot always necessarily increase the shipping of that country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital, therefore, employed in the home trade of any country, will\r\ngenerally give encouragement and support to a greater quantity of productive\r\nlabour in that country, and increase the value of its annual produce, more than\r\nan equal capital employed in the foreign trade of consumption; and the capital\r\nemployed in this latter trade has, in both these respects, a still greater\r\nadvantage over an equal capital employed in the carrying trade. The riches, and\r\nso far as power depends upon riches, the power of every country must always be\r\nin proportion to the value of its annual produce, the fund from which all taxes\r\nmust ultimately be paid. But the great object of the political economy of every\r\ncountry, is to increase the riches and power of that country. It ought,\r\ntherefore, to give no preference nor superior encouragement to the foreign\r\ntrade of consumption above the home trade, nor to the carrying trade above\r\neither of the other two. It ought neither to force nor to allure into either of\r\nthose two channels a greater share of the capital of the country, than what\r\nwould naturally flow into them of its own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEach of those different branches of trade, however, is not only advantageous,\r\nbut necessary and unavoidable, when the course of things, without any\r\nconstraint or violence, naturally introduces it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the produce of any particular branch of industry exceeds what the demand\r\nof the country requires, the surplus must be sent abroad, and exchanged for\r\nsomething for which there is a demand at home. Without such exportation, a part\r\nof the productive labour of the country must cease, and the value of its annual\r\nproduce diminish. The land and labour of Great Britain produce generally more\r\ncorn, woollens, and hardware, than the demand of the home market requires. The\r\nsurplus part of them, therefore, must be sent abroad, and exchanged for\r\nsomething for which there is a demand at home. It is only by means of such\r\nexportation, that this surplus can acquire a value sufficient to compensate the\r\nlabour and expense of producing it. The neighbourhood of the sea-coast, and the\r\nbanks of all navigable rivers, are advantageous situations for industry, only\r\nbecause they facilitate the exportation and exchange of such surplus produce\r\nfor something else which is more in demand there.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the foreign goods which are thus purchased with the surplus produce of\r\ndomestic industry exceed the demand of the home market, the surplus part of\r\nthem must be sent abroad again, and exchanged for something more in demand at\r\nhome. About 96,000 hogsheads of tobacco are annually purchased in Virginia and\r\nMaryland with a part of the surplus produce of British industry. But the demand\r\nof Great Britain does not require, perhaps, more than 14,000. If the remaining\r\n82,000, therefore, could not be sent abroad, and exchanged for something more\r\nin demand at home, the importation of them must cease immediately, and with it\r\nthe productive labour of all those inhabitants of Great Britain who are at\r\npresent employed in preparing the goods with which these 82,000 hogsheads are\r\nannually purchased. Those goods, which are part of the produce of the land and\r\nlabour of Great Britain, having no market at home, and being deprived of that\r\nwhich they had abroad, must cease to be produced. The most round-about foreign\r\ntrade of consumption, therefore, may, upon some occasions, be as necessary for\r\nsupporting the productive labour of the country, and the value of its annual\r\nproduce, as the most direct.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the capital stock of any country is increased to such a degree that it\r\ncannot be all employed in supplying the consumption, and supporting the\r\nproductive labour of that particular country, the surplus part of it naturally\r\ndisgorges itself into the carrying trade, and is employed in performing the\r\nsame offices to other countries. The carrying trade is the natural effect and\r\nsymptom of great national wealth; but it does not seem to be the natural cause\r\nof it. Those statesmen who have been disposed to favour it with particular\r\nencouragement, seem to have mistaken the effect and symptom for the cause.\r\nHolland, in proportion to the extent of the land and the number of its\r\ninhabitants, by far the richest country in Europe, has accordingly the greatest\r\nshare of the carrying trade of Europe. England, perhaps the second richest\r\ncountry of Europe, is likewise supposed to have a considerable share in it;\r\nthough what commonly passes for the carrying trade of England will frequently,\r\nperhaps, be found to be no more than a round-about foreign trade of\r\nconsumption. Such are, in a great measure, the trades which carry the goods of\r\nthe East and West Indies and of America to the different European markets.\r\nThose goods are generally purchased, either immediately with the produce of\r\nBritish industry, or with something else which had been purchased with that\r\nproduce, and the final returns of those trades are generally used or consumed\r\nin Great Britain. The trade which is carried on in British bottoms between the\r\ndifferent ports of the Mediterranean, and some trade of the same kind carried\r\non by British merchants between the different ports of India, make, perhaps,\r\nthe principal branches of what is properly the carrying trade of Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe extent of the home trade, and of the capital which can be employed in it,\r\nis necessarily limited by the value of the surplus produce of all those distant\r\nplaces within the country which have occasion to exchange their respective\r\nproductions with one another; that of the foreign trade of consumption, by the\r\nvalue of the surplus produce of the whole country, and of what can be purchased\r\nwith it; that of the carrying trade, by the value of the surplus produce of all\r\nthe different countries in the world. Its possible extent, therefore, is in a\r\nmanner infinite in comparison of that of the other two, and is capable of\r\nabsorbing the greatest capitals.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe consideration of his own private profit is the sole motive which determines\r\nthe owner of any capital to employ it either in agriculture, in manufactures,\r\nor in some particular branch of the wholesale or retail trade. The different\r\nquantities of productive labour which it may put into motion, and the different\r\nvalues which it may add to the annual produce of the land and labour of the\r\nsociety, according as it is employed in one or other of those different ways,\r\nnever enter into his thoughts. In countries, therefore, where agriculture is\r\nthe most profitable of all employments, and farming and improving the most\r\ndirect roads to a splendid fortune, the capitals of individuals will naturally\r\nbe employed in the manner most advantageous to the whole society. The profits\r\nof agriculture, however, seem to have no superiority over those of other\r\nemployments in any part of Europe. Projectors, indeed, in every corner of it,\r\nhave, within these few years, amused the public with most magnificent accounts\r\nof the profits to be made by the cultivation and improvement of land. Without\r\nentering into any particular discussion of their calculations, a very simple\r\nobservation may satisfy us that the result of them must be false. We see, every\r\nday, the most splendid fortunes, that have been acquired in the course of a\r\nsingle life, by trade and manufactures, frequently from a very small capital,\r\nsometimes from no capital. A single instance of such a fortune, acquired by\r\nagriculture in the same time, and from such a capital, has not, perhaps,\r\noccurred in Europe, during the course of the present century. In all the great\r\ncountries of Europe, however, much good land still remains uncultivated; and\r\nthe greater part of what is cultivated, is far from being improved to the\r\ndegree of which it is capable. Agriculture, therefore, is almost everywhere\r\ncapable of absorbing a much greater capital than has ever yet been employed in\r\nit. What circumstances in the policy of Europe have given the trades which are\r\ncarried on in towns so great an advantage over that which is carried on in the\r\ncountry, that private persons frequently find it more for their advantage to\r\nemploy their capitals in the most distant carrying trades of Asia and America\r\nthan in the improvement and cultivation of the most fertile fields in their own\r\nneighbourhood, I shall endeavour to explain at full length in the two following\r\nbooks.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap20\"\u003e\u003c/a\u003eBOOK III.\u003cbr\u003e\r\nOF THE DIFFERENT PROGRESS OF OPULENCE IN DIFFERENT NATIONS\u003c/h2\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap21\"\u003e\u003c/a\u003eCHAPTER I.\u003cbr\u003e\r\nOF THE NATURAL PROGRESS OF OPULENCE.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe great commerce of every civilized society is that carried on between the\r\ninhabitants of the town and those of the country. It consists in the exchange\r\nof rude for manufactured produce, either immediately, or by the intervention of\r\nmoney, or of some sort of paper which represents money. The country supplies\r\nthe town with the means of subsistence and the materials of manufacture. The\r\ntown repays this supply, by sending back a part of the manufactured produce to\r\nthe inhabitants of the country. The town, in which there neither is nor can be\r\nany reproduction of substances, may very properly be said to gain its whole\r\nwealth and subsistence from the country. We must not, however, upon this\r\naccount, imagine that the gain of the town is the loss of the country. The\r\ngains of both are mutual and reciprocal, and the division of labour is in this,\r\nas in all other cases, advantageous to all the different persons employed in\r\nthe various occupations into which it is subdivided. The inhabitants of the\r\ncountry purchase of the town a greater quantity of manufactured goods with the\r\nproduce of a much smaller quantity of their own labour, than they must have\r\nemployed had they attempted to prepare them themselves. The town affords a\r\nmarket for the surplus produce of the country, or what is over and above the\r\nmaintenance of the cultivators; and it is there that the inhabitants of the\r\ncountry exchange it for something else which is in demand among them. The\r\ngreater the number and revenue of the inhabitants of the town, the more\r\nextensive is the market which it affords to those of the country; and the more\r\nextensive that market, it is always the more advantageous to a great number.\r\nThe corn which grows within a mile of the town, sells there for the same price\r\nwith that which comes from twenty miles distance. But the price of the latter\r\nmust, generally, not only pay the expense of raising it and bringing it to\r\nmarket, but afford, too, the ordinary profits of agriculture to the farmer. The\r\nproprietors and cultivators of the country, therefore, which lies in the\r\nneighbourhood of the town, over and above the ordinary profits of agriculture,\r\ngain, in the price of what they sell, the whole value of the carriage of the\r\nlike produce that is brought from more distant parts; and they save, besides,\r\nthe whole value of this carriage in the price of what they buy. Compare the\r\ncultivation of the lands in the neighbourhood of any considerable town, with\r\nthat of those which lie at some distance from it, and you will easily satisfy\r\nyourself how much the country is benefited by the commerce of the town. Among\r\nall the absurd speculations that have been propagated concerning the balance of\r\ntrade, it has never been pretended that either the country loses by its\r\ncommerce with the town, or the town by that with the country which maintains\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs subsistence is, in the nature of things, prior to conveniency and luxury, so\r\nthe industry which procures the former, must necessarily be prior to that which\r\nministers to the latter. The cultivation and improvement of the country,\r\ntherefore, which affords subsistence, must, necessarily, be prior to the\r\nincrease of the town, which furnishes only the means of conveniency and luxury.\r\nIt is the surplus produce of the country only, or what is over and above the\r\nmaintenance of the cultivators, that constitutes the subsistence of the town,\r\nwhich can therefore increase only with the increase of the surplus produce. The\r\ntown, indeed, may not always derive its whole subsistence from the country in\r\nits neighbourhood, or even from the territory to which it belongs, but from\r\nvery distant countries; and this, though it forms no exception from the general\r\nrule, has occasioned considerable variations in the progress of opulence in\r\ndifferent ages and nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat order of things which necessity imposes, in general, though not in every\r\nparticular country, is in every particular country promoted by the natural\r\ninclinations of man. If human institutions had never thwarted those natural\r\ninclinations, the towns could nowhere have increased beyond what the\r\nimprovement and cultivation of the territory in which they were situated could\r\nsupport; till such time, at least, as the whole of that territory was\r\ncompletely cultivated and improved. Upon equal, or nearly equal profits, most\r\nmen will choose to employ their capitals, rather in the improvement and\r\ncultivation of land, than either in manufactures or in foreign trade. The man\r\nwho employs his capital in land, has it more under his view and command; and\r\nhis fortune is much less liable to accidents than that of the trader, who is\r\nobliged frequently to commit it, not only to the winds and the waves, but to\r\nthe more uncertain elements of human folly and injustice, by giving great\r\ncredits, in distant countries, to men with whose character and situation he can\r\nseldom be thoroughly acquainted. The capital of the landlord, on the contrary,\r\nwhich is fixed in the improvement of his land, seems to be as well secured as\r\nthe nature of human affairs can admit of. The beauty of the country, besides,\r\nthe pleasure of a country life, the tranquillity of mind which it promises,\r\nand, wherever the injustice of human laws does not disturb it, the independency\r\nwhich it really affords, have charms that, more or less, attract everybody; and\r\nas to cultivate the ground was the original destination of man, so, in every\r\nstage of his existence, he seems to retain a predilection for this primitive\r\nemployment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWithout the assistance of some artificers, indeed, the cultivation of land\r\ncannot be carried on, but with great inconveniency and continual interruption.\r\nSmiths, carpenters, wheelwrights and ploughwrights, masons and bricklayers,\r\ntanners, shoemakers, and tailors, are people whose service the farmer has\r\nfrequent occasion for. Such artificers, too, stand occasionally in need of the\r\nassistance of one another; and as their residence is not, like that of the\r\nfarmer, necessarily tied down to a precise spot, they naturally settle in the\r\nneighbourhood of one another, and thus form a small town or village. The\r\nbutcher, the brewer, and the baker, soon join them, together with many other\r\nartificers and retailers, necessary or useful for supplying their occasional\r\nwants, and who contribute still further to augment the town. The inhabitants of\r\nthe town, and those of the country, are mutually the servants of one another.\r\nThe town is a continual fair or market, to which the inhabitants of the country\r\nresort, in order to exchange their rude for manufactured produce. It is this\r\ncommerce which supplies the inhabitants of the town, both with the materials of\r\ntheir work, and the means of their subsistence. The quantity of the finished\r\nwork which they sell to the inhabitants of the country, necessarily regulates\r\nthe quantity of the materials and provisions which they buy. Neither their\r\nemployment nor subsistence, therefore, can augment, but in proportion to the\r\naugmentation of the demand from the country for finished work; and this demand\r\ncan augment only in proportion to the extension of improvement and cultivation.\r\nHad human institutions, therefore, never disturbed the natural course of\r\nthings, the progressive wealth and increase of the towns would, in every\r\npolitical society, be consequential, and in proportion to the improvement and\r\ncultivation of the territory of country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn our North American colonies, where uncultivated land is still to be had upon\r\neasy terms, no manufactures for distant sale have ever yet been established in\r\nany of their towns. When an artificer has acquired a little more stock than is\r\nnecessary for carrying on his own business in supplying the neighbouring\r\ncountry, he does not, in North America, attempt to establish with it a\r\nmanufacture for more distant sale, but employs it in the purchase and\r\nimprovement of uncultivated land. From artificer he becomes planter; and\r\nneither the large wages nor the easy subsistence which that country affords to\r\nartificers, can bribe him rather to work for other people than for himself. He\r\nfeels that an artificer is the servant of his customers, from whom he derives\r\nhis subsistence; but that a planter who cultivates his own land, and derives\r\nhis necessary subsistence from the labour of his own family, is really a\r\nmaster, and independent of all the world.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries, on the contrary, where there is either no uncultivated land, or\r\nnone that can be had upon easy terms, every artificer who has acquired more\r\nstock than he can employ in the occasional jobs of the neighbourhood,\r\nendeavours to prepare work for more distant sale. The smith erects some sort of\r\niron, the weaver some sort of linen or woollen manufactory. Those different\r\nmanufactures come, in process of time, to be gradually subdivided, and thereby\r\nimproved and refined in a great variety of ways, which may easily be conceived,\r\nand which it is therefore unnecessary to explain any farther.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn seeking for employment to a capital, manufactures are, upon equal or nearly\r\nequal profits, naturally preferred to foreign commerce, for the same reason\r\nthat agriculture is naturally preferred to manufactures. As the capital of the\r\nlandlord or farmer is more secure than that of the manufacturer, so the capital\r\nof the manufacturer, being at all times more within his view and command, is\r\nmore secure than that of the foreign merchant. In every period, indeed, of\r\nevery society, the surplus part both of the rude and manufactured produce, or\r\nthat for which there is no demand at home, must be sent abroad, in order to be\r\nexchanged for something for which there is some demand at home. But whether the\r\ncapital which carries this surplus produce abroad be a foreign or a domestic\r\none, is of very little importance. If the society has not acquired sufficient\r\ncapital, both to cultivate all its lands, and to manufacture in the completest\r\nmanner the whole of its rude produce, there is even a considerable advantage\r\nthat the rude produce should be exported by a foreign capital, in order that\r\nthe whole stock of the society may be employed in more useful purposes. The\r\nwealth of ancient Egypt, that of China and Indostan, sufficiently demonstrate\r\nthat a nation may attain a very high degree of opulence, though the greater\r\npart of its exportation trade be carried on by foreigners. The progress of our\r\nNorth American and West Indian colonies, would have been much less rapid, had\r\nno capital but what belonged to themselves been employed in exporting their\r\nsurplus produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAccording to the natural course of things, therefore, the greater part of the\r\ncapital of every growing society is, first, directed to agriculture, afterwards\r\nto manufactures, and, last of all, to foreign commerce. This order of things is\r\nso very natural, that in every society that had any territory, it has always, I\r\nbelieve, been in some degree observed. Some of their lands must have been\r\ncultivated before any considerable towns could be established, and some sort of\r\ncoarse industry of the manufacturing kind must have been carried on in those\r\ntowns, before they could well think of employing themselves in foreign\r\ncommerce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though this natural order of things must have taken place in some degree in\r\nevery such society, it has, in all the modern states of Europe, been in many\r\nrespects entirely inverted. The foreign commerce of some of their cities has\r\nintroduced all their finer manufactures, or such as were fit for distant sale;\r\nand manufactures and foreign commerce together have given birth to the\r\nprincipal improvements of agriculture. The manners and customs which the nature\r\nof their original government introduced, and which remained after that\r\ngovernment was greatly altered, necessarily forced them into this unnatural and\r\nretrograde order.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap22\"\u003e\u003c/a\u003eCHAPTER II.\u003cbr\u003e\r\nOF THE DISCOURAGEMENT OF AGRICULTURE IN THE ANCIENT STATE OF EUROPE, AFTER THE\r\nFALL OF THE ROMAN EMPIRE.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nWhen the German and Scythian nations overran the western provinces of the Roman\r\nempire, the confusions which followed so great a revolution lasted for several\r\ncenturies. The rapine and violence which the barbarians exercised against the\r\nancient inhabitants, interrupted the commerce between the towns and the\r\ncountry. The towns were deserted, and the country was left uncultivated; and\r\nthe western provinces of Europe, which had enjoyed a considerable degree of\r\nopulence under the Roman empire, sunk into the lowest state of poverty and\r\nbarbarism. During the continuance of those confusions, the chiefs and principal\r\nleaders of those nations acquired, or usurped to themselves, the greater part\r\nof the lands of those countries. A great part of them was uncultivated; but no\r\npart of them, whether cultivated or uncultivated, was left without a\r\nproprietor. All of them were engrossed, and the greater part by a few great\r\nproprietors.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis original engrossing of uncultivated lands, though a great, might have been\r\nbut a transitory evil. They might soon have been divided again, and broke into\r\nsmall parcels, either by succession or by alienation. The law of primogeniture\r\nhindered them from being divided by succession; the introduction of entails\r\nprevented their being broke into small parcels by alienation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen land, like moveables, is considered as the means only of subsistence and\r\nenjoyment, the natural law of succession divides it, like them, among all the\r\nchildren of the family; of all of whom the subsistence and enjoyment may be\r\nsupposed equally dear to the father. This natural law of succession,\r\naccordingly, took place among the Romans who made no more distinction between\r\nelder and younger, between male and female, in the inheritance of lands, than\r\nwe do in the distribution of moveables. But when land was considered as the\r\nmeans, not of subsistence merely, but of power and protection, it was thought\r\nbetter that it should descend undivided to one. In those disorderly times,\r\nevery great landlord was a sort of petty prince. His tenants were his subjects.\r\nHe was their judge, and in some respects their legislator in peace and their\r\nleader in war. He made war according to his own discretion, frequently against\r\nhis neighbours, and sometimes against his sovereign. The security of a landed\r\nestate, therefore, the protection which its owner could afford to those who\r\ndwelt on it, depended upon its greatness. To divide it was to ruin it, and to\r\nexpose every part of it to be oppressed and swallowed up by the incursions of\r\nits neighbours. The law of primogeniture, therefore, came to take place, not\r\nimmediately indeed, but in process of time, in the succession of landed\r\nestates, for the same reason that it has generally taken place in that of\r\nmonarchies, though not always at their first institution. That the power, and\r\nconsequently the security of the monarchy, may not be weakened by division, it\r\nmust descend entire to one of the children. To which of them so important a\r\npreference shall be given, must be determined by some general rule, founded not\r\nupon the doubtful distinctions of personal merit, but upon some plain and\r\nevident difference which can admit of no dispute. Among the children of the\r\nsame family there can be no indisputable difference but that of sex, and that\r\nof age. The male sex is universally preferred to the female; and when all other\r\nthings are equal, the elder everywhere takes place of the younger. Hence the\r\norigin of the right of primogeniture, and of what is called lineal succession.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLaws frequently continue in force long after the circumstances which first gave\r\noccasion to them, and which could alone render them reasonable, are no more. In\r\nthe present state of Europe, the proprietor of a single acre of land is as\r\nperfectly secure in his possession as the proprietor of 100,000. The right of\r\nprimogeniture, however, still continues to be respected; and as of all\r\ninstitutions it is the fittest to support the pride of family distinctions, it\r\nis still likely to endure for many centuries. In every other respect, nothing\r\ncan be more contrary to the real interest of a numerous family, than a right\r\nwhich, in order to enrich one, beggars all the rest of the children.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEntails are the natural consequences of the law of primogeniture. They were\r\nintroduced to preserve a certain lineal succession, of which the law of\r\nprimogeniture first gave the idea, and to hinder any part of the original\r\nestate from being carried out of the proposed line, either by gift, or device,\r\nor alienation; either by the folly, or by the misfortune of any of its\r\nsuccessive owners. They were altogether unknown to the Romans. Neither their\r\nsubstitutions, nor fidei commisses, bear any resemblance to entails, though\r\nsome French lawyers have thought proper to dress the modern institution in the\r\nlanguage and garb of those ancient ones.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen great landed estates were a sort of principalities, entails might not be\r\nunreasonable. Like what are called the fundamental laws of some monarchies,\r\nthey might frequently hinder the security of thousands from being endangered by\r\nthe caprice or extravagance of one man. But in the present state of Europe,\r\nwhen small as well as great estates derive their security from the laws of\r\ntheir country, nothing can be more completely absurd. They are founded upon the\r\nmost absurd of all suppositions, the supposition that every successive\r\ngeneration of men have not an equal right to the earth, and to all that it\r\npossesses; but that the property of the present generation should be restrained\r\nand regulated according to the fancy of those who died, perhaps five hundred\r\nyears ago. Entails, however, are still respected, through the greater part of\r\nEurope; In those countries, particularly, in which noble birth is a necessary\r\nqualification for the enjoyment either of civil or military honours. Entails\r\nare thought necessary for maintaining this exclusive privilege of the nobility\r\nto the great offices and honours of their country; and that order having\r\nusurped one unjust advantage over the rest of their fellow-citizens, lest their\r\npoverty should render it ridiculous, it is thought reasonable that they should\r\nhave another. The common law of England, indeed, is said to abhor perpetuities,\r\nand they are accordingly more restricted there than in any other European\r\nmonarchy; though even England is not altogether without them. In Scotland, more\r\nthan one fifth, perhaps more than one third part of the whole lands in the\r\ncountry, are at present supposed to be under strict entail.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGreat tracts of uncultivated land were in this manner not only engrossed by\r\nparticular families, but the possibility of their being divided again was as\r\nmuch as possible precluded for ever. It seldom happens, however, that a great\r\nproprietor is a great improver. In the disorderly times which gave birth to\r\nthose barbarous institutions, the great proprietor was sufficiently employed in\r\ndefending his own territories, or in extending his jurisdiction and authority\r\nover those of his neighbours. He had no leisure to attend to the cultivation\r\nand improvement of land. When the establishment of law and order afforded him\r\nthis leisure, he often wanted the inclination, and almost always the requisite\r\nabilities. If the expense of his house and person either equalled or exceeded\r\nhis revenue, as it did very frequently, he had no stock to employ in this\r\nmanner. If he was an economist, he generally found it more profitable to employ\r\nhis annual savings in new purchases than in the improvement of his old estate.\r\nTo improve land with profit, like all other commercial projects, requires an\r\nexact attention to small savings and small gains, of which a man born to a\r\ngreat fortune, even though naturally frugal, is very seldom capable. The\r\nsituation of such a person naturally disposes him to attend rather to ornament,\r\nwhich pleases his fancy, than to profit, for which he has so little occasion.\r\nThe elegance of his dress, of his equipage, of his house and household\r\nfurniture, are objects which, from his infancy, he has been accustomed to have\r\nsome anxiety about. The turn of mind which this habit naturally forms, follows\r\nhim when he comes to think of the improvement of land. He embellishes, perhaps,\r\nfour or five hundred acres in the neighbourhood of his house, at ten times the\r\nexpense which the land is worth after all his improvements; and finds, that if\r\nhe was to improve his whole estate in the same manner, and he has little taste\r\nfor any other, he would be a bankrupt before he had finished the tenth part of\r\nit. There still remain, in both parts of the united kingdom, some great estates\r\nwhich have continued, without interruption, in the hands of the same family\r\nsince the times of feudal anarchy. Compare the present condition of those\r\nestates with the possessions of the small proprietors in their neighbourhood,\r\nand you will require no other argument to convince you how unfavourable such\r\nextensive property is to improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf little improvement was to be expected from such great proprietors, still\r\nless was to be hoped for from those who occupied the land under them. In the\r\nancient state of Europe, the occupiers of land were all tenants at will. They\r\nwere all, or almost all, slaves, but their slavery was of a milder kind than\r\nthat known among the ancient Greeks and Romans, or even in our West Indian\r\ncolonies. They were supposed to belong more directly to the land than to their\r\nmaster. They could, therefore, be sold with it, but not separately. They could\r\nmarry, provided it was with the consent of their master; and he could not\r\nafterwards dissolve the marriage by selling the man and wife to different\r\npersons. If he maimed or murdered any of them, he was liable to some penalty,\r\nthough generally but to a small one. They were not, however, capable of\r\nacquiring property. Whatever they acquired was acquired to their master, and he\r\ncould take it from them at pleasure. Whatever cultivation and improvement could\r\nbe carried on by means of such slaves, was properly carried on by their master.\r\nIt was at his expense. The seed, the cattle, and the instruments of husbandry,\r\nwere all his. It was for his benefit. Such slaves could acquire nothing but\r\ntheir daily maintenance. It was properly the proprietor himself, therefore,\r\nthat in this case occupied his own lands, and cultivated them by his own\r\nbondmen. This species of slavery still subsists in Russia, Poland, Hungary,\r\nBohemia, Moravia, and other parts of Germany. It is only in the western and\r\nsouth-western provinces of Europe that it has gradually been abolished\r\naltogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if great improvements are seldom to be expected from great proprietors,\r\nthey are least of all to be expected when they employ slaves for their workmen.\r\nThe experience of all ages and nations, I believe, demonstrates that the work\r\ndone by slaves, though it appears to cost only their maintenance, is in the end\r\nthe dearest of any. A person who can acquire no property can have no other\r\ninterest but to eat as much and to labour as little as possible. Whatever work\r\nhe does beyond what is sufficient to purchase his own maintenance, can be\r\nsqueezed out of him by violence only, and not by any interest of his own. In\r\nancient Italy, how much the cultivation of corn degenerated, how unprofitable\r\nit became to the master, when it fell under the management of slaves, is\r\nremarked both by Pliny and Columella. In the time of Aristotle, it had not been\r\nmuch better in ancient Greece. Speaking of the ideal republic described in the\r\nlaws of Plato, to maintain 5000 idle men (the number of warriors supposed\r\nnecessary for its defence), together with their women and servants, would\r\nrequire, he says, a territory of boundless extent and fertility, like the\r\nplains of Babylon.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe pride of man makes him love to domineer, and nothing mortifies him so much\r\nas to be obliged to condescend to persuade his inferiors. Wherever the law\r\nallows it, and the nature of the work can afford it, therefore, he will\r\ngenerally prefer the service of slaves to that of freemen. The planting of\r\nsugar and tobacco can afford the expense of slave cultivation. The raising of\r\ncorn, it seems, in the present times, cannot. In the English colonies, of which\r\nthe principal produce is corn, the far greater part of the work is done by\r\nfreemen. The late resolution of the Quakers in Pennsylvania, to set at liberty\r\nall their negro slaves, may satisfy us that their number cannot be very great.\r\nHad they made any considerable part of their property, such a resolution could\r\nnever have been agreed to. In our sugar colonies., on the contrary, the whole\r\nwork is done by slaves, and in our tobacco colonies a very great part of it.\r\nThe profits of a sugar plantation in any of our West Indian colonies, are\r\ngenerally much greater than those of any other cultivation that is known either\r\nin Europe or America; and the profits of a tobacco plantation, though inferior\r\nto those of sugar, are superior to those of corn, as has already been observed.\r\nBoth can afford the expense of slave cultivation but sugar can afford it still\r\nbetter than tobacco. The number of negroes, accordingly, is much greater, in\r\nproportion to that of whites, in our sugar than in our tobacco colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo the slave cultivators of ancient times gradually succeeded a species of\r\nfarmers, known at present in France by the name of metayers. They are called in\r\nLatin Coloni Partiarii. They have been so long in disuse in England, that at\r\npresent I know no English name for them. The proprietor furnished them with the\r\nseed, cattle, and instruments of husbandry, the whole stock, in short,\r\nnecessary for cultivating the farm. The produce was divided equally between the\r\nproprietor and the farmer, after setting aside what was judged necessary for\r\nkeeping up the stock, which was restored to the proprietor, when the farmer\r\neither quitted or was turned out of the farm.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLand occupied by such tenants is properly cultivated at the expense of the\r\nproprietors, as much as that occupied by slaves. There is, however, one very\r\nessential difference between them. Such tenants, being freemen, are capable of\r\nacquiring property; and having a certain proportion of the produce of the land,\r\nthey have a plain interest that the whole produce should be as great as\r\npossible, in order that their own proportion may be so. A slave, on the\r\ncontrary, who can acquire nothing but his maintenance, consults his own ease,\r\nby making the land produce as little as possible over and above that\r\nmaintenance. It is probable that it was partly upon account of this advantage,\r\nand partly upon account of the encroachments which the sovereigns, always\r\njealous of the great lords, gradually encouraged their villains to make upon\r\ntheir authority, and which seem, at least, to have been such as rendered this\r\nspecies of servitude altogether inconvenient, that tenure in villanage\r\ngradually wore out through the greater part of Europe. The time and manner,\r\nhowever, in which so important a revolution was brought about, is one of the\r\nmost obscure points in modern history. The church of Rome claims great merit in\r\nit; and it is certain, that so early as the twelfth century, Alexander III.\r\npublished a bull for the general emancipation of slaves. It seems, however, to\r\nhave been rather a pious exhortation, than a law to which exact obedience was\r\nrequired from the faithful. Slavery continued to take place almost universally\r\nfor several centuries afterwards, till it was gradually abolished by the joint\r\noperation of the two interests above mentioned; that of the proprietor on the\r\none hand, and that of the sovereign on the other. A villain, enfranchised, and\r\nat the same time allowed to continue in possession of the land, having no stock\r\nof his own, could cultivate it only by means of what the landlord advanced to\r\nhim, and must therefore have been what the French call a metayer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt could never, however, be the interest even of this last species of\r\ncultivators, to lay out, in the further improvement of the land, any part of\r\nthe little stock which they might save from their own share of the produce;\r\nbecause the landlord, who laid out nothing, was to get one half of whatever it\r\nproduced. The tithe, which is but a tenth of the produce, is found to be a very\r\ngreat hindrance to improvement. A tax, therefore, which amounted to one half,\r\nmust have been an effectual bar to it. It might be the interest of a metayer to\r\nmake the land produce as much as could be brought out of it by means of the\r\nstock furnished by the proprietor; but it could never be his interest to mix\r\nany part of his own with it. In France, where five parts out of six of the\r\nwhole kingdom are said to be still occupied by this species of cultivators, the\r\nproprietors complain, that their metayers take every opportunity of employing\r\ntheir master’s cattle rather in carriage than in cultivation; because, in\r\nthe one case, they get the whole profits to themselves, in the other they share\r\nthem with their landlord. This species of tenants still subsists in some parts\r\nof Scotland. They are called steel-bow tenants. Those ancient English tenants,\r\nwho are said by Chief-Baron Gilbert and Dr Blackstone to have been rather\r\nbailiffs of the landlord than farmers, properly so called, were probably of the\r\nsame kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo this species of tenantry succeeded, though by very slow degrees, farmers,\r\nproperly so called, who cultivated the land with their own stock, paying a rent\r\ncertain to the landlord. When such farmers have a lease for a term of years,\r\nthey may sometimes find it for their interest to lay out part of their capital\r\nin the further improvement of the farm; because they may sometimes expect to\r\nrecover it, with a large profit, before the expiration of the lease. The\r\npossession, even of such farmers, however, was long extremely precarious, and\r\nstill is so in many parts of Europe. They could, before the expiration of their\r\nterm, be legally ousted of their leases by a new purchaser; in England, even,\r\nby the fictitious action of a common recovery. If they were turned out\r\nillegally by the violence of their master, the action by which they obtained\r\nredress was extremely imperfect. It did not always reinstate them in the\r\npossession of the land, but gave them damages, which never amounted to a real\r\nloss. Even in England, the country, perhaps of Europe, where the yeomanry has\r\nalways been most respected, it was not till about the 14th of Henry VII. that\r\nthe action of ejectment was invented, by which the tenant recovers, not damages\r\nonly, but possession, and in which his claim is not necessarily concluded by\r\nthe uncertain decision of a single assize. This action has been found so\r\neffectual a remedy, that, in the modern practice, when the landlord has\r\noccasion to sue for the possession of the land, he seldom makes use of the\r\nactions which properly belong to him as a landlord, the writ of right or the\r\nwrit of entry, but sues in the name of his tenant, by the writ of ejectment. In\r\nEngland, therefore the security of the tenant is equal to that of the\r\nproprietor. In England, besides, a lease for life of forty shillings a-year\r\nvalue is a freehold, and entitles the lessee to a vote for a member of\r\nparliament; and as a great part of the yeomanry have freeholds of this kind,\r\nthe whole order becomes respectable to their landlords, on account of the\r\npolitical consideration which this gives them. There is, I believe, nowhere in\r\nEurope, except in England, any instance of the tenant building upon the land of\r\nwhich he had no lease, and trusting that the honour of his landlord would take\r\nno advantage of so important an improvement. Those laws and customs, so\r\nfavourable to the yeomanry, have perhaps contributed more to the present\r\ngrandeur of England, than all their boasted regulations of commerce taken\r\ntogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe law which secures the longest leases against successors of every kind, is,\r\nso far as I know, peculiar to Great Britain. It was introduced into Scotland so\r\nearly as 1449, by a law of James II. Its beneficial influence, however, has\r\nbeen much obstructed by entails; the heirs of entail being generally restrained\r\nfrom letting leases for any long term of years, frequently for more than one\r\nyear. A late act of parliament has, in this respect, somewhat slackened their\r\nfetters, though they are still by much too strait. In Scotland, besides, as no\r\nleasehold gives a vote for a member of parliament, the yeomanry are upon this\r\naccount less respectable to their landlords than in England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn other parts of Europe, after it was found convenient to secure tenants both\r\nagainst heirs and purchasers, the term of their security was still limited to a\r\nvery short period; in France, for example, to nine years from the commencement\r\nof the lease. It has in that country, indeed, been lately extended to\r\ntwentyseven, a period still too short to encourage the tenant to make the most\r\nimportant improvements. The proprietors of land were anciently the legislators\r\nof every part of Europe. The laws relating to land, therefore, were all\r\ncalculated for what they supposed the interest of the proprietor. It was for\r\nhis interest, they had imagined, that no lease granted by any of his\r\npredecessors should hinder him from enjoying, during a long term of years, the\r\nfull value of his land. Avarice and injustice are always short-sighted, and\r\nthey did not foresee how much this regulation must obstruct improvement, and\r\nthereby hurt, in the long-run, the real interest of the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe farmers, too, besides paying the rent, were anciently, it was supposed,\r\nbound to perform a great number of services to the landlord, which were seldom\r\neither specified in the lease, or regulated by any precise rule, but by the use\r\nand wont of the manor or barony. These services, therefore, being almost\r\nentirely arbitrary, subjected the tenant to many vexations. In Scotland the\r\nabolition of all services not precisely stipulated in the lease, has, in the\r\ncourse of a few years, very much altered for the better the condition of the\r\nyeomanry of that country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public services to which the yeomanry were bound, were not less arbitrary\r\nthan the private ones. To make and maintain the high roads, a servitude which\r\nstill subsists, I believe, everywhere, though with different degrees of\r\noppression in different countries, was not the only one. When the king’s\r\ntroops, when his household, or his officers of any kind, passed through any\r\npart of the country, the yeomanry were bound to provide them with horses,\r\ncarriages, and provisions, at a price regulated by the purveyor. Great Britain\r\nis, I believe, the only monarchy in Europe where the oppression of purveyance\r\nhas been entirely abolished. It still subsists in France and Germany.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public taxes, to which they were subject, were as irregular and oppressive\r\nas the services. The ancient lords, though extremely unwilling to grant,\r\nthemselves, any pecuniary aid to their sovereign, easily allowed him to\r\ntallage, as they called it, their tenants, and had not knowledge enough to\r\nforesee how much this must, in the end, affect their own revenue. The taille,\r\nas it still subsists in France may serve as an example of those ancient\r\ntallages. It is a tax upon the supposed profits of the farmer, which they\r\nestimate by the stock that he has upon the farm. It is his interest, therefore,\r\nto appear to have as little as possible, and consequently to employ as little\r\nas possible in its cultivation, and none in its improvement. Should any stock\r\nhappen to accumulate in the hands of a French farmer, the taille is almost\r\nequal to a prohibition of its ever being employed upon the land. This tax,\r\nbesides, is supposed to dishonour whoever is subject to it, and to degrade him\r\nbelow, not only the rank of a gentleman, but that of a burgher; and whoever\r\nrents the lands of another becomes subject to it. No gentleman, nor even any\r\nburgher, who has stock, will submit to this degradation. This tax, therefore,\r\nnot only hinders the stock which accumulates upon the land from being employed\r\nin its improvement, but drives away all other stock from it. The ancient tenths\r\nand fifteenths, so usual in England in former times, seem, so far as they\r\naffected the land, to have been taxes of the same nature with the taille.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnder all these discouragements, little improvement could be expected from the\r\noccupiers of land. That order of people, with all the liberty and security\r\nwhich law can give, must always improve under great disadvantage. The farmer,\r\ncompared with the proprietor, is as a merchant who trades with burrowed money,\r\ncompared with one who trades with his own. The stock of both may improve; but\r\nthat of the one, with only equal good conduct, must always improve more slowly\r\nthan that of the other, on account of the large share of the profits which is\r\nconsumed by the interest of the loan. The lands cultivated by the farmer must,\r\nin the same manner, with only equal good conduct, be improved more slowly than\r\nthose cultivated by the proprietor, on account of the large share of the\r\nproduce which is consumed in the rent, and which, had the farmer been\r\nproprietor, he might have employed in the further improvement of the land. The\r\nstation of a farmer, besides, is, from the nature of things, inferior to that\r\nof a proprietor. Through the greater part of Europe, the yeomanry are regarded\r\nas an inferior rank of people, even to the better sort of tradesmen and\r\nmechanics, and in all parts of Europe to the great merchants and master\r\nmanufacturers. It can seldom happen, therefore, that a man of any considerable\r\nstock should quit the superior, in order to place himself in an inferior\r\nstation. Even in the present state of Europe, therefore, little stock is likely\r\nto go from any other profession to the improvement of land in the way of\r\nfarming. More does, perhaps, in Great Britain than in any other country, though\r\neven there the great stocks which are in some places employed in farming, have\r\ngenerally been acquired by fanning, the trade, perhaps, in which, of all\r\nothers, stock is commonly acquired most slowly. After small proprietors,\r\nhowever, rich and great farmers are in every country the principal improvers.\r\nThere are more such, perhaps, in England than in any other European monarchy.\r\nIn the republican governments of Holland, and of Berne in Switzerland, the\r\nfarmers are said to be not inferior to those of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient policy of Europe was, over and above all this, unfavourable to the\r\nimprovement and cultivation of land, whether carried on by the proprietor or by\r\nthe farmer; first, by the general prohibition of the exportation of corn,\r\nwithout a special licence, which seems to have been a very universal\r\nregulation; and, secondly, by the restraints which were laid upon the inland\r\ncommerce, not only of corn, but of almost every other part of the produce of\r\nthe farm, by the absurd laws against engrossers, regraters, and forestallers,\r\nand by the privileges of fairs and markets. It has already been observed in\r\nwhat manner the prohibition of the exportation of corn, together with some\r\nencouragement given to the importation of foreign corn, obstructed the\r\ncultivation of ancient Italy, naturally the most fertile country in Europe, and\r\nat that time the seat of the greatest empire in the world. To what degree such\r\nrestraints upon the inland commerce of this commodity, joined to the general\r\nprohibition of exportation, must have discouraged the cultivation of countries\r\nless fertile, and less favourably circumstanced, it is not, perhaps, very easy\r\nto imagine.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap23\"\u003e\u003c/a\u003eCHAPTER III.\u003cbr\u003e\r\nOF THE RISE AND PROGRESS OF CITIES AND TOWNS, AFTER THE FALL OF THE ROMAN\r\nEMPIRE.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe inhabitants of cities and towns were, after the fall of the Roman empire,\r\nnot more favoured than those of the country. They consisted, indeed, of a very\r\ndifferent order of people from the first inhabitants of the ancient republics\r\nof Greece and Italy. These last were composed chiefly of the proprietors of\r\nlands, among whom the public territory was originally divided, and who found it\r\nconvenient to build their houses in the neighbourhood of one another, and to\r\nsurround them with a wall, for the sake of common defence. After the fall of\r\nthe Roman empire, on the contrary, the proprietors of land seem generally to\r\nhave lived in fortified castles on their own estates, and in the midst of their\r\nown tenants and dependants. The towns were chiefly inhabited by tradesmen and\r\nmechanics, who seem, in those days, to have been of servile, or very nearly of\r\nservile condition. The privileges which we find granted by ancient charters to\r\nthe inhabitants of some of the principal towns in Europe, sufficiently show\r\nwhat they were before those grants. The people to whom it is granted as a\r\nprivilege, that they might give away their own daughters in marriage without\r\nthe consent of their lord, that upon their death their own children, and not\r\ntheir lord, should succeed to their goods, and that they might dispose of their\r\nown effects by will, must, before those grants, have been either altogether, or\r\nvery nearly, in the same state of villanage with the occupiers of land in the\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThey seem, indeed, to have been a very poor, mean set of people, who seemed to\r\ntravel about with their goods from place to place, and from fair to fair, like\r\nthe hawkers and pedlars of the present times. In all the different countries of\r\nEurope then, in the same manner as in several of the Tartar governments of Asia\r\nat present, taxes used to be levied upon the persons and goods of travellers,\r\nwhen they passed through certain manors, when they went over certain bridges,\r\nwhen they carried about their goods from place to place in a fair, when they\r\nerected in it a booth or stall to sell them in. These different taxes were\r\nknown in England by the names of passage, pontage, lastage, and stallage.\r\nSometimes the king, sometimes a great lord, who had, it seems, upon some\r\noccasions, authority to do this, would grant to particular traders, to such\r\nparticularly as lived in their own demesnes, a general exemption from such\r\ntaxes. Such traders, though in other respects of servile, or very nearly of\r\nservile condition, were upon this account called free traders. They, in return,\r\nusually paid to their protector a sort of annual poll-tax. In those days\r\nprotection was seldom granted without a valuable consideration, and this tax\r\nmight perhaps be considered as compensation for what their patrons might lose\r\nby their exemption from other taxes. At first, both those poll-taxes and those\r\nexemptions seem to have been altogether personal, and to have affected only\r\nparticular individuals, during either their lives, or the pleasure of their\r\nprotectors. In the very imperfect accounts which have been published from\r\nDoomsday-book, of several of the towns of England, mention is frequently made,\r\nsometimes of the tax which particular burghers paid, each of them, either to\r\nthe king, or to some other great lord, for this sort of protection, and\r\nsometimes of the general amount only of all those taxes. {see Brady’s\r\nHistorical Treatise of Cities and Boroughs, p. 3. etc.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut how servile soever may have been originally the condition of the\r\ninhabitants of the towns, it appears evidently, that they arrived at liberty\r\nand independency much earlier than the occupiers of land in the country. That\r\npart of the king’s revenue which arose from such poll-taxes in any\r\nparticular town, used commonly to be let in farm, during a term of years, for a\r\nrent certain, sometimes to the sheriff of the county, and sometimes to other\r\npersons. The burghers themselves frequently got credit enough to be admitted to\r\nfarm the revenues of this sort which arose out of their own town, they becoming\r\njointly and severally answerable for the whole rent. {See Madox, Firma Burgi,\r\np. 18; also History of the Exchequer, chap. 10, sect. v, p. 223, first\r\nedition.} To let a farm in this manner, was quite agreeable to the usual\r\neconomy of, I believe, the sovereigns of all the different countries of Europe,\r\nwho used frequently to let whole manors to all the tenants of those manors,\r\nthey becoming jointly and severally answerable for the whole rent; but in\r\nreturn being allowed to collect it in their own way, and to pay it into the\r\nking’s exchequer by the hands of their own bailiff, and being thus\r\naltogether freed from the insolence of the king’s officers; a\r\ncircumstance in those days regarded as of the greatest importance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt first, the farm of the town was probably let to the burghers, in the same\r\nmanner as it had been to other farmers, for a term of years only. In process of\r\ntime, however, it seems to have become the general practice to grant it to them\r\nin fee, that is for ever, reserving a rent certain, never afterwards to be\r\naugmented. The payment having thus become perpetual, the exemptions, in return,\r\nfor which it was made, naturally became perpetual too. Those exemptions,\r\ntherefore, ceased to be personal, and could not afterwards be considered as\r\nbelonging to individuals, as individuals, but as burghers of a particular\r\nburgh, which, upon this account, was called a free burgh, for the same reason\r\nthat they had been called free burghers or free traders.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAlong with this grant, the important privileges, above mentioned, that they\r\nmight give away their own daughters in marriage, that their children should\r\nsucceed to them, and that they might dispose of their own effects by will, were\r\ngenerally bestowed upon the burghers of the town to whom it was given. Whether\r\nsuch privileges had before been usually granted, along with the freedom of\r\ntrade, to particular burghers, as individuals, I know not. I reckon it not\r\nimprobable that they were, though I cannot produce any direct evidence of it.\r\nBut however this may have been, the principal attributes of villanage and\r\nslavery being thus taken away from them, they now at least became really free,\r\nin our present sense of the word freedom.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNor was this all. They were generally at the same time erected into a\r\ncommonalty or corporation, with the privilege of having magistrates and a\r\ntown-council of their own, of making bye-laws for their own government, of\r\nbuilding walls for their own defence, and of reducing all their inhabitants\r\nunder a sort of military discipline, by obliging them to watch and ward; that\r\nis, as anciently understood, to guard and defend those walls against all\r\nattacks and surprises, by night as well as by day. In England they were\r\ngenerally exempted from suit to the hundred and county courts: and all such\r\npleas as should arise among them, the pleas of the crown excepted, were left to\r\nthe decision of their own magistrates. In other countries, much greater and\r\nmore extensive jurisdictions were frequently granted to them. {See Madox, Firma\r\nBurgi. See also Pfeffel in the Remarkable events under Frederick II. and his\r\nSuccessors of the House of Suabia.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt might, probably, be necessary to grant to such towns as were admitted to\r\nfarm their own revenues, some sort of compulsive jurisdiction to oblige their\r\nown citizens to make payment. In those disorderly times, it might have been\r\nextremely inconvenient to have left them to seek this sort of justice from any\r\nother tribunal. But it must seem extraordinary, that the sovereigns of all the\r\ndifferent countries of Europe should have exchanged in this manner for a rent\r\ncertain, never more to be augmented, that branch of their revenue, which was,\r\nperhaps, of all others, the most likely to be improved by the natural course of\r\nthings, without either expense or attention of their own; and that they should,\r\nbesides, have in this manner voluntarily erected a sort of independent\r\nrepublics in the heart of their own dominions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to understand this, it must be remembered, that, in those days, the\r\nsovereign of perhaps no country in Europe was able to protect, through the\r\nwhole extent of his dominions, the weaker part of his subjects from the\r\noppression of the great lords. Those whom the law could not protect, and who\r\nwere not strong enough to defend themselves, were obliged either to have\r\nrecourse to the protection of some great lord, and in order to obtain it, to\r\nbecome either his slaves or vassals; or to enter into a league of mutual\r\ndefence for the common protection of one another. The inhabitants of cities and\r\nburghs, considered as single individuals, had no power to defend themselves;\r\nbut by entering into a league of mutual defence with their neighbours, they\r\nwere capable of making no contemptible resistance. The lords despised the\r\nburghers, whom they considered not only as a different order, but as a parcel\r\nof emancipated slaves, almost of a different species from themselves. The\r\nwealth of the burghers never failed to provoke their envy and indignation, and\r\nthey plundered them upon every occasion without mercy or remorse. The burghers\r\nnaturally hated and feared the lords. The king hated and feared them too; but\r\nthough, perhaps, he might despise, he had no reason either to hate or fear the\r\nburghers. Mutual interest, therefore, disposed them to support the king, and\r\nthe king to support them against the lords. They were the enemies of his\r\nenemies, and it was his interest to render them as secure and independent of\r\nthose enemies as he could. By granting them magistrates of their own, the\r\nprivilege of making bye-laws for their own government, that of building walls\r\nfor their own defence, and that of reducing all their inhabitants under a sort\r\nof military discipline, he gave them all the means of security and independency\r\nof the barons which it was in his power to bestow. Without the establishment of\r\nsome regular government of this kind, without some authority to compel their\r\ninhabitants to act according to some certain plan or system, no voluntary\r\nleague of mutual defence could either have afforded them any permanent\r\nsecurity, or have enabled them to give the king any considerable support. By\r\ngranting them the farm of their own town in fee, he took away from those whom\r\nhe wished to have for his friends, and, if one may say so, for his allies, all\r\nground of jealousy and suspicion, that he was ever afterwards to oppress them,\r\neither by raising the farm-rent of their town, or by granting it to some other\r\nfarmer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe princes who lived upon the worst terms with their barons, seem accordingly\r\nto have been the most liberal in grants of this kind to their burghs. King John\r\nof England, for example, appears to have been a most munificent benefactor to\r\nhis towns. {See Madox.} Philip I. of France lost all authority over his barons.\r\nTowards the end of his reign, his son Lewis, known afterwards by the name of\r\nLewis the Fat, consulted, according to Father Daniel, with the bishops of the\r\nroyal demesnes, concerning the most proper means of restraining the violence of\r\nthe great lords. Their advice consisted of two different proposals. One was to\r\nerect a new order of jurisdiction, by establishing magistrates and a\r\ntown-council in every considerable town of his demesnes. The other was to form\r\na new militia, by making the inhabitants of those towns, under the command of\r\ntheir own magistrates, march out upon proper occasions to the assistance of the\r\nking. It is from this period, according to the French antiquarians, that we are\r\nto date the institution of the magistrates and councils of cities in France. It\r\nwas during the unprosperous reigns of the princes of the house of Suabia, that\r\nthe greater part of the free towns of Germany received the first grants of\r\ntheir privileges, and that the famous Hanseatic league first became formidable.\r\n{See Pfeffel.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe militia of the cities seems, in those times, not to have been inferior to\r\nthat of the country; and as they could be more readily assembled upon any\r\nsudden occasion, they frequently had the advantage in their disputes with the\r\nneighbouring lords. In countries such as Italy or Switzerland, in which, on\r\naccount either of their distance from the principal seat of government, of the\r\nnatural strength of the country itself, or of some other reason, the sovereign\r\ncame to lose the whole of his authority; the cities generally became\r\nindependent republics, and conquered all the nobility in their neighbourhood;\r\nobliging them to pull down their castles in the country, and to live, like\r\nother peaceable inhabitants, in the city. This is the short history of the\r\nrepublic of Berne, as well as of several other cities in Switzerland. If you\r\nexcept Venice, for of that city the history is somewhat different, it is the\r\nhistory of all the considerable Italian republics, of which so great a number\r\narose and perished between the end of the twelfth and the beginning of the\r\nsixteenth century.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries such as France and England, where the authority of the sovereign,\r\nthough frequently very low, never was destroyed altogether, the cities had no\r\nopportunity of becoming entirely independent. They became, however, so\r\nconsiderable, that the sovereign could impose no tax upon them, besides the\r\nstated farm-rent of the town, without their own consent. They were, therefore,\r\ncalled upon to send deputies to the general assembly of the states of the\r\nkingdom, where they might join with the clergy and the barons in granting, upon\r\nurgent occasions, some extraordinary aid to the king. Being generally, too,\r\nmore favourable to his power, their deputies seem sometimes to have been\r\nemployed by him as a counterbalance in those assemblies to the authority of the\r\ngreat lords. Hence the origin of the representation of burghs in the\r\nstates-general of all great monarchies in Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOrder and good government, and along with them the liberty and security of\r\nindividuals, were in this manner established in cities, at a time when the\r\noccupiers of land in the country, were exposed to every sort of violence. But\r\nmen in this defenceless state naturally content themselves with their necessary\r\nsubsistence; because, to acquire more, might only tempt the injustice of their\r\noppressors. On the contrary, when they are secure of enjoying the fruits of\r\ntheir industry, they naturally exert it to better their condition, and to\r\nacquire not only the necessaries, but the conveniencies and elegancies of life.\r\nThat industry, therefore, which aims at something more than necessary\r\nsubsistence, was established in cities long before it was commonly practised by\r\nthe occupiers of land in the country. If, in the hands of a poor cultivator,\r\noppressed with the servitude of villanage, some little stock should accumulate,\r\nhe would naturally conceal it with great care from his master, to whom it would\r\notherwise have belonged, and take the first opportunity of running away to a\r\ntown. The law was at that time so indulgent to the inhabitants of towns, and so\r\ndesirous of diminishing the authority of the lords over those of the country,\r\nthat if he could conceal himself there from the pursuit of his lord for a year,\r\nhe was free for ever. Whatever stock, therefore, accumulated in the hands of\r\nthe industrious part of the inhabitants of the country, naturally took refuge\r\nin cities, as the only sanctuaries in which it could be secure to the person\r\nthat acquired it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inhabitants of a city, it is true, must always ultimately derive their\r\nsubsistence, and the whole materials and means of their industry, from the\r\ncountry. But those of a city, situated near either the sea-coast or the banks\r\nof a navigable river, are not necessarily confined to derive them from the\r\ncountry in their neighbourhood. They have a much wider range, and may draw them\r\nfrom the most remote corners of the world, either in exchange for the\r\nmanufactured produce of their own industry, or by performing the office of\r\ncarriers between distant countries, and exchanging the produce of one for that\r\nof another. A city might, in this manner, grow up to great wealth and\r\nsplendour, while not only the country in its neighbourhood, but all those to\r\nwhich it traded, were in poverty and wretchedness. Each of those countries,\r\nperhaps, taken singly, could afford it but a small part, either of its\r\nsubsistence or of its employment; but all of them taken together, could afford\r\nit both a great subsistence and a great employment. There were, however, within\r\nthe narrow circle of the commerce of those times, some countries that were\r\nopulent and industrious. Such was the Greek empire as long as it subsisted, and\r\nthat of the Saracens during the reigns of the Abassides. Such, too, was Egypt\r\ntill it was conquered by the Turks, some part of the coast of Barbary, and all\r\nthose provinces of Spain which were under the government of the Moors.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe cities of Italy seem to have been the first in Europe which were raised by\r\ncommerce to any considerable degree of opulence. Italy lay in the centre of\r\nwhat was at that time the improved and civilized part of the world. The\r\ncrusades, too, though, by the great waste of stock and destruction of\r\ninhabitants which they occasioned, they must necessarily have retarded the\r\nprogress of the greater part of Europe, were extremely favourable to that of\r\nsome Italian cities. The great armies which marched from all parts to the\r\nconquest of the Holy Land, gave extraordinary encouragement to the shipping of\r\nVenice, Genoa, and Pisa, sometimes in transporting them thither, and always in\r\nsupplying them with provisions. They were the commissaries, if one may say so,\r\nof those armies; and the most destructive frenzy that ever befel the European\r\nnations, was a source of opulence to those republics.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inhabitants of trading cities, by importing the improved manufactures and\r\nexpensive luxuries of richer countries, afforded some food to the vanity of the\r\ngreat proprietors, who eagerly purchased them with great quantities of the rude\r\nproduce of their own lands. The commerce of a great part of Europe in those\r\ntimes, accordingly, consisted chiefly in the exchange of their own rude, for\r\nthe manufactured produce of more civilized nations. Thus the wool of England\r\nused to be exchanged for the wines of France, and the fine cloths of Flanders,\r\nin the same manner as the corn in Poland is at this day, exchanged for the\r\nwines and brandies of France, and for the silks and velvets of France and\r\nItaly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA taste for the finer and more improved manufactures was, in this manner,\r\nintroduced by foreign commerce into countries where no such works were carried\r\non. But when this taste became so general as to occasion a considerable demand,\r\nthe merchants, in order to save the expense of carriage, naturally endeavoured\r\nto establish some manufactures of the same kind in their own country. Hence the\r\norigin of the first manufactures for distant sale, that seem to have been\r\nestablished in the western provinces of Europe, after the fall of the Roman\r\nempire.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo large country, it must be observed, ever did or could subsist without some\r\nsort of manufactures being carried on in it; and when it is said of any such\r\ncountry that it has no manufactures, it must always be understood of the finer\r\nand more improved, or of such as are fit for distant sale. In every large\r\ncountry both the clothing and household furniture or the far greater part of\r\nthe people, are the produce of their own industry. This is even more\r\nuniversally the case in those poor countries which are commonly said to have no\r\nmanufactures, than in those rich ones that are said to abound in them. In the\r\nlatter you will generally find, both in the clothes and household furniture of\r\nthe lowest rank of people, a much greater proportion of foreign productions\r\nthan in the former.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose manufactures which are fit for distant sale, seem to have been introduced\r\ninto different countries in two different ways.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSometimes they have been introduced in the manner above mentioned, by the\r\nviolent operation, if one may say so, of the stocks of particular merchants and\r\nundertakers, who established them in imitation of some foreign manufactures of\r\nthe same kind. Such manufactures, therefore, are the offspring of foreign\r\ncommerce; and such seem to have been the ancient manufactures of silks,\r\nvelvets, and brocades, which flourished in Lucca during the thirteenth century.\r\nThey were banished from thence by the tyranny of one of Machiavel’s\r\nheroes, Castruccio Castracani. In 1310, nine hundred families were driven out\r\nof Lucca, of whom thirty-one retired to Venice, and offered to introduce there\r\nthe silk manufacture. {See Sandi Istoria civile de Vinezia, part 2 vol. i, page\r\n247 and 256.} Their offer was accepted, many privileges were conferred upon\r\nthem, and they began the manufacture with three hundred workmen. Such, too,\r\nseem to have been the manufactures of fine cloths that anciently flourished in\r\nFlanders, and which were introduced into England in the beginning of the reign\r\nof Elizabeth, and such are the present silk manufactures of Lyons and\r\nSpitalfields. Manufactures introduced in this manner are generally employed\r\nupon foreign materials, being imitations of foreign manufactures. When the\r\nVenetian manufacture was first established, the materials were all brought from\r\nSicily and the Levant. The more ancient manufacture of Lucca was likewise\r\ncarried on with foreign materials. The cultivation of mulberry trees, and the\r\nbreeding of silk-worms, seem not to have been common in the northern parts of\r\nItaly before the sixteenth century. Those arts were not introduced into France\r\ntill the reign of Charles IX. The manufactures of Flanders were carried on\r\nchiefly with Spanish and English wool. Spanish wool was the material, not of\r\nthe first woollen manufacture of England, but of the first that was fit for\r\ndistant sale. More than one half the materials of the Lyons manufacture is at\r\nthis day foreign silk; when it was first established, the whole, or very nearly\r\nthe whole, was so. No part of the materials of the Spitalfields manufacture is\r\never likely to be the produce of England. The seat of such manufactures, as\r\nthey are generally introduced by the scheme and project of a few individuals,\r\nis sometimes established in a maritime city, and sometimes in an inland town,\r\naccording as their interest, judgment, or caprice, happen to determine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt other times, manufactures for distant sale grow up naturally, and as it were\r\nof their own accord, by the gradual refinement of those household and coarser\r\nmanufactures which must at all times be carried on even in the poorest and\r\nrudest countries. Such manufactures are generally employed upon the materials\r\nwhich the country produces, and they seem frequently to have been first refined\r\nand improved in such inland countries as were not, indeed, at a very great, but\r\nat a considerable distance from the sea-coast, and sometimes even from all\r\nwater carriage. An inland country, naturally fertile and easily cultivated,\r\nproduces a great surplus of provisions beyond what is necessary for maintaining\r\nthe cultivators; and on account of the expense of land carriage, and\r\ninconveniency of river navigation, it may frequently be difficult to send this\r\nsurplus abroad. Abundance, therefore, renders provisions cheap, and encourages\r\na great number of workmen to settle in the neighbourhood, who find that their\r\nindustry can there procure them more of the necessaries and conveniencies of\r\nlife than in other places. They work up the materials of manufacture which the\r\nland produces, and exchange their finished work, or, what is the same thing,\r\nthe price of it, for more materials and provisions. They give a new value to\r\nthe surplus part of the rude produce, by saving the expense of carrying it to\r\nthe water-side, or to some distant market; and they furnish the cultivators\r\nwith something in exchange for it that is either useful or agreeable to them,\r\nupon easier terms than they could have obtained it before. The cultivators get\r\na better price for their surplus produce, and can purchase cheaper other\r\nconveniencies which they have occasion for. They are thus both encouraged and\r\nenabled to increase this surplus produce by a further improvement and better\r\ncultivation of the land; and as the fertility of the land had given birth to\r\nthe manufacture, so the progress of the manufacture re-acts upon the land, and\r\nincreases still further its fertility. The manufacturers first supply the\r\nneighbourhood, and afterwards, as their work improves and refines, more distant\r\nmarkets. For though neither the rude produce, nor even the coarse manufacture,\r\ncould, without the greatest difficulty, support the expense of a considerable\r\nland-carriage, the refined and improved manufacture easily may. In a small bulk\r\nit frequently contains the price of a great quantity of rude produce. A piece\r\nof fine cloth, for example which weighs only eighty pounds, contains in it the\r\nprice, not only of eighty pounds weight of wool, but sometimes of several\r\nthousand weight of corn, the maintenance of the different working people, and\r\nof their immediate employers. The corn which could with difficulty have been\r\ncarried abroad in its own shape, is in this manner virtually exported in that\r\nof the complete manufacture, and may easily be sent to the remotest corners of\r\nthe world. In this manner have grown up naturally, and, as it were, of their\r\nown accord, the manufactures of Leeds, Halifax, Sheffield, Birmingham, and\r\nWolverhampton. Such manufactures are the offspring of agriculture. In the\r\nmodern history of Europe, their extension and improvement have generally been\r\nposterior to those which were the offspring of foreign commerce. England was\r\nnoted for the manufacture of fine cloths made of Spanish wool, more than a\r\ncentury before any of those which now flourish in the places above mentioned\r\nwere fit for foreign sale. The extension and improvement of these last could\r\nnot take place but in consequence of the extension and improvement of\r\nagriculture, the last and greatest effect of foreign commerce, and of the\r\nmanufactures immediately introduced by it, and which I shall now proceed to\r\nexplain.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap24\"\u003e\u003c/a\u003eCHAPTER IV.\u003cbr\u003e\r\nHOW THE COMMERCE OF TOWNS CONTRIBUTED TO THE IMPROVEMENT OF THE COUNTRY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe increase and riches of commercial and manufacturing towns contributed to\r\nthe improvement and cultivation of the countries to which they belonged, in\r\nthree different ways.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, by affording a great and ready market for the rude produce of the\r\ncountry, they gave encouragement to its cultivation and further improvement.\r\nThis benefit was not even confined to the countries in which they were\r\nsituated, but extended more or less to all those with which they had any\r\ndealings. To all of them they afforded a market for some part either of their\r\nrude or manufactured produce, and, consequently, gave some encouragement to the\r\nindustry and improvement of all. Their own country, however, on account of its\r\nneighbourhood, necessarily derived the greatest benefit from this market. Its\r\nrude produce being charged with less carriage, the traders could pay the\r\ngrowers a better price for it, and yet afford it as cheap to the consumers as\r\nthat of more distant countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, the wealth acquired by the inhabitants of cities was frequently\r\nemployed in purchasing such lands as were to be sold, of which a great part\r\nwould frequently be uncultivated. Merchants are commonly ambitious of becoming\r\ncountry gentlemen, and, when they do, they are generally the best of all\r\nimprovers. A merchant is accustomed to employ his money chiefly in profitable\r\nprojects; whereas a mere country gentleman is accustomed to employ it chiefly\r\nin expense. The one often sees his money go from him, and return to him again\r\nwith a profit; the other, when once he parts with it, very seldom expects to\r\nsee any more of it. Those different habits naturally affect their temper and\r\ndisposition in every sort of business. The merchant is commonly a bold, a\r\ncountry gentleman a timid undertaker. The one is not afraid to lay out at once\r\na large capital upon the improvement of his land, when he has a probable\r\nprospect of raising the value of it in proportion to the expense; the other, if\r\nhe has any capital, which is not always the case, seldom ventures to employ it\r\nin this manner. If he improves at all, it is commonly not with a capital, but\r\nwith what he can save out or his annual revenue. Whoever has had the fortune to\r\nlive in a mercantile town, situated in an unimproved country, must have\r\nfrequently observed how much more spirited the operations of merchants were in\r\nthis way, than those of mere country gentlemen. The habits, besides, of order,\r\neconomy, and attention, to which mercantile business naturally forms a\r\nmerchant, render him much fitter to execute, with profit and success, any\r\nproject of improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, and lastly, commerce and manufactures gradually introduced order and\r\ngood government, and with them the liberty and security of individuals, among\r\nthe inhabitants of the country, who had before lived almost in a continual\r\nstate of war with their neighbours, and of servile dependency upon their\r\nsuperiors. This, though it has been the least observed, is by far the most\r\nimportant of all their effects. Mr Hume is the only writer who, so far as I\r\nknow, has hitherto taken notice of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country which has neither foreign commerce nor any of the finer\r\nmanufactures, a great proprietor, having nothing for which he can exchange the\r\ngreater part of the produce of his lands which is over and above the\r\nmaintenance of the cultivators, consumes the whole in rustic hospitality at\r\nhome. If this surplus produce is sufficient to maintain a hundred or a thousand\r\nmen, he can make use of it in no other way than by maintaining a hundred or a\r\nthousand men. He is at all times, therefore, surrounded with a multitude of\r\nretainers and dependants, who, having no equivalent to give in return for their\r\nmaintenance, but being fed entirely by his bounty, must obey him, for the same\r\nreason that soldiers must obey the prince who pays them. Before the extension\r\nof commerce and manufactures in Europe, the hospitality of the rich and the\r\ngreat, from the sovereign down to the smallest baron, exceeded every thing\r\nwhich, in the present times, we can easily form a notion of Westminster-hall\r\nwas the dining-room of William Rufus, and might frequently, perhaps, not be too\r\nlarge for his company. It was reckoned a piece of magnificence in Thomas\r\nBecket, that he strewed the floor of his hall with clean hay or rushes in the\r\nseason, in order that the knights and squires, who could not get seats, might\r\nnot spoil their fine clothes when they sat down on the floor to eat their\r\ndinner. The great Earl of Warwick is said to have entertained every day, at his\r\ndifferent manors, 30,000 people; and though the number here may have been\r\nexaggerated, it must, however, have been very great to admit of such\r\nexaggeration. A hospitality nearly of the same kind was exercised not many\r\nyears ago in many different parts of the Highlands of Scotland. It seems to be\r\ncommon in all nations to whom commerce and manufactures are little known. I\r\nhave seen, says Doctor Pocock, an Arabian chief dine in the streets of a town\r\nwhere he had come to sell his cattle, and invite all passengers, even common\r\nbeggars, to sit down with him and partake of his banquet.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe occupiers of land were in every respect as dependent upon the great\r\nproprietor as his retainers. Even such of them as were not in a state of\r\nvillanage, were tenants at will, who paid a rent in no respect equivalent to\r\nthe subsistence which the land afforded them. A crown, half a crown, a sheep, a\r\nlamb, was some years ago, in the Highlands of Scotland, a common rent for lands\r\nwhich maintained a family. In some places it is so at this day; nor will money\r\nat present purchase a greater quantity of commodities there than in other\r\nplaces. In a country where the surplus produce of a large estate must be\r\nconsumed upon the estate itself, it will frequently be more convenient for the\r\nproprietor, that part of it be consumed at a distance from his own house,\r\nprovided they who consume it are as dependent upon him as either his retainers\r\nor his menial servants. He is thereby saved from the embarrassment of either\r\ntoo large a company, or too large a family. A tenant at will, who possesses\r\nland sufficient to maintain his family for little more than a quit-rent, is as\r\ndependent upon the proprietor as any servant or retainer whatever, and must\r\nobey him with as little reserve. Such a proprietor, as he feeds his servants\r\nand retainers at his own house, so he feeds his tenants at their houses. The\r\nsubsistence of both is derived from his bounty, and its continuance depends\r\nupon his good pleasure.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUpon the authority which the great proprietors necessarily had, in such a state\r\nof things, over their tenants and retainers, was founded the power of the\r\nancient barons. They necessarily became the judges in peace, and the leaders in\r\nwar, of all who dwelt upon their estates. They could maintain order, and\r\nexecute the law, within their respective demesnes, because each of them could\r\nthere turn the whole force of all the inhabitants against the injustice of\r\nanyone. No other person had sufficient authority to do this. The king, in\r\nparticular, had not. In those ancient times, he was little more than the\r\ngreatest proprietor in his dominions, to whom, for the sake of common defence\r\nagainst their common enemies, the other great proprietors paid certain\r\nrespects. To have enforced payment of a small debt within the lands of a great\r\nproprietor, where all the inhabitants were armed, and accustomed to stand by\r\none another, would have cost the king, had he attempted it by his own\r\nauthority, almost the same effort as to extinguish a civil war. He was,\r\ntherefore, obliged to abandon the administration of justice, through the\r\ngreater part of the country, to those who were capable of administering it;\r\nand, for the same reason, to leave the command of the country militia to those\r\nwhom that militia would obey.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is a mistake to imagine that those territorial jurisdictions took their\r\norigin from the feudal law. Not only the highest jurisdictions, both civil and\r\ncriminal, but the power of levying troops, of coining money, and even that of\r\nmaking bye-laws for the government of their own people, were all rights\r\npossessed allodially by the great proprietors of land, several centuries before\r\neven the name of the feudal law was known in Europe. The authority and\r\njurisdiction of the Saxon lords in England appear to have been as great before\r\nthe Conquest as that of any of the Norman lords after it. But the feudal law is\r\nnot supposed to have become the common law of England till after the Conquest.\r\nThat the most extensive authority and jurisdictions were possessed by the great\r\nlords in France allodially, long before the feudal law was introduced into that\r\ncountry, is a matter of fact that admits of no doubt. That authority, and those\r\njurisdictions, all necessarily flowed from the state of property and manners\r\njust now described. Without remounting to the remote antiquities of either the\r\nFrench or English monarchies, we may find, in much later times, many proofs\r\nthat such effects must always flow from such causes. It is not thirty years ago\r\nsince Mr Cameron of Lochiel, a gentleman of Lochaber in Scotland, without any\r\nlegal warrant whatever, not being what was then called a lord of regality, nor\r\neven a tenant in chief, but a vassal of the Duke of Argyll, and with out being\r\nso much as a justice of peace, used, notwithstanding, to exercise the highest\r\ncriminal jurisdictions over his own people. He is said to have done so with\r\ngreat equity, though without any of the formalities of justice; and it is not\r\nimprobable that the state of that part of the country at that time made it\r\nnecessary for him to assume this authority, in order to maintain the public\r\npeace. That gentleman, whose rent never exceeded £500 a-year, carried, in 1745,\r\n800 of his own people into the rebellion with him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe introduction of the feudal law, so far from extending, may be regarded as\r\nan attempt to moderate, the authority of the great allodial lords. It\r\nestablished a regular subordination, accompanied with a long train of services\r\nand duties, from the king down to the smallest proprietor. During the minority\r\nof the proprietor, the rent, together with the management of his lands, fell\r\ninto the hands of his immediate superior; and, consequently, those of all great\r\nproprietors into the hands of the king, who was charged with the maintenance\r\nand education of the pupil, and who, from his authority as guardian, was\r\nsupposed to have a right of disposing of him in marriage, provided it was in a\r\nmanner not unsuitable to his rank. But though this institution necessarily\r\ntended to strengthen the authority of the king, and to weaken that of the great\r\nproprietors, it could not do either sufficiently for establishing order and\r\ngood government among the inhabitants of the country; because it could not\r\nalter sufficiently that state of property and manners from which the disorders\r\narose. The authority of government still continued to be, as before, too weak\r\nin the head, and too strong in the inferior members; and the excessive strength\r\nof the inferior members was the cause of the weakness of the head. After the\r\ninstitution of feudal subordination, the king was as incapable of restraining\r\nthe violence of the great lords as before. They still continued to make war\r\naccording to their own discretion, almost continually upon one another, and\r\nvery frequently upon the king; and the open country still continued to be a\r\nscene of violence, rapine, and disorder.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut what all the violence of the feudal institutions could never have effected,\r\nthe silent and insensible operation of foreign commerce and manufactures\r\ngradually brought about. These gradually furnished the great proprietors with\r\nsomething for which they could exchange the whole surplus produce of their\r\nlands, and which they could consume themselves, without sharing it either with\r\ntenants or retainers. All for ourselves, and nothing for other people, seems,\r\nin every age of the world, to have been the vile maxim of the masters of\r\nmankind. As soon, therefore, as they could find a method of consuming the whole\r\nvalue of their rents themselves, they had no disposition to share them with any\r\nother persons. For a pair of diamond buckles, perhaps, or for something as\r\nfrivolous and useless, they exchanged the maintenance, or, what is the same\r\nthing, the price of the maintenance of 1000 men for a year, and with it the\r\nwhole weight and authority which it could give them. The buckles, however, were\r\nto be all their own, and no other human creature was to have any share of them;\r\nwhereas, in the more ancient method of expense, they must have shared with at\r\nleast 1000 people. With the judges that were to determine the preference, this\r\ndifference was perfectly decisive; and thus, for the gratification of the most\r\nchildish, the meanest, and the most sordid of all vanities they gradually\r\nbartered their whole power and authority.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country where there is no foreign commerce, nor any of the finer\r\nmanufactures, a man of £10,000 a-year cannot well employ his revenue in any\r\nother way than in maintaining, perhaps, 1000 families, who are all of them\r\nnecessarily at his command. In the present state of Europe, a man of £10,000\r\na-year can spend his whole revenue, and he generally does so, without directly\r\nmaintaining twenty people, or being able to command more than ten footmen, not\r\nworth the commanding. Indirectly, perhaps, he maintains as great, or even a\r\ngreater number of people, than he could have done by the ancient method of\r\nexpense. For though the quantity of precious productions for which he exchanges\r\nhis whole revenue be very small, the number of workmen employed in collecting\r\nand preparing it must necessarily have been very great. Its great price\r\ngenerally arises from the wages of their labour, and the profits of all their\r\nimmediate employers. By paying that price, he indirectly pays all those wages\r\nand profits, and thus indirectly contributes to the maintenance of all the\r\nworkmen and their employers. He generally contributes, however, but a very\r\nsmall proportion to that of each; to a very few, perhaps, not a tenth, to many\r\nnot a hundredth, and to some not a thousandth, or even a ten thousandth part of\r\ntheir whole annual maintenance. Though he contributes, therefore, to the\r\nmaintenance of them all, they are all more or less independent of him, because\r\ngenerally they can all be maintained without him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the great proprietors of land spend their rents in maintaining their\r\ntenants and retainers, each of them maintains entirely all his own tenants and\r\nall his own retainers. But when they spend them in maintaining tradesmen and\r\nartificers, they may, all of them taken together, perhaps maintain as great,\r\nor, on account of the waste which attends rustic hospitality, a greater number\r\nof people than before. Each of them, however, taken singly, contributes often\r\nbut a very small share to the maintenance of any individual of this greater\r\nnumber. Each tradesman or artificer derives his subsistence from the\r\nemployment, not of one, but of a hundred or a thousand different customers.\r\nThough in some measure obliged to them all, therefore, he is not absolutely\r\ndependent upon any one of them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe personal expense of the great proprietors having in this manner gradually\r\nincreased, it was impossible that the number of their retainers should not as\r\ngradually diminish, till they were at last dismissed altogether. The same cause\r\ngradually led them to dismiss the unnecessary part of their tenants. Farms were\r\nenlarged, and the occupiers of land, notwithstanding the complaints of\r\ndepopulation, reduced to the number necessary for cultivating it, according to\r\nthe imperfect state of cultivation and improvement in those times. By the\r\nremoval of the unnecessary mouths, and by exacting from the farmer the full\r\nvalue of the farm, a greater surplus, or, what is the same thing, the price of\r\na greater surplus, was obtained for the proprietor, which the merchants and\r\nmanufacturers soon furnished him with a method of spending upon his own person,\r\nin the same manner as he had done the rest. The cause continuing to operate, he\r\nwas desirous to raise his rents above what his lands, in the actual state of\r\ntheir improvement, could afford. His tenants could agree to this upon one\r\ncondition only, that they should be secured in their possession for such a term\r\nof years as might give them time to recover, with profit, whatever they should\r\nlay out in the further improvement of the land. The expensive vanity of the\r\nlandlord made him willing to accept of this condition; and hence the origin of\r\nlong leases.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven a tenant at will, who pays the full value of the land, is not altogether\r\ndependent upon the landlord. The pecuniary advantages which they receive from\r\none another are mutual and equal, and such a tenant will expose neither his\r\nlife nor his fortune in the service of the proprietor. But if he has a lease\r\nfor a long term of years he is altogether independent; and his landlord must\r\nnot expect from him even the most trifling service, beyond what is either\r\nexpressly stipulated in the lease, or imposed upon him by the common and known\r\nlaw of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tenants having in this manner become independent, and the retainers being\r\ndismissed, the great proprietors were no longer capable of interrupting the\r\nregular execution of justice, or of disturbing the peace of the country. Having\r\nsold their birth-right, not like Esau, for a mess of pottage in time of hunger\r\nand necessity, but, in the wantonness of plenty, for trinkets and baubles,\r\nfitter to be the playthings of children than the serious pursuits of men, they\r\nbecame as insignificant as any substantial burgher or tradesmen in a city. A\r\nregular government was established in the country as well as in the city,\r\nnobody having sufficient power to disturb its operations in the one, any more\r\nthan in the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt does not, perhaps, relate to the present subject, but I cannot help\r\nremarking it, that very old families, such as have possessed some considerable\r\nestate from father to son for many successive generations, are very rare in\r\ncommercial countries. In countries which have little commerce, on the contrary,\r\nsuch as Wales, or the Highlands of Scotland, they are very common. The Arabian\r\nhistories seem to be all full of genealogies; and there is a history written by\r\na Tartar Khan, which has been translated into several European languages, and\r\nwhich contains scarce any thing else; a proof that ancient families are very\r\ncommon among those nations. In countries where a rich man can spend his revenue\r\nin no other way than by maintaining as many people as it can maintain, he is\r\napt to run out, and his benevolence, it seems, is seldom so violent as to\r\nattempt to maintain more than he can afford. But where he can spend the\r\ngreatest revenue upon his own person, he frequently has no bounds to his\r\nexpense, because he frequently has no bounds to his vanity, or to his affection\r\nfor his own person. In commercial countries, therefore, riches, in spite of the\r\nmost violent regulations of law to prevent their dissipation, very seldom\r\nremain long in the same family. Among simple nations, on the contrary, they\r\nfrequently do, without any regulations of law; for among nations of shepherds,\r\nsuch as the Tartars and Arabs, the consumable nature of their property\r\nnecessarily renders all such regulations impossible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA revolution of the greatest importance to the public happiness, was in this\r\nmanner brought about by two different orders of people, who had not the least\r\nintention to serve the public. To gratify the most childish vanity was the sole\r\nmotive of the great proprietors. The merchants and artificers, much less\r\nridiculous, acted merely from a view to their own interest, and in pursuit of\r\ntheir own pedlar principle of turning a penny wherever a penny was to be got.\r\nNeither of them had either knowledge or foresight of that great revolution\r\nwhich the folly of the one, and the industry of the other, was gradually\r\nbringing about.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was thus, that, through the greater part of Europe, the commerce and\r\nmanufactures of cities, instead of being the effect, have been the cause and\r\noccasion of the improvement and cultivation of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis order, however, being contrary to the natural course of things, is\r\nnecessarily both slow and uncertain. Compare the slow progress of those\r\nEuropean countries of which the wealth depends very much upon their commerce\r\nand manufactures, with the rapid advances of our North American colonies, of\r\nwhich the wealth is founded altogether in agriculture. Through the greater part\r\nof Europe, the number of inhabitants is not supposed to double in less than\r\nfive hundred years. In several of our North American colonies, it is found to\r\ndouble in twenty or five-and-twenty years. In Europe, the law of primogeniture,\r\nand perpetuities of different kinds, prevent the division of great estates, and\r\nthereby hinder the multiplication of small proprietors. A small proprietor,\r\nhowever, who knows every part of his little territory, views it with all the\r\naffection which property, especially small property, naturally inspires, and\r\nwho upon that account takes pleasure, not only in cultivating, but in adorning\r\nit, is generally of all improvers the most industrious, the most intelligent,\r\nand the most successful. The same regulations, besides, keep so much land out\r\nof the market, that there are always more capitals to buy than there is land to\r\nsell, so that what is sold always sells at a monopoly price. The rent never\r\npays the interest of the purchase-money, and is, besides, burdened with repairs\r\nand other occasional charges, to which the interest of money is not liable. To\r\npurchase land, is, everywhere in Europe, a most unprofitable employment of a\r\nsmall capital. For the sake of the superior security, indeed, a man of moderate\r\ncircumstances, when he retires from business, will sometimes choose to lay out\r\nhis little capital in land. A man of profession, too whose revenue is derived\r\nfrom another source often loves to secure his savings in the same way. But a\r\nyoung man, who, instead of applying to trade or to some profession, should\r\nemploy a capital of two or three thousand pounds in the purchase and\r\ncultivation of a small piece of land, might indeed expect to live very happily\r\nand very independently, but must bid adieu for ever to all hope of either great\r\nfortune or great illustration, which, by a different employment of his stock,\r\nhe might have had the same chance of acquiring with other people. Such a\r\nperson, too, though he cannot aspire at being a proprietor, will often disdain\r\nto be a farmer. The small quantity of land, therefore, which is brought to\r\nmarket, and the high price of what is brought thither, prevents a great number\r\nof capitals from being employed in its cultivation and improvement, which would\r\notherwise have taken that direction. In North America, on the contrary, fifty\r\nor sixty pounds is often found a sufficient stock to begin a plantation with.\r\nThe purchase and improvement of uncultivated land is there the most profitable\r\nemployment of the smallest as well as of the greatest capitals, and the most\r\ndirect road to all the fortune and illustration which can be required in that\r\ncountry. Such land, indeed, is in North America to be had almost for nothing,\r\nor at a price much below the value of the natural produce; a thing impossible\r\nin Europe, or indeed in any country where all lands have long been private\r\nproperty. If landed estates, however, were divided equally among all the\r\nchildren, upon the death of any proprietor who left a numerous family, the\r\nestate would generally be sold. So much land would come to market, that it\r\ncould no longer sell at a monopoly price. The free rent of the land would go no\r\nnearer to pay the interest of the purchase-money, and a small capital might be\r\nemployed in purchasing land as profitable as in any other way.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEngland, on account of the natural fertility of the soil, of the great extent\r\nof the sea-coast in proportion to that of the whole country, and of the many\r\nnavigable rivers which run through it, and afford the conveniency of water\r\ncarriage to some of the most inland parts of it, is perhaps as well fitted by\r\nnature as any large country in Europe to be the seat of foreign commerce, of\r\nmanufactures for distant sale, and of all the improvements which these can\r\noccasion. From the beginning of the reign of Elizabeth, too, the English\r\nlegislature has been peculiarly attentive to the interest of commerce and\r\nmanufactures, and in reality there is no country in Europe, Holland itself not\r\nexcepted, of which the law is, upon the whole, more favourable to this sort of\r\nindustry. Commerce and manufactures have accordingly been continually advancing\r\nduring all this period. The cultivation and improvement of the country has, no\r\ndoubt, been gradually advancing too; but it seems to have followed slowly, and\r\nat a distance, the more rapid progress of commerce and manufactures. The\r\ngreater part of the country must probably have been cultivated before the reign\r\nof Elizabeth; and a very great part of it still remains uncultivated, and the\r\ncultivation of the far greater part much inferior to what it might be, The law\r\nof England, however, favours agriculture, not only indirectly, by the\r\nprotection of commerce, but by several direct encouragements. Except in times\r\nof scarcity, the exportation of corn is not only free, but encouraged by a\r\nbounty. In times of moderate plenty, the importation of foreign corn is loaded\r\nwith duties that amount to a prohibition. The importation of live cattle,\r\nexcept from Ireland, is prohibited at all times; and it is but of late that it\r\nwas permitted from thence. Those who cultivate the land, therefore, have a\r\nmonopoly against their countrymen for the two greatest and most important\r\narticles of land produce, bread and butcher’s meat. These encouragements,\r\nalthough at bottom, perhaps, as I shall endeavour to show hereafter, altogether\r\nillusory, sufficiently demonstrate at least the good intention of the\r\nlegislature to favour agriculture. But what is of much more importance than all\r\nof them, the yeomanry of England are rendered as secure, as independent, and as\r\nrespectable, as law can make them. No country, therefore, which the right of\r\nprimogeniture takes place, which pays tithes, and where perpetuities, though\r\ncontrary to the spirit of the law, are admitted in some cases, can give more\r\nencouragement to agriculture than England. Such, however, notwithstanding, is\r\nthe state of its cultivation. What would it have been, had the law given no\r\ndirect encouragement to agriculture besides what arises indirectly from the\r\nprogress of commerce, and had left the yeomanry in the same condition as in\r\nmost other countries of Europe? It is now more than two hundred years since the\r\nbeginning of the reign of Elizabeth, a period as long as the course of human\r\nprosperity usually endures.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrance seems to have had a considerable share of foreign commerce, near a\r\ncentury before England was distinguished as a commercial country. The marine of\r\nFrance was considerable, according to the notions of the times, before the\r\nexpedition of Charles VIII. to Naples. The cultivation and improvement of\r\nFrance, however, is, upon the whole, inferior to that of England. The law of\r\nthe country has never given the same direct encouragement to agriculture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe foreign commerce of Spain and Portugal to the other parts of Europe, though\r\nchiefly carried on in foreign ships, is very considerable. That to their\r\ncolonies is carried on in their own, and is much greater, on account of the\r\ngreat riches and extent of those colonies. But it has never introduced any\r\nconsiderable manufactures for distant sale into either of those countries, and\r\nthe greater part of both still remains uncultivated. The foreign commerce of\r\nPortugal is of older standing than that of any great country in Europe, except\r\nItaly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nItaly is the only great country of Europe which seems to have been cultivated\r\nand improved in every part, by means of foreign commerce and manufactures for\r\ndistant sale. Before the invasion of Charles VIII., Italy, according to\r\nGuicciardini, was cultivated not less in the most mountainous and barren parts\r\nof the country, than in the plainest and most fertile. The advantageous\r\nsituation of the country, and the great number of independent states which at\r\nthat time subsisted in it, probably contributed not a little to this general\r\ncultivation. It is not impossible, too, notwithstanding this general expression\r\nof one of the most judicious and reserved of modern historians, that Italy was\r\nnot at that time better cultivated than England is at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital, however, that is acquired to any country by commerce and\r\nmanufactures, is always a very precarious and uncertain possession, till some\r\npart of it has been secured and realized in the cultivation and improvement of\r\nits lands. A merchant, it has been said very properly, is not necessarily the\r\ncitizen of any particular country. It is in a great measure indifferent to him\r\nfrom what place he carries on his trade; and a very trifling disgust will make\r\nhim remove his capital, and, together with it, all the industry which it\r\nsupports, from one country to another. No part of it can be said to belong to\r\nany particular country, till it has been spread, as it were, over the face of\r\nthat country, either in buildings, or in the lasting improvement of lands. No\r\nvestige now remains of the great wealth said to have been possessed by the\r\ngreater part of the Hanse Towns, except in the obscure histories of the\r\nthirteenth and fourteenth centuries. It is even uncertain where some of them\r\nwere situated, or to what towns in Europe the Latin names given to some of them\r\nbelong. But though the misfortunes of Italy, in the end of the fifteenth and\r\nbeginning of the sixteenth centuries, greatly diminished the commerce and\r\nmanufactures of the cities of Lombardy and Tuscany, those countries still\r\ncontinue to be among the most populous and best cultivated in Europe. The civil\r\nwars of Flanders, and the Spanish government which succeeded them, chased away\r\nthe great commerce of Antwerp, Ghent, and Bruges. But Flanders still continues\r\nto be one of the richest, best cultivated, and most populous provinces of\r\nEurope. The ordinary revolutions of war and government easily dry up the\r\nsources of that wealth which arises from commerce only. That which arises from\r\nthe more solid improvements of agriculture is much more durable, and cannot be\r\ndestroyed but by those more violent convulsions occasioned by the depredations\r\nof hostile and barbarous nations continued for a century or two together; such\r\nas those that happened for some time before and after the fall of the Roman\r\nempire in the western provinces of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap25\"\u003e\u003c/a\u003eBOOK IV.\u003cbr\u003e\r\nOF SYSTEMS OF POLITICAL ECONOMY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nPolitical economy, considered as a branch of the science of a statesman or\r\nlegislator, proposes two distinct objects; first, to provide a plentiful\r\nrevenue or subsistence for the people, or, more properly, to enable them to\r\nprovide such a revenue or subsistence for themselves; and, secondly, to supply\r\nthe state or commonwealth with a revenue sufficient for the public services. It\r\nproposes to enrich both the people and the sovereign.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe different progress of opulence in different ages and nations, has given\r\noccasion to two different systems of political economy, with regard to\r\nenriching the people. The one may be called the system of commerce, the other\r\nthat of agriculture. I shall endeavour to explain both as fully and distinctly\r\nas I can, and shall begin with the system of commerce. It is the modern system,\r\nand is best understood in our own country and in our own times.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap26\"\u003e\u003c/a\u003eCHAPTER I.\u003cbr\u003e\r\nOF THE PRINCIPLE OF THE COMMERCIAL OR MERCANTILE SYSTEM.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThat wealth consists in money, or in gold and silver, is a popular notion which\r\nnaturally arises from the double function of money, as the instrument of\r\ncommerce, and as the measure of value. In consequence of its being the\r\ninstrument of commerce, when we have money we can more readily obtain whatever\r\nelse we have occasion for, than by means of any other commodity. The great\r\naffair, we always find, is to get money. When that is obtained, there is no\r\ndifficulty in making any subsequent purchase. In consequence of its being the\r\nmeasure of value, we estimate that of all other commodities by the quantity of\r\nmoney which they will exchange for. We say of a rich man, that he is worth a\r\ngreat deal, and of a poor man, that he is worth very little money. A frugal\r\nman, or a man eager to be rich, is said to love money; and a careless, a\r\ngenerous, or a profuse man, is said to be indifferent about it. To grow rich is\r\nto get money; and wealth and money, in short, are, in common language,\r\nconsidered as in every respect synonymous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA rich country, in the same manner as a rich man, is supposed to be a country\r\nabounding in money; and to heap up gold and silver in any country is supposed\r\nto be the readiest way to enrich it. For some time after the discovery of\r\nAmerica, the first inquiry of the Spaniards, when they arrived upon any unknown\r\ncoast, used to be, if there was any gold or silver to be found in the\r\nneighbourhood? By the information which they received, they judged whether it\r\nwas worth while to make a settlement there, or if the country was worth the\r\nconquering. Plano Carpino, a monk sent ambassador from the king of France to\r\none of the sons of the famous Gengis Khan, says, that the Tartars used\r\nfrequently to ask him, if there was plenty of sheep and oxen in the kingdom of\r\nFrance? Their inquiry had the same object with that of the Spaniards. They\r\nwanted to know if the country was rich enough to be worth the conquering. Among\r\nthe Tartars, as among all other nations of shepherds, who are generally\r\nignorant of the use of money, cattle are the instruments of commerce and the\r\nmeasures of value. Wealth, therefore, according to them, consisted in cattle,\r\nas, according to the Spaniards, it consisted in gold and silver. Of the two,\r\nthe Tartar notion, perhaps, was the nearest to the truth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMr Locke remarks a distinction between money and other moveable goods. All\r\nother moveable goods, he says, are of so consumable a nature, that the wealth\r\nwhich consists in them cannot be much depended on; and a nation which abounds\r\nin them one year may, without any exportation, but merely by their own waste\r\nand extravagance, be in great want of them the next. Money, on the contrary, is\r\na steady friend, which, though it may travel about from hand to hand, yet if it\r\ncan be kept from going out of the country, is not very liable to be wasted and\r\nconsumed. Gold and silver, therefore, are, according to him, the must solid and\r\nsubstantial part of the moveable wealth of a nation; and to multiply those\r\nmetals ought, he thinks, upon that account, to be the great object of its\r\npolitical economy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOthers admit, that if a nation could be separated from all the world, it would\r\nbe of no consequence how much or how little money circulated in it. The\r\nconsumable goods, which were circulated by means of this money, would only be\r\nexchanged for a greater or a smaller number of pieces; but the real wealth or\r\npoverty of the country, they allow, would depend altogether upon the abundance\r\nor scarcity of those consumable goods. But it is otherwise, they think, with\r\ncountries which have connections with foreign nations, and which are obliged to\r\ncarry on foreign wars, and to maintain fleets and armies in distant countries.\r\nThis, they say, cannot be done, but by sending abroad money to pay them with;\r\nand a nation cannot send much money abroad, unless it has a good deal at home.\r\nEvery such nation, therefore, must endeavour, in time of peace, to accumulate\r\ngold and silver, that when occasion requires, it may have wherewithal to carry\r\non foreign wars.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of those popular notions, all the different nations of Europe\r\nhave studied, though to little purpose, every possible means of accumulating\r\ngold and silver in their respective countries. Spain and Portugal, the\r\nproprietors of the principal mines which supply Europe with those metals, have\r\neither prohibited their exportation under the severest penalties, or subjected\r\nit to a considerable duty. The like prohibition seems anciently to have made a\r\npart of the policy of most other European nations. It is even to be found,\r\nwhere we should least of all expect to find it, in some old Scotch acts of\r\nParliament, which forbid, under heavy penalties, the carrying gold or silver\r\nforth of the kingdom. The like policy anciently took place both in France and\r\nEngland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen those countries became commercial, the merchants found this prohibition,\r\nupon many occasions, extremely inconvenient. They could frequently buy more\r\nadvantageously with gold and silver, than with any other commodity, the foreign\r\ngoods which they wanted, either to import into their own, or to carry to some\r\nother foreign country. They remonstrated, therefore, against this prohibition\r\nas hurtful to trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThey represented, first, that the exportation of gold and silver, in order to\r\npurchase foreign goods, did not always diminish the quantity of those metals in\r\nthe kingdom; that, on the contrary, it might frequently increase the quantity;\r\nbecause, if the consumption of foreign goods was not thereby increased in the\r\ncountry, those goods might be re-exported to foreign countries, and being there\r\nsold for a large profit, might bring back much more treasure than was\r\noriginally sent out to purchase them. Mr Mun compares this operation of foreign\r\ntrade to the seed-time and harvest of agriculture. “If we only\r\nbehold,” says he, “the actions of the husbandman in the seed time,\r\nwhen he casteth away much good corn into the ground, we shall account him\r\nrather a madman than a husbandman. But when we consider his labours in the\r\nharvest, which is the end of his endeavours, we shall find the worth and\r\nplentiful increase of his actions.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThey represented, secondly, that this prohibition could not hinder the\r\nexportation of gold and silver, which, on account of the smallness of their\r\nbulk in proportion to their value, could easily be smuggled abroad. That this\r\nexportation could only be prevented by a proper attention to what they called\r\nthe balance of trade. That when the country exported to a greater value than it\r\nimported, a balance became due to it from foreign nations, which was\r\nnecessarily paid to it in gold and silver, and thereby increased the quantity\r\nof those metals in the kingdom. But that when it imported to a greater value\r\nthan it exported, a contrary balance became due to foreign nations, which was\r\nnecessarily paid to them in the same manner, and thereby diminished that\r\nquantity: that in this case, to prohibit the exportation of those metals, could\r\nnot prevent it, but only, by making it more dangerous, render it more\r\nexpensive: that the exchange was thereby turned more against the country which\r\nowed the balance, than it otherwise might have been; the merchant who purchased\r\na bill upon the foreign country being obliged to pay the banker who sold it,\r\nnot only for the natural risk, trouble, and expense of sending the money\r\nthither, but for the extraordinary risk arising from the prohibition; but that\r\nthe more the exchange was against any country, the more the balance of trade\r\nbecame necessarily against it; the money of that country becoming necessarily\r\nof so much less value, in comparison with that of the country to which the\r\nbalance was due. That if the exchange between England and Holland, for example,\r\nwas five per cent. against England, it would require 105 ounces of silver in\r\nEngland to purchase a bill for 100 ounces of silver in Holland: that 105 ounces\r\nof silver in England, therefore, would be worth only 100 ounces of silver in\r\nHolland, and would purchase only a proportionable quantity of Dutch goods; but\r\nthat 100 ounces of silver in Holland, on the contrary, would be worth 105\r\nounces in England, and would purchase a proportionable quantity of English\r\ngoods; that the English goods which were sold to Holland would be sold so much\r\ncheaper, and the Dutch goods which were sold to England so much dearer, by the\r\ndifference of the exchange: that the one would draw so much less Dutch money to\r\nEngland, and the other so much more English money to Holland, as this\r\ndifference amounted to: and that the balance of trade, therefore, would\r\nnecessarily be so much more against England, and would require a greater\r\nbalance of gold and silver to be exported to Holland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose arguments were partly solid and partly sophistical. They were solid, so\r\nfar as they asserted that the exportation of gold and silver in trade might\r\nfrequently be advantageous to the country. They were solid, too, in asserting\r\nthat no prohibition could prevent their exportation, when private people found\r\nany advantage in exporting them. But they were sophistical, in supposing, that\r\neither to preserve or to augment the quantity of those metals required more the\r\nattention of government, than to preserve or to augment the quantity of any\r\nother useful commodities, which the freedom of trade, without any such\r\nattention, never fails to supply in the proper quantity. They were sophistical,\r\ntoo, perhaps, in asserting that the high price of exchange necessarily\r\nincreased what they called the unfavourable balance of trade, or occasioned the\r\nexportation of a greater quantity of gold and silver. That high price, indeed,\r\nwas extremely disadvantageous to the merchants who had any money to pay in\r\nforeign countries. They paid so much dearer for the bills which their bankers\r\ngranted them upon those countries. But though the risk arising from the\r\nprohibition might occasion some extraordinary expense to the bankers, it would\r\nnot necessarily carry any more money out of the country. This expense would\r\ngenerally be all laid out in the country, in smuggling the money out of it, and\r\ncould seldom occasion the exportation of a single sixpence beyond the precise\r\nsum drawn for. The high price of exchange, too, would naturally dispose the\r\nmerchants to endeavour to make their exports nearly balance their imports, in\r\norder that they might have this high exchange to pay upon as small a sum as\r\npossible. The high price of exchange, besides, must necessarily have operated\r\nas a tax, in raising the price of foreign goods, and thereby diminishing their\r\nconsumption. It would tend, therefore, not to increase, but to diminish, what\r\nthey called the unfavourable balance of trade, and consequently the exportation\r\nof gold and silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch as they were, however, those arguments convinced the people to whom they\r\nwere addressed. They were addressed by merchants to parliaments and to the\r\ncouncils of princes, to nobles, and to country gentlemen; by those who were\r\nsupposed to understand trade, to those who were conscious to them selves that\r\nthey knew nothing about the matter. That foreign trade enriched the country,\r\nexperience demonstrated to the nobles and country gentlemen, as well as to the\r\nmerchants; but how, or in what manner, none of them well knew. The merchants\r\nknew perfectly in what manner it enriched themselves, it was their business to\r\nknow it. But to know in what manner it enriched the country, was no part of\r\ntheir business. The subject never came into their consideration, but when they\r\nhad occasion to apply to their country for some change in the laws relating to\r\nforeign trade. It then became necessary to say something about the beneficial\r\neffects of foreign trade, and the manner in which those effects were obstructed\r\nby the laws as they then stood. To the judges who were to decide the business,\r\nit appeared a most satisfactory account of the matter, when they were told that\r\nforeign trade brought money into the country, but that the laws in question\r\nhindered it from bringing so much as it otherwise would do. Those arguments,\r\ntherefore, produced the wished-for effect. The prohibition of exporting gold\r\nand silver was, in France and England, confined to the coin of those respective\r\ncountries. The exportation of foreign coin and of bullion was made free. In\r\nHolland, and in some other places, this liberty was extended even to the coin\r\nof the country. The attention of government was turned away from guarding\r\nagainst the exportation of gold and silver, to watch over the balance of trade,\r\nas the only cause which could occasion any augmentation or diminution of those\r\nmetals. From one fruitless care, it was turned away to another care much more\r\nintricate, much more embarrassing, and just equally fruitless. The title of\r\nMun’s book, England’s Treasure in Foreign Trade, became a\r\nfundamental maxim in the political economy, not of England only, but of all\r\nother commercial countries. The inland or home trade, the most important of\r\nall, the trade in which an equal capital affords the greatest revenue, and\r\ncreates the greatest employment to the people of the country, was considered as\r\nsubsidiary only to foreign trade. It neither brought money into the country, it\r\nwas said, nor carried any out of it. The country, therefore, could never become\r\neither richer or poorer by means of it, except so far as its prosperity or\r\ndecay might indirectly influence the state of foreign trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA country that has no mines of its own, must undoubtedly draw its gold and\r\nsilver from foreign countries, in the same manner as one that has no vineyards\r\nof its own must draw its wines. It does not seem necessary, however, that the\r\nattention of government should be more turned towards the one than towards the\r\nother object. A country that has wherewithal to buy wine, will always get the\r\nwine which it has occasion for; and a country that has wherewithal to buy gold\r\nand silver, will never be in want of those metals. They are to be bought for a\r\ncertain price, like all other commodities; and as they are the price of all\r\nother commodities, so all other commodities are the price of those metals. We\r\ntrust, with perfect security, that the freedom of trade, without any attention\r\nof government, will always supply us with the wine which we have occasion for;\r\nand we may trust, with equal security, that it will always supply us with all\r\nthe gold and silver which we can afford to purchase or to employ, either in\r\ncirculating our commodities or in other uses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe quantity of every commodity which human industry can either purchase or\r\nproduce, naturally regulates itself in every country according to the effectual\r\ndemand, or according to the demand of those who are willing to pay the whole\r\nrent, labour, and profits, which must be paid in order to prepare and bring it\r\nto market. But no commodities regulate themselves more easily or more exactly,\r\naccording to this effectual demand, than gold and silver; because, on account\r\nof the small bulk and great value of those metals, no commodities can be more\r\neasily transported from one place to another; from the places where they are\r\ncheap, to those where they are dear; from the places where they exceed, to\r\nthose where they fall short of this effectual demand. If there were in England,\r\nfor example, an effectual demand for an additional quantity of gold, a\r\npacket-boat could bring from Lisbon, or from wherever else it was to be had,\r\nfifty tons of gold, which could be coined into more than five millions of\r\nguineas. But if there were an effectual demand for grain to the same value, to\r\nimport it would require, at five guineas a-ton, a million of tons of shipping,\r\nor a thousand ships of a thousand tons each. The navy of England would not be\r\nsufficient.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the quantity of gold and silver imported into any country exceeds the\r\neffectual demand, no vigilance of government can prevent their exportation. All\r\nthe sanguinary laws of Spain and Portugal are not able to keep their gold and\r\nsilver at home. The continual importations from Peru and Brazil exceed the\r\neffectual demand of those countries, and sink the price of those metals there\r\nbelow that in the neighbouring countries. If, on the contrary, in any\r\nparticular country, their quantity fell short of the effectual demand, so as to\r\nraise their price above that of the neighbouring countries, the government\r\nwould have no occasion to take any pains to import them. If it were even to\r\ntake pains to prevent their importation, it would not be able to effectuate it.\r\nThose metals, when the Spartans had got wherewithal to purchase them, broke\r\nthrough all the barriers which the laws of Lycurgus opposed to their entrance\r\ninto Lacedaemon. All the sanguinary laws of the customs are not able to prevent\r\nthe importation of the teas of the Dutch and Gottenburg East India companies;\r\nbecause somewhat cheaper than those of the British company. A pound of tea,\r\nhowever, is about a hundred times the bulk of one of the highest prices,\r\nsixteen shillings, that is commonly paid for it in silver, and more than two\r\nthousand times the bulk of the same price in gold, and, consequently, just so\r\nmany times more difficult to smuggle.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is partly owing to the easy transportation of gold and silver, from the\r\nplaces where they abound to those where they are wanted, that the price of\r\nthose metals does not fluctuate continually, like that of the greater part of\r\nother commodities, which are hindered by their bulk from shifting their\r\nsituation, when the market happens to be either over or under-stocked with\r\nthem. The price of those metals, indeed, is not altogether exempted from\r\nvariation; but the changes to which it is liable are generally slow, gradual,\r\nand uniform. In Europe, for example, it is supposed, without much foundation,\r\nperhaps, that during the course of the present and preceding century, they have\r\nbeen constantly, but gradually, sinking in their value, on account of the\r\ncontinual importations from the Spanish West Indies. But to make any sudden\r\nchange in the price of gold and silver, so as to raise or lower at once,\r\nsensibly and remarkably, the money price of all other commodities, requires\r\nsuch a revolution in commerce as that occasioned by the discovery of America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, not withstanding all this, gold and silver should at any time fall short in\r\na country which has wherewithal to purchase them, there are more expedients for\r\nsupplying their place, than that of almost any other commodity. If the\r\nmaterials of manufacture are wanted, industry must stop. If provisions are\r\nwanted, the people must starve. But if money is wanted, barter will supply its\r\nplace, though with a good deal of inconveniency. Buying and selling upon\r\ncredit, and the different dealers compensating their credits with one another,\r\nonce a-month, or once a-year, will supply it with less inconveniency. A\r\nwell-regulated paper-money will supply it not only without any inconveniency,\r\nbut, in some cases, with some advantages. Upon every account, therefore, the\r\nattention of government never was so unnecessarily employed, as when directed\r\nto watch over the preservation or increase of the quantity of money in any\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo complaint, however, is more common than that of a scarcity of money. Money,\r\nlike wine, must always be scarce with those who have neither wherewithal to buy\r\nit, nor credit to borrow it. Those who have either, will seldom be in want\r\neither of the money, or of the wine which they have occasion for. This\r\ncomplaint, however, of the scarcity of money, is not always confined to\r\nimprovident spendthrifts. It is sometimes general through a whole mercantile\r\ntown and the country in its neighbourhood. Over-trading is the common cause of\r\nit. Sober men, whose projects have been disproportioned to their capitals, are\r\nas likely to have neither wherewithal to buy money, nor credit to borrow it, as\r\nprodigals, whose expense has been disproportioned to their revenue. Before\r\ntheir projects can be brought to bear, their stock is gone, and their credit\r\nwith it. They run about everywhere to borrow money, and everybody tells them\r\nthat they have none to lend. Even such general complaints of the scarcity of\r\nmoney do not always prove that the usual number of gold and silver pieces are\r\nnot circulating in the country, but that many people want those pieces who have\r\nnothing to give for them. When the profits of trade happen to be greater than\r\nordinary over-trading becomes a general error, both among great and small\r\ndealers. They do not always send more money abroad than usual, but they buy\r\nupon credit, both at home and abroad, an unusual quantity of goods, which they\r\nsend to some distant market, in hopes that the returns will come in before the\r\ndemand for payment. The demand comes before the returns, and they have nothing\r\nat hand with which they can either purchase money or give solid security for\r\nborrowing. It is not any scarcity of gold and silver, but the difficulty which\r\nsuch people find in borrowing, and which their creditor find in getting\r\npayment, that occasions the general complaint of the scarcity of money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt would be too ridiculous to go about seriously to prove, that wealth does not\r\nconsist in money, or in gold and silver; but in what money purchases, and is\r\nvaluable only for purchasing. Money, no doubt, makes always a part of the\r\nnational capital; but it has already been shown that it generally makes but a\r\nsmall part, and always the most unprofitable part of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not because wealth consists more essentially in money than in goods, that\r\nthe merchant finds it generally more easy to buy goods with money, than to buy\r\nmoney with goods; but because money is the known and established instrument of\r\ncommerce, for which every thing is readily given in exchange, but which is not\r\nalways with equal readiness to be got in exchange for every thing. The greater\r\npart of goods, besides, are more perishable than money, and he may frequently\r\nsustain a much greater loss by keeping them. When his goods are upon hand, too,\r\nhe is more liable to such demands for money as he may not be able to answer,\r\nthan when he has got their price in his coffers. Over and above all this, his\r\nprofit arises more directly from selling than from buying; and he is, upon all\r\nthese accounts, generally much more anxious to exchange his goods for money\r\nthan his money for goods. But though a particular merchant, with abundance of\r\ngoods in his warehouse, may sometimes be ruined by not being able to sell them\r\nin time, a nation or country is not liable to the same accident, The whole\r\ncapital of a merchant frequently consists in perishable goods destined for\r\npurchasing money. But it is but a very small part of the annual produce of the\r\nland and labour of a country, which can ever be destined for purchasing gold\r\nand silver from their neighbours. The far greater part is circulated and\r\nconsumed among themselves; and even of the surplus which is sent abroad, the\r\ngreater part is generally destined for the purchase of other foreign goods.\r\nThough gold and silver, therefore, could not be had in exchange for the goods\r\ndestined to purchase them, the nation would not be ruined. It might, indeed,\r\nsuffer some loss and inconveniency, and be forced upon some of those expedients\r\nwhich are necessary for supplying the place of money. The annual produce of its\r\nland and labour, however, would be the same, or very nearly the same as usual;\r\nbecause the same, or very nearly the same consumable capital would be employed\r\nin maintaining it. And though goods do not always draw money so readily as\r\nmoney draws goods, in the long-run they draw it more necessarily than even it\r\ndraws them. Goods can serve many other purposes besides purchasing money, but\r\nmoney can serve no other purpose besides purchasing goods. Money, therefore,\r\nnecessarily runs after goods, but goods do not always or necessarily run after\r\nmoney. The man who buys, does not always mean to sell again, but frequently to\r\nuse or to consume; whereas he who sells always means to buy again. The one may\r\nfrequently have done the whole, but the other can never have done more than the\r\none half of his business. It is not for its own sake that men desire money, but\r\nfor the sake of what they can purchase with it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nConsumable commodities, it is said, are soon destroyed; whereas gold and silver\r\nare of a more durable nature, and were it not for this continual exportation,\r\nmight be accumulated for ages together, to the incredible augmentation of the\r\nreal wealth of the country. Nothing, therefore, it is pretended, can be more\r\ndisadvantageous to any country, than the trade which consists in the exchange\r\nof such lasting for such perishable commodities. We do not, however, reckon\r\nthat trade disadvantageous, which consists in the exchange of the hardware of\r\nEngland for the wines of France, and yet hardware is a very durable commodity,\r\nand were it not for this continual exportation, might too be accumulated for\r\nages together, to the incredible augmentation of the pots and pans of the\r\ncountry. But it readily occurs, that the number of such utensils is in every\r\ncountry necessarily limited by the use which there is for them; that it would\r\nbe absurd to have more pots and pans than were necessary for cooking the\r\nvictuals usually consumed there; and that, if the quantity of victuals were to\r\nincrease, the number of pots and pans would readily increase along with it; a\r\npart of the increased quantity of victuals being employed in purchasing them,\r\nor in maintaining an additional number of workmen whose business it was to make\r\nthem. It should as readily occur, that the quantity of gold and silver is, in\r\nevery country, limited by the use which there is for those metals; that their\r\nuse consists in circulating commodities, as coin, and in affording a species of\r\nhousehold furniture, as plate; that the quantity of coin in every country is\r\nregulated by the value of the commodities which are to be circulated by it;\r\nincrease that value, and immediately a part of it will be sent abroad to\r\npurchase, wherever it is to be had, the additional quantity of coin requisite\r\nfor circulating them: that the quantity of plate is regulated by the number and\r\nwealth of those private families who choose to indulge themselves in that sort\r\nof magnificence; increase the number and wealth of such families, and a part of\r\nthis increased wealth will most probably be employed in purchasing, wherever it\r\nis to be found, an additional quantity of plate; that to attempt to increase\r\nthe wealth of any country, either by introducing or by detaining in it an\r\nunnecessary quantity of gold and silver, is as absurd as it would be to attempt\r\nto increase the good cheer of private families, by obliging them to keep an\r\nunnecessary number of kitchen utensils. As the expense of purchasing those\r\nunnecessary utensils would diminish, instead of increasing, either the quantity\r\nor goodness of the family provisions; so the expense of purchasing an\r\nunnecessary quantity of gold and silver must, in every country, as necessarily\r\ndiminish the wealth which feeds, clothes, and lodges, which maintains and\r\nemploys the people. Gold and silver, whether in the shape of coin or of plate,\r\nare utensils, it must be remembered, as much as the furniture of the kitchen.\r\nIncrease the use of them, increase the consumable commodities which are to be\r\ncirculated, managed, and prepared by means of them, and you will infallibly\r\nincrease the quantity; but if you attempt by extraordinary means to increase\r\nthe quantity, you will as infallibly diminish the use, and even the quantity\r\ntoo, which in those metals can never be greater than what the use requires.\r\nWere they ever to be accumulated beyond this quantity, their transportation is\r\nso easy, and the loss which attends their lying idle and unemployed so great,\r\nthat no law could prevent their being immediately sent out of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not always necessary to accumulate gold and silver, in order to enable a\r\ncountry to carry on foreign wars, and to maintain fleets and armies in distant\r\ncountries. Fleets and armies are maintained, not with gold and silver, but with\r\nconsumable goods. The nation which, from the annual produce of its domestic\r\nindustry, from the annual revenue arising out of its lands, and labour, and\r\nconsumable stock, has wherewithal to purchase those consumable goods in distant\r\ncountries, can maintain foreign wars there.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA nation may purchase the pay and provisions of an army in a distant country\r\nthree different ways; by sending abroad either, first, some part of its\r\naccumulated gold and silver; or, secondly, some part of the annual produce of\r\nits manufactures; or, last of all, some part of its annual rude produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gold and silver which can properly be considered as accumulated, or stored\r\nup in any country, may be distinguished into three parts; first, the\r\ncirculating money; secondly, the plate of private families; and, last of all,\r\nthe money which may have been collected by many years parsimony, and laid up in\r\nthe treasury of the prince.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt can seldom happen that much can be spared from the circulating money of the\r\ncountry; because in that there can seldom be much redundancy. The value of\r\ngoods annually bought and sold in any country requires a certain quantity of\r\nmoney to circulate and distribute them to their proper consumers, and can give\r\nemployment to no more. The channel of circulation necessarily draws to itself a\r\nsum sufficient to fill it, and never admits any more. Something, however, is\r\ngenerally withdrawn from this channel in the case of foreign war. By the great\r\nnumber of people who are maintained abroad, fewer are maintained at home. Fewer\r\ngoods are circulated there, and less money becomes necessary to circulate them.\r\nAn extraordinary quantity of paper money of some sort or other, too, such as\r\nexchequer notes, navy bills, and bank bills, in England, is generally issued\r\nupon such occasions, and, by supplying the place of circulating gold and\r\nsilver, gives an opportunity of sending a greater quantity of it abroad. All\r\nthis, however, could afford but a poor resource for maintaining a foreign war,\r\nof great expense, and several years duration.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe melting down of the plate of private families has, upon every occasion,\r\nbeen found a still more insignificant one. The French, in the beginning of the\r\nlast war, did not derive so much advantage from this expedient as to compensate\r\nthe loss of the fashion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe accumulated treasures of the prince have in former times afforded a much\r\ngreater and more lasting resource. In the present times, if you except the king\r\nof Prussia, to accumulate treasure seems to be no part of the policy of\r\nEuropean princes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe funds which maintained the foreign wars of the present century, the most\r\nexpensive perhaps which history records, seem to have had little dependency\r\nupon the exportation either of the circulating money, or of the plate of\r\nprivate families, or of the treasure of the prince. The last French war cost\r\nGreat Britain upwards of £90,000,000, including not only the £75,000,000 of new\r\ndebt that was contracted, but the additional 2s. in the pound land-tax, and\r\nwhat was annually borrowed of the sinking fund. More than two-thirds of this\r\nexpense were laid out in distant countries; in Germany, Portugal, America, in\r\nthe ports of the Mediterranean, in the East and West Indies. The kings of\r\nEngland had no accumulated treasure. We never heard of any extraordinary\r\nquantity of plate being melted down. The circulating gold and silver of the\r\ncountry had not been supposed to exceed £18,000,000. Since the late recoinage\r\nof the gold, however, it is believed to have been a good deal under-rated. Let\r\nus suppose, therefore, according to the most exaggerated computation which I\r\nremember to have either seen or heard of, that, gold and silver together, it\r\namounted to £30,000,000. Had the war been carried on by means of our money, the\r\nwhole of it must, even according to this computation, have been sent out and\r\nreturned again, at least twice in a period of between six and seven years.\r\nShould this be supposed, it would afford the most decisive argument, to\r\ndemonstrate how unnecessary it is for government to watch over the preservation\r\nof money, since, upon this supposition, the whole money of the country must\r\nhave gone from it, and returned to it again, two different times in so short a\r\nperiod, without any body’s knowing any thing of the matter. The channel\r\nof circulation, however, never appeared more empty than usual during any part\r\nof this period. Few people wanted money who had wherewithal to pay for it. The\r\nprofits of foreign trade, indeed, were greater than usual during the whole war,\r\nbut especially towards the end of it. This occasioned, what it always\r\noccasions, a general over-trading in all the ports of Great Britain; and this\r\nagain occasioned the usual complaint of the scarcity of money, which always\r\nfollows over-trading. Many people wanted it, who had neither wherewithal to buy\r\nit, nor credit to borrow it; and because the debtors found it difficult to\r\nborrow, the creditors found it difficult to get payment. Gold and silver,\r\nhowever, were generally to be had for their value, by those who had that value\r\nto give for them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe enormous expense of the late war, therefore, must have been chiefly\r\ndefrayed, not by the exportation of gold and silver, but by that of British\r\ncommodities of some kind or other. When the government, or those who acted\r\nunder them, contracted with a merchant for a remittance to some foreign\r\ncountry, he would naturally endeavour to pay his foreign correspondent, upon\r\nwhom he granted a bill, by sending abroad rather commodities than gold and\r\nsilver. If the commodities of Great Britain were not in demand in that country,\r\nhe would endeavour to send them to some other country in which he could\r\npurchase a bill upon that country. The transportation of commodities, when\r\nproperly suited to the market, is always attended with a considerable profit;\r\nwhereas that of gold and silver is scarce ever attended with any. When those\r\nmetals are sent abroad in order to purchase foreign commodities, the\r\nmerchant’s profit arises, not from the purchase, but from the sale of the\r\nreturns. But when they are sent abroad merely to pay a debt, he gets no\r\nreturns, and consequently no profit. He naturally, therefore, exerts his\r\ninvention to find out a way of paying his foreign debts, rather by the\r\nexportation of commodities, than by that of gold and silver. The great quantity\r\nof British goods, exported during the course of the late war, without bringing\r\nback any returns, is accordingly remarked by the author of the Present State of\r\nthe Nation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBesides the three sorts of gold and silver above mentioned, there is in all\r\ngreat commercial countries a good deal of bullion alternately imported and\r\nexported, for the purposes of foreign trade. This bullion, as it circulates\r\namong different commercial countries, in the same manner as the national coin\r\ncirculates in every country, may be considered as the money of the great\r\nmercantile republic. The national coin receives its movement and direction from\r\nthe commodities circulated within the precincts of each particular country; the\r\nmoney in the mercantile republic, from those circulated between different\r\ncountries. Both are employed in facilitating exchanges, the one between\r\ndifferent individuals of the same, the other between those of different\r\nnations. Part of this money of the great mercantile republic may have been, and\r\nprobably was, employed in carrying on the late war. In time of a general war,\r\nit is natural to suppose that a movement and direction should be impressed upon\r\nit, different from what it usually follows in profound peace, that it should\r\ncirculate more about the seat of the war, and be more employed in purchasing\r\nthere, and in the neighbouring countries, the pay and provisions of the\r\ndifferent armies. But whatever part of this money of the mercantile republic\r\nGreat Britain may have annually employed in this manner, it must have been\r\nannually purchased, either with British commodities, or with something else\r\nthat had been purchased with them; which still brings us back to commodities,\r\nto the annual produce of the land and labour of the country, as the ultimate\r\nresources which enabled us to carry on the war. It is natural, indeed, to\r\nsuppose, that so great an annual expense must have been defrayed from a great\r\nannual produce. The expense of 1761, for example, amounted to more than\r\n£19,000,000. No accumulation could have supported so great an annual profusion.\r\nThere is no annual produce, even of gold and silver, which could have supported\r\nit. The whole gold and silver annually imported into both Spain and Portugal,\r\naccording to the best accounts, does not commonly much exceed £6,000,000\r\nsterling, which, in some years, would scarce have paid four months expense of\r\nthe late war.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe commodities most proper for being transported to distant countries, in\r\norder to purchase there either the pay and provisions of an army, or some part\r\nof the money of the mercantile republic to be employed in purchasing them, seem\r\nto be the finer and more improved manufactures; such as contain a great value\r\nin a small bulk, and can therefore be exported to a great distance at little\r\nexpense. A country whose industry produces a great annual surplus of such\r\nmanufactures, which are usually exported to foreign countries, may carry on for\r\nmany years a very expensive foreign war, without either exporting any\r\nconsiderable quantity of gold and silver, or even having any such quantity to\r\nexport. A considerable part of the annual surplus of its manufactures must,\r\nindeed, in this case, be exported without bringing back any returns to the\r\ncountry, though it does to the merchant; the government purchasing of the\r\nmerchant his bills upon foreign countries, in order to purchase there the pay\r\nand provisions of an army. Some part of this surplus, however, may still\r\ncontinue to bring back a return. The manufacturers during; the war will have a\r\ndouble demand upon them, and be called upon first to work up goods to be sent\r\nabroad, for paying the bills drawn upon foreign countries for the pay and\r\nprovisions of the army: and, secondly, to work up such as are necessary for\r\npurchasing the common returns that had usually been consumed in the country. In\r\nthe midst of the most destructive foreign war, therefore, the greater part of\r\nmanufactures may frequently flourish greatly; and, on the contrary, they may\r\ndecline on the return of peace. They may flourish amidst the ruin of their\r\ncountry, and begin to decay upon the return of its prosperity. The different\r\nstate of many different branches of the British manufactures during the late\r\nwar, and for some time after the peace, may serve as an illustration of what\r\nhas been just now said.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo foreign war, of great expense or duration, could conveniently be carried on\r\nby the exportation of the rude produce of the soil. The expense of sending such\r\na quantity of it into a foreign country as might purchase the pay and\r\nprovisions of an army would be too great. Few countries, too, produce much more\r\nrude produce than what is sufficient for the subsistence of their own\r\ninhabitants. To send abroad any great quantity of it, therefore, would be to\r\nsend abroad a part of the necessary subsistence of the people. It is otherwise\r\nwith the exportation of manufactures. The maintenance of the people employed in\r\nthem is kept at home, and only the surplus part of their work is exported. Mr\r\nHume frequently takes notice of the inability of the ancient kings of England\r\nto carry on, without interruption, any foreign war of long duration. The\r\nEnglish in those days had nothing wherewithal to purchase the pay and\r\nprovisions of their armies in foreign countries, but either the rude produce of\r\nthe soil, of which no considerable part could be spared from the home\r\nconsumption, or a few manufactures of the coarsest kind, of which, as well as\r\nof the rude produce, the transportation was too expensive. This inability did\r\nnot arise from the want of money, but of the finer and more improved\r\nmanufactures. Buying and selling was transacted by means of money in England\r\nthen as well as now. The quantity of circulating money must have borne the same\r\nproportion, to the number and value of purchases and sales usually transacted\r\nat that time, which it does to those transacted at present; or, rather, it must\r\nhave borne a greater proportion, because there was then no paper, which now\r\noccupies a great part of the employment of gold and silver. Among nations to\r\nwhom commerce and manufactures are little known, the sovereign, upon\r\nextraordinary occasions, can seldom draw any considerable aid from his\r\nsubjects, for reasons which shall be explained hereafter. It is in such\r\ncountries, therefore, that he generally endeavours to accumulate a treasure, as\r\nthe only resource against such emergencies. Independent of this necessity, he\r\nis, in such a situation, naturally disposed to the parsimony requisite for\r\naccumulation. In that simple state, the expense even of a sovereign is not\r\ndirected by the vanity which delights in the gaudy finery of a court, but is\r\nemployed in bounty to his tenants, and hospitality to his retainers. But bounty\r\nand hospitality very seldom lead to extravagance; though vanity almost always\r\ndoes. Every Tartar chief, accordingly, has a treasure. The treasures of Mazepa,\r\nchief of the Cossacks in the Ukraine, the famous ally of Charles XII., are said\r\nto have been very great. The French kings of the Merovingian race had all\r\ntreasures. When they divided their kingdom among their different children, they\r\ndivided their treasures too. The Saxon princes, and the first kings after the\r\nConquest, seem likewise to have accumulated treasures. The first exploit of\r\nevery new reign was commonly to seize the treasure of the preceding king, as\r\nthe most essential measure for securing the succession. The sovereigns of\r\nimproved and commercial countries are not under the same necessity of\r\naccumulating treasures, because they can generally draw from their subjects\r\nextraordinary aids upon extraordinary occasions. They are likewise less\r\ndisposed to do so. They naturally, perhaps necessarily, follow the mode of the\r\ntimes; and their expense comes to be regulated by the same extravagant vanity\r\nwhich directs that of all the other great proprietors in their dominions. The\r\ninsignificant pageantry of their court becomes every day more brilliant; and\r\nthe expense of it not only prevents accumulation, but frequently encroaches\r\nupon the funds destined for more necessary expenses. What Dercyllidas said of\r\nthe court of Persia, may be applied to that of several European princes, that\r\nhe saw there much splendour, but little strength, and many servants, but few\r\nsoldiers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe importation of gold and silver is not the principal, much less the sole\r\nbenefit, which a nation derives from its foreign trade. Between whatever places\r\nforeign trade is carried on, they all of them derive two distinct benefits from\r\nit. It carries out that surplus part of the produce of their land and labour\r\nfor which there is no demand among them, and brings back in return for it\r\nsomething else for which there is a demand. It gives a value to their\r\nsuperfluities, by exchanging them for something else, which may satisfy a part\r\nof their wants and increase their enjoyments. By means of it, the narrowness of\r\nthe home market does not hinder the division of labour in any particular branch\r\nof art or manufacture from being carried to the highest perfection. By opening\r\na more extensive market for whatever part of the produce of their labour may\r\nexceed the home consumption, it encourages them to improve its productive\r\npower, and to augment its annual produce to the utmost, and thereby to increase\r\nthe real revenue and wealth of the society. These great and important services\r\nforeign trade is continually occupied in performing to all the different\r\ncountries between which it is carried on. They all derive great benefit from\r\nit, though that in which the merchant resides generally derives the greatest,\r\nas he is generally more employed in supplying the wants, and carrying out the\r\nsuperfluities of his own, than of any other particular country. To import the\r\ngold and silver which may be wanted into the countries which have no mines, is,\r\nno doubt a part of the business of foreign commerce. It is, however, a most\r\ninsignificant part of it. A country which carried on foreign trade merely upon\r\nthis account, could scarce have occasion to freight a ship in a century.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not by the importation of gold and silver that the discovery of America\r\nhas enriched Europe. By the abundance of the American mines, those metals have\r\nbecome cheaper. A service of plate can now be purchased for about a third part\r\nof the corn, or a third part of the labour, which it would have cost in the\r\nfifteenth century. With the same annual expense of labour and commodities,\r\nEurope can annually purchase about three times the quantity of plate which it\r\ncould have purchased at that time. But when a commodity comes to be sold for a\r\nthird part of what bad been its usual price, not only those who purchased it\r\nbefore can purchase three times their former quantity, but it is brought down\r\nto the level of a much greater number of purchasers, perhaps to more than ten,\r\nperhaps to more than twenty times the former number. So that there may be in\r\nEurope at present, not only more than three times, but more than twenty or\r\nthirty times the quantity of plate which would have been in it, even in its\r\npresent state of improvement, had the discovery of the American mines never\r\nbeen made. So far Europe has, no doubt, gained a real conveniency, though\r\nsurely a very trifling one. The cheapness of gold and silver renders those\r\nmetals rather less fit for the purposes of money than they were before. In\r\norder to make the same purchases, we must load ourselves with a greater\r\nquantity of them, and carry about a shilling in our pocket, where a groat would\r\nhave done before. It is difficult to say which is most trifling, this\r\ninconveniency, or the opposite conveniency. Neither the one nor the other could\r\nhave made any very essential change in the state of Europe. The discovery of\r\nAmerica, however, certainly made a most essential one. By opening a new and\r\ninexhaustible market to all the commodities of Europe, it gave occasion to new\r\ndivisions of labour and improvements of art, which in the narrow circle of the\r\nancient commerce could never have taken place, for want of a market to take off\r\nthe greater part of their produce. The productive powers of labour were\r\nimproved, and its produce increased in all the different countries of Europe,\r\nand together with it the real revenue and wealth of the inhabitants. The\r\ncommodities of Europe were almost all new to America, and many of those of\r\nAmerica were new to Europe. A new set of exchanges, therefore, began to take\r\nplace, which had never been thought of before, and which should naturally have\r\nproved as advantageous to the new, as it certainly did to the old continent.\r\nThe savage injustice of the Europeans rendered an event, which ought to have\r\nbeen beneficial to all, ruinous and destructive to several of those unfortunate\r\ncountries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discovery of a passage to the East Indies by the Cape of Good Hope, which\r\nhappened much about the same time, opened perhaps a still more extensive range\r\nto foreign commerce, than even that of America, notwithstanding the greater\r\ndistance. There were but two nations in America, in any respect, superior to\r\nthe savages, and these were destroyed almost as soon as discovered. The rest\r\nwere mere savages. But the empires of China, Indostan, Japan, as well as\r\nseveral others in the East Indies, without having richer mines of gold or\r\nsilver, were, in every other respect, much richer, better cultivated, and more\r\nadvanced in all arts and manufactures, than either Mexico or Peru, even though\r\nwe should credit, what plainly deserves no credit, the exaggerated accounts of\r\nthe Spanish writers concerning the ancient state of those empires. But rich and\r\ncivilized nations can always exchange to a much greater value with one another,\r\nthan with savages and barbarians. Europe, however, has hitherto derived much\r\nless advantage from its commerce with the East Indies, than from that with\r\nAmerica. The Portuguese monopolised the East India trade to themselves for\r\nabout a century; and it was only indirectly, and through them, that the other\r\nnations of Europe could either send out or receive any goods from that country.\r\nWhen the Dutch, in the beginning of the last century, began to encroach upon\r\nthem, they vested their whole East India commerce in an exclusive company. The\r\nEnglish, French, Swedes, and Danes, have all followed their example; so that no\r\ngreat nation of Europe has ever yet had the benefit of a free commerce to the\r\nEast Indies. No other reason need be assigned why it has never been so\r\nadvantageous as the trade to America, which, between almost every nation of\r\nEurope and its own colonies, is free to all its subjects. The exclusive\r\nprivileges of those East India companies, their great riches, the great favour\r\nand protection which these have procured them from their respective\r\ngovernments, have excited much envy against them. This envy has frequently\r\nrepresented their trade as altogether pernicious, on account of the great\r\nquantities of silver which it every year exports from the countries from which\r\nit is carried on. The parties concerned have replied, that their trade by this\r\ncontinual exportation of silver, might indeed tend to impoverish Europe in\r\ngeneral, but not the particular country from which it was carried on; because,\r\nby the exportation of a part of the returns to other European countries, it\r\nannually brought home a much greater quantity of that metal than it carried\r\nout. Both the objection and the reply are founded in the popular notion which I\r\nhave been just now examining. It is therefore unnecessary to say any thing\r\nfurther about either. By the annual exportation of silver to the East Indies,\r\nplate is probably somewhat dearer in Europe than it otherwise might have been;\r\nand coined silver probably purchases a larger quantity both of labour and\r\ncommodities. The former of these two effects is a very small loss, the latter a\r\nvery small advantage; both too insignificant to deserve any part of the public\r\nattention. The trade to the East Indies, by opening a market to the commodities\r\nof Europe, or, what comes nearly to the same thing, to the gold and silver\r\nwhich is purchased with those commodities, must necessarily tend to increase\r\nthe annual production of European commodities, and consequently the real wealth\r\nand revenue of Europe. That it has hitherto increased them so little, is\r\nprobably owing to the restraints which it everywhere labours under.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI thought it necessary, though at the hazard of being tedious, to examine at\r\nfull length this popular notion, that wealth consists in money or in gold and\r\nsilver. Money, in common language, as I have already observed, frequently\r\nsignifies wealth; and this ambiguity of expression has rendered this popular\r\nnotion so familiar to us, that even they who are convinced of its absurdity,\r\nare very apt to forget their own principles, and, in the course of their\r\nreasonings, to take it for granted as a certain and undeniable truth. Some of\r\nthe best English writers upon commerce set out with observing, that the wealth\r\nof a country consists, not in its gold and silver only, but in its lands,\r\nhouses, and consumable goods of all different kinds. In the course of their\r\nreasonings, however, the lands, houses, and consumable goods, seem to slip out\r\nof their memory; and the strain of their argument frequently supposes that all\r\nwealth consists in gold and silver, and that to multiply those metals is the\r\ngreat object of national industry and commerce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe two principles being established, however, that wealth consisted in gold\r\nand silver, and that those metals could be brought into a country which had no\r\nmines, only by the balance of trade, or by exporting to a greater value than it\r\nimported; it necessarily became the great object of political economy to\r\ndiminish as much as possible the importation of foreign goods for home\r\nconsumption, and to increase as much as possible the exportation of the produce\r\nof domestic industry. Its two great engines for enriching the country,\r\ntherefore, were restraints upon importation, and encouragement to exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe restraints upon importation were of two kinds.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, restraints upon the importation of such foreign goods for home\r\nconsumption as could be produced at home, from whatever country they were\r\nimported.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, restraints upon the importation of goods of almost all kinds, from\r\nthose particular countries with which the balance of trade was supposed to be\r\ndisadvantageous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose different restraints consisted sometimes in high duties, and sometimes in\r\nabsolute prohibitions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nExportation was encouraged sometimes by drawbacks, sometimes by bounties,\r\nsometimes by advantageous treaties of commerce with foreign states, and\r\nsometimes by the establishment of colonies in distant countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDrawbacks were given upon two different occasions. When the home manufactures\r\nwere subject to any duty or excise, either the whole or a part of it was\r\nfrequently drawn back upon their exportation; and when foreign goods liable to\r\na duty were imported, in order to be exported again, either the whole or a part\r\nof this duty was sometimes given back upon such exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBounties were given for the encouragement, either of some beginning\r\nmanufactures, or of such sorts of industry of other kinds as were supposed to\r\ndeserve particular favour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy advantageous treaties of commerce, particular privileges were procured in\r\nsome foreign state for the goods and merchants of the country, beyond what were\r\ngranted to those of other countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the establishment of colonies in distant countries, not only particular\r\nprivileges, but a monopoly was frequently procured for the goods and merchants\r\nof the country which established them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe two sorts of restraints upon importation above mentioned, together with\r\nthese four encouragements to exportation, constitute the six principal means by\r\nwhich the commercial system proposes to increase the quantity of gold and\r\nsilver in any country, by turning the balance of trade in its favour. I shall\r\nconsider each of them in a particular chapter, and, without taking much farther\r\nnotice of their supposed tendency to bring money into the country, I shall\r\nexamine chiefly what are likely to be the effects of each of them upon the\r\nannual produce of its industry. According as they tend either to increase or\r\ndiminish the value of this annual produce, they must evidently tend either to\r\nincrease or diminish the real wealth and revenue of the country.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap27\"\u003e\u003c/a\u003eCHAPTER II.\u003cbr\u003e\r\nOF RESTRAINTS UPON IMPORTATION FROM FOREIGN COUNTRIES OF SUCH GOODS AS CAN BE\r\nPRODUCED AT HOME.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nBy restraining, either by high duties, or by absolute prohibitions, the\r\nimportation of such goods from foreign countries as can be produced at home,\r\nthe monopoly of the home market is more or less secured to the domestic\r\nindustry employed in producing them. Thus the prohibition of importing either\r\nlive cattle or salt provisions from foreign countries, secures to the graziers\r\nof Great Britain the monopoly of the home market for butcher’s meat. The\r\nhigh duties upon the importation of corn, which, in times of moderate plenty,\r\namount to a prohibition, give a like advantage to the growers of that\r\ncommodity. The prohibition of the importation of foreign woollen is equally\r\nfavourable to the woollen manufacturers. The silk manufacture, though\r\naltogether employed upon foreign materials, has lately obtained the same\r\nadvantage. The linen manufacture has not yet obtained it, but is making great\r\nstrides towards it. Many other sorts of manufactures have, in the same manner\r\nobtained in Great Britain, either altogether, or very nearly, a monopoly\r\nagainst their countrymen. The variety of goods, of which the importation into\r\nGreat Britain is prohibited, either absolutely, or under certain circumstances,\r\ngreatly exceeds what can easily be suspected by those who are not well\r\nacquainted with the laws of the customs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat this monopoly of the home market frequently gives great encouragement to\r\nthat particular species of industry which enjoys it, and frequently turns\r\ntowards that employment a greater share of both the labour and stock of the\r\nsociety than would otherwise have gone to it, cannot be doubted. But whether it\r\ntends either to increase the general industry of the society, or to give it the\r\nmost advantageous direction, is not, perhaps, altogether so evident.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe general industry of the society can never exceed what the capital of the\r\nsociety can employ. As the number of workmen that can be kept in employment by\r\nany particular person must bear a certain proportion to his capital, so the\r\nnumber of those that can be continually employed by all the members of a great\r\nsociety must bear a certain proportion to the whole capital of the society, and\r\nnever can exceed that proportion. No regulation of commerce can increase the\r\nquantity of industry in any society beyond what its capital can maintain. It\r\ncan only divert a part of it into a direction into which it might not otherwise\r\nhave gone; and it is by no means certain that this artificial direction is\r\nlikely to be more advantageous to the society, than that into which it would\r\nhave gone of its own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery individual is continually exerting himself to find out the most\r\nadvantageous employment for whatever capital he can command. It is his own\r\nadvantage, indeed, and not that of the society, which he has in view. But the\r\nstudy of his own advantage naturally, or rather necessarily, leads him to\r\nprefer that employment which is most advantageous to the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, every individual endeavours to employ his capital as near home as he\r\ncan, and consequently as much as he can in the support of domestic industry,\r\nprovided always that he can thereby obtain the ordinary, or not a great deal\r\nless than the ordinary profits of stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThus, upon equal, or nearly equal profits, every wholesale merchant naturally\r\nprefers the home trade to the foreign trade of consumption, and the foreign\r\ntrade of consumption to the carrying trade. In the home trade, his capital is\r\nnever so long out of his sight as it frequently is in the foreign trade of\r\nconsumption. He can know better the character and situation of the persons whom\r\nhe trusts; and if he should happen to be deceived, he knows better the laws of\r\nthe country from which he must seek redress. In the carrying trade, the capital\r\nof the merchant is, as it were, divided between two foreign countries, and no\r\npart of it is ever necessarily brought home, or placed under his own immediate\r\nview and command. The capital which an Amsterdam merchant employs in carrying\r\ncorn from Koningsberg to Lisbon, and fruit and wine from Lisbon to Koningsberg,\r\nmust generally be the one half of it at Koningsberg, and the other half at\r\nLisbon. No part of it need ever come to Amsterdam. The natural residence of\r\nsuch a merchant should either be at Koningsberg or Lisbon; and it can only be\r\nsome very particular circumstances which can make him prefer the residence of\r\nAmsterdam. The uneasiness, however, which he feels at being separated so far\r\nfrom his capital, generally determines him to bring part both of the\r\nKoningsberg goods which he destines for the market of Lisbon, and of the Lisbon\r\ngoods which he destines for that of Koningsberg, to Amsterdam; and though this\r\nnecessarily subjects him to a double charge of loading and unloading as well as\r\nto the payment of some duties and customs, yet, for the sake of having some\r\npart of his capital always under his own view and command, he willingly submits\r\nto this extraordinary charge; and it is in this manner that every country which\r\nhas any considerable share of the carrying trade, becomes always the emporium,\r\nor general market, for the goods of all the different countries whose trade it\r\ncarries on. The merchant, in order to save a second loading and unloading,\r\nendeavours always to sell in the home market, as much of the goods of all those\r\ndifferent countries as he can; and thus, so far as he can, to convert his\r\ncarrying trade into a foreign trade of consumption. A merchant, in the same\r\nmanner, who is engaged in the foreign trade of consumption, when he collects\r\ngoods for foreign markets, will always be glad, upon equal or nearly equal\r\nprofits, to sell as great a part of them at home as he can. He saves himself\r\nthe risk and trouble of exportation, when, so far as he can, he thus converts\r\nhis foreign trade of consumption into a home trade. Home is in this manner the\r\ncentre, if I may say so, round which the capitals of the inhabitants of every\r\ncountry are continually circulating, and towards which they are always tending,\r\nthough, by particular causes, they may sometimes be driven off and repelled\r\nfrom it towards more distant employments. But a capital employed in the home\r\ntrade, it has already been shown, necessarily puts into motion a greater\r\nquantity of domestic industry, and gives revenue and employment to a greater\r\nnumber of the inhabitants of the country, than an equal capital employed in the\r\nforeign trade of consumption; and one employed in the foreign trade of\r\nconsumption has the same advantage over an equal capital employed in the\r\ncarrying trade. Upon equal, or only nearly equal profits, therefore, every\r\nindividual naturally inclines to employ his capital in the manner in which it\r\nis likely to afford the greatest support to domestic industry, and to give\r\nrevenue and employment to the greatest number of people of his own country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, every individual who employs his capital in the support of domestic\r\nindustry, necessarily endeavours so to direct that industry, that its produce\r\nmay be of the greatest possible value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe produce of industry is what it adds to the subject or materials upon which\r\nit is employed. In proportion as the value of this produce is great or small,\r\nso will likewise be the profits of the employer. But it is only for the sake of\r\nprofit that any man employs a capital in the support of industry; and he will\r\nalways, therefore, endeavour to employ it in the support of that industry of\r\nwhich the produce is likely to be of the greatest value, or to exchange for the\r\ngreatest quantity either of money or of other goods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the annual revenue of every society is always precisely equal to the\r\nexchangeable value of the whole annual produce of its industry, or rather is\r\nprecisely the same thing with that exchangeable value. As every individual,\r\ntherefore, endeavours as much as he can, both to employ his capital in the\r\nsupport of domestic industry, and so to direct that industry that its produce\r\nmaybe of the greatest value; every individual necessarily labours to render the\r\nannual revenue of the society as great as he can. He generally, indeed, neither\r\nintends to promote the public interest, nor knows how much he is promoting it.\r\nBy preferring the support of domestic to that of foreign industry, he intends\r\nonly his own security; and by directing that industry in such a manner as its\r\nproduce may be of the greatest value, he intends only his own gain; and he is\r\nin this, as in many other cases, led by an invisible hand to promote an end\r\nwhich was no part of his intention. Nor is it always the worse for the society\r\nthat it was no part of it. By pursuing his own interest, he frequently promotes\r\nthat of the society more effectually than when he really intends to promote it.\r\nI have never known much good done by those who affected to trade for the public\r\ngood. It is an affectation, indeed, not very common among merchants, and very\r\nfew words need be employed in dissuading them from it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is the species of domestic industry which his capital can employ, and of\r\nwhich the produce is likely to be of the greatest value, every individual, it\r\nis evident, can in his local situation judge much better than any statesman or\r\nlawgiver can do for him. The statesman, who should attempt to direct private\r\npeople in what manner they ought to employ their capitals, would not only load\r\nhimself with a most unnecessary attention, but assume an authority which could\r\nsafely be trusted, not only to no single person, but to no council or senate\r\nwhatever, and which would nowhere be so dangerous as in the hands of a man who\r\nhad folly and presumption enough to fancy himself fit to exercise it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo give the monopoly of the home market to the produce of domestic industry, in\r\nany particular art or manufacture, is in some measure to direct private people\r\nin what manner they ought to employ their capitals, and must in almost all\r\ncases be either a useless or a hurtful regulation. If the produce of domestic\r\ncan be brought there as cheap as that of foreign industry, the regulation is\r\nevidently useless. If it cannot, it must generally be hurtful. It is the maxim\r\nof every prudent master of a family, never to attempt to make at home what it\r\nwill cost him more to make than to buy. The tailor does not attempt to make his\r\nown shoes, but buys them of the shoemaker. The shoemaker does not attempt to\r\nmake his own clothes, but employs a tailor. The farmer attempts to make neither\r\nthe one nor the other, but employs those different artificers. All of them find\r\nit for their interest to employ their whole industry in a way in which they\r\nhave some advantage over their neighbours, and to purchase with a part of its\r\nproduce, or, what is the same thing, with the price of a part of it, whatever\r\nelse they have occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is prudence in the conduct of every private family, can scarce be folly in\r\nthat of a great kingdom. If a foreign country can supply us with a commodity\r\ncheaper than we ourselves can make it, better buy it of them with some part of\r\nthe produce of our own industry, employed in a way in which we have some\r\nadvantage. The general industry of the country being always in proportion to\r\nthe capital which employs it, will not thereby be diminished, no more than that\r\nof the abovementioned artificers; but only left to find out the way in which it\r\ncan be employed with the greatest advantage. It is certainly not employed to\r\nthe greatest advantage, when it is thus directed towards an object which it can\r\nbuy cheaper than it can make. The value of its annual produce is certainly more\r\nor less diminished, when it is thus turned away from producing commodities\r\nevidently of more value than the commodity which it is directed to produce.\r\nAccording to the supposition, that commodity could be purchased from foreign\r\ncountries cheaper than it can be made at home; it could therefore have been\r\npurchased with a part only of the commodities, or, what is the same thing, with\r\na part only of the price of the commodities, which the industry employed by an\r\nequal capital would have produced at home, had it been left to follow its\r\nnatural course. The industry of the country, therefore, is thus turned away\r\nfrom a more to a less advantageous employment; and the exchangeable value of\r\nits annual produce, instead of being increased, according to the intention of\r\nthe lawgiver, must necessarily be diminished by every such regulation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy means of such regulations, indeed, a particular manufacture may sometimes be\r\nacquired sooner than it could have been otherwise, and after a certain time may\r\nbe made at home as cheap, or cheaper, than in the foreign country. But though\r\nthe industry of the society may be thus carried with advantage into a\r\nparticular channel sooner than it could have been otherwise, it will by no\r\nmeans follow that the sum-total, either of its industry, or of its revenue, can\r\never be augmented by any such regulation. The industry of the society can\r\naugment only in proportion as its capital augments, and its capital can augment\r\nonly in proportion to what can be gradually saved out of its revenue. But the\r\nimmediate effect of every such regulation is to diminish its revenue; and what\r\ndiminishes its revenue is certainly not very likely to augment its capital\r\nfaster than it would have augmented of its own accord, had both capital and\r\nindustry been left to find out their natural employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough, for want of such regulations, the society should never acquire the\r\nproposed manufacture, it would not upon that account necessarily be the poorer\r\nin anyone period of its duration. In every period of its duration its whole\r\ncapital and industry might still have been employed, though upon different\r\nobjects, in the manner that was most advantageous at the time. In every period\r\nits revenue might have been the greatest which its capital could afford, and\r\nboth capital and revenue might have been augmented with the greatest possible\r\nrapidity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe natural advantages which one country has over another, in producing\r\nparticular commodities, are sometimes so great, that it is acknowledged by all\r\nthe world to be in vain to struggle with them. By means of glasses, hot-beds,\r\nand hot-walls, very good grapes can be raised in Scotland, and very good wine,\r\ntoo, can be made of them, at about thirty times the expense for which at least\r\nequally good can be brought from foreign countries. Would it be a reasonable\r\nlaw to prohibit the importation of all foreign wines, merely to encourage the\r\nmaking of claret and Burgundy in Scotland? But if there would be a manifest\r\nabsurdity in turning towards any employment thirty times more of the capital\r\nand industry of the country than would be necessary to purchase from foreign\r\ncountries an equal quantity of the commodities wanted, there must be an\r\nabsurdity, though not altogether so glaring, yet exactly of the same kind, in\r\nturning towards any such employment a thirtieth, or even a three hundredth part\r\nmore of either. Whether the advantages which one country has over another be\r\nnatural or acquired, is in this respect of no consequence. As long as the one\r\ncountry has those advantages, and the other wants them, it will always be more\r\nadvantageous for the latter rather to buy of the former than to make. It is an\r\nacquired advantage only, which one artificer has over his neighbour, who\r\nexercises another trade; and yet they both find it more advantageous to buy of\r\none another, than to make what does not belong to their particular trades.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMerchants and manufacturers are the people who derive the greatest advantage\r\nfrom this monopoly of the home market. The prohibition of the importation of\r\nforeign cattle and of salt provisions, together with the high duties upon\r\nforeign corn, which in times of moderate plenty amount to a prohibition, are\r\nnot near so advantageous to the graziers and farmers of Great Britain, as other\r\nregulations of the same kind are to its merchants and manufacturers.\r\nManufactures, those of the finer kind especially, are more easily transported\r\nfrom one country to another than corn or cattle. It is in the fetching and\r\ncarrying manufactures, accordingly, that foreign trade is chiefly employed. In\r\nmanufactures, a very small advantage will enable foreigners to undersell our\r\nown workmen, even in the home market. It will require a very great one to\r\nenable them to do so in the rude produce of the soil. If the free importation\r\nof foreign manufactures were permitted, several of the home manufactures would\r\nprobably suffer, and some of them perhaps go to ruin altogether, and a\r\nconsiderable part of the stock and industry at present employed in them, would\r\nbe forced to find out some other employment. But the freest importation of the\r\nrude produce of the soil could have no such effect upon the agriculture of the\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the importation of foreign cattle, for example, were made ever so free, so\r\nfew could be imported, that the grazing trade of Great Britain could be little\r\naffected by it. Live cattle are, perhaps, the only commodity of which the\r\ntransportation is more expensive by sea than by land. By land they carry\r\nthemselves to market. By sea, not only the cattle, but their food and their\r\nwater too, must be carried at no small expense and inconveniency. The short sea\r\nbetween Ireland and Great Britain, indeed, renders the importation of Irish\r\ncattle more easy. But though the free importation of them, which was lately\r\npermitted only for a limited time, were rendered perpetual, it could have no\r\nconsiderable effect upon the interest of the graziers of Great Britain. Those\r\nparts of Great Britain which border upon the Irish sea are all grazing\r\ncountries. Irish cattle could never be imported for their use, but must be\r\ndrove through those very extensive countries, at no small expense and\r\ninconveniency, before they could arrive at their proper market. Fat cattle\r\ncould not be drove so far. Lean cattle, therefore, could only be imported; and\r\nsuch importation could interfere not with the interest of the feeding or\r\nfattening countries, to which, by reducing the price of lean cattle it would\r\nrather be advantageous, but with that of the breeding countries only. The small\r\nnumber of Irish cattle imported since their importation was permitted, together\r\nwith the good price at which lean cattle still continue to sell, seem to\r\ndemonstrate, that even the breeding countries of Great Britain are never likely\r\nto be much affected by the free importation of Irish cattle. The common people\r\nof Ireland, indeed, are said to have sometimes opposed with violence the\r\nexportation of their cattle. But if the exporters had found any great advantage\r\nin continuing the trade, they could easily, when the law was on their side,\r\nhave conquered this mobbish opposition.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFeeding and fattening countries, besides, must always be highly improved,\r\nwhereas breeding countries are generally uncultivated. The high price of lean\r\ncattle, by augmenting the value of uncultivated land, is like a bounty against\r\nimprovement. To any country which was highly improved throughout, it would be\r\nmore advantageous to import its lean cattle than to breed them. The province of\r\nHolland, accordingly, is said to follow this maxim at present. The mountains of\r\nScotland, Wales, and Northumberland, indeed, are countries not capable of much\r\nimprovement, and seem destined by nature to be the breeding countries of Great\r\nBritain. The freest importation of foreign cattle could have no other effect\r\nthan to hinder those breeding countries from taking advantage of the increasing\r\npopulation and improvement of the rest of the kingdom, from raising their price\r\nto an exorbitant height, and from laying a real tax upon all the more improved\r\nand cultivated parts of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe freest importation of salt provisions, in the same manner, could have as\r\nlittle effect upon the interest of the graziers of Great Britain as that of\r\nlive cattle. Salt provisions are not only a very bulky commodity, but when\r\ncompared with fresh meat they are a commodity both of worse quality, and, as\r\nthey cost more labour and expense, of higher price. They could never,\r\ntherefore, come into competition with the fresh meat, though they might with\r\nthe salt provisions of the country. They might be used for victualling ships\r\nfor distant voyages, and such like uses, but could never make any considerable\r\npart of the food of the people. The small quantity of salt provisions imported\r\nfrom Ireland since their importation was rendered free, is an experimental\r\nproof that our graziers have nothing to apprehend from it. It does not appear\r\nthat the price of butcher’s meat has ever been sensibly affected by it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven the free importation of foreign corn could very little affect the interest\r\nof the farmers of Great Britain. Corn is a much more bulky commodity than\r\nbutcher’s meat. A pound of wheat at a penny is as dear as a pound of\r\nbutcher’s meat at fourpence. The small quantity of foreign corn imported\r\neven in times of the greatest scarcity, may satisfy our farmers that they can\r\nhave nothing to fear from the freest importation. The average quantity\r\nimported, one year with another, amounts only, according to the very well\r\ninformed author of the Tracts upon the Corn Trade, to 23,728 quarters of all\r\nsorts of grain, and does not exceed the five hundredth and seventy-one part of\r\nthe annual consumption. But as the bounty upon corn occasions a greater\r\nexportation in years of plenty, so it must, of consequence, occasion a greater\r\nimportation in years of scarcity, than in the actual state of tillage would\r\notherwise take place. By means of it, the plenty of one year does not\r\ncompensate the scarcity of another; and as the average quantity exported is\r\nnecessarily augmented by it, so must likewise, in the actual state of tillage,\r\nthe average quantity imported. If there were no bounty, as less corn would be\r\nexported, so it is probable that, one year with another, less would be imported\r\nthan at present. The corn-merchants, the fetchers and carriers of corn between\r\nGreat Britain and foreign countries, would have much less employment, and might\r\nsuffer considerably; but the country gentlemen and farmers could suffer very\r\nlittle. It is in the corn-merchants, accordingly, rather than the country\r\ngentlemen and farmers, that I have observed the greatest anxiety for the\r\nrenewal and continuation of the bounty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCountry gentlemen and farmers are, to their great honour, of all people, the\r\nleast subject to the wretched spirit of monopoly. The undertaker of a great\r\nmanufactory is sometimes alarmed if another work of the same kind is\r\nestablished within twenty miles of him; the Dutch undertaker of the woollen\r\nmanufacture at Abbeville, stipulated that no work of the same kind should be\r\nestablished within thirty leagues of that city. Farmers and country gentlemen,\r\non the contrary, are generally disposed rather to promote, than to obstruct,\r\nthe cultivation and improvement of their neighbours farms and estates. They\r\nhave no secrets, such as those of the greater part of manufacturers, but are\r\ngenerally rather fond of communicating to their neighbours, and of extending as\r\nfar as possible any new practice which they may have found to be advantageous.\r\n“Pius quaestus”, says old Cato, “stabilissimusque, minimeque\r\ninvidiosus; minimeque male cogitantes sunt, qui in eo studio occupati\r\nsunt.” Country gentlemen and farmers, dispersed in different parts of the\r\ncountry, cannot so easily combine as merchants and manufacturers, who being\r\ncollected into towns, and accustomed to that exclusive corporation spirit which\r\nprevails in them, naturally endeavour to obtain, against all their countrymen,\r\nthe same exclusive privilege which they generally possess against the\r\ninhabitants of their respective towns. They accordingly seem to have been the\r\noriginal inventors of those restraints upon the importation of foreign goods,\r\nwhich secure to them the monopoly of the home market. It was probably in\r\nimitation of them, and to put themselves upon a level with those who, they\r\nfound, were disposed to oppress them, that the country gentlemen and farmers of\r\nGreat Britain so far forgot the generosity which is natural to their station,\r\nas to demand the exclusive privilege of supplying their countrymen with corn\r\nand butcher’s meat. They did not, perhaps, take time to consider how much\r\nless their interest could be affected by the freedom of trade, than that of the\r\npeople whose example they followed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo prohibit, by a perpetual law, the importation of foreign corn and cattle, is\r\nin reality to enact, that the population and industry of the country shall, at\r\nno time, exceed what the rude produce of its own soil can maintain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere seem, however, to be two cases, in which it will generally be\r\nadvantageous to lay some burden upon foreign, for the encouragement of domestic\r\nindustry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first is, when some particular sort of industry is necessary for the\r\ndefence of the country. The defence of Great Britain, for example, depends very\r\nmuch upon the number of its sailors and shipping. The act of navigation,\r\ntherefore, very properly endeavours to give the sailors and shipping of Great\r\nBritain the monopoly of the trade of their own country, in some cases, by\r\nabsolute prohibitions, and in others, by heavy burdens upon the shipping of\r\nforeign countries. The following are the principal dispositions of this act.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, All ships, of which the owners, masters, and three-fourths of the\r\nmariners, are not British subjects, are prohibited, upon pain of forfeiting\r\nship and cargo, from trading to the British settlements and plantations, or\r\nfrom being employed in the coasting trade of Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, A great variety of the most bulky articles of importation can be\r\nbrought into Great Britain only, either in such ships as are above described,\r\nor in ships of the country where those goods are produced, and of which the\r\nowners, masters, and three-fourths of the mariners, are of that particular\r\ncountry; and when imported even in ships of this latter kind, they are subject\r\nto double aliens duty. If imported in ships of any other country, the penalty\r\nis forfeiture of ship and goods. When this act was made, the Dutch were, what\r\nthey still are, the great carriers of Europe; and by this regulation they were\r\nentirely excluded from being the carriers to Great Britain, or from importing\r\nto us the goods of any other European country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, A great variety of the most bulky articles of importation are\r\nprohibited from being imported, even in British ships, from any country but\r\nthat in which they are produced, under pain of forfeiting ship and cargo. This\r\nregulation, too, was probably intended against the Dutch. Holland was then, as\r\nnow, the great emporium for all European goods; and by this regulation, British\r\nships were hindered from loading in Holland the goods of any other European\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, Salt fish of all kinds, whale fins, whalebone, oil, and blubber, not\r\ncaught by and cured on board British vessels, when imported into Great Britain,\r\nare subject to double aliens duty. The Dutch, as they are still the principal,\r\nwere then the only fishers in Europe that attempted to supply foreign nations\r\nwith fish. By this regulation, a very heavy burden was laid upon their\r\nsupplying Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the act of navigation was made, though England and Holland were not\r\nactually at war, the most violent animosity subsisted between the two nations.\r\nIt had begun during the government of the long parliament, which first framed\r\nthis act, and it broke out soon after in the Dutch wars, during that of the\r\nProtector and of Charles II. It is not impossible, therefore, that some of the\r\nregulations of this famous act may have proceeded from national animosity. They\r\nare as wise, however, as if they had all been dictated by the most deliberate\r\nwisdom. National animosity, at that particular time, aimed at the very same\r\nobject which the most deliberate wisdom would have recommended, the diminution\r\nof the naval power of Holland, the only naval power which could endanger the\r\nsecurity of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe act of navigation is not favourable to foreign commerce, or to the growth\r\nof that opulence which can arise from it. The interest of a nation, in its\r\ncommercial relations to foreign nations, is, like that of a merchant with\r\nregard to the different people with whom he deals, to buy as cheap, and to sell\r\nas dear as possible. But it will be most likely to buy cheap, when, by the most\r\nperfect freedom of trade, it encourages all nations to bring to it the goods\r\nwhich it has occasion to purchase; and, for the same reason, it will be most\r\nlikely to sell dear, when its markets are thus filled with the greatest number\r\nof buyers. The act of navigation, it is true, lays no burden upon foreign ships\r\nthat come to export the produce of British industry. Even the ancient aliens\r\nduty, which used to be paid upon all goods, exported as well as imported, has,\r\nby several subsequent acts, been taken off from the greater part of the\r\narticles of exportation. But if foreigners, either by prohibitions or high\r\nduties, are hindered from coming to sell, they cannot always afford to come to\r\nbuy; because, coming without a cargo, they must lose the freight from their own\r\ncountry to Great Britain. By diminishing the number of sellers, therefore, we\r\nnecessarily diminish that of buyers, and are thus likely not only to buy\r\nforeign goods dearer, but to sell our own cheaper, than if there was a more\r\nperfect freedom of trade. As defence, however, is of much more importance than\r\nopulence, the act of navigation is, perhaps, the wisest of all the commercial\r\nregulations of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second case, in which it will generally be advantageous to lay some burden\r\nupon foreign for the encouragement of domestic industry, is when some tax is\r\nimposed at home upon the produce of the latter. In this case, it seems\r\nreasonable that an equal tax should be imposed upon the like produce of the\r\nformer. This would not give the monopoly of the home market to domestic\r\nindustry, nor turn towards a particular employment a greater share of the stock\r\nand labour of the country, than what would naturally go to it. It would only\r\nhinder any part of what would naturally go to it from being turned away by the\r\ntax into a less natural direction, and would leave the competition between\r\nforeign and domestic industry, after the tax, as nearly as possible upon the\r\nsame footing as before it. In Great Britain, when any such tax is laid upon the\r\nproduce of domestic industry, it is usual, at the same time, in order to stop\r\nthe clamorous complaints of our merchants and manufacturers, that they will be\r\nundersold at home, to lay a much heavier duty upon the importation of all\r\nforeign goods of the same kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis second limitation of the freedom of trade, according to some people,\r\nshould, upon most occasions, be extended much farther than to the precise\r\nforeign commodities which could come into competition with those which had been\r\ntaxed at home. When the necessaries of life have been taxed in any country, it\r\nbecomes proper, they pretend, to tax not only the like necessaries of life\r\nimported from other countries, but all sorts of foreign goods which can come\r\ninto competition with any thing that is the produce of domestic industry.\r\nSubsistence, they say, becomes necessarily dearer in consequence of such taxes;\r\nand the price of labour must always rise with the price of the labourer’s\r\nsubsistence. Every commodity, therefore, which is the produce of domestic\r\nindustry, though not immediately taxed itself, becomes dearer in consequence of\r\nsuch taxes, because the labour which produces it becomes so. Such taxes,\r\ntherefore, are really equivalent, they say, to a tax upon every particular\r\ncommodity produced at home. In order to put domestic upon the same footing with\r\nforeign industry, therefore, it becomes necessary, they think, to lay some duty\r\nupon every foreign commodity, equal to this enhancement of the price of the\r\nhome commodities with which it can come into competition.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhether taxes upon the necessaries of life, such as those in Great Britain upon\r\nsoap, salt, leather, candles, etc. necessarily raise the price of labour, and\r\nconsequently that of all other commodities, I shall consider hereafter, when I\r\ncome to treat of taxes. Supposing, however, in the mean time, that they have\r\nthis effect, and they have it undoubtedly, this general enhancement of the\r\nprice of all commodities, in consequence of that labour, is a case which\r\ndiffers in the two following respects from that of a particular commodity, of\r\nwhich the price was enhanced by a particular tax immediately imposed upon it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, It might always be known with great exactness, how far the price of such\r\na commodity could be enhanced by such a tax; but how far the general\r\nenhancement of the price of labour might affect that of every different\r\ncommodity about which labour was employed, could never be known with any\r\ntolerable exactness. It would be impossible, therefore, to proportion, with any\r\ntolerable exactness, the tax of every foreign, to the enhancement of the price\r\nof every home commodity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, Taxes upon the necessaries of life have nearly the same effect upon\r\nthe circumstances of the people as a poor soil and a bad climate. Provisions\r\nare thereby rendered dearer, in the same manner as if it required extraordinary\r\nlabour and expense to raise them. As, in the natural scarcity arising from soil\r\nand climate, it would be absurd to direct the people in what manner they ought\r\nto employ their capitals and industry, so is it likewise in the artificial\r\nscarcity arising from such taxes. To be left to accommodate, as well as they\r\ncould, their industry to their situation, and to find out those employments in\r\nwhich, notwithstanding their unfavourable circumstances, they might have some\r\nadvantage either in the home or in the foreign market, is what, in both cases,\r\nwould evidently be most for their advantage. To lay a new-tax upon them,\r\nbecause they are already overburdened with taxes, and because they already pay\r\ntoo dear for the necessaries of life, to make them likewise pay too dear for\r\nthe greater part of other commodities, is certainly a most absurd way of making\r\namends.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes, when they have grown up to a certain height, are a curse equal to\r\nthe barrenness of the earth, and the inclemency of the heavens, and yet it is\r\nin the richest and most industrious countries that they have been most\r\ngenerally imposed. No other countries could support so great a disorder. As the\r\nstrongest bodies only can live and enjoy health under an unwholesome regimen,\r\nso the nations only, that in every sort of industry have the greatest natural\r\nand acquired advantages, can subsist and prosper under such taxes. Holland is\r\nthe country in Europe in which they abound most, and which, from peculiar\r\ncircumstances, continues to prosper, not by means of them, as has been most\r\nabsurdly supposed, but in spite of them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs there are two cases in which it will generally be advantageous to lay some\r\nburden upon foreign for the encouragement of domestic industry, so there are\r\ntwo others in which it may sometimes be a matter of deliberation, in the one,\r\nhow far it is proper to continue the free importation of certain foreign goods;\r\nand, in the other, how far, or in what manner, it may be proper to restore that\r\nfree importation, after it has been for some time interrupted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe case in which it may sometimes be a matter of deliberation how far it is\r\nproper to continue the free importation of certain foreign goods, is when some\r\nforeign nation restrains, by high duties or prohibitions, the importation of\r\nsome of our manufactures into their country. Revenge, in this case, naturally\r\ndictates retaliation, and that we should impose the like duties and\r\nprohibitions upon the importation of some or all of their manufactures into\r\nours. Nations, accordingly, seldom fail to retaliate in this manner. The French\r\nhave been particularly forward to favour their own manufactures, by restraining\r\nthe importation of such foreign goods as could come into competition with them.\r\nIn this consisted a great part of the policy of Mr Colbert, who,\r\nnotwithstanding his great abilities, seems in this case to have been imposed\r\nupon by the sophistry of merchants and manufacturers, who are always demanding\r\na monopoly against their countrymen. It is at present the opinion of the most\r\nintelligent men in France, that his operations of this kind have not been\r\nbeneficial to his country. That minister, by the tariff of 1667, imposed very\r\nhigh duties upon a great number of foreign manufactures. Upon his refusing to\r\nmoderate them in favour of the Dutch, they, in 1671, prohibited the importation\r\nof the wines, brandies, and manufactures of France. The war of 1672 seems to\r\nhave been in part occasioned by this commercial dispute. The peace of Nimeguen\r\nput an end to it in 1678, by moderating some of those duties in favour of the\r\nDutch, who in consequence took off their prohibition. It was about the same\r\ntime that the French and English began mutually to oppress each other’s\r\nindustry, by the like duties and prohibitions, of which the French, however,\r\nseem to have set the first example, The spirit of hostility which has subsisted\r\nbetween the two nations ever since, has hitherto hindered them from being\r\nmoderated on either side. In 1697, the English prohibited the importation of\r\nbone lace, the manufacture of Flanders. The government of that country, at that\r\ntime under the dominion of Spain, prohibited, in return, the importation of\r\nEnglish woollens. In 1700, the prohibition of importing bone lace into England\r\nwas taken off upon condition that the importation of English woollens into\r\nFlanders should be put on the same footing as before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere may be good policy in retaliations of this kind, when there is a\r\nprobability that they will procure the repeal of the high duties or\r\nprohibitions complained of. The recovery of a great foreign market will\r\ngenerally more than compensate the transitory inconveniency of paying dearer\r\nduring a short time for some sorts of goods. To judge whether such retaliations\r\nare likely to produce such an effect, does not, perhaps, belong so much to the\r\nscience of a legislator, whose deliberations ought to be governed by general\r\nprinciples, which are always the same, as to the skill of that insidious and\r\ncrafty animal vulgarly called a statesman or politician, whose councils are\r\ndirected by the momentary fluctuations of affairs. When there is no probability\r\nthat any such repeal can be procured, it seems a bad method of compensating the\r\ninjury done to certain classes of our people, to do another injury ourselves,\r\nnot only to those classes, but to almost all the other classes of them. When\r\nour neighbours prohibit some manufacture of ours, we generally prohibit, not\r\nonly the same, for that alone would seldom affect them considerably, but some\r\nother manufacture of theirs. This may, no doubt, give encouragement to some\r\nparticular class of workmen among ourselves, and, by excluding some of their\r\nrivals, may enable them to raise their price in the home market. Those workmen\r\nhowever, who suffered by our neighbours prohibition, will not be benefited by\r\nours. On the contrary, they, and almost all the other classes of our citizens,\r\nwill thereby be obliged to pay dearer than before for certain goods. Every such\r\nlaw, therefore, imposes a real tax upon the whole country, not in favour of\r\nthat particular class of workmen who were injured by our neighbours\r\nprohibitions, but of some other class.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe case in which it may sometimes be a matter of deliberation, how far, or in\r\nwhat manner, it is proper to restore the free importation of foreign goods,\r\nafter it has been for some time interrupted, is when particular manufactures,\r\nby means of high duties or prohibitions upon all foreign goods which can come\r\ninto competition with them, have been so far extended as to employ a great\r\nmultitude of hands. Humanity may in this case require that the freedom of trade\r\nshould be restored only by slow gradations, and with a good deal of reserve and\r\ncircumspection. Were those high duties and prohibitions taken away all at once,\r\ncheaper foreign goods of the same kind might be poured so fast into the home\r\nmarket, as to deprive all at once many thousands of our people of their\r\nordinary employment and means of subsistence. The disorder which this would\r\noccasion might no doubt be very considerable. It would in all probability,\r\nhowever, be much less than is commonly imagined, for the two following reasons.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, All those manufactures of which any part is commonly exported to other\r\nEuropean countries without a bounty, could be very little affected by the\r\nfreest importation of foreign goods. Such manufactures must be sold as cheap\r\nabroad as any other foreign goods of the same quality and kind, and\r\nconsequently must be sold cheaper at home. They would still, therefore, keep\r\npossession of the home market; and though a capricious man of fashion might\r\nsometimes prefer foreign wares, merely because they were foreign, to cheaper\r\nand better goods of the same kind that were made at home, this folly could,\r\nfrom the nature of things, extend to so few, that it could make no sensible\r\nimpression upon the general employment of the people. But a great part of all\r\nthe different branches of our woollen manufacture, of our tanned leather, and\r\nof our hardware, are annually exported to other European countries without any\r\nbounty, and these are the manufactures which employ the greatest number of\r\nhands. The silk, perhaps, is the manufacture which would suffer the most by\r\nthis freedom of trade, and after it the linen, though the latter much less than\r\nthe former.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, Though a great number of people should, by thus restoring the freedom\r\nof trade, be thrown all at once out of their ordinary employment and common\r\nmethod of subsistence, it would by no means follow that they would thereby be\r\ndeprived either of employment or subsistence. By the reduction of the army and\r\nnavy at the end of the late war, more than 100,000 soldiers and seamen, a\r\nnumber equal to what is employed in the greatest manufactures, were all at once\r\nthrown out of their ordinary employment: but though they no doubt suffered some\r\ninconveniency, they were not thereby deprived of all employment and\r\nsubsistence. The greater part of the seamen, it is probable, gradually betook\r\nthemselves to the merchant service as they could find occasion, and in the mean\r\ntime both they and the soldiers were absorbed in the great mass of the people,\r\nand employed in a great variety of occupations. Not only no great convulsion,\r\nbut no sensible disorder, arose from so great a change in the situation of more\r\nthan 100,000 men, all accustomed to the use of arms, and many of them to rapine\r\nand plunder. The number of vagrants was scarce anywhere sensibly increased by\r\nit; even the wages of labour were not reduced by it in any occupation, so far\r\nas I have been able to learn, except in that of seamen in the merchant service.\r\nBut if we compare together the habits of a soldier and of any sort of\r\nmanufacturer, we shall find that those of the latter do not tend so much to\r\ndisqualify him from being employed in a new trade, as those of the former from\r\nbeing employed in any. The manufacturer has always been accustomed to look for\r\nhis subsistence from his labour only; the soldier to expect it from his pay.\r\nApplication and industry have been familiar to the one; idleness and\r\ndissipation to the other. But it is surely much easier to change the direction\r\nof industry from one sort of labour to another, than to turn idleness and\r\ndissipation to any. To the greater part of manufactures, besides, it has\r\nalready been observed, there are other collateral manufactures of so similar a\r\nnature, that a workman can easily transfer his industry from one of them to\r\nanother. The greater part of such workmen, too, are occasionally employed in\r\ncountry labour. The stock which employed them in a particular manufacture\r\nbefore, will still remain in the country, to employ an equal number of people\r\nin some other way. The capital of the country remaining the same, the demand\r\nfor labour will likewise be the same, or very nearly the same, though it may be\r\nexerted in different places, and for different occupations. Soldiers and\r\nseamen, indeed, when discharged from the king’s service, are at liberty\r\nto exercise any trade within any town or place of Great Britain or Ireland. Let\r\nthe same natural liberty of exercising what species of industry they please, be\r\nrestored to all his Majesty’s subjects, in the same manner as to soldiers\r\nand seamen; that is, break down the exclusive privileges of corporations, and\r\nrepeal the statute of apprenticeship, both which are really encroachments upon\r\nnatural Liberty, and add to those the repeal of the law of settlements, so that\r\na poor workman, when thrown out of employment, either in one trade or in one\r\nplace, may seek for it in another trade or in another place, without the fear\r\neither of a prosecution or of a removal; and neither the public nor the\r\nindividuals will suffer much more from the occasional disbanding some\r\nparticular classes of manufacturers, than from that of the soldiers. Our\r\nmanufacturers have no doubt great merit with their country, but they cannot\r\nhave more than those who defend it with their blood, nor deserve to be treated\r\nwith more delicacy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo expect, indeed, that the freedom of trade should ever be entirely restored\r\nin Great Britain, is as absurd as to expect that an Oceana or Utopia should\r\never be established in it. Not only the prejudices of the public, but, what is\r\nmuch more unconquerable, the private interests of many individuals,\r\nirresistibly oppose it. Were the officers of the army to oppose, with the same\r\nzeal and unanimity, any reduction in the number of forces, with which master\r\nmanufacturers set themselves against every law that is likely to increase the\r\nnumber of their rivals in the home market; were the former to animate their\r\nsoldiers, in the same manner as the latter inflame their workmen, to attack\r\nwith violence and outrage the proposers of any such regulation; to attempt to\r\nreduce the army would be as dangerous as it has now become to attempt to\r\ndiminish, in any respect, the monopoly which our manufacturers have obtained\r\nagainst us. This monopoly has so much increased the number of some particular\r\ntribes of them, that, like an overgrown standing army, they have become\r\nformidable to the government, and, upon many occasions, intimidate the\r\nlegislature. The member of parliament who supports every proposal for\r\nstrengthening this monopoly, is sure to acquire not only the reputation of\r\nunderstanding trade, but great popularity and influence with an order of men\r\nwhose numbers and wealth render them of great importance. If he opposes them,\r\non the contrary, and still more, if he has authority enough to be able to\r\nthwart them, neither the most acknowledged probity, nor the highest rank, nor\r\nthe greatest public services, can protect him from the most infamous abuse and\r\ndetraction, from personal insults, nor sometimes from real danger, arising from\r\nthe insolent outrage of furious and disappointed monopolists.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe undertaker of a great manufacture, who, by the home markets being suddenly\r\nlaid open to the competition of foreigners, should be obliged to abandon his\r\ntrade, would no doubt suffer very considerably. That part of his capital which\r\nhad usually been employed in purchasing materials, and in paying his workmen,\r\nmight, without much difficulty, perhaps, find another employment; but that part\r\nof it which was fixed in workhouses, and in the instruments of trade, could\r\nscarce be disposed of without considerable loss. The equitable regard,\r\ntherefore, to his interest, requires that changes of this kind should never be\r\nintroduced suddenly, but slowly, gradually, and after a very long warning. The\r\nlegislature, were it possible that its deliberations could be always directed,\r\nnot by the clamorous importunity of partial interests, but by an extensive view\r\nof the general good, ought, upon this very account, perhaps, to be particularly\r\ncareful, neither to establish any new monopolies of this kind, nor to extend\r\nfurther those which are already established. Every such regulation introduces\r\nsome degree of real disorder into the constitution of the state, which it will\r\nbe difficult afterwards to cure without occasioning another disorder.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHow far it may be proper to impose taxes upon the importation of foreign goods,\r\nin order not to prevent their importation, but to raise a revenue for\r\ngovernment, I shall consider hereafter when I come to treat of taxes. Taxes\r\nimposed with a view to prevent, or even to diminish importation, are evidently\r\nas destructive of the revenue of the customs as of the freedom of trade.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap28\"\u003e\u003c/a\u003eCHAPTER III.\u003cbr\u003e\r\nOF THE EXTRAORDINARY RESTRAINTS UPON THE IMPORTATION OF GOODS OF ALMOST ALL\r\nKINDS, FROM THOSE COUNTRIES WITH WHICH THE BALANCE IS SUPPOSED TO BE\r\nDISADVANTAGEOUS.\u003c/h2\u003e\r\n\r\n\u003ch3\u003ePart I—Of the Unreasonableness of those Restraints, even upon the\r\nPrinciples of the Commercial System.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nTo lay extraordinary restraints upon the importation of goods of almost all\r\nkinds, from those particular countries with which the balance of trade is\r\nsupposed to be disadvantageous, is the second expedient by which the commercial\r\nsystem proposes to increase the quantity of gold and silver. Thus, in Great\r\nBritain, Silesia lawns may be imported for home consumption, upon paying\r\ncertain duties; but French cambrics and lawns are prohibited to be imported,\r\nexcept into the port of London, there to be warehoused for exportation. Higher\r\nduties are imposed upon the wines of France than upon those of Portugal, or\r\nindeed of any other country. By what is called the impost 1692, a duty of five\r\nand-twenty per cent. of the rate or value, was laid upon all French goods;\r\nwhile the goods of other nations were, the greater part of them, subjected to\r\nmuch lighter duties, seldom exceeding five per cent. The wine, brandy, salt,\r\nand vinegar of France, were indeed excepted; these commodities being subjected\r\nto other heavy duties, either by other laws, or by particular clauses of the\r\nsame law. In 1696, a second duty of twenty-five per cent. the first not having\r\nbeen thought a sufficient discouragement, was imposed upon all French goods,\r\nexcept brandy; together with a new duty of five-and-twenty pounds upon the ton\r\nof French wine, and another of fifteen pounds upon the ton of French vinegar.\r\nFrench goods have never been omitted in any of those general subsidies or\r\nduties of five per cent. which have been imposed upon all, or the greater part,\r\nof the goods enumerated in the book of rates. If we count the one-third and\r\ntwo-third subsidies as making a complete subsidy between them, there have been\r\nfive of these general subsidies; so that, before the commencement of the\r\npresent war, seventy-five per cent. may be considered as the lowest duty to\r\nwhich the greater part of the goods of the growth, produce, or manufacture of\r\nFrance, were liable. But upon the greater part of goods, those duties are\r\nequivalent to a prohibition. The French, in their turn, have, I believe,\r\ntreated our goods and manufactures just as hardly; though I am not so well\r\nacquainted with the particular hardships which they have imposed upon them.\r\nThose mutual restraints have put an end to almost all fair commerce between the\r\ntwo nations; and smugglers are now the principal importers, either of British\r\ngoods into France, or of French goods into Great Britain. The principles which\r\nI have been examining, in the foregoing chapter, took their origin from private\r\ninterest and the spirit of monopoly; those which I am going te examine in this,\r\nfrom national prejudice and animosity. They are, accordingly, as might well be\r\nexpected, still more unreasonable. They are so, even upon the principles of the\r\ncommercial system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, Though it were certain that in the case of a free trade between France\r\nand England, for example, the balance would be in favour of France, it would by\r\nno means follow that such a trade would be disadvantageous to England, or that\r\nthe general balance of its whole trade would thereby be turned more against it.\r\nIf the wines of France are better and cheaper than those of Portugal, or its\r\nlinens than those of Germany, it would be more advantageous for Great Britain\r\nto purchase both the wine and the foreign linen which it had occasion for of\r\nFrance, than of Portugal and Germany. Though the value of the annual\r\nimportations from France would thereby be greatly augmented, the value of the\r\nwhole annual importations would be diminished, in proportion as the French\r\ngoods of the same quality were cheaper than those of the other two countries.\r\nThis would be the case, even upon the supposition that the whole French goods\r\nimported were to be consumed in Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut, Secondly, A great part of them might be re-exported to other countries,\r\nwhere, being sold with profit, they might bring back a return, equal in value,\r\nperhaps, to the prime cost of the whole French goods imported. What has\r\nfrequently been said of the East India trade, might possibly be true of the\r\nFrench; that though the greater part of East India goods were bought with gold\r\nand silver, the re-exportation of a part of them to other countries brought\r\nback more gold and silver to that which carried on the trade, than the prime\r\ncost of the whole amounted to. One of the most important branches of the Dutch\r\ntrade at present, consists in the carriage of French goods to other European\r\ncountries. Some part even of the French wine drank in Great Britain, is\r\nclandestinely imported from Holland and Zealand. If there was either a free\r\ntrade between France and England, or if French goods could be imported upon\r\npaying only the same duties as those of other European nations, to be drawn\r\nback upon exportation, England might have some share of a trade which is found\r\nso advantageous to Holland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, and lastly, There is no certain criterion by which we can determine on\r\nwhich side what is called the balance between any two countries lies, or which\r\nof them exports to the greatest value. National prejudice and animosity,\r\nprompted always by the private interest of particular traders, are the\r\nprinciples which generally direct our judgment upon all questions concerning\r\nit. There are two criterions, however, which have frequently been appealed to\r\nupon such occasions, the custom-house books and the course of exchange. The\r\ncustom-house books, I think, it is now generally acknowledged, are a very\r\nuncertain criterion, on account of the inaccuracy of the valuation at which the\r\ngreater part of goods are rated in them. The course of exchange is, perhaps,\r\nalmost equally so.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the exchange between two places, such as London and Paris, is at par, it\r\nis said to be a sign that the debts due from London to Paris are compensated by\r\nthose due from Paris to London. On the contrary, when a premium is paid at\r\nLondon for a bill upon Paris, it is said to be a sign that the debts due from\r\nLondon to Paris are not compensated by those due from Paris to London, but that\r\na balance in money must be sent out from the latter place; for the risk,\r\ntrouble, and expense, of exporting which, the premium is both demanded and\r\ngiven. But the ordinary state of debt and credit between those two cities must\r\nnecessarily be regulated, it is said, by the ordinary course of their dealings\r\nwith one another. When neither of them imports from from other to a greater\r\namount than it exports to that other, the debts and credits of each may\r\ncompensate one another. But when one of them imports from the other to a\r\ngreater value than it exports to that other, the former necessarily becomes\r\nindebted to the latter in a greater sum than the latter becomes indebted to it:\r\nthe debts and credits of each do not compensate one another, and money must be\r\nsent out from that place of which the debts overbalance the credits. The\r\nordinary course of exchange, therefore, being an indication of the ordinary\r\nstate of debt and credit between two places, must likewise be an indication of\r\nthe ordinary course of their exports and imports, as these necessarily regulate\r\nthat state.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the ordinary course of exchange shall be allowed to be a sufficient\r\nindication of the ordinary state of debt and credit between any two places, it\r\nwould not from thence follow, that the balance of trade was in favour of that\r\nplace which had the ordinary state of debt and credit in its favour. The\r\nordinary state of debt and credit between any two places is not always entirely\r\nregulated by the ordinary course of their dealings with one another, but is\r\noften influenced by that of the dealings of either with many other places. If\r\nit is usual, for example, for the merchants of England to pay for the goods\r\nwhich they buy of Hamburg, Dantzic, Riga, etc. by bills upon Holland, the\r\nordinary state of debt and credit between England and Holland will not be\r\nregulated entirely by the ordinary course of the dealings of those two\r\ncountries with one another, but will be influenced by that of the dealings in\r\nEngland with those other places. England may be obliged to send out every year\r\nmoney to Holland, though its annual exports to that country may exceed very\r\nmuch the annual value of its imports from thence, and though what is called the\r\nbalance of trade may be very much in favour of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the way, besides, in which the par of exchange has hitherto been computed,\r\nthe ordinary course of exchange can afford no sufficient indication that the\r\nordinary state of debt and credit is in favour of that country which seems to\r\nhave, or which is supposed to have, the ordinary course of exchange in its\r\nfavour; or, in other words, the real exchange may be, and in fact often is, so\r\nvery different from the computed one, that, from the course of the latter, no\r\ncertain conclusion can, upon many occasions, be drawn concerning that of the\r\nformer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen for a sum or money paid in England, containing, according to the standard\r\nof the English mint, a certain number of ounces of pure silver, you receive a\r\nbill for a sum of money to be paid in France, containing, according to the\r\nstandard of the French mint, an equal number of ounces of pure silver, exchange\r\nis said to be at par between England and France. When you pay more, you are\r\nsupposed to give a premium, and exchange is said to be against England, and in\r\nfavour of France. When you pay less, you are supposed to get a premium, and\r\nexchange is said to be against France, and in favour of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut, first, We cannot always judge of the value of the current money of\r\ndifferent countries by the standard of their respective mints. In some it is\r\nmore, in others it is less worn, clipt, and otherwise degenerated from that\r\nstandard. But the value of the current coin of every country, compared with\r\nthat of any other country, is in proportion, not to the quantity of pure silver\r\nwhich it ought to contain, but to that which it actually does contain. Before\r\nthe reformation of the silver coin in King William’s time, exchange\r\nbetween England and Holland, computed in the usual manner, according to the\r\nstandard of their respective mints, was five-and twenty per cent. against\r\nEngland. But the value of the current coin of England, as we learn from Mr\r\nLowndes, was at that time rather more than five-and-twenty per cent. below its\r\nstandard value. The real exchange, therefore, may even at that time have been\r\nin favour of England, notwithstanding the computed exchange was so much against\r\nit; a smaller number or ounces of pure silver, actually paid in England, may\r\nhave purchased a bill for a greater number of ounces of pure silver to be paid\r\nin Holland, and the man who was supposed to give, may in reality have got the\r\npremium. The French coin was, before the late reformation of the English gold\r\ncoin, much less wore than the English, and was perhaps two or three per cent.\r\nnearer its standard. If the computed exchange with France, therefore, was not\r\nmore than two or three per cent. against England, the real exchange might have\r\nbeen in its favour. Since the reformation of the gold coin, the exchange has\r\nbeen constantly in favour of England, and against France.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, In some countries the expense of coinage is defrayed by the\r\ngovernment; in others, it is defrayed by the private people, who carry their\r\nbullion to the mint, and the government even derives some revenue from the\r\ncoinage. In England it is defrayed by the government; and if you carry a pound\r\nweight of standard silver to the mint, you get back sixty-two shillings,\r\ncontaining a pound weight of the like standard silver. In France a duty of\r\neight per cent. is deducted for the coinage, which not only defrays the expense\r\nof it, but affords a small revenue to the government. In England, as the\r\ncoinage costs nothing, the current coin can never be much more valuable than\r\nthe quantity of bullion which it actually contains. In France, the workmanship,\r\nas you pay for it, adds to the value, in the same manner as to that of wrought\r\nplate. A sum of French money, therefore, containing an equal weight of pure\r\nsilver, is more valuable than a sum of English money containing an equal weight\r\nof pure silver, and must require more bullion, or other commodities, to\r\npurchase it. Though the current coin of the two countries, therefore, were\r\nequally near the standards of their respective mints, a sum of English money\r\ncould not well purchase a sum of French money containing an equal number of\r\nounces of pure silver, nor, consequently, a bill upon France for such a sum.\r\nIf, for such a bill, no more additional money was paid than what was sufficient\r\nto compensate the expense of the French coinage, the real exchange might be at\r\npar between the two countries; their debts and credits might mutually\r\ncompensate one another, while the computed exchange was considerably in favour\r\nof France. If less than this was paid, the real exchange might be in favour of\r\nEngland, while the computed was in favour of France.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, and lastly, In some places, as at Amsterdam, Hamburg, Venice, etc.\r\nforeign bills of exchange are paid in what they call bank money; while in\r\nothers, as at London, Lisbon, Antwerp, Leghorn, etc. they are paid in the\r\ncommon currency of the country. What is called bank money, is always of more\r\nvalue than the same nominal sum of common currency. A thousand guilders in the\r\nbank of Amsterdam, for example, are of more value than a thousand guilders of\r\nAmsterdam currency. The difference between them is called the agio of the bank,\r\nwhich at Amsterdam is generally about five per cent. Supposing the current\r\nmoney of the two countries equally near to the standard of their respective\r\nmints, and that the one pays foreign bills in this common currency, while the\r\nother pays them in bank money, it is evident that the computed exchange may be\r\nin favour of that which pays in bank money, though the real exchange should be\r\nin favour of that which pays in current money; for the same reason that the\r\ncomputed exchange may be in favour of that which pays in better money, or in\r\nmoney nearer to its own standard, though the real exchange should be in favour\r\nof that which pays in worse. The computed exchange, before the late reformation\r\nof the gold coin, was generally against London with Amsterdam, Hamburg, Venice,\r\nand, I believe, with all other places which pay in what is called bank money.\r\nIt will by no means follow, however, that the real exchange was against it.\r\nSince the reformation of the gold coin, it has been in favour of London, even\r\nwith those places. The computed exchange has generally been in favour of London\r\nwith Lisbon, Antwerp, Leghorn, and, if you except France, I believe with most\r\nother parts of Europe that pay in common currency; and it is not improbable\r\nthat the real exchange was so too.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDigression concerning Banks of Deposit, particularly concerning that of\r\nAmsterdam.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe currency of a great state, such as France or England, generally consists\r\nalmost entirely of its own coin. Should this currency, therefore, be at any\r\ntime worn, clipt, or otherwise degraded below its standard value, the state, by\r\na reformation of its coin, can effectually re-establish its currency. But the\r\ncurrency of a small state, such as Genoa or Hamburg, can seldom consist\r\naltogether in its own coin, but must be made up, in a great measure, of the\r\ncoins of all the neighbouring states with which its inhabitants have a\r\ncontinual intercourse. Such a state, therefore, by reforming its coin, will not\r\nalways be able to reform its currency. If foreign bills of exchange are paid in\r\nthis currency, the uncertain value of any sum, of what is in its own nature so\r\nuncertain, must render the exchange always very much against such a state, its\r\ncurrency being in all foreign states necessarily valued even below what it is\r\nworth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to remedy the inconvenience to which this disadvantageous exchange\r\nmust have subjected their merchants, such small states, when they began to\r\nattend to the interest of trade, have frequently enacted that foreign bills of\r\nexchange of a certain value should be paid, not in common currency, but by an\r\norder upon, or by a transfer in the books of a certain bank, established upon\r\nthe credit, and under the protection of the state, this bank being always\r\nobliged to pay, in good and true money, exactly according to the standard of\r\nthe state. The banks of Venice, Genoa, Amsterdam, Hamburg, and Nuremberg, seem\r\nto have been all originally established with this view, though some of them may\r\nhave afterwards been made subservient to other purposes. The money of such\r\nbanks, being better than the common currency of the country, necessarily bore\r\nan agio, which was greater or smaller, according as the currency was supposed\r\nto be more or less degraded below the standard of the state. The agio of the\r\nbank of Hamburg, for example, which is said to be commonly about fourteen per\r\ncent. is the supposed difference between the good standard money of the state,\r\nand the clipt, worn, and diminished currency, poured into it from all the\r\nneighbouring states.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore 1609, the great quantity of clipt and worn foreign coin which the\r\nextensive trade of Amsterdam brought from all parts of Europe, reduced the\r\nvalue of its currency about nine per cent. below that of good money fresh from\r\nthe mint. Such money no sooner appeared, than it was melted down or carried\r\naway, as it always is in such circumstances. The merchants, with plenty of\r\ncurrency, could not always find a sufficient quantity of good money to pay\r\ntheir bills of exchange; and the value of those bills, in spite of several\r\nregulations which were made to prevent it, became in a great measure uncertain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to remedy these inconveniencies, a bank was established in 1609, under\r\nthe guarantee of the city. This bank received both foreign coin, and the light\r\nand worn coin of the country, at its real intrinsic value in the good standard\r\nmoney of the country, deducting only so much as was necessary for defraying the\r\nexpense of coinage and the other necessary expense of management. For the value\r\nwhich remained after this small deduction was made, it gave a credit in its\r\nbooks. This credit was called bank money, which, as it represented money\r\nexactly according to the standard of the mint, was always of the same real\r\nvalue, and intrinsically worth more than current money. It was at the same time\r\nenacted, that all bills drawn upon or negotiated at Amsterdam, of the value of\r\n600 guilders and upwards, should be paid in bank money, which at once took away\r\nall uncertainty in the value of those bills. Every merchant, in consequence of\r\nthis regulation, was obliged to keep an account with the bank, in order to pay\r\nhis foreign bills of exchange, which necessarily occasioned a certain demand\r\nfor bank money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBank money, over and above both its intrinsic superiority to currency, and the\r\nadditional value which this demand necessarily gives it, has likewise some\r\nother advantages, It is secure from fire, robbery, and other accidents; the\r\ncity of Amsterdam is bound for it; it can be paid away by a simple transfer,\r\nwithout the trouble of counting, or the risk of transporting it from one place\r\nto another. In consequence of those different advantages, it seems from the\r\nbeginning to have borne an agio; and it is generally believed that all the\r\nmoney originally deposited in the bank, was allowed to remain there, nobody\r\ncaring to demand payment of a debt which he could sell for a premium in the\r\nmarket. By demanding payment of the bank, the owner of a bank credit would lose\r\nthis premium. As a shilling fresh from the mint will buy no more goods in the\r\nmarket than one of our common worn shillings, so the good and true money which\r\nmight be brought from the coffers of the bank into those of a private person,\r\nbeing mixed and confounded with the common currency of the country, would be of\r\nno more value than that currency, from which it could no longer be readily\r\ndistinguished. While it remained in the coffers of the bank, its superiority\r\nwas known and ascertained. When it had come into those of a private person, its\r\nsuperiority could not well be ascertained without more trouble than perhaps the\r\ndifference was worth. By being brought from the coffers of the bank, besides,\r\nit lost all the other advantages of bank money; its security, its easy and safe\r\ntransferability, its use in paying foreign bills of exchange. Over and above\r\nall this, it could not be brought from those coffers, as will appear by and by,\r\nwithout previously paying for the keeping.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose deposits of coin, or those deposits which the bank was bound to restore\r\nin coin, constituted the original capital of the bank, or the whole value of\r\nwhat was represented by what is called bank money. At present they are supposed\r\nto constitute but a very small part of it. In order to facilitate the trade in\r\nbullion, the bank has been for these many years in the practice of giving\r\ncredit in its books, upon deposits of gold and silver bullion. This credit is\r\ngenerally about five per cent. below the mint price of such bullion. The bank\r\ngrants at the same time what is called a recipice or receipt, entitling the\r\nperson who makes the deposit, or the bearer, to take out the bullion again at\r\nany time within six months, upon transferring to the bank a quantity of bank\r\nmoney equal to that for which credit had been given in its books when the\r\ndeposit was made, and upon paying one-fourth per cent. for the keeping, if the\r\ndeposit was in silver; and one-half per cent. if it was in gold; but at the\r\nsame time declaring, that in default of such payment, and upon the expiration\r\nof this term, the deposit should belong to the bank, at the price at which it\r\nhad been received, or for which credit had been given in the transfer books.\r\nWhat is thus paid for the keeping of the deposit may be considered as a sort of\r\nwarehouse rent; and why this warehouse rent should be so much dearer for gold\r\nthan for silver, several different reasons have been assigned. The fineness of\r\ngold, it has been said, is more difficult to be ascertained than that of\r\nsilver. Frauds are more easily practised, and occasion a greater loss in the\r\nmost precious metal. Silver, besides, being the standard metal, the state, it\r\nhas been said, wishes to encourage more the making of deposits of silver than\r\nthose of gold.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDeposits of bullion are most commonly made when the price is somewhat lower\r\nthan ordinary, and they are taken out again when it happens to rise. In Holland\r\nthe market price of bullion is generally above the mint price, for the same\r\nreason that it was so in England before the late reformation of the gold coin.\r\nThe difference is said to be commonly from about six to sixteen stivers upon\r\nthe mark, or eight ounces of silver, of eleven parts of fine and one part\r\nalloy. The bank price, or the credit which the bank gives for the deposits of\r\nsuch silver (when made in foreign coin, of which the fineness is well known and\r\nascertained, such as Mexico dollars), is twenty-two guilders the mark: the mint\r\nprice is about twenty-three guilders, and the market price is from twenty-three\r\nguilders six, to twenty-three guilders sixteen stivers, or from two to three\r\nper cent. above the mint price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe following are the prices at which the bank of Amsterdam at present\r\n{September 1775} receives bullion and coin of different kinds:\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n SILVER\r\n Mexico dollars …………….. 22 Guilders / mark\r\n French crowns ……………… 22\r\n English silver coin…………. 22\r\n Mexico dollars, new coin…….. 21 10\r\n Ducatoons………………….. 3 0\r\n Rix-dollars………………… 2 8\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nBar silver, containing 11-12ths fine silver, 21 Guilders / mark, and in this\r\nproportion down to 1-4th fine, on which 5 guilders are given. Fine\r\nbars,…………….. 28 Guilders / mark.\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n GOLD\r\n Portugal coin…………….. 310 Guilders / mark\r\n Guineas………………….. 310\r\n Louis d’ors, new………….. 310\r\n Ditto old………….. 300\r\n New ducats……………….. 4 19 8 per ducat\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nBar or ingot gold is received in proportion to its fineness, compared with the\r\nabove foreign gold coin. Upon fine bars the bank gives 340 per mark. In\r\ngeneral, however, something more is given upon coin of a known fineness, than\r\nupon gold and silver bars, of which the fineness cannot be ascertained but by a\r\nprocess of melting and assaying.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportions between the bank price, the mint price, and the market price of\r\ngold bullion, are nearly the same. A person can generally sell his receipt for\r\nthe difference between the mint price of bullion and the market price. A\r\nreceipt for bullion is almost always worth something, and it very seldom\r\nhappens, therefore, that anybody suffers his receipts to expire, or allows his\r\nbullion to fall to the bank at the price at which it had been received, either\r\nby not taking it out before the end of the six months, or by neglecting to pay\r\none fourth or one half per cent. in order to obtain a new receipt for another\r\nsix months. This, however, though it happens seldom, is said to happen\r\nsometimes, and more frequently with regard to gold than with regard to silver,\r\non account of the higher warehouse rent which is paid for the keeping of the\r\nmore precious metal.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe person who, by making a deposit of bullion, obtains both a bank credit and\r\na receipt, pays his bills of exchange as they become due, with his bank credit;\r\nand either sells or keeps his receipt, according as he judges that the price of\r\nbullion is likely to rise or to fall. The receipt and the bank credit seldom\r\nkeep long together, and there is no occasion that they should. The person who\r\nhas a receipt, and who wants to take out bullion, finds always plenty of bank\r\ncredits, or bank money, to buy at the ordinary price, and the person who has\r\nbank money, and wants to take out bullion, finds receipts always in equal\r\nabundance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe owners of bank credits, and the holders of receipts, constitute two\r\ndifferent sorts of creditors against the bank. The holder of a receipt cannot\r\ndraw out the bullion for which it is granted, without re-assigning to the bank\r\na sum of bank money equal to the price at which the bullion had been received.\r\nIf he has no bank money of his own, he must purchase it of those who have it.\r\nThe owner of bank money cannot draw out bullion, without producing to the bank\r\nreceipts for the quantity which he wants. If he has none of his own, he must\r\nbuy them of those who have them. The holder of a receipt, when he purchases\r\nbank money, purchases the power of taking out a quantity of bullion, of which\r\nthe mint price is five per cent. above the bank price. The agio of five per\r\ncent. therefore, which he commonly pays for it, is paid, not for an imaginary,\r\nbut for a real value. The owner of bank money, when he purchases a receipt,\r\npurchases the power of taking out a quantity of bullion, of which the market\r\nprice is commonly from two to three per cent. above the mint price. The price\r\nwhich he pays for it, therefore, is paid likewise for a real value. The price\r\nof the receipt, and the price of the bank money, compound or make up between\r\nthem the full value or price of the bullion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUpon deposits of the coin current in the country, the bank grant receipts\r\nlikewise, as well as bank credits; but those receipts are frequently of no\r\nvalue and will bring no price in the market. Upon ducatoons, for example, which\r\nin the currency pass for three guilders three stivers each, the bank gives a\r\ncredit of three guilders only, or five per cent. below their current value. It\r\ngrants a receipt likewise, entitling the bearer to take out the number of\r\nducatoons deposited at any time within six months, upon paying one fourth per\r\ncent. for the keeping. This receipt will frequently bring no price in the\r\nmarket. Three guilders, bank money, generally sell in the market for three\r\nguilders three stivers, the full value of the ducatoons, if they were taken out\r\nof the bank; and before they can be taken out, one-fourth per cent. must be\r\npaid for the keeping, which would be mere loss to the holder of the receipt. If\r\nthe agio of the bank, however, should at any time fall to three per cent. such\r\nreceipts might bring some price in the market, and might sell for one and\r\nthree-fourths per cent. But the agio of the bank being now generally about five\r\nper cent. such receipts are frequently allowed to expire, or, as they express\r\nit, to fall to the bank. The receipts which are given for deposits of gold\r\nducats fall to it yet more frequently, because a higher warehouse rent, or one\r\nhalf per cent. must be paid for the keeping of them, before they can be taken\r\nout again. The five per cent. which the bank gains, when deposits either of\r\ncoin or bullion are allowed to fall to it, maybe considered as the warehouse\r\nrent for the perpetual keeping of such deposits.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sum of bank money, for which the receipts are expired, must be very\r\nconsiderable. It must comprehend the whole original capital of the bank, which,\r\nit is generally supposed, has been allowed to remain there from the time it was\r\nfirst deposited, nobody caring either to renew his receipt, or to take out his\r\ndeposit, as, for the reasons already assigned, neither the one nor the other\r\ncould be done without loss. But whatever may be the amount of this sum, the\r\nproportion which it bears to the whole mass of bank money is supposed to be\r\nvery small. The bank of Amsterdam has, for these many years past, been the\r\ngreat warehouse of Europe for bullion, for which the receipts are very seldom\r\nallowed to expire, or, as they express it, to fall to the bank. The far greater\r\npart of the bank money, or of the credits upon the books of the bank, is\r\nsupposed to have been created, for these many years past, by such deposits,\r\nwhich the dealers in bullion are continually both making and withdrawing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo demand can be made upon the bank, but by means of a recipice or receipt. The\r\nsmaller mass of bank money, for which the receipts are expired, is mixed and\r\nconfounded with the much greater mass for which they are still in force; so\r\nthat, though there may be a considerable sum of bank money, for which there are\r\nno receipts, there is no specific sum or portion of it which may not at any\r\ntime be demanded by one. The bank cannot be debtor to two persons for the same\r\nthing; and the owner of bank money who has no receipt, cannot demand payment of\r\nthe bank till he buys one. In ordinary and quiet times, he can find no\r\ndifficulty in getting one to buy at the market price, which generally\r\ncorresponds with the price at which he can sell the coin or bullion it entitles\r\nhim to take out of the bank.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt might be otherwise during a public calamity; an invasion, for example, such\r\nas that of the French in 1672. The owners of bank money being then all eager to\r\ndraw it out of the bank, in order to have it in their own keeping, the demand\r\nfor receipts might raise their price to an exorbitant height. The holders of\r\nthem might form extravagant expectations, and, instead of two or three per\r\ncent. demand half the bank money for which credit had been given upon the\r\ndeposits that the receipts had respectively been granted for. The enemy,\r\ninformed of the constitution of the bank, might even buy them up, in order to\r\nprevent the carrying away of the treasure. In such emergencies, the bank, it is\r\nsupposed, would break through its ordinary rule of making payment only to the\r\nholders of receipts. The holders of receipts, who had no bank money, must have\r\nreceived within two or three per cent. of the value of the deposit for which\r\ntheir respective receipts had been granted. The bank, therefore, it is said,\r\nwould in this case make no scruple of paying, either with money or bullion, the\r\nfull value of what the owners of bank money, who could get no receipts, were\r\ncredited for in its books; paying, at the same time, two or three per cent. to\r\nsuch holders of receipts as had no bank money, that being the whole value\r\nwhich, in this state of things, could justly be supposed due to them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven in ordinary and quiet times, it is the interest of the holders of receipts\r\nto depress the agio, in order either to buy bank money (and consequently the\r\nbullion which their receipts would then enable them to take out of the bank )\r\nso much cheaper, or to sell their receipts to those who have bank money, and\r\nwho want to take out bullion, so much dearer; the price of a receipt being\r\ngenerally equal to the difference between the market price of bank money and\r\nthat of the coin or bullion for which the receipt had been granted. It is the\r\ninterest of the owners of bank money, on the contrary, to raise the agio, in\r\norder either to sell their bank money so much dearer, or to buy a receipt so\r\nmuch cheaper. To prevent the stock-jobbing tricks which those opposite\r\ninterests might sometimes occasion, the bank has of late years come to the\r\nresolution, to sell at all times bank money for currency at five per cent.\r\nagio, and to buy it in again at four per cent. agio. In consequence of this\r\nresolution, the agio can never either rise above five, or sink below four per\r\ncent.; and the proportion between the market price of bank and that of current\r\nmoney is kept at all times very near the proportion between their intrinsic\r\nvalues. Before this resolution was taken, the market price of bank money used\r\nsometimes to rise so high as nine per cent. agio, and sometimes to sink so low\r\nas par, according as opposite interests happened to influence the market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bank of Amsterdam professes to lend out no part of what is deposited with\r\nit, but for every guilder for which it gives credit in its books, to keep in\r\nits repositories the value of a guilder either in money or bullion. That it\r\nkeeps in its repositories all the money or bullion for which there are receipts\r\nin force for which it is at all times liable to be called upon, and which in\r\nreality is continually going from it, and returning to it again, cannot well be\r\ndoubted. But whether it does so likewise with regard to that part of its\r\ncapital for which the receipts are long ago expired, for which, in ordinary and\r\nquiet times, it cannot be called upon, and which, in reality, is very likely to\r\nremain with it for ever, or as long as the states of the United Provinces\r\nsubsist, may perhaps appear more uncertain. At Amsterdam, however, no point of\r\nfaith is better established than that, for every guilder circulated as bank\r\nmoney, there is a correspondent guilder in gold or silver to be found in the\r\ntreasures of the bank. The city is guarantee that it should be so. The bank is\r\nunder the direction of the four reigning burgomasters who are changed every\r\nyear. Each new set of burgomasters visits the treasure, compares it with the\r\nbooks, receives it upon oath, and delivers it over, with the same awful\r\nsolemnity to the set which succeeds; and in that sober and religious country,\r\noaths are not yet disregarded. A rotation of this kind seems alone a sufficient\r\nsecurity against any practices which cannot be avowed. Amidst all the\r\nrevolutions which faction has ever occasioned in the government of Amsterdam,\r\nthe prevailing party has at no time accused their predecessors of infidelity in\r\nthe administration of the bank. No accusation could have affected more deeply\r\nthe reputation and fortune of the disgraced party; and if such an accusation\r\ncould have been supported, we may be assured that it would have been brought.\r\nIn 1672, when the French king was at Utrecht, the bank of Amsterdam paid so\r\nreadily, as left no doubt of the fidelity with which it had observed its\r\nengagements. Some of the pieces which were then brought from its repositories,\r\nappeared to have been scorched with the fire which happened in the town-house\r\nsoon after the bank was established. Those pieces, therefore, must have lain\r\nthere from that time.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat may be the amount of the treasure in the bank, is a question which has\r\nlong employed the speculations of the curious. Nothing but conjecture can be\r\noffered concerning it. It is generally reckoned, that there are about 2000\r\npeople who keep accounts with the bank; and allowing them to have, one with\r\nanother, the value of £1500 sterling lying upon their respective accounts (a\r\nvery large allowance), the whole quantity of bank money, and consequently of\r\ntreasure in the bank, will amount to about £3,000,000 sterling, or, at eleven\r\nguilders the pound sterling, 33,000,000 of guilders; a great sum, and\r\nsufficient to carry on a very extensive circulation, but vastly below the\r\nextravagant ideas which some people have formed of this treasure.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe city of Amsterdam derives a considerable revenue from the bank. Besides\r\nwhat may be called the warehouse rent above mentioned, each person, upon first\r\nopening an account with the bank, pays a fee of ten guilders; and for every new\r\naccount, three guilders three stivers; for every transfer, two stivers; and if\r\nthe transfer is for less than 300 guilders, six stivers, in order to discourage\r\nthe multiplicity of small transactions. The person who neglects to balance his\r\naccount twice in the year, forfeits twenty-five guilders. The person who orders\r\na transfer for more than is upon his account, is obliged to pay three per cent.\r\nfor the sum overdrawn, and his order is set aside into the bargain. The bank is\r\nsupposed, too, to make a considerable profit by the sale of the foreign coin or\r\nbullion which sometimes falls to it by the expiring of receipts, and which is\r\nalways kept till it can be sold with advantage. It makes a profit, likewise, by\r\nselling bank money at five per cent. agio, and buying it in at four. These\r\ndifferent emoluments amount to a good deal more than what is necessary for\r\npaying the salaries of officers, and defraying the expense of management. What\r\nis paid for the keeping of bullion upon receipts, is alone supposed to amount\r\nto a neat annual revenue of between 150,000 and 200,000 guilders. Public\r\nutility, however, and not revenue, was the original object of this institution.\r\nIts object was to relieve the merchants from the inconvenience of a\r\ndisadvantageous exchange. The revenue which has arisen from it was unforeseen,\r\nand may be considered as accidental. But it is now time to return from this\r\nlong digression, into which I have been insensibly led, in endeavouring to\r\nexplain the reasons why the exchange between the countries which pay in what is\r\ncalled bank money, and those which pay in common currency, should generally\r\nappear to be in favour of the former, and against the latter. The former pay in\r\na species of money, of which the intrinsic value is always the same, and\r\nexactly agreeable to the standard of their respective mints; the latter is a\r\nspecies of money, of which the intrinsic value is continually varying, and is\r\nalmost always more or less below that standard.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II.—Of the Unreasonableness of those extraordinary Restraints,\r\nupon other Principles.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nIn the foregoing part of this chapter, I have endeavoured to show, even upon\r\nthe principles of the commercial system, how unnecessary it is to lay\r\nextraordinary restraints upon the importation of goods from those countries\r\nwith which the balance of trade is supposed to be disadvantageous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNothing, however, can be more absurd than this whole doctrine of the balance of\r\ntrade, upon which, not only these restraints, but almost all the other\r\nregulations of commerce, are founded. When two places trade with one another,\r\nthis doctrine supposes that, if the balance be even, neither of them either\r\nloses or gains; but if it leans in any degree to one side, that one of them\r\nloses, and the other gains, in proportion to its declension from the exact\r\nequilibrium. Both suppositions are false. A trade, which is forced by means of\r\nbounties and monopolies, may be, and commonly is, disadvantageous to the\r\ncountry in whose favour it is meant to be established, as I shall endeavour to\r\nshow hereafter. But that trade which, without force or constraint, is naturally\r\nand regularly carried on between any two places, is always advantageous, though\r\nnot always equally so, to both.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy advantage or gain, I understand, not the increase of the quantity of gold\r\nand silver, but that of the exchangeable value of the annual produce of the\r\nland and labour of the country, or the increase of the annual revenue of its\r\ninhabitants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the balance be even, and if the trade between the two places consist\r\naltogether in the exchange of their native commodities, they will, upon most\r\noccasions, not only both gain, but they will gain equally, or very nearly\r\nequally; each will, in this case, afford a market for a part of the surplus\r\nproduce of the other; each will replace a capital which had been employed in\r\nraising and preparing for the market this part of the surplus produce of the\r\nother, and which had been distributed among, and given revenue and maintenance\r\nto, a certain number of its inhabitants. Some part of the inhabitants of each,\r\ntherefore, will directly derive their revenue and maintenance from the other.\r\nAs the commodities exchanged, too, are supposed to be of equal value, so the\r\ntwo capitals employed in the trade will, upon most occasions, be equal, or very\r\nnearly equal; and both being employed in raising the native commodities of the\r\ntwo countries, the revenue and maintenance which their distribution will afford\r\nto the inhabitants of each will be equal, or very nearly equal. This revenue\r\nand maintenance, thus mutually afforded, will be greater or smaller, in\r\nproportion to the extent of their dealings. If these should annually amount to\r\n£100,000, for example, or to £1,000,000, on each side, each of them will afford\r\nan annual revenue, in the one case, of £100,000, and, in the other, of\r\n£1,000,000, to the inhabitants of the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf their trade should be of such a nature, that one of them exported to the\r\nother nothing but native commodities, while the returns of that other consisted\r\naltogether in foreign goods; the balance, in this case, would still be supposed\r\neven, commodities being paid for with commodities. They would, in this case\r\ntoo, both gain, but they would not gain equally; and the inhabitants of the\r\ncountry which exported nothing but native commodities, would derive the\r\ngreatest revenue from the trade. If England, for example, should import from\r\nFrance nothing but the native commodities of that country, and not having such\r\ncommodities of its own as were in demand there, should annually repay them by\r\nsending thither a large quantity of foreign goods, tobacco, we shall suppose,\r\nand East India goods; this trade, though it would give some revenue to the\r\ninhabitants of both countries, would give more to those of France than to those\r\nof England. The whole French capital annually employed in it would annually be\r\ndistributed among the people of France; but that part of the English capital\r\nonly, which was employed in producing the English commodities with which those\r\nforeign goods were purchased, would be annually distributed among the people of\r\nEngland. The greater part of it would replace the capitals which had been\r\nemployed in Virginia, Indostan, and China, and which had given revenue and\r\nmaintenance to the inhabitants of those distant countries. If the capitals were\r\nequal, or nearly equal, therefore, this employment of the French capital would\r\naugment much more the revenue of the people of France, than that of the English\r\ncapital would the revenue of the people of England. France would, in this case,\r\ncarry on a direct foreign trade of consumption with England; whereas England\r\nwould carry on a round-about trade of the same kind with France. The different\r\neffects of a capital employed in the direct, and of one employed in the\r\nround-about foreign trade of consumption, have already been fully explained.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere is not, probably, between any two countries, a trade which consists\r\naltogether in the exchange, either of native commodities on both sides, or of\r\nnative commodities on one side, and of foreign goods on the other. Almost all\r\ncountries exchange with one another, partly native and partly foreign goods.\r\nThat country, however, in whose cargoes there is the greatest proportion of\r\nnative, and the least of foreign goods, will always be the principal gainer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf it was not with tobacco and East India goods, but with gold and silver, that\r\nEngland paid for the commodities annually imported from France, the balance, in\r\nthis case, would be supposed uneven, commodities not being paid for with\r\ncommodities, but with gold and silver. The trade, however, would in this case,\r\nas in the foregoing, give some revenue to the inhabitants of both countries,\r\nbut more to those of France than to those of England. It would give some\r\nrevenue to those of England. The capital which had been employed in producing\r\nthe English goods that purchased this gold and silver, the capital which had\r\nbeen distributed among, and given revenue to, certain inhabitants of England,\r\nwould thereby be replaced, and enabled to continue that employment. The whole\r\ncapital of England would no more be diminished by this exportation of gold and\r\nsilver, than by the exportation of an equal value of any other goods. On the\r\ncontrary, it would, in most cases, be augmented. No goods are sent abroad but\r\nthose for which the demand is supposed to be greater abroad than at home, and\r\nof which the returns, consequently, it is expected, will be of more value at\r\nhome than the commodities exported. If the tobacco which in England is worth\r\nonly £100,000, when sent to France, will purchase wine which is in England\r\nworth £110,000, the exchange will augment the capital of England by £10,000. If\r\n£100,000 of English gold, in the same manner, purchase French wine, which in\r\nEngland is worth £110,000, this exchange will equally augment the capital of\r\nEngland by £10,000. As a merchant, who has £110,000 worth of wine in his\r\ncellar, is a richer man than he who has only £100,000 worth of tobacco in his\r\nwarehouse, so is he likewise a richer man than he who has only £100,000 worth\r\nof gold in his coffers. He can put into motion a greater quantity of industry,\r\nand give revenue, maintenance, and employment, to a greater number of people,\r\nthan either of the other two. But the capital of the country is equal to the\r\ncapital of all its different inhabitants; and the quantity of industry which\r\ncan be annually maintained in it is equal to what all those different capitals\r\ncan maintain. Both the capital of the country, therefore, and the quantity of\r\nindustry which can be annually maintained in it, must generally be augmented by\r\nthis exchange. It would, indeed, be more advantageous for England that it could\r\npurchase the wines of France with its own hardware and broad cloth, than with\r\neither the tobacco of Virginia, or the gold and silver of Brazil and Peru. A\r\ndirect foreign trade of consumption is always more advantageous than a\r\nround-about one. But a round-about foreign trade of consumption, which is\r\ncarried on with gold and silver, does not seem to be less advantageous than any\r\nother equally round-about one. Neither is a country which has no mines, more\r\nlikely to be exhausted of gold and silver by this annual exportation of those\r\nmetals, than one which does not grow tobacco by the like annual exportation of\r\nthat plant. As a country which has wherewithal to buy tobacco will never be\r\nlong in want of it, so neither will one be long in want of gold and silver\r\nwhich has wherewithal to purchase those metals.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is a losing trade, it is said, which a workman carries on with the alehouse;\r\nand the trade which a manufacturing nation would naturally carry on with a wine\r\ncountry, may be considered as a trade of the same nature. I answer, that the\r\ntrade with the alehouse is not necessarily a losing trade. In its own nature it\r\nis just as advantageous as any other, though, perhaps, somewhat more liable to\r\nbe abused. The employment of a brewer, and even that of a retailer of fermented\r\nliquors, are as necessary divisions of labour as any other. It will generally\r\nbe more advantageous for a workman to buy of the brewer the quantity he has\r\noccasion for, than to brew it himself; and if he is a poor workman, it will\r\ngenerally be more advantageous for him to buy it by little and little of the\r\nretailer, than a large quantity of the brewer. He may no doubt buy too much of\r\neither, as he may of any other dealers in his neighbourhood; of the butcher, if\r\nhe is a glutton; or of the draper, if he affects to be a beau among his\r\ncompanions. It is advantageous to the great body of workmen, notwithstanding,\r\nthat all these trades should be free, though this freedom may be abused in all\r\nof them, and is more likely to be so, perhaps, in some than in others. Though\r\nindividuals, besides, may sometimes ruin their fortunes by an excessive\r\nconsumption of fermented liquors, there seems to be no risk that a nation\r\nshould do so. Though in every country there are many people who spend upon such\r\nliquors more than they can afford, there are always many more who spend less.\r\nIt deserves to be remarked, too, that if we consult experience, the cheapness\r\nof wine seems to be a cause, not of drunkenness, but of sobriety. The\r\ninhabitants of the wine countries are in general the soberest people of Europe;\r\nwitness the Spaniards, the Italians, and the inhabitants of the southern\r\nprovinces of France. People are seldom guilty of excess in what is their daily\r\nfare. Nobody affects the character of liberality and good fellowship, by being\r\nprofuse of a liquor which is as cheap as small beer. On the contrary, in the\r\ncountries which, either from excessive heat or cold, produce no grapes, and\r\nwhere wine consequently is dear and a rarity, drunkenness is a common vice, as\r\namong the northern nations, and all those who live between the tropics, the\r\nnegroes, for example on the coast of Guinea. When a French regiment comes from\r\nsome of the northern provinces of France, where wine is somewhat dear, to be\r\nquartered in the southern, where it is very cheap, the soldiers, I have\r\nfrequently heard it observed, are at first debauched by the cheapness and\r\nnovelty of good wine; but after a few months residence, the greater part of\r\nthem become as sober as the rest of the inhabitants. Were the duties upon\r\nforeign wines, and the excises upon malt, beer, and ale, to be taken away all\r\nat once, it might, in the same manner, occasion in Great Britain a pretty\r\ngeneral and temporary drunkenness among the middling and inferior ranks of\r\npeople, which would probably be soon followed by a permanent and almost\r\nuniversal sobriety. At present, drunkenness is by no means the vice of people\r\nof fashion, or of those who can easily afford the most expensive liquors. A\r\ngentleman drunk with ale has scarce ever been seen among us. The restraints\r\nupon the wine trade in Great Britain, besides, do not so much seem calculated\r\nto hinder the people from going, if I may say so, to the alehouse, as from\r\ngoing where they can buy the best and cheapest liquor. They favour the wine\r\ntrade of Portugal, and discourage that of France. The Portuguese, it is said,\r\nindeed, are better customers for our manufactures than the French, and should\r\ntherefore be encouraged in preference to them. As they give us their custom, it\r\nis pretended we should give them ours. The sneaking arts of underling tradesmen\r\nare thus erected into political maxims for the conduct of a great empire; for\r\nit is the most underling tradesmen only who make it a rule to employ chiefly\r\ntheir own customers. A great trader purchases his goods always where they are\r\ncheapest and best, without regard to any little interest of this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy such maxims as these, however, nations have been taught that their interest\r\nconsisted in beggaring all their neighbours. Each nation has been made to look\r\nwith an invidious eye upon the prosperity of all the nations with which it\r\ntrades, and to consider their gain as its own loss. Commerce, which ought\r\nnaturally to be, among nations as among individuals, a bond of union and\r\nfriendship, has become the most fertile source of discord and animosity. The\r\ncapricious ambition of kings and ministers has not, during the present and the\r\npreceding century, been more fatal to the repose of Europe, than the\r\nimpertinent jealousy of merchants and manufacturers. The violence and injustice\r\nof the rulers of mankind is an ancient evil, for which, I am afraid, the nature\r\nof human affairs can scarce admit of a remedy: but the mean rapacity, the\r\nmonopolizing spirit, of merchants and manufacturers, who neither are, nor ought\r\nto be, the rulers of mankind, though it cannot, perhaps, be corrected, may very\r\neasily be prevented from disturbing the tranquillity of anybody but themselves.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat it was the spirit of monopoly which originally both invented and\r\npropagated this doctrine, cannot be doubted and they who first taught it, were\r\nby no means such fools as they who believed it. In every country it always is,\r\nand must be, the interest of the great body of the people, to buy whatever they\r\nwant of those who sell it cheapest. The proposition is so very manifest, that\r\nit seems ridiculous to take any pains to prove it; nor could it ever have been\r\ncalled in question, had not the interested sophistry of merchants and\r\nmanufacturers confounded the common sense of mankind. Their interest is, in\r\nthis respect, directly opposite to that of the great body of the people. As it\r\nis the interest of the freemen of a corporation to hinder the rest of the\r\ninhabitants from employing any workmen but themselves; so it is the interest of\r\nthe merchants and manufacturers of every country to secure to themselves the\r\nmonopoly of the home market. Hence, in Great Britain, and in most other\r\nEuropean countries, the extraordinary duties upon almost all goods imported by\r\nalien merchants. Hence the high duties and prohibitions upon all those foreign\r\nmanufactures which can come into competition with our own. Hence, too, the\r\nextraordinary restraints upon the importation of almost all sorts of goods from\r\nthose countries with which the balance of trade is supposed to be\r\ndisadvantageous; that is, from those against whom national animosity happens ta\r\nbe most violently inflamed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wealth of neighbouring nations, however, though dangerous in war and\r\npolitics, is certainly advantageous in trade. In a state of hostility, it may\r\nenable our enemies to maintain fleets and armies superior to our own; but in a\r\nstate of peace and commerce it must likewise enable them to exchange with us to\r\na greater value, and to afford a better market, either for the immediate\r\nproduce of our own industry, or for whatever is purchased with that produce. As\r\na rich man is likely to be a better customer to the industrious people in his\r\nneighbourhood, than a poor, so is likewise a rich nation. A rich man, indeed,\r\nwho is himself a manufacturer, is a very dangerous neighbour to all those who\r\ndeal in the same way. All the rest of the neighbourhood, however, by far the\r\ngreatest number, profit by the good market which his expense affords them. They\r\neven profit by his underselling the poorer workmen who deal in the same way\r\nwith him. The manufacturers of a rich nation, in the same manner, may no doubt\r\nbe very dangerous rivals to those of their neighbours. This very competition,\r\nhowever, is advantageous to the great body of the people, who profit greatly,\r\nbesides, by the good market which the great expense of such a nation affords\r\nthem in every other way. Private people, who want to make a fortune, never\r\nthink of retiring to the remote and poor provinces of the country, but resort\r\neither to the capital, or to some of the great commercial towns. They know,\r\nthat where little wealth circulates, there is little to be got; but that where\r\na great deal is in motion, some share of it may fall to them. The same maxim\r\nwhich would in this manner direct the common sense of one, or ten, or twenty\r\nindividuals, should regulate the judgment of one, or ten, or twenty millions,\r\nand should make a whole nation regard the riches of its neighbours, as a\r\nprobable cause and occasion for itself to acquire riches. A nation that would\r\nenrich itself by foreign trade, is certainly most likely to do so, when its\r\nneighbours are all rich, industrious and commercial nations. A great nation,\r\nsurrounded on all sides by wandering savages and poor barbarians, might, no\r\ndoubt, acquire riches by the cultivation of its own lands, and by its own\r\ninterior commerce, but not by foreign trade. It seems to have been in this\r\nmanner that the ancient Egyptians and the modern Chinese acquired their great\r\nwealth. The ancient Egyptians, it is said, neglected foreign commerce, and the\r\nmodern Chinese, it is known, hold it in the utmost contempt, and scarce deign\r\nto afford it the decent protection of the laws. The modern maxims of foreign\r\ncommerce, by aiming at the impoverishment of all our neighbours, so far as they\r\nare capable of producing their intended effect, tend to render that very\r\ncommerce insignificant and contemptible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in consequence of these maxims, that the commerce between France and\r\nEngland has, in both countries, been subjected to so many discouragements and\r\nrestraints. If those two countries, however, were to consider their real\r\ninterest, without either mercantile jealousy or national animosity, the\r\ncommerce of France might be more advantageous to Great Britain than that of any\r\nother country, and, for the same reason, that of Great Britain to France.\r\nFrance is the nearest neighbour to Great Britain. In the trade between the\r\nsouthern coast of England and the northern and north-western coast of France,\r\nthe returns might be expected, in the same manner as in the inland trade, four,\r\nfive, or six times in the year. The capital, therefore, employed in this trade\r\ncould, in each of the two countries, keep in motion four, five, or six times\r\nthe quantity of industry, and afford employment and subsistence to four, five,\r\nor six times the number of people, which all equal capital could do in the\r\ngreater part of the other branches of foreign trade. Between the parts of\r\nFrance and Great Britain most remote from one another, the returns might be\r\nexpected, at least, once in the year; and even this trade would so far be at\r\nleast equally advantageous, as the greater part of the other branches of our\r\nforeign European trade. It would be, at least, three times more advantageous\r\nthan the boasted trade with our North American colonies, in which the returns\r\nwere seldom made in less than three years, frequently not in less than four or\r\nfive years. France, besides, is supposed to contain 24,000,000 of inhabitants.\r\nOur North American colonies were never supposed to contain more than 3,000,000;\r\nand France is a much richer country than North America; though, on account of\r\nthe more unequal distribution of riches, there is much more poverty and beggary\r\nin the one country than in the other. France, therefore, could afford a market\r\nat least eight times more extensive, and, on account of the superior frequency\r\nof the returns, four-and-twenty times more advantageous than that which our\r\nNorth American colonies ever afforded. The trade of Great Britain would be just\r\nas advantageous to France, and, in proportion to the wealth, population, and\r\nproximity of the respective countries, would have the same superiority over\r\nthat which France carries on with her own colonies. Such is the very great\r\ndifference between that trade which the wisdom of both nations has thought\r\nproper to discourage, and that which it has favoured the most.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the very same circumstances which would have rendered an open and free\r\ncommerce between the two countries so advantageous to both, have occasioned the\r\nprincipal obstructions to that commerce. Being neighbours, they are necessarily\r\nenemies, and the wealth and power of each becomes, upon that account, more\r\nformidable to the other; and what would increase the advantage of national\r\nfriendship, serves only to inflame the violence of national animosity. They are\r\nboth rich and industrious nations; and the merchants and manufacturers of each\r\ndread the competition of the skill and activity of those of the other.\r\nMercantile jealousy is excited, and both inflames, and is itself inflamed, by\r\nthe violence of national animosity, and the traders of both countries have\r\nannounced, with all the passionate confidence of interested falsehood, the\r\ncertain ruin of each, in consequence of that unfavourable balance of trade,\r\nwhich, they pretend, would be the infallible effect of an unrestrained commerce\r\nwith the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere is no commercial country in Europe, of which the approaching ruin has not\r\nfrequently been foretold by the pretended doctors of this system, from all\r\nunfavourably balance of trade. After all the anxiety, however, which they have\r\nexcited about this, after all the vain attempts of almost all trading nations\r\nto turn that balance in their own favour, and against their neighbours, it does\r\nnot appear that any one nation in Europe has been, in any respect, impoverished\r\nby this cause. Every town and country, on the contrary, in proportion as they\r\nhave opened their ports to all nations, instead of being ruined by this free\r\ntrade, as the principles of the commercial system would lead us to expect, have\r\nbeen enriched by it. Though there are in Europe indeed, a few towns which, in\r\nsame respects, deserve the name of free ports, there is no country which does\r\nso. Holland, perhaps, approaches the nearest to this character of any, though\r\nstill very remote from it; and Holland, it is acknowledged, not only derives\r\nits whole wealth, but a great part of its necessary subsistence, from foreign\r\ntrade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere is another balance, indeed, which has already been explained, very\r\ndifferent from the balance of trade, and which, according as it happens to be\r\neither favourable or unfavourable, necessarily occasions the prosperity or\r\ndecay of every nation. This is the balance of the annual produce and\r\nconsumption. If the exchangeable value of the annual produce, it has already\r\nbeen observed, exceeds that of the annual consumption, the capital of the\r\nsociety must annually increase in proportion to this excess. The society in\r\nthis case lives within its revenue; and what is annually saved out of its\r\nrevenue, is naturally added to its capital, and employed so as to increase\r\nstill further the annual produce. If the exchangeable value of the annual\r\nproduce, on the contrary, fall short of the annual consumption, the capital of\r\nthe society must annually decay in proportion to this deficiency. The expense\r\nof the society, in this case, exceeds its revenue, and necessarily encroaches\r\nupon its capital. Its capital, therefore, must necessarily decay, and, together\r\nwith it, the exchangeable value of the annual produce of its industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis balance of produce and consumption is entirely different from what is\r\ncalled the balance of trade. It might take place in a nation which had no\r\nforeign trade, but which was entirely separated from all the world. It may take\r\nplace in the whole globe of the earth, of which the wealth, population, and\r\nimprovement, may be either gradually increasing or gradually decaying.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe balance of produce and consumption may be constantly in favour of a nation,\r\nthough what is called the balance of trade be generally against it. A nation\r\nmay import to a greater value than it exports for half a century, perhaps,\r\ntogether; the gold and silver which comes into it during all this time, may be\r\nall immediately sent out of it; its circulating coin may gradually decay,\r\ndifferent sorts of paper money being substituted in its place, and even the\r\ndebts, too, which it contracts in the principal nations with whom it deals, may\r\nbe gradually increasing; and yet its real wealth, the exchangeable value of the\r\nannual produce of its lands and labour, may, during the same period, have been\r\nincreasing in a much greater proportion. The state of our North American\r\ncolonies, and of the trade which they carried on with Great Britain, before the\r\ncommencement of the present disturbances, {This paragraph was written in the\r\nyear 1775.} may serve as a proof that this is by no means an impossible\r\nsupposition.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap29\"\u003e\u003c/a\u003eCHAPTER IV.\u003cbr\u003e\r\nOF DRAWBACKS.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nMerchants and manufacturers are not contented with the monopoly of the home\r\nmarket, but desire likewise the most extensive foreign sale for their goods.\r\nTheir country has no jurisdiction in foreign nations, and therefore can seldom\r\nprocure them any monopoly there. They are generally obliged, therefore, to\r\ncontent themselves with petitioning for certain encouragements to exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf these encouragements, what are called drawbacks seem to be the most\r\nreasonable. To allow the merchant to draw back upon exportation, either the\r\nwhole, or a part of whatever excise or inland duty is imposed upon domestic\r\nindustry, can never occasion the exportation of a greater quantity of goods\r\nthan what would have been exported had no duty been imposed. Such\r\nencouragements do not tend to turn towards any particular employment a greater\r\nshare of the capital of the country, than what would go to that employment of\r\nits own accord, but only to hinder the duty from driving away any part of that\r\nshare to other employments. They tend not to overturn that balance which\r\nnaturally establishes itself among all the various employments of the society,\r\nbut to hinder it from being overturned by the duty. They tend not to destroy,\r\nbut to preserve, what it is in most cases advantageous to preserve, the natural\r\ndivision and distribution of labour in the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same thing may be said of the drawbacks upon the re-exportation of foreign\r\ngoods imported, which, in Great Britain, generally amount to by much the\r\nlargest part of the duty upon importation. By the second of the rules, annexed\r\nto the act of parliament, which imposed what is now called the old subsidy,\r\nevery merchant, whether English or alien. was allowed to draw back half that\r\nduty upon exportation; the English merchant, provided the exportation took\r\nplace within twelve months; the alien, provided it took place within nine\r\nmonths. Wines, currants, and wrought silks, were the only goods which did not\r\nfall within this rule, having other and more advantageous allowances. The\r\nduties imposed by this act of parliament were, at that time, the only duties\r\nupon the importation of foreign goods. The term within which this, and all\r\nother drawbacks could be claimed, was afterwards (by 7 Geo. I. chap. 21. sect.\r\n10.) extended to three years.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe duties which have been imposed since the old subsidy, are, the greater part\r\nof them, wholly drawn back upon exportation. This general rule, however, is\r\nliable to a great number of exceptions; and the doctrine of drawbacks has\r\nbecome a much less simple matter than it was at their first institution.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUpon the exportation of some foreign goods, of which it was expected that the\r\nimportation would greatly exceed what was necessary for the home consumption,\r\nthe whole duties are drawn back, without retaining even half the old subsidy.\r\nBefore the revolt of our North American colonies, we had the monopoly of the\r\ntobacco of Maryland and Virginia. We imported about ninety-six thousand\r\nhogsheads, and the home consumption was not supposed to exceed fourteen\r\nthousand. To facilitate the great exportation which was necessary, in order to\r\nrid us of the rest, the whole duties were drawn back, provided the exportation\r\ntook place within three years.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWe still have, though not altogether, yet very nearly, the monopoly of the\r\nsugars of our West Indian islands. If sugars are exported within a year,\r\ntherefore, all the duties upon importation are drawn back; and if exported\r\nwithin three years, all the duties, except half the old subsidy, which still\r\ncontinues to be retained upon the exportation of the greater part of goods.\r\nThough the importation of sugar exceeds a good deal what is necessary for the\r\nhome consumption, the excess is inconsiderable, in comparison of what it used\r\nto be in tobacco.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome goods, the particular objects of the jealousy of our own manufacturers,\r\nare prohibited to be imported for home consumption. They may, however, upon\r\npaying certain duties, be imported and warehoused for exportation. But upon\r\nsuch exportation no part of these duties is drawn back. Our manufacturers are\r\nunwilling, it seems, that even this restricted importation should be\r\nencouraged, and are afraid lest some part of these goods should be stolen out\r\nof the warehouse, and thus come into competition with their own. It is under\r\nthese regulations only that we can import wrought silks, French cambrics and\r\nlawns, calicoes, painted, printed, stained, or dyed, etc.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWe are unwilling even to be the carriers of French goods, and choose rather to\r\nforego a profit to ourselves than to suffer those whom we consider as our\r\nenemies to make any profit by our means. Not only half the old subsidy, but the\r\nsecond twenty-five per cent. is retained upon the exportation of all French\r\ngoods.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the fourth of the rules annexed to the old subsidy, the drawback allowed\r\nupon the exportation of all wines amounted to a great deal more than half the\r\nduties which were at that time paid upon their importation; and it seems at\r\nthat time to have been the object of the legislature to give somewhat more than\r\nordinary encouragement to the carrying trade in wine. Several of the other\r\nduties, too which were imposed either at the same time or subsequent to the old\r\nsubsidy, what is called the additional duty, the new subsidy, the one-third and\r\ntwo-thirds subsidies, the impost 1692, the tonnage on wine, were allowed to be\r\nwholly drawn back upon exportation. All those duties, however, except the\r\nadditional duty and impost 1692, being paid down in ready money upon\r\nimportation, the interest of so large a sum occasioned an expense, which made\r\nit unreasonable to expect any profitable carrying trade in this article. Only a\r\npart, therefore of the duty called the impost on wine, and no part of the\r\ntwenty-five pounds the ton upon French wines, or of the duties imposed in 1745,\r\nin 1763, and in 1778, were allowed to be drawn back upon exportation. The two\r\nimposts of five per cent. imposed in 1779 and 1781, upon all the former duties\r\nof customs, being allowed to be wholly drawn back upon the exportation of all\r\nother goods, were likewise allowed to be drawn back upon that of wine. The last\r\nduty that has been particularly imposed upon wine, that of 1780, is allowed to\r\nbe wholly drawn back; an indulgence which, when so many heavy duties are\r\nretained, most probably could never occasion the exportation of a single ton of\r\nwine. These rules took place with regard to all places of lawful exportation,\r\nexcept the British colonies in America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe 15th Charles II, chap. 7, called an act for the encouragement of trade, had\r\ngiven Great Britain the monopoly of supplying the colonies with all the\r\ncommodities of the growth or manufacture of Europe, and consequently with\r\nwines. In a country of so extensive a coast as our North American and West\r\nIndian colonies, where our authority was always so very slender, and where the\r\ninhabitants were allowed to carry out in their own ships their non-enumerated\r\ncommodities, at first to all parts of Europe, and afterwards to all parts of\r\nEurope south of Cape Finisterre, it is not very probable that this monopoly\r\ncould ever be much respected; and they probably at all times found means of\r\nbringing back some cargo from the countries to which they were allowed to carry\r\nout one. They seem, however, to have found some difficulty in importing\r\nEuropean wines from the places of their growth; and they could not well import\r\nthem from Great Britain, where they were loaded with many heavy duties, of\r\nwhich a considerable part was not drawn back upon exportation. Madeira wine,\r\nnot being an European commodity, could be imported directly into America and\r\nthe West Indies, countries which, in all their non-enumerated commodities,\r\nenjoyed a free trade to the island of Madeira. These circumstances had probably\r\nintroduced that general taste for Madeira wine, which our officers found\r\nestablished in all our colonies at the commencement of the war which began in\r\n1755, and which they brought back with them to the mother country, where that\r\nwine had not been much in fashion before. Upon the conclusion of that war, in\r\n1763 (by the 4th Geo. III, chap. 15, sect. 12), all the duties except £3, 10s.\r\nwere allowed to be drawn back upon the exportation to the colonies of all\r\nwines, except French wines, to the commerce and consumption of which national\r\nprejudice would allow no sort of encouragement. The period between the granting\r\nof this indulgence and the revolt of our North American colonies, was probably\r\ntoo short to admit of any considerable change in the customs of those\r\ncountries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same act which, in the drawbacks upon all wines, except French wines, thus\r\nfavoured the colonies so much more than other countries, in those upon the\r\ngreater part of other commodities, favoured them much less. Upon the\r\nexportation of the greater part of commodities to other countries, half the old\r\nsubsidy was drawn back. But this law enacted, that no part of that duty should\r\nbe drawn back upon the exportation to the colonies of any commodities of the\r\ngrowth or manufacture either of Europe or the East Indies, except wines, white\r\ncalicoes, and muslins.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDrawbacks were, perhaps, originally granted for the encouragement of the\r\ncarrying trade, which, as the freight of the ship is frequently paid by\r\nforeigners in money, was supposed to be peculiarly fitted for bringing gold and\r\nsilver into the country. But though the carrying trade certainly deserves no\r\npeculiar encouragement, though the motive of the institution was, perhaps,\r\nabundantly foolish, the institution itself seems reasonable enough. Such\r\ndrawbacks cannot force into this trade a greater share of the capital of the\r\ncountry than what would have gone to it of its own accord, had there been no\r\nduties upon importation; they only prevent its being excluded altogether by\r\nthose duties. The carrying trade, though it deserves no preference, ought not\r\nto be precluded, but to be left free, like all other trades. It is a necessary\r\nresource to those capitals which cannot find employment, either in the\r\nagriculture or in the manufactures of the country, either in its home trade, or\r\nin its foreign trade of consumption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue of the customs, instead of suffering, profits from such drawbacks,\r\nby that part of the duty which is retained. If the whole duties had been\r\nretained, the foreign goods upon which they are paid could seldom have been\r\nexported, nor consequently imported, for want of a market. The duties,\r\ntherefore, of which a part is retained, would never have been paid.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese reasons seem sufficiently to justify drawbacks, and would justify them,\r\nthough the whole duties, whether upon the produce of domestic industry or upon\r\nforeign goods, were always drawn back upon exportation. The revenue of excise\r\nwould, in this case indeed, suffer a little, and that of the customs a good\r\ndeal more; but the natural balance of industry, the natural division and\r\ndistribution of labour, which is always more or less disturbed by such duties,\r\nwould be more nearly re-established by such a regulation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese reasons, however, will justify drawbacks only upon exporting goods to\r\nthose countries which are altogether foreign and independent, not to those in\r\nwhich our merchants and manufacturers enjoy a monopoly. A drawback, for\r\nexample, upon the exportation of European goods to our American colonies, will\r\nnot always occasion a greater exportation than what would have taken place\r\nwithout it. By means of the monopoly which our merchants and manufacturers\r\nenjoy there, the same quantity might frequently, perhaps, be sent thither,\r\nthough the whole duties were retained. The drawback, therefore, may frequently\r\nbe pure loss to the revenue of excise and customs, without altering the state\r\nof the trade, or rendering it in any respect more extensive. How far such\r\ndrawbacks can be justified as a proper encouragement to the industry of our\r\ncolonies, or how far it is advantageous to the mother country that they should\r\nbe exempted from taxes which are paid by all the rest of their fellow-subjects,\r\nwill appear hereafter, when I come to treat of colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDrawbacks, however, it must always be understood, are useful only in those\r\ncases in which the goods, for the exportation of which they are given, are\r\nreally exported to some foreign country, and not clandestinely re-imported into\r\nour own. That some drawbacks, particularly those upon tobacco, have frequently\r\nbeen abused in this manner, and have given occasion to many frauds, equally\r\nhurtful both to the revenue and to the fair trader, is well known.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap30\"\u003e\u003c/a\u003eCHAPTER V.\u003cbr\u003e\r\nOF BOUNTIES.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nBounties upon exportation are, in Great Britain, frequently petitioned for, and\r\nsometimes granted, to the produce of particular branches of domestic industry.\r\nBy means of them, our merchants and manufacturers, it is pretended, will be\r\nenabled to sell their goods as cheap or cheaper than their rivals in the\r\nforeign market. A greater quantity, it is said, will thus be exported, and the\r\nbalance of trade consequently turned more in favour of our own country. We\r\ncannot give our workmen a monopoly in the foreign, as we have done in the home\r\nmarket. We cannot force foreigners to buy their goods, as we have done our own\r\ncountrymen. The next best expedient, it has been thought, therefore, is to pay\r\nthem for buying. It is in this manner that the mercantile system proposes to\r\nenrich the whole country, and to put money into all our pockets, by means of\r\nthe balance of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBounties, it is allowed, ought to be given to those branches of trade only\r\nwhich cannot be carried on without them. But every branch of trade in which the\r\nmerchant can sell his goods for a price which replaces to him, with the\r\nordinary profits of stock, the whole capital employed in preparing and sending\r\nthem to market, can be carried on without a bounty. Every such branch is\r\nevidently upon a level with all the other branches of trade which are carried\r\non without bounties, and cannot, therefore, require one more than they. Those\r\ntrades only require bounties, in which the merchant is obliged to sell his\r\ngoods for a price which does not replace to him his capital, together with the\r\nordinary profit, or in which he is obliged to sell them for less than it really\r\ncost him to send them to market. The bounty is given in order to make up this\r\nloss, and to encourage him to continue, or, perhaps, to begin a trade, of which\r\nthe expense is supposed to be greater than the returns, of which every\r\noperation eats up a part of the capital employed in it, and which is of such a\r\nnature, that if all other trades resembled it, there would soon be no capital\r\nleft in the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trades, it is to be observed, which are carried on by means of bounties,\r\nare the only ones which can be carried on between two nations for any\r\nconsiderable time together, in such a manner as that one of them shall always\r\nand regularly lose, or sell its goods for less than it really cost to send them\r\nto market. But if the bounty did not repay to the merchant what he would\r\notherwise lose upon the price of his goods, his own interest would soon oblige\r\nhim to employ his stock in another way, or to find out a trade in which the\r\nprice of the goods would replace to him, with the ordinary profit, the capital\r\nemployed in sending them to market. The effect of bounties, like that of all\r\nthe other expedients of the mercantile system, can only be to force the trade\r\nof a country into a channel much less advantageous than that in which it would\r\nnaturally run of its own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ingenious and well-informed author of the Tracts upon the Corn Trade has\r\nshown very clearly, that since the bounty upon the exportation of corn was\r\nfirst established, the price of the corn exported, valued moderately enough,\r\nhas exceeded that of the corn imported, valued very high, by a much greater sum\r\nthan the amount of the whole bounties which have been paid during that period.\r\nThis, he imagines, upon the true principles of the mercantile system, is a\r\nclear proof that this forced corn trade is beneficial to the nation, the value\r\nof the exportation exceeding that of the importation by a much greater sum than\r\nthe whole extraordinary expense which the public has been at in order to get it\r\nexported. He does not consider that this extraordinary expense, or the bounty,\r\nis the smallest part of the expense which the exportation of corn really costs\r\nthe society. The capital which the farmer employed in raising it must likewise\r\nbe taken into the account. Unless the price of the corn, when sold in the\r\nforeign markets, replaces not only the bounty, but this capital, together with\r\nthe ordinary profits of stock, the society is a loser by the difference, or the\r\nnational stock is so much diminished. But the very reason for which it has been\r\nthought necessary to grant a bounty, is the supposed insufficiency of the price\r\nto do this.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe average price of corn, it has been said, has fallen considerably since the\r\nestablishment of the bounty. That the average price of corn began to fall\r\nsomewhat towards the end of the last century, and has continued to do so during\r\nthe course of the sixty-four first years of the present, I have already\r\nendeavoured to show. But this event, supposing it to be real, as I believe it\r\nto be, must have happened in spite of the bounty, and cannot possibly have\r\nhappened in consequence of it. It has happened in France, as well as in\r\nEngland, though in France there was not only no bounty, but, till 1764, the\r\nexportation of corn was subjected to a general prohibition. This gradual fall\r\nin the average price of grain, it is probable, therefore, is ultimately owing\r\nneither to the one regulation nor to the other, but to that gradual and\r\ninsensible rise in the real value of silver, which, in the first book of this\r\ndiscourse, I have endeavoured to show, has taken place in the general market of\r\nEurope during the course of the present century. It seems to be altogether\r\nimpossible that the bounty could ever contribute to lower the price of grain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn years of plenty, it has already been observed, the bounty, by occasioning an\r\nextraordinary exportation, necessarily keeps up the price of corn in the home\r\nmarket above what it would naturally fall to. To do so was the avowed purpose\r\nof the institution. In years of scarcity, though the bounty is frequently\r\nsuspended, yet the great exportation which it occasions in years of plenty,\r\nmust frequently hinder, more or less, the plenty of one year from relieving the\r\nscarcity of another. Both in years of plenty and in years of scarcity,\r\ntherefore, the bounty necessarily tends to raise the money price of corn\r\nsomewhat higher than it otherwise would be in the home market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat in the actual state of tillage the bounty must necessarily have this\r\ntendency, will not, I apprehend, be disputed by any reasonable person. But it\r\nhas been thought by many people, that it tends to encourage tillage, and that\r\nin two different ways; first, by opening a more extensive foreign market to the\r\ncorn of the farmer, it tends, they imagine, to increase the demand for, and\r\nconsequently the production of, that commodity; and, secondly by securing to\r\nhim a better price than he could otherwise expect in the actual state of\r\ntillage, it tends, they suppose, to encourage tillage. This double\r\nencouragement must they imagine, in a long period of years, occasion such an\r\nincrease in the production of corn, as may lower its price in the home market,\r\nmuch more than the bounty can raise it in the actual state which tillage may,\r\nat the end of that period, happen to be in.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI answer, that whatever extension of the foreign market can be occasioned by\r\nthe bounty must, in every particular year, be altogether at the expense of the\r\nhome market; as every bushel of corn, which is exported by means of the bounty,\r\nand which would not have been exported without the bounty, would have remained\r\nin the home market to increase the consumption, and to lower the price of that\r\ncommodity. The corn bounty, it is to be observed, as well as every other bounty\r\nupon exportation, imposes two different taxes upon the people; first, the tax\r\nwhich they are obliged to contribute, in order to pay the bounty; and,\r\nsecondly, the tax which arises from the advanced price of the commodity in the\r\nhome market, and which, as the whole body of the people are purchasers of corn,\r\nmust, in this particular commodity, be paid by the whole body of the people. In\r\nthis particular commodity, therefore, this second tax is by much the heaviest\r\nof the two. Let us suppose that, taking one year with another, the bounty of\r\n5s. upon the exportation of the quarter of wheat raises the price of that\r\ncommodity in the home market only 6d. the bushel, or 4s. the quarter higher\r\nthan it otherwise would have been in the actual state of the crop. Even upon\r\nthis very moderate supposition, the great body of the people, over and above\r\ncontributing the tax which pays the bounty of 5s. upon every quarter of wheat\r\nexported, must pay another of 4s. upon every quarter which they themselves\r\nconsume. But according to the very well informed author of the Tracts upon the\r\nCorn Trade, the average proportion of the corn exported to that consumed at\r\nhome, is not more than that of one to thirty-one. For every 5s. therefore,\r\nwhich they contribute to the payment of the first tax, they must contribute\r\n£6:4s. to the payment of the second. So very heavy a tax upon the first\r\nnecessary of life-must either reduce the subsistence of the labouring poor, or\r\nit must occasion some augmentation in their pecuniary wages, proportionable to\r\nthat in the pecuniary price of their subsistence. So far as it operates in the\r\none way, it must reduce the ability of the labouring poor to educate and bring\r\nup their children, and must, so far, tend to restrain the population of the\r\ncountry. So far as it operates in the other, it must reduce the ability of the\r\nemployers of the poor, to employ so great a number as they otherwise might do,\r\nand must so far tend to restrain the industry of the country. The extraordinary\r\nexportation of corn, therefore occasioned by the bounty, not only in every\r\nparticular year diminishes the home, just as much as it extends the foreign\r\nmarket and consumption, but, by restraining the population and industry of the\r\ncountry, its final tendency is to stint and restrain the gradual extension of\r\nthe home market; and thereby, in the long-run, rather to diminish than to\r\naugment the whole market and consumption of corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis enhancement of the money price of corn, however, it has been thought, by\r\nrendering that commodity more profitable to the farmer, must necessarily\r\nencourage its production.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI answer, that this might be the case, if the effect of the bounty was to raise\r\nthe real price of corn, or to enable the farmer, with an equal quantity of it,\r\nto maintain a greater number of labourers in the same manner, whether liberal,\r\nmoderate, or scanty, than other labourers are commonly maintained in his\r\nneighbourhood. But neither the bounty, it is evident, nor any other human\r\ninstitution, can have any such effect. It is not the real, but the nominal\r\nprice of corn, which can in any considerable degree be affected by the bounty.\r\nAnd though the tax, which that institution imposes upon the whole body of the\r\npeople, may be very burdensome to those who pay it, it is of very little\r\nadvantage to those who receive it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe real effect of the bounty is not so much to raise the real value of corn,\r\nas to degrade the real value of silver; or to make an equal quantity of it\r\nexchange for a smaller quantity, not only of corn, but of all other home made\r\ncommodities; for the money price of corn regulates that of all other home made\r\ncommodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt regulates the money price of labour, which must always be such as to enable\r\nthe labourer to purchase a quantity of corn sufficient to maintain him and his\r\nfamily, either in the liberal, moderate, or scanty manner, in which the\r\nadvancing, stationary, or declining, circumstances of the society, oblige his\r\nemployers to maintain him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt regulates the money price of all the other parts of the rude produce of\r\nland, which, in every period of improvement, must bear a certain proportion to\r\nthat of corn, though this proportion is different in different periods. It\r\nregulates, for example, the money price of grass and hay, of butcher’s\r\nmeat, of horses, and the maintenance of horses, of land carriage consequently,\r\nor of the greater part of the inland commerce of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy regulating the money price of all the other parts of the rude produce of\r\nland, it regulates that of the materials of almost all manufactures; by\r\nregulating the money price of labour, it regulates that of manufacturing art\r\nand industry; and by regulating both, it regulates that of the complete\r\nmanufacture. The money price of labour, and of every thing that is the produce,\r\neither of land or labour, must necessarily either rise or fall in proportion to\r\nthe money price of corn.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough in consequence of the bounty, therefore, the farmer should be enabled to\r\nsell his corn for 4s. the bushel, instead of 3s:6d. and to pay his landlord a\r\nmoney rent proportionable to this rise in the money price of his produce; yet\r\nif, in consequence of this rise in the price of corn, 4s. will purchase no more\r\nhome made goods of any other kind than 3s. 6d. would have done before, neither\r\nthe circumstances of the farmer, nor those of the landlord, will be much mended\r\nby this change. The farmer will not be able to cultivate much better; the\r\nlandlord will not be able to live much better. In the purchase of foreign\r\ncommodities, this enhancement in the price of corn may give them some little\r\nadvantage. In that of home made commodities, it can give them none at all. And\r\nalmost the whole expense of the farmer, and the far greater part even of that\r\nof the landlord, is in home made commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat degradation in the value of silver, which is the effect of the fertility\r\nof the mines, and which operates equally, or very nearly equally, through the\r\ngreater part of the commercial world, is a matter of very little consequence to\r\nany particular country. The consequent rise of all money prices, though it does\r\nnot make those who receive them really richer, does not make them really\r\npoorer. A service of plate becomes really cheaper, and every thing else remains\r\nprecisely of the same real value as before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut that degradation in the value of silver, which, being the effect either of\r\nthe peculiar situation or of the political institutions of a particular\r\ncountry, takes place only in that country, is a matter of very great\r\nconsequence, which, far from tending to make anybody really richer, tends to\r\nmake every body really poorer. The rise in the money price of all commodities,\r\nwhich is in this case peculiar to that country, tends to discourage more or\r\nless every sort of industry which is carried on within it, and to enable\r\nforeign nations, by furnishing almost all sorts of goods for a smaller quantity\r\nof silver than its own workmen can afford to do, to undersell them, not only in\r\nthe foreign, but even in the home market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is the peculiar situation of Spain and Portugal, as proprietors of the\r\nmines, to be the distributers of gold and silver to all the other countries of\r\nEurope. Those metals ought naturally, therefore, to be somewhat cheaper in\r\nSpain and Portugal than in any other part of Europe. The difference, however,\r\nshould be no more than the amount of the freight and insurance; and, on account\r\nof the great value and small bulk of those metals, their freight is no great\r\nmatter, and their insurance is the same as that of any other goods of equal\r\nvalue. Spain and Portugal, therefore, could suffer very little from their\r\npeculiar situation, if they did not aggravate its disadvantages by their\r\npolitical institutions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSpain by taxing, and Portugal by prohibiting, the exportation of gold and\r\nsilver, load that exportation with the expense of smuggling, and raise the\r\nvalue of those metals in other countries so much more above what it is in their\r\nown, by the whole amount of this expense. When you dam up a stream of water, as\r\nsoon as the dam is full, as much water must run over the dam-head as if there\r\nwas no dam at all. The prohibition of exportation cannot detain a greater\r\nquantity of gold and silver in Spain and Portugal, than what they can afford to\r\nemploy, than what the annual produce of their land and labour will allow them\r\nto employ, in coin, plate, gilding, and other ornaments of gold and silver.\r\nWhen they have got this quantity, the dam is full, and the whole stream which\r\nflows in afterwards must run over. The annual exportation of gold and silver\r\nfrom Spain and Portugal, accordingly, is, by all accounts, notwithstanding\r\nthese restraints, very near equal to the whole annual importation. As the\r\nwater, however, must always be deeper behind the dam-head than before it, so\r\nthe quantity of gold and silver which these restraints detain in Spain and\r\nPortugal, must, in proportion to the annual produce of their land and labour,\r\nbe greater than what is to be found in other countries. The higher and stronger\r\nthe dam-head, the greater must be the difference in the depth of water behind\r\nand before it. The higher the tax, the higher the penalties with which the\r\nprohibition is guarded, the more vigilant and severe the police which looks\r\nafter the execution of the law, the greater must be the difference in the\r\nproportion of gold and silver to the annual produce of the land and labour of\r\nSpain and Portugal, and to that of other countries. It is said, accordingly, to\r\nbe very considerable, and that you frequently find there a profusion of plate\r\nin houses, where there is nothing else which would in other countries be\r\nthought suitable or correspondent to this sort of magnificence. The cheapness\r\nof gold and silver, or, what is the same thing, the dearness of all\r\ncommodities, which is the necessary effect of this redundancy of the precious\r\nmetals, discourages both the agriculture and manufactures of Spain and\r\nPortugal, and enables foreign nations to supply them with many sorts of rude,\r\nand with almost all sorts of manufactured produce, for a smaller quantity of\r\ngold and silver than what they themselves can either raise or make them for at\r\nhome. The tax and prohibition operate in two different ways. They not only\r\nlower very much the value of the precious metals in Spain and Portugal, but by\r\ndetaining there a certain quantity of those metals which would otherwise flow\r\nover other countries, they keep up their value in those other countries\r\nsomewhat above what it otherwise would be, and thereby give those countries a\r\ndouble advantage in their commerce with Spain and Portugal. Open the\r\nflood-gates, and there will presently be less water above, and more below the\r\ndam-head, and it will soon come to a level in both places. Remove the tax and\r\nthe prohibition, and as the quantity of gold and silver will diminish\r\nconsiderably in Spain and Portugal, so it will increase somewhat in other\r\ncountries; and the value of those metals, their proportion to the annual\r\nproduce of land and labour, will soon come to a level, or very near to a level,\r\nin all. The loss which Spain and Portugal could sustain by this exportation of\r\ntheir gold and silver, would be altogether nominal and imaginary. The nominal\r\nvalue of their goods, and of the annual produce of their land and labour, would\r\nfall, and would be expressed or represented by a smaller quantity of silver\r\nthan before; but their real value would be the same as before, and would be\r\nsufficient to maintain, command, and employ the same quantity of labour. As the\r\nnominal value of their goods would fall, the real value of what remained of\r\ntheir gold and silver would rise, and a smaller quantity of those metals would\r\nanswer all the same purposes of commerce and circulation which had employed a\r\ngreater quantity before. The gold and silver which would go abroad would not go\r\nabroad for nothing, but would bring back an equal value of goods of some kind\r\nor other. Those goods, too, would not be all matters of mere luxury and\r\nexpense, to be consumed by idle people, who produce nothing in return for their\r\nconsumption. As the real wealth and revenue of idle people would not be\r\naugmented by this extraordinary exportation of gold and silver, so neither\r\nwould their consumption be much augmented by it. Those goods would probably,\r\nthe greater part of them, and certainly some part of them, consist in\r\nmaterials, tools, and provisions, for the employment and maintenance of\r\nindustrious people, who would reproduce, with a profit, the full value of their\r\nconsumption. A part of the dead stock of the society would thus be turned into\r\nactive stock, and would put into motion a greater quantity of industry than had\r\nbeen employed before. The annual produce of their land and labour would\r\nimmediately be augmented a little, and in a few years would probably be\r\naugmented a great deal; their industry being thus relieved from one of the most\r\noppressive burdens which it at present labours under.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bounty upon the exportation of corn necessarily operates exactly in the\r\nsame way as this absurd policy of Spain and Portugal. Whatever be the actual\r\nstate of tillage, it renders our corn somewhat dearer in the home market than\r\nit otherwise would be in that state, and somewhat cheaper in the foreign; and\r\nas the average money price of corn regulates, more or less, that of all other\r\ncommodities, it lowers the value of silver considerably in the one, and tends\r\nto raise it a little in the other. It enables foreigners, the Dutch in\r\nparticular, not only to eat our corn cheaper than they otherwise could do, but\r\nsometimes to eat it cheaper than even our own people can do upon the same\r\noccasions; as we are assured by an excellent authority, that of Sir Matthew\r\nDecker. It hinders our own workmen from furnishing their goods for so small a\r\nquantity of silver as they otherwise might do, and enables the Dutch to furnish\r\ntheirs for a smaller. It tends to render our manufactures somewhat dearer in\r\nevery market, and theirs somewhat cheaper, than they otherwise would be, and\r\nconsequently to give their industry a double advantage over our own.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bounty, as it raises in the home market, not so much the real, as the\r\nnominal price of our corn; as it augments, not the quantity of labour which a\r\ncertain quantity of corn can maintain and employ, but only the quantity of\r\nsilver which it will exchange for; it discourages our manufactures, without\r\nrendering any considerable service, either to our farmers or country gentlemen.\r\nIt puts, indeed, a little more money into the pockets of both, and it will\r\nperhaps be somewhat difficult to persuade the greater part of them that this is\r\nnot rendering them a very considerable service. But if this money sinks in its\r\nvalue, in the quantity of labour, provisions, and home-made commodities of all\r\ndifferent kinds which it is capable of purchasing, as much as it rises in its\r\nquantity, the service will be little more than nominal and imaginary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere is, perhaps, but one set of men in the whole commonwealth to whom the\r\nbounty either was or could be essentially serviceable. These were the corn\r\nmerchants, the exporters and importers of corn. In years of plenty, the bounty\r\nnecessarily occasioned a greater exportation than would otherwise have taken\r\nplace; and by hindering the plenty of the one year from relieving the scarcity\r\nof another, it occasioned in years of scarcity a greater importation than would\r\notherwise have been necessary. It increased the business of the corn merchant\r\nin both; and in the years of scarcity, it not only enabled him to import a\r\ngreater quantity, but to sell it for a better price, and consequently with a\r\ngreater profit, than he could otherwise have made, if the plenty of one year\r\nhad not been more or less hindered from relieving the scarcity of another. It\r\nis in this set of men, accordingly, that I have observed the greatest zeal for\r\nthe continuance or renewal of the bounty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur country gentlemen, when they imposed the high duties upon the exportation\r\nof foreign corn, which in times of moderate plenty amount to a prohibition, and\r\nwhen they established the bounty, seem to have imitated the conduct of our\r\nmanufacturers. By the one institution, they secured to themselves the monopoly\r\nof the home market, and by the other they endeavoured to prevent that market\r\nfrom ever being overstocked with their commodity. By both they endeavoured to\r\nraise its real value, in the same manner as our manufacturers had, by the like\r\ninstitutions, raised the real value of many different sorts of manufactured\r\ngoods. They did not, perhaps, attend to the great and essential difference\r\nwhich nature has established between corn and almost every other sort of goods.\r\nWhen, either by the monopoly of the home market, or by a bounty upon\r\nexportation, you enable our woollen or linen manufacturers to sell their goods\r\nfor somewhat a better price than they otherwise could get for them, you raise,\r\nnot only the nominal, but the real price of those goods; you render them\r\nequivalent to a greater quantity of labour and subsistence; you increase not\r\nonly the nominal, but the real profit, the real wealth and revenue of those\r\nmanufacturers; and you enable them, either to live better themselves, or to\r\nemploy a greater quantity of labour in those particular manufactures. You\r\nreally encourage those manufactures, and direct towards them a greater quantity\r\nof the industry of the country than what would properly go to them of its own\r\naccord. But when, by the like institutions, you raise the nominal or money\r\nprice of corn, you do not raise its real value; you do not increase the real\r\nwealth, the real revenue, either of our farmers or country gentlemen; you do\r\nnot encourage the growth of corn, because you do not enable them to maintain\r\nand employ more labourers in raising it. The nature of things has stamped upon\r\ncorn a real value, which cannot be altered by merely altering its money price.\r\nNo bounty upon exportation, no monopoly of the home market, can raise that\r\nvalue. The freest competition cannot lower it, Through the world in general,\r\nthat value is equal to the quantity of labour which it can maintain, and in\r\nevery particular place it is equal to the quantity of labour which it can\r\nmaintain in the way, whether liberal, moderate, or scanty, in which labour is\r\ncommonly maintained in that place. Woollen or linen cloth are not the\r\nregulating commodities by which the real value of all other commodities must be\r\nfinally measured and determined; corn is. The real value of every other\r\ncommodity is finally measured and determined by the proportion which its\r\naverage money price bears to the average money price of corn. The real value of\r\ncorn does not vary with those variations in its average money price, which\r\nsometimes occur from one century to another; it is the real value of silver\r\nwhich varies with them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBounties upon the exportation of any homemade commodity are liable, first, to\r\nthat general objection which may be made to all the different expedients of the\r\nmercantile system; the objection of forcing some part of the industry of the\r\ncountry into a channel less advantageous than that in which it would run of its\r\nown accord; and, secondly, to the particular objection of forcing it not only\r\ninto a channel that is less advantageous, but into one that is actually\r\ndisadvantageous; the trade which cannot be carried on but by means of a bounty\r\nbeing necessarily a losing trade. The bounty upon the exportation of corn is\r\nliable to this further objection, that it can in no respect promote the raising\r\nof that particular commodity of which it was meant to encourage the production.\r\nWhen our country gentlemen, therefore, demanded the establishment of the\r\nbounty, though they acted in imitation of our merchants and manufacturers, they\r\ndid not act with that complete comprehension of their own interest, which\r\ncommonly directs the conduct of those two other orders of people. They loaded\r\nthe public revenue with a very considerable expense: they imposed a very heavy\r\ntax upon the whole body of the people; but they did not, in any sensible\r\ndegree, increase the real value of their own commodity; and by lowering\r\nsomewhat the real value of silver, they discouraged, in some degree, the\r\ngeneral industry of the country, and, instead of advancing, retarded more or\r\nless the improvement of their own lands, which necessarily depend upon the\r\ngeneral industry of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo encourage the production of any commodity, a bounty upon production, one\r\nshould imagine, would have a more direct operation than one upon exportation.\r\nIt would, besides, impose only one tax upon the people, that which they must\r\ncontribute in order to pay the bounty. Instead of raising, it would tend to\r\nlower the price of the commodity in the home market; and thereby, instead of\r\nimposing a second tax upon the people, it might, at least in part, repay them\r\nfor what they had contributed to the first. Bounties upon production, however,\r\nhave been very rarely granted. The prejudices established by the commercial\r\nsystem have taught us to believe, that national wealth arises more immediately\r\nfrom exportation than from production. It has been more favoured, accordingly,\r\nas the more immediate means of bringing money into the country. Bounties upon\r\nproduction, it has been said too, have been found by experience more liable to\r\nfrauds than those upon exportation. How far this is true, I know not. That\r\nbounties upon exportation have been abused, to many fraudulent purposes, is\r\nvery well known. But it is not the interest of merchants and manufacturers, the\r\ngreat inventors of all these expedients, that the home market should be\r\noverstocked with their goods; an event which a bounty upon production might\r\nsometimes occasion. A bounty upon exportation, by enabling them to send abroad\r\ntheir surplus part, and to keep up the price of what remains in the home\r\nmarket, effectually prevents this. Of all the expedients of the mercantile\r\nsystem, accordingly, it is the one of which they are the fondest. I have known\r\nthe different undertakers of some particular works agree privately among\r\nthemselves to give a bounty out of their own pockets upon the exportation of a\r\ncertain proportion of the goods which they dealt in. This expedient succeeded\r\nso well, that it more than doubled the price of their goods in the home market,\r\nnotwithstanding a very considerable increase in the produce. The operation of\r\nthe bounty upon corn must have been wonderfully different, if it has lowered\r\nthe money price of that commodity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSomething like a bounty upon production, however, has been granted upon some\r\nparticular occasions. The tonnage bounties given to the white herring and whale\r\nfisheries may, perhaps, be considered as somewhat of this nature. They tend\r\ndirectly, it may be supposed, to render the goods cheaper in the home market\r\nthan they otherwise would be. In other respects, their effects, it must be\r\nacknowledged, are the same as those of bounties upon exportation. By means of\r\nthem, a part of the capital of the country is employed in bringing goods to\r\nmarket, of which the price does not repay the cost, together with the ordinary\r\nprofits of stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the tonnage bounties to those fisheries do not contribute to the\r\nopulence of the nation, it may, perhaps, be thought that they contribute to its\r\ndefence, by augmenting the number of its sailors and shipping. This, it may be\r\nalleged, may sometimes be done by means of such bounties, at a much smaller\r\nexpense than by keeping up a great standing navy, if I may use such an\r\nexpression, in the same way as a standing army.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNotwithstanding these favourable allegations, however, the following\r\nconsiderations dispose me to believe, that in granting at least one of these\r\nbounties, the legislature has been very grossly imposed upon:\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, The herring-buss bounty seems too large.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom the commencement of the winter fishing 1771, to the end of the winter\r\nfishing 1781, the tonnage bounty upon the herring-buss fishery has been at\r\nthirty shillings the ton. During these eleven years, the whole number of\r\nbarrels caught by the herring-buss fishery of Scotland amounted to 378,347. The\r\nherrings caught and cured at sea are called sea-sticks. In order to render them\r\nwhat are called merchantable herrings, it is necessary to repack them with an\r\nadditional quantity of salt; and in this case, it is reckoned, that three\r\nbarrels of sea-sticks are usually repacked into two barrels of merchantable\r\nherrings. The number of barrels of merchantable herrings, therefore, caught\r\nduring these eleven years, will amount only, according to this account, to\r\n252,231¼. During these eleven years, the tonnage bounties paid amounted to\r\n£155,463:11s. or 8s:2¼d. upon every barrel of sea-sticks, and to 12s:3¾d. upon\r\nevery barrel of merchantable herrings.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe salt with which these herrings are cured is sometimes Scotch, and sometimes\r\nforeign salt; both which are delivered, free of all excise duty, to the\r\nfish-curers. The excise duty upon Scotch salt is at present 1s:6d., that upon\r\nforeign salt 10s. the bushel. A barrel of herrings is supposed to require about\r\none bushel and one-fourth of a bushel foreign salt. Two bushels are the\r\nsupposed average of Scotch salt. If the herrings are entered for exportation,\r\nno part of this duty is paid up; if entered for home consumption, whether the\r\nherrings were cured with foreign or with Scotch salt, only one shilling the\r\nbarrel is paid up. It was the old Scotch duty upon a bushel of salt, the\r\nquantity which, at a low estimation, had been supposed necessary for curing a\r\nbarrel of herrings. In Scotland, foreign salt is very little used for any other\r\npurpose but the curing of fish. But from the 5th April 1771 to the 5th April\r\n1782, the quantity of foreign salt imported amounted to 936,974 bushels, at\r\neighty-four pounds the bushel; the quantity of Scotch salt delivered from the\r\nworks to the fish-curers, to no more than 168,226, at fifty-six pounds the\r\nbushel only. It would appear, therefore, that it is principally foreign salt\r\nthat is used in the fisheries. Upon every barrel of herrings exported, there\r\nis, besides, a bounty of 2s:8d. and more than two-thirds of the buss-caught\r\nherrings are exported. Put all these things together, and you will find that,\r\nduring these eleven years, every barrel of buss-caught herrings, cured with\r\nScotch salt, when exported, has cost government 17s:11¾d.; and, when entered\r\nfor home consumption, 14s:3¾d.; and that every barrel cured with foreign salt,\r\nwhen exported, has cost government £1:7:5¾d.; and, when entered for home\r\nconsumption, £1:3:9¾d. The price of a barrel of good merchantable herrings runs\r\nfrom seventeen and eighteen to four and five-and-twenty shillings; about a\r\nguinea at an average. {See the accounts at the end of this Book.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, The bounty to the white-herring fishery is a tonnage bounty, and is\r\nproportioned to the burden of the ship, not to her diligence or success in the\r\nfishery; and it has, I am afraid, been too common for the vessels to fit out\r\nfor the sole purpose of catching, not the fish but the bounty. In the year\r\n1759, when the bounty was at fifty shillings the ton, the whole buss fishery of\r\nScotland brought in only four barrels of sea-sticks. In that year, each barrel\r\nof sea-sticks cost government, in bounties alone, £113:15s.; each barrel of\r\nmerchantable herrings £159:7:6.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, The mode of fishing, for which this tonnage bounty in the white\r\nherring fishery has been given (by busses or decked vessels from twenty to\r\neighty tons burden ), seems not so well adapted to the situation of Scotland,\r\nas to that of Holland, from the practice of which country it appears to have\r\nbeen borrowed. Holland lies at a great distance from the seas to which herrings\r\nare known principally to resort, and can, therefore, carry on that fishery only\r\nin decked vessels, which can carry water and provisions sufficient for a voyage\r\nto a distant sea; but the Hebrides, or Western Islands, the islands of\r\nShetland, and the northern and north-western coasts of Scotland, the countries\r\nin whose neighbourhood the herring fishery is principally carried on, are\r\neverywhere intersected by arms of the sea, which run up a considerable way into\r\nthe land, and which, in the language of the country, are called sea-lochs. It\r\nis to these sea-lochs that the herrings principally resort during the seasons\r\nin which they visit these seas; for the visits of this, and, I am assured, of\r\nmany other sorts of fish, are not quite regular and constant. A boat-fishery,\r\ntherefore, seems to be the mode of fishing best adapted to the peculiar\r\nsituation of Scotland, the fishers carrying the herrings on shore as fast as\r\nthey are taken, to be either cured or consumed fresh. But the great\r\nencouragement which a bounty of 30s. the ton gives to the buss-fishery, is\r\nnecessarily a discouragement to the boat-fishery, which, having no such bounty,\r\ncannot bring its cured fish to market upon the same terms as the buss-fishery.\r\nThe boat-fishery; accordingly, which, before the establishment of the\r\nbuss-bounty, was very considerable, and is said to have employed a number of\r\nseamen, not inferior to what the buss-fishery employs at present, is now gone\r\nalmost entirely to decay. Of the former extent, however, of this now ruined and\r\nabandoned fishery, I must acknowledge that I cannot pretend to speak with much\r\nprecision. As no bounty was-paid upon the outfit of the boat-fishery, no\r\naccount was taken of it by the officers of the customs or salt duties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, In many parts of Scotland, during certain seasons of the year,\r\nherrings make no inconsiderable part of the food of the common people. A bounty\r\nwhich tended to lower their price in the home market, might contribute a good\r\ndeal to the relief of a great number of our fellow-subjects, whose\r\ncircumstances are by no means affluent. But the herring-bus bounty contributes\r\nto no such good purpose. It has ruined the boat fishery, which is by far the\r\nbest adapted for the supply of the home market; and the additional bounty of\r\n2s:8d. the barrel upon exportation, carries the greater part, more than\r\ntwo-thirds, of the produce of the buss-fishery abroad. Between thirty and forty\r\nyears ago, before the establishment of the buss-bounty, 16s. the barrel, I have\r\nbeen assured, was the common price of white herrings. Between ten and fifteen\r\nyears ago, before the boat-fishery was entirely ruined, the price was said to\r\nhave run from seventeen to twenty shillings the barrel. For these last five\r\nyears, it has, at an average, been at twenty-five shillings the barrel. This\r\nhigh price, however, may have been owing to the real scarcity of the herrings\r\nupon the coast of Scotland. I must observe, too, that the cask or barrel, which\r\nis usually sold with the herrings, and of which the price is included in all\r\nthe foregoing prices, has, since the commencement of the American war, risen to\r\nabout double its former price, or from about 3s. to about 6s. I must likewise\r\nobserve, that the accounts I have received of the prices of former times, have\r\nbeen by no means quite uniform and consistent, and an old man of great accuracy\r\nand experience has assured me, that, more than fifty years ago, a guinea was\r\nthe usual price of a barrel of good merchantable herrings; and this, I imagine,\r\nmay still be looked upon as the average price. All accounts, however, I think,\r\nagree that the price has not been lowered in the home market in consequence of\r\nthe buss-bounty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the undertakers of fisheries, after such liberal bounties have been\r\nbestowed upon them, continue to sell their commodity at the same, or even at a\r\nhigher price than they were accustomed to do before, it might be expected that\r\ntheir profits should be very great; and it is not improbable that those of some\r\nindividuals may have been so. In general, however, I have every reason to\r\nbelieve they have been quite otherwise. The usual effect of such bounties is,\r\nto encourage rash undertakers to adventure in a business which they do not\r\nunderstand; and what they lose by their own negligence and ignorance, more than\r\ncompensates all that they can gain by the utmost liberality of government. In\r\n1750, by the same act which first gave the bounty of 30s. the ton for the\r\nencouragement of the white herring fishery (the 23d Geo. II. chap. 24), a joint\r\nstock company was erected, with a capital of £500,000, to which the subscribers\r\n(over and above all other encouragements, the tonnage bounty just now\r\nmentioned, the exportation bounty of 2s:8d. the barrel, the delivery of both\r\nBritish and foreign salt duty free) were, during the space of fourteen years,\r\nfor every hundred pounds which they subscribed and paid into the stock of the\r\nsociety, entitled to three pounds a-year, to be paid by the receiver-general of\r\nthe customs in equal half-yearly payments. Besides this great company, the\r\nresidence of whose governor and directors was to be in London, it was declared\r\nlawful to erect different fishing chambers in all the different out-ports of\r\nthe kingdom, provided a sum not less than £10,000 was subscribed into the\r\ncapital of each, to be managed at its own risk, and for its own profit and\r\nloss. The same annuity, and the same encouragements of all kinds, were given to\r\nthe trade of those inferior chambers as to that of the great company. The\r\nsubscription of the great company was soon filled up, and several different\r\nfishing chambers were erected in the different out-ports of the kingdom. In\r\nspite of all these encouragements, almost all those different companies, both\r\ngreat and small, lost either the whole or the greater part of their capitals;\r\nscarce a vestige now remains of any of them, and the white-herring fishery is\r\nnow entirely, or almost entirely, carried on by private adventurers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf any particular manufacture was necessary, indeed, for the defence of the\r\nsociety, it might not always be prudent to depend upon our neighbours for the\r\nsupply; and if such manufacture could not otherwise be supported at home, it\r\nmight not be unreasonable that all the other branches of industry should be\r\ntaxed in order to support it. The bounties upon the exportation of British made\r\nsail-cloth, and British made gunpowder, may, perhaps, both be vindicated upon\r\nthis principle.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though it can very seldom be reasonable to tax the industry of the great\r\nbody of the people, in order to support that of some particular class of\r\nmanufacturers; yet, in the wantonness of great prosperity, when the public\r\nenjoys a greater revenue than it knows well what to do with, to give such\r\nbounties to favourite manufactures, may, perhaps, be as natural as to incur any\r\nother idle expense. In public, as well as in private expenses, great wealth,\r\nmay, perhaps, frequently be admitted as an apology for great folly. But there\r\nmust surely be something more than ordinary absurdity in continuing such\r\nprofusion in times of general difficulty and distress.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is called a bounty, is sometimes no more than a drawback, and,\r\nconsequently, is not liable to the same objections as what is properly a\r\nbounty. The bounty, for example, upon refined sugar exported, may be considered\r\nas a drawback of the duties upon the brown and Muscovado sugars, from which it\r\nis made; the bounty upon wrought silk exported, a drawback of the duties upon\r\nraw and thrown silk imported; the bounty upon gunpowder exported, a drawback of\r\nthe duties upon brimstone and saltpetre imported. In the language of the\r\ncustoms, those allowances only are called drawbacks which are given upon goods\r\nexported in the same form in which they are imported. When that form has been\r\nso altered by manufacture of any kind as to come under a new denomination, they\r\nare called bounties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPremiums given by the public to artists and manufacturers, who excel in their\r\nparticular occupations, are not liable to the same objections as bounties. By\r\nencouraging extraordinary dexterity and ingenuity, they serve to keep up the\r\nemulation of the workmen actually employed in those respective occupations, and\r\nare not considerable enough to turn towards any one of them a greater share of\r\nthe capital of the country than what would go to it of its own accord. Their\r\ntendency is not to overturn the natural balance of employments, but to render\r\nthe work which is done in each as perfect and complete as possible. The expense\r\nof premiums, besides, is very trifling, that of bounties very great. The bounty\r\nupon corn alone has sometimes cost the public, in one year, more than £300,000.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBounties are sometimes called premiums, as drawbacks are sometimes called\r\nbounties. But we must, in all cases, attend to the nature of the thing, without\r\npaying any regard to the word.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDigression concerning the Corn Trade and Corn Laws.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI cannot conclude this chapter concerning bounties, without observing, that the\r\npraises which have been bestowed upon the law which establishes the bounty upon\r\nthe exportation of corn, and upon that system of regulations which is connected\r\nwith it, are altogether unmerited. A particular examination of the nature of\r\nthe corn trade, and of the principal British laws which relate to it, will\r\nsufficiently demonstrate the truth of this assertion. The great importance of\r\nthis subject must justify the length of the digression.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trade of the corn merchant is composed of four different branches, which,\r\nthough they may sometimes be all carried on by the same person, are, in their\r\nown nature, four separate and distinct trades. These are, first, the trade of\r\nthe inland dealer; secondly, that of the merchant-importer for home\r\nconsumption; thirdly, that of the merchant-exporter of home produce for foreign\r\nconsumption; and, fourthly, that of the merchant-carrier, or of the importer of\r\ncorn, in order to export it again.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI. The interest of the inland dealer, and that of the great body of the people,\r\nhow opposite soever they may at first appear, are, even in years of the\r\ngreatest scarcity, exactly the same. It is his interest to raise the price of\r\nhis corn as high as the real scarcity of the season requires, and it can never\r\nbe his interest to raise it higher. By raising the price, he discourages the\r\nconsumption, and puts every body more or less, but particularly the inferior\r\nranks of people, upon thrift and good management. If, by raising it too high,\r\nhe discourages the consumption so much that the supply of the season is likely\r\nto go beyond the consumption of the season, and to last for some time after the\r\nnext crop begins to come in, he runs the hazard, not only of losing a\r\nconsiderable part of his corn by natural causes, but of being obliged to sell\r\nwhat remains of it for much less than what he might have had for it several\r\nmonths before. If, by not raising the price high enough, he discourages the\r\nconsumption so little, that the supply of the season is likely to fall short of\r\nthe consumption of the season, he not only loses a part of the profit which he\r\nmight otherwise have made, but he exposes the people to suffer before the end\r\nof the season, instead of the hardships of a dearth, the dreadful horrors of a\r\nfamine. It is the interest of the people that their daily, weekly, and monthly\r\nconsumption should be proportioned as exactly as possible to the supply of the\r\nseason. The interest of the inland corn dealer is the same. By supplying them,\r\nas nearly as he can judge, in this proportion, he is likely to sell all his\r\ncorn for the highest price, and with the greatest profit; and his knowledge of\r\nthe state of the crop, and of his daily, weekly, and monthly sales, enables him\r\nto judge, with more or less accuracy, how far they really are supplied in this\r\nmanner. Without intending the interest of the people, he is necessarily led, by\r\na regard to his own interest, to treat them, even in years of scarcity, pretty\r\nmuch in the same manner as the prudent master of a vessel is sometimes obliged\r\nto treat his crew. When he foresees that provisions are likely to run short, he\r\nputs them upon short allowance. Though from excess of caution he should\r\nsometimes do this without any real necessity, yet all the inconveniencies which\r\nhis crew can thereby suffer are inconsiderable, in comparison of the danger,\r\nmisery, and ruin, to which they might sometimes be exposed by a less provident\r\nconduct. Though, from excess of avarice, in the same manner, the inland corn\r\nmerchant should sometimes raise the price of his corn somewhat higher than the\r\nscarcity of the season requires, yet all the inconveniencies which the people\r\ncan suffer from this conduct, which effectually secures them from a famine in\r\nthe end of the season, are inconsiderable, in comparison of what they might\r\nhave been exposed to by a more liberal way of dealing in the beginning of it\r\nthe corn merchant himself is likely to suffer the most by this excess of\r\navarice; not only from the indignation which it generally excites against him,\r\nbut, though he should escape the effects of this indignation, from the quantity\r\nof corn which it necessarily leaves upon his hands in the end of the season,\r\nand which, if the next season happens to prove favourable, he must always sell\r\nfor a much lower price than he might otherwise have had.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWere it possible, indeed, for one great company of merchants to possess\r\nthemselves of the whole crop of an extensive country, it might perhaps be their\r\ninterest to deal with it, as the Dutch are said to do with the spiceries of the\r\nMoluccas, to destroy or throw away a considerable part of it, in order to keep\r\nup the price of the rest. But it is scarce possible, even by the violence of\r\nlaw, to establish such an extensive monopoly with regard to corn; and wherever\r\nthe law leaves the trade free, it is of all commodities the least liable to be\r\nengrossed or monopolised by the force a few large capitals, which buy up the\r\ngreater part of it. Not only its value far exceeds what the capitals of a few\r\nprivate men are capable of purchasing; but, supposing they were capable of\r\npurchasing it, the manner in which it is produced renders this purchase\r\naltogether impracticable. As, in every civilized country, it is the commodity\r\nof which the annual consumption is the greatest; so a greater quantity of\r\nindustry is annually employed in producing corn than in producing any other\r\ncommodity. When it first comes from the ground, too, it is necessarily divided\r\namong a greater number of owners than any other commodity; and these owners can\r\nnever be collected into one place, like a number of independent manufacturers,\r\nbut are necessarily scattered through all the different corners of the country.\r\nThese first owners either immediately supply the consumers in their own\r\nneighbourhood, or they supply other inland dealers, who supply those consumers.\r\nThe inland dealers in corn, therefore, including both the farmer and the baker,\r\nare necessarily more numerous than the dealers in any other commodity; and\r\ntheir dispersed situation renders it altogether impossible for them to enter\r\ninto any general combination. If, in a year of scarcity, therefore, any of them\r\nshould find that he had a good deal more corn upon hand than, at the current\r\nprice, he could hope to dispose of before the end of the season, he would never\r\nthink of keeping up this price to his own loss, and to the sole benefit of his\r\nrivals and competitors, but would immediately lower it, in order to get rid of\r\nhis corn before the new crop began to come in. The same motives, the same\r\ninterests, which would thus regulate the conduct of any one dealer, would\r\nregulate that of every other, and oblige them all in general to sell their corn\r\nat the price which, according to the best of their judgment, was most suitable\r\nto the scarcity or plenty of the season.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhoever examines, with attention, the history of the dearths and famines which\r\nhave afflicted any part of Europe during either the course of the present or\r\nthat of the two preceding centuries, of several of which we have pretty exact\r\naccounts, will find, I believe, that a dearth never has arisen from any\r\ncombination among the inland dealers in corn, nor from any other cause but a\r\nreal scarcity, occasioned sometimes, perhaps, and in some particular places, by\r\nthe waste of war, but in by far the greatest number of cases by the fault of\r\nthe seasons; and that a famine has never arisen from any other cause but the\r\nviolence of government attempting, by improper means, to remedy the\r\ninconveniencies of a dearth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn an extensive corn country, between all the different parts of which there is\r\na free commerce and communication, the scarcity occasioned by the most\r\nunfavourable seasons can never be so great as to produce a famine; and the\r\nscantiest crop, if managed with frugality and economy, will maintain, through\r\nthe year, the same number of people that are commonly fed in a more affluent\r\nmanner by one of moderate plenty. The seasons most unfavourable to the crop are\r\nthose of excessive drought or excessive rain. But as corn grows equally upon\r\nhigh and low lands, upon grounds that are disposed to be too wet, and upon\r\nthose that are disposed to be too dry, either the drought or the rain, which is\r\nhurtful to one part of the country, is favourable to another; and though, both\r\nin the wet and in the dry season, the crop is a good deal less than in one more\r\nproperly tempered; yet, in both, what is lost in one part of the country is in\r\nsome measure compensated by what is gained in the other. In rice countries,\r\nwhere the crop not only requires a very moist soil, but where, in a certain\r\nperiod of its growing, it must be laid under water, the effects of a drought\r\nare much more dismal. Even in such countries, however, the drought is, perhaps,\r\nscarce ever so universal as necessarily to occasion a famine, if the government\r\nwould allow a free trade. The drought in Bengal, a few years ago, might\r\nprobably have occasioned a very great dearth. Some improper regulations, some\r\ninjudicious restraints, imposed by the servants of the East India Company upon\r\nthe rice trade, contributed, perhaps, to turn that dearth into a famine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the government, in order to remedy the inconveniencies of a dearth, orders\r\nall the dealers to sell their corn at what it supposes a reasonable price, it\r\neither hinders them from bringing it to market, which may sometimes produce a\r\nfamine even in the beginning of the season; or, if they bring it thither, it\r\nenables the people, and thereby encourages them to consume it so fast as must\r\nnecessarily produce a famine before the end of the season. The unlimited,\r\nunrestrained freedom of the corn trade, as it is the only effectual preventive\r\nof the miseries of a famine, so it is the best palliative of the\r\ninconveniencies of a dearth; for the inconveniencies of a real scarcity cannot\r\nbe remedied; they can only be palliated. No trade deserves more the full\r\nprotection of the law, and no trade requires it so much; because no trade is so\r\nmuch exposed to popular odium.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn years of scarcity, the inferior ranks of people impute their distress to the\r\navarice of the corn merchant, who becomes the object of their hatred and\r\nindignation. Instead of making profit upon such occasions, therefore, he is\r\noften in danger of being utterly ruined, and of having his magazines plundered\r\nand destroyed by their violence. It is in years of scarcity, however, when\r\nprices are high, that the corn merchant expects to make his principal profit.\r\nHe is generally in contract with some farmers to furnish him, for a certain\r\nnumber of years, with a certain quantity of corn, at a certain price. This\r\ncontract price is settled according to what is supposed to be the moderate and\r\nreasonable, that is, the ordinary or average price, which, before the late\r\nyears of scarcity, was commonly about 28s. for the quarter of wheat, and for\r\nthat of other grain in proportion. In years of scarcity, therefore, the corn\r\nmerchant buys a great part of his corn for the ordinary price, and sells it for\r\na much higher. That this extraordinary profit, however, is no more than\r\nsufficient to put his trade upon a fair level with other trades, and to\r\ncompensate the many losses which he sustains upon other occasions, both from\r\nthe perishable nature of the commodity itself, and from the frequent and\r\nunforeseen fluctuations of its price, seems evident enough, from this single\r\ncircumstance, that great fortunes are as seldom made in this as in any other\r\ntrade. The popular odium, however, which attends it in years of scarcity, the\r\nonly years in which it can be very profitable, renders people of character and\r\nfortune averse to enter into it. It is abandoned to an inferior set of dealers;\r\nand millers, bakers, meal-men, and meal-factors, together with a number of\r\nwretched hucksters, are almost the only middle people that, in the home market,\r\ncome between the grower and the consumer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient policy of Europe, instead of discountenancing this popular odium\r\nagainst a trade so beneficial to the public, seems, on the contrary, to have\r\nauthorised and encouraged it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 5th and 6th of Edward VI cap. 14, it was enacted, that whoever should\r\nbuy any corn or grain, with intent to sell it again, should be reputed an\r\nunlawful engrosser, and should, for the first fault, suffer two months\r\nimprisonment, and forfeit the value of the corn; for the second, suffer six\r\nmonths imprisonment, and forfeit double the value; and, for the third, be set\r\nin the pillory, suffer imprisonment during the king’s pleasure, and\r\nforfeit all his goods and chattels. The ancient policy of most other parts of\r\nEurope was no better than that of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur ancestors seem to have imagined, that the people would buy their corn\r\ncheaper of the farmer than of the corn merchant, who, they were afraid, would\r\nrequire, over and above the price which he paid to the farmer, an exorbitant\r\nprofit to himself. They endeavoured, therefore, to annihilate his trade\r\naltogether. They even endeavoured to hinder, as much as possible, any middle\r\nman of any kind from coming in between the grower and the consumer; and this\r\nwas the meaning of the many restraints which they imposed upon the trade of\r\nthose whom they called kidders, or carriers of corn; a trade which nobody was\r\nallowed to exercise without a licence, ascertaining his qualifications as a man\r\nof probity and fair dealing. The authority of three justices of the peace was,\r\nby the statute of Edward VI. necessary in order to grant this licence. But even\r\nthis restraint was afterwards thought insufficient, and, by a statute of\r\nElizabeth, the privilege of granting it was confined to the quarter-sessions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient policy of Europe endeavoured, in this manner, to regulate\r\nagriculture, the great trade of the country, by maxims quite different from\r\nthose which it established with regard to manufactures, the great trade of the\r\ntowns. By leaving a farmer no other customers but either the consumers or their\r\nimmediate factors, the kidders and carriers of corn, it endeavoured to force\r\nhim to exercise the trade, not only of a farmer, but of a corn merchant, or\r\ncorn retailer. On the contrary, it, in many cases, prohibited the manufacturer\r\nfrom exercising the trade of a shopkeeper, or from selling his own goods by\r\nretail. It meant, by the one law, to promote the general interest of the\r\ncountry, or to render corn cheap, without, perhaps, its being well understood\r\nhow this was to be done. By the other, it meant to promote that of a particular\r\norder of men, the shopkeepers, who would be so much undersold by the\r\nmanufacturer, it was supposed, that their trade would be ruined, if he was\r\nallowed to retail at all.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe manufacturer, however, though he had been allowed to keep a shop, and to\r\nsell his own goods by retail, could not have undersold the common shopkeeper.\r\nWhatever part of his capital he might have placed in his shop, he must have\r\nwithdrawn it from his manufacture. In order to carry on his business on a level\r\nwith that of other people, as he must have had the profit of a manufacturer on\r\nthe one part, so he must have had that of a shopkeeper upon the other. Let us\r\nsuppose, for example, that in the particular town where he lived, ten per cent.\r\nwas the ordinary profit both of manufacturing and shopkeeping stock; he must in\r\nthis case have charged upon every piece of his own goods, which he sold in his\r\nshop, a profit of twenty per cent. When he carried them from his workhouse to\r\nhis shop, he must have valued them at the price for which he could have sold\r\nthem to a dealer or shopkeeper, who would have bought them by wholesale. If he\r\nvalued them lower, he lost a part of the profit of his manufacturing capital.\r\nWhen, again, he sold them from his shop, unless he got the same price at which\r\na shopkeeper would have sold them, he lost a part of the profit of his\r\nshop-keeping capital. Though he might appear, therefore, to make a double\r\nprofit upon the same piece of goods, yet, as these goods made successively a\r\npart of two distinct capitals, he made but a single profit upon the whole\r\ncapital employed about them; and if he made less than his profit, he was a\r\nloser, and did not employ his whole capital with the same advantage as the\r\ngreater part of his neighbours.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat the manufacturer was prohibited to do, the farmer was in some measure\r\nenjoined to do; to divide his capital between two different employments; to\r\nkeep one part of it in his granaries and stack-yard, for supplying the\r\noccasional demands of the market, and to employ the other in the cultivation of\r\nhis land. But as he could not afford to employ the latter for less than the\r\nordinary profits of farming stock, so he could as little afford to employ the\r\nformer for less than the ordinary profits of mercantile stock. Whether the\r\nstock which really carried on the business of a corn merchant belonged to the\r\nperson who was called a farmer, or to the person who was called a corn\r\nmerchant, an equal profit was in both cases requisite, in order to indemnify\r\nits owner for employing it in this manner, in order to put his business on a\r\nlevel with other trades, and in order to hinder him from having an interest to\r\nchange it as soon as possible for some other. The farmer, therefore, who was\r\nthus forced to exercise the trade of a corn merchant, could not afford to sell\r\nhis corn cheaper than any other corn merchant would have been obliged to do in\r\nthe case of a free competition.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe dealer who can employ his whole stock in one single branch of business, has\r\nan advantage of the same kind with the workman who can employ his whole labour\r\nin one single operation. As the latter acquires a dexterity which enables him,\r\nwith the same two hands, to perform a much greater quantity of work, so the\r\nformer acquires so easy and ready a method of transacting his business, of\r\nbuying and disposing of his goods, that with the same capital he can transact a\r\nmuch greater quantity of business. As the one can commonly afford his work a\r\ngood deal cheaper, so the other can commonly afford his goods somewhat cheaper,\r\nthan if his stock and attention were both employed about a greater variety of\r\nobjects. The greater part of manufacturers could not afford to retail their own\r\ngoods so cheap as a vigilant and active shopkeeper, whose sole business it was\r\nto buy them by wholesale and to retail them again. The greater part of farmers\r\ncould still less afford to retail their own corn, to supply the inhabitants of\r\na town, at perhaps four or five miles distance from the greater part of them,\r\nso cheap as a vigilant and active corn merchant, whose sole business it was to\r\npurchase corn by wholesale, to collect it into a great magazine, and to retail\r\nit again.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe law which prohibited the manufacturer from exercising the trade of a\r\nshopkeeper, endeavoured to force this division in the employment of stock to go\r\non faster than it might otherwise have done. The law which obliged the farmer\r\nto exercise the trade of a corn merchant, endeavoured to hinder it from going\r\non so fast. Both laws were evident violations of natural liberty, and therefore\r\nunjust; and they were both, too, as impolitic as they were unjust. It is the\r\ninterest of every society, that things of this kind should never either he\r\nforced or obstructed. The man who employs either his labour or his stock in a\r\ngreater variety of ways than his situation renders necessary, can never hurt\r\nhis neighbour by underselling him. He may hurt himself, and he generally does\r\nso. Jack-of-all-trades will never be rich, says the proverb. But the law ought\r\nalways to trust people with the care of their own interest, as in their local\r\nsituations they must generally be able to judge better of it than the\r\nlegislature can do. The law, however, which obliged the farmer to exercise the\r\ntrade of a corn merchant was by far the most pernicious of the two.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt obstructed not only that division in the employment of stock which is so\r\nadvantageous to every society, but it obstructed likewise the improvement and\r\ncultivation of the land. By obliging the farmer to carry on two trades instead\r\nof one, it forced him to divide his capital into two parts, of which one only\r\ncould be employed in cultivation. But if he had been at liberty to sell his\r\nwhole crop to a corn merchant as fast as he could thresh it out, his whole\r\ncapital might have returned immediately to the land, and have been employed in\r\nbuying more cattle, and hiring more servants, in order to improve and cultivate\r\nit better. But by being obliged to sell his corn by retail, he was obliged to\r\nkeep a great part of his capital in his granaries and stack-yard through the\r\nyear, and could not therefore cultivate so well as with the same capital he\r\nmight otherwise have done. This law, therefore, necessarily obstructed the\r\nimprovement of the land, and, instead of tending to render corn cheaper, must\r\nhave tended to render it scarcer, and therefore dearer, than it would otherwise\r\nhave been.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter the business of the farmer, that of the corn merchant is in reality the\r\ntrade which, if properly protected and encouraged, would contribute the most to\r\nthe raising of corn. It would support the trade of the farmer, in the same\r\nmanner as the trade of the wholesale dealer supports that of the manufacturer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wholesale dealer, by affording a ready market to the manufacturer, by\r\ntaking his goods off his hand as fast as he can make them, and by sometimes\r\neven advancing their price to him before he has made them, enables him to keep\r\nhis whole capital, and sometimes even more than his whole capital, constantly\r\nemployed in manufacturing, and consequently to manufacture a much greater\r\nquantity of goods than if he was obliged to dispose of them himself to the\r\nimmediate consumers, or even to the retailers. As the capital of the wholesale\r\nmerchant, too, is generally sufficient to replace that of many manufacturers,\r\nthis intercourse between him and them interests the owner of a large capital to\r\nsupport the owners of a great number of small ones, and to assist them in those\r\nlosses and misfortunes which might otherwise prove ruinous to them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn intercourse of the same kind universally established between the farmers and\r\nthe corn merchants, would be attended with effects equally beneficial to the\r\nfarmers. They would be enabled to keep their whole capitals, and even more than\r\ntheir whole capitals constantly employed in cultivation. In case of any of\r\nthose accidents to which no trade is more liable than theirs, they would find\r\nin their ordinary customer, the wealthy corn merchant, a person who had both an\r\ninterest to support them, and the ability to do it; and they would not, as at\r\npresent, be entirely dependent upon the forbearance of their landlord, or the\r\nmercy of his steward. Were it possible, as perhaps it is not, to establish this\r\nintercourse universally, and all at once; were it possible to turn all at once\r\nthe whole farming stock of the kingdom to its proper business, the cultivation\r\nof land, withdrawing it from every other employment into which any part of it\r\nmay be at present diverted; and were it possible, in order to support and\r\nassist, upon occasion, the operations of this great stock, to provide all at\r\nonce another stock almost equally great; it is not, perhaps, very easy to\r\nimagine how great, how extensive, and how sudden, would be the improvement\r\nwhich this change of circumstances would alone produce upon the whole face of\r\nthe country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe statute of Edward VI. therefore, by prohibiting as much as possible any\r\nmiddle man from coming in between the grower and the consumer, endeavoured to\r\nannihilate a trade, of which the free exercise is not only the best palliative\r\nof the inconveniencies of a dearth, but the best preventive of that calamity;\r\nafter the trade of the farmer, no trade contributing so much to the growing of\r\ncorn as that of the corn merchant.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rigour of this law was afterwards softened by several subsequent statutes,\r\nwhich successively permitted the engrossing of corn when the price of wheat\r\nshould not exceed 20s. and 24s. 32s. and 40s. the quarter. At last, by the 15th\r\nof Charles II. c.7, the engrossing or buying of corn, in order to sell it\r\nagain, as long as the price of wheat did not exceed 48s. the quarter, and that\r\nof other grain in proportion, was declared lawful to all persons not being\r\nforestallers, that is, not selling again in the same market within three\r\nmonths. All the freedom which the trade of the inland corn dealer has ever yet\r\nenjoyed was bestowed upon it by this statute. The statute of the twelfth of the\r\npresent king, which repeals almost all the other ancient laws against\r\nengrossers and forestallers, does not repeal the restrictions of this\r\nparticular statute, which therefore still continue in force.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis statute, however, authorises in some measure two very absurd popular\r\nprejudices.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, It supposes, that when the price of wheat has risen so high as 48s. the\r\nquarter, and that of other grain in proportion, corn is likely to be so\r\nengrossed as to hurt the people. But, from what has been already said, it seems\r\nevident enough, that corn can at no price be so engrossed by the inland dealers\r\nas to hurt the people; and 48s. the quarter, besides, though it may be\r\nconsidered as a very high price, yet, in years of scarcity, it is a price which\r\nfrequently takes place immediately after harvest, when scarce any part of the\r\nnew crop can be sold off, and when it is impossible even for ignorance to\r\nsuppose that any part of it can be so engrossed as to hurt the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, It supposes that there is a certain price at which corn is likely to\r\nbe forestalled, that is, bought up in order to be sold again soon after in the\r\nsame market, so as to hurt the people. But if a merchant ever buys up corn,\r\neither going to a particular market, or in a particular market, in order to\r\nsell it again soon after in the same market, it must be because he judges that\r\nthe market cannot be so liberally supplied through the whole season as upon\r\nthat particular occasion, and that the price, therefore, must soon rise. If he\r\njudges wrong in this, and if the price does not rise, he not only loses the\r\nwhole profit of the stock which he employs in this manner, but a part of the\r\nstock itself, by the expense and loss which necessarily attend the storing and\r\nkeeping of corn. He hurts himself, therefore, much more essentially than he can\r\nhurt even the particular people whom he may hinder from supplying themselves\r\nupon that particular market day, because they may afterwards supply themselves\r\njust as cheap upon any other market day. If he judges right, instead of hurting\r\nthe great body of the people, he renders them a most important service. By\r\nmaking them feel the inconveniencies of a dearth somewhat earlier than they\r\notherwise might do, he prevents their feeling them afterwards so severely as\r\nthey certainly would do, if the cheapness of price encouraged them to consume\r\nfaster than suited the real scarcity of the season. When the scarcity is real,\r\nthe best thing that can be done for the people is, to divide the inconvenience\r\nof it as equally as possible, through all the different months and weeks and\r\ndays of the year. The interest of the corn merchant makes him study to do this\r\nas exactly as he can; and as no other person can have either the same interest,\r\nor the same knowledge, or the same abilities, to do it so exactly as he, this\r\nmost important operation of commerce ought to be trusted entirely to him; or,\r\nin other words, the corn trade, so far at least as concerns the supply of the\r\nhome market, ought to be left perfectly free.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe popular fear of engrossing and forestalling may be compared to the popular\r\nterrors and suspicions of witchcraft. The unfortunate wretches accused of this\r\nlatter crime were not more innocent of the misfortunes imputed to them, than\r\nthose who have been accused of the former. The law which put an end to all\r\nprosecutions against witchcraft, which put it out of any man’s power to\r\ngratify his own malice by accusing his neighbour of that imaginary crime, seems\r\neffectually to have put an end to those fears and suspicions, by taking away\r\nthe great cause which encouraged and supported them. The law which would\r\nrestore entire freedom to the inland trade of corn, would probably prove as\r\neffectual to put an end to the popular fears of engrossing and forestalling.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe 15th of Charles II. c. 7, however, with all its imperfections, has,\r\nperhaps, contributed more, both to the plentiful supply of the home market, and\r\nto the increase of tillage, than any other law in the statute book. It is from\r\nthis law that the inland corn trade has derived all the liberty and protection\r\nwhich it has ever yet enjoyed; and both the supply of the home market and the\r\ninterest of tillage are much more effectually promoted by the inland, than\r\neither by the importation or exportation trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proportion of the average quantity of all sorts of grain imported into\r\nGreat Britain to that of all sorts of grain consumed, it has been computed by\r\nthe author of the Tracts upon the Corn Trade, does not exceed that of one to\r\nfive hundred and seventy. For supplying the home market, therefore, the\r\nimportance of the inland trade must be to that of the importation trade as five\r\nhundred and seventy to one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe average quantity of all sorts of grain exported from Great Britain does\r\nnot, according to the same author, exceed the one-and-thirtieth part of the\r\nannual produce. For the encouragement of tillage, therefore, by providing a\r\nmarket for the home produce, the importance of the inland trade must be to that\r\nof the exportation trade as thirty to one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI have no great faith in political arithmetic, and I mean not to warrant the\r\nexactness of either of these computations. I mention them only in order to show\r\nof how much less consequence, in the opinion of the most judicious and\r\nexperienced persons, the foreign trade of corn is than the home trade. The\r\ngreat cheapness of corn in the years immediately preceding the establishment of\r\nthe bounty may, perhaps with reason, he ascribed in some measure to the\r\noperation of this statute of Charles II. which had been enacted about\r\nfive-and-twenty years before, and which had, therefore, full time to produce\r\nits effect.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA very few words will sufficiently explain all that I have to say concerning\r\nthe other three branches of the corn trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nII. The trade of the merchant-importer of foreign corn for home consumption,\r\nevidently contributes to the immediate supply of the home market, and must so\r\nfar be immediately beneficial to the great body of the people. It tends,\r\nindeed, to lower somewhat the average money price of corn, but not to diminish\r\nits real value, or the quantity of labour which it is capable of maintaining.\r\nIf importation was at all times free, our farmers and country gentlemen would\r\nprobably, one year with another, get less money for their corn than they do at\r\npresent, when importation is at most times in effect prohibited; but the money\r\nwhich they got would be of more value, would buy more goods of all other kinds,\r\nand would employ more labour. Their real wealth, their real revenue, therefore,\r\nwould be the same as at present, though it might be expressed by a smaller\r\nquantity of silver, and they would neither be disabled nor discouraged from\r\ncultivating corn as much as they do at present. On the contrary, as the rise in\r\nthe real value of silver, in consequence of lowering the money price of corn,\r\nlowers somewhat the money price of all other commodities, it gives the industry\r\nof the country where it takes place some advantage in all foreign markets and\r\nthereby tends to encourage and increase that industry. But the extent of the\r\nhome market for corn must be in proportion to the general industry of the\r\ncountry where it grows, or to the number of those who produce something else,\r\nand therefore, have something else, or, what comes to the same thing, the price\r\nof something else, to give in exchange for corn. But in every country, the home\r\nmarket, as it is the nearest and most convenient, so is it likewise the\r\ngreatest and most important market for corn. That rise in the real value of\r\nsilver, therefore, which is the effect of lowering the average money price of\r\ncorn, tends to enlarge the greatest and most important market for corn, and\r\nthereby to encourage, instead of discouraging its growth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 22d of Charles II. c. 13, the importation of wheat, whenever the price\r\nin the home market did not exceed 53s:4d. the quarter, was subjected to a duty\r\nof 16s. the quarter; and to a duty of 8s. whenever the price did not exceed £4.\r\nThe former of these two prices has, for more than a century past, taken place\r\nonly in times of very great scarcity; and the latter has, so far as I know, not\r\ntaken place at all. Yet, till wheat has risen above this latter price, it was,\r\nby this statute, subjected to a very high duty; and, till it had risen above\r\nthe former, to a duty which amounted to a prohibition. The importation of other\r\nsorts of grain was restrained at rates and by duties, in proportion to the\r\nvalue of the grain, almost equally high. Before the 13th of the present king,\r\nthe following were the duties payable upon the importation of the different\r\nsorts of grain:\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n Grain. Duties. Duties Duties.\r\n Beans to 28s. per qr. 19s:10d. after till 40s. 16s:8d. then 12d.\r\n Barley to 28s. – 19s:10d. – 32s. 16s. – 12d.\r\n Malt is prohibited by the annual malt-tax bill.\r\n Oats to 16s. – 5s:10d. after – 9½d.\r\n Pease to 40s. – 16s: 0d. after – 9¾d.\r\n Rye to 36s. – 19s:10d. till 40s. 16s:8d – 12d.\r\n Wheat to 44s. – 21s: 9d. till 53s:4d. 17s. – 8s.\r\n till £4, and after that about 1s:4d.\r\n Buck-wheat to 32s. per qr. to pay 16s.\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nThese different duties were imposed, partly by the 22d of Charles II. in place\r\nof the old subsidy, partly by the new subsidy, by the one-third and two-thirds\r\nsubsidy, and by the subsidy 1747. Subsequent laws still further increased those\r\nduties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe distress which, in years of scarcity, the strict execution of those laws\r\nmight have brought upon the people, would probably have been very great; but,\r\nupon such occasions, its execution was generally suspended by temporary\r\nstatutes, which permitted, for a limited time, the importation of foreign corn.\r\nThe necessity of these temporary statutes sufficiently demonstrates the\r\nimpropriety of this general one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese restraints upon importation, though prior to the establishment of the\r\nbounty, were dictated by the same spirit, by the same principles, which\r\nafterwards enacted that regulation. How hurtful soever in themselves, these, or\r\nsome other restraints upon importation, became necessary in consequence of that\r\nregulation. If, when wheat was either below 48s. the quarter, or not much above\r\nit, foreign corn could have been imported, either duty free, or upon paying\r\nonly a small duty, it might have been exported again, with the benefit of the\r\nbounty, to the great loss of the public revenue, and to the entire perversion\r\nof the institution, of which the object was to extend the market for the home\r\ngrowth, not that for the growth of foreign countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIII. The trade of the merchant-exporter of corn for foreign consumption,\r\ncertainly does not contribute directly to the plentiful supply of the home\r\nmarket. It does so, however, indirectly. From whatever source this supply maybe\r\nusually drawn, whether from home growth, or from foreign importation, unless\r\nmore corn is either usually grown, or usually imported into the country, than\r\nwhat is usually consumed in it, the supply of the home market can never be very\r\nplentiful. But unless the surplus can, in all ordinary cases, be exported, the\r\ngrowers will be careful never to grow more, and the importers never to import\r\nmore, than what the bare consumption of the home market requires. That market\r\nwill very seldom be overstocked; but it will generally be understocked; the\r\npeople, whose business it is to supply it, being generally afraid lest their\r\ngoods should be left upon their hands. The prohibition of exportation limits\r\nthe improvement and cultivation of the country to what the supply of its own\r\ninhabitants require. The freedom of exportation enables it to extend\r\ncultivation for the supply of foreign nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 12th of Charles II. c.4, the exportation of corn was permitted whenever\r\nthe price of wheat did not exceed 40s. the quarter, and that of other grain in\r\nproportion. By the 15th of the same prince, this liberty was extended till the\r\nprice of wheat exceeded 48s. the quarter; and by the 22d, to all higher prices.\r\nA poundage, indeed, was to be paid to the king upon such exportation; but all\r\ngrain was rated so low in the book of rates, that this poundage amounted only,\r\nupon wheat to 1s., upon oats to 4d., and upon all other grain to 6d. the\r\nquarter. By the 1st of William and Mary, the act which established this bounty,\r\nthis small duty was virtually taken off whenever the price of wheat did not\r\nexceed 48s. the quarter; and by the 11th and 12th of William III. c. 20, it was\r\nexpressly taken off at all higher prices.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trade of the merchant-exporter was, in this manner, not only encouraged by\r\na bounty, but rendered much more free than that of the inland dealer. By the\r\nlast of these statutes, corn could be engrossed at any price for exportation;\r\nbut it could not be engrossed for inland sale, except when the price did not\r\nexceed 48s. the quarter. The interest of the inland dealer, however, it has\r\nalready been shown, can never be opposite to that of the great body of the\r\npeople. That of the merchant-exporter may, and in fact sometimes is. If, while\r\nhis own country labours under a dearth, a neighbouring country should be\r\nafflicted with a famine, it might be his interest to carry corn to the latter\r\ncountry, in such quantities as might very much aggravate the calamities of the\r\ndearth. The plentiful supply of the home market was not the direct object of\r\nthose statutes; but, under the pretence of encouraging agriculture, to raise\r\nthe money price of corn as high as possible, and thereby to occasion, as much\r\nas possible, a constant dearth in the home market. By the discouragement of\r\nimportation, the supply of that market; even in times of great scarcity, was\r\nconfined to the home growth; and by the encouragement of exportation, when the\r\nprice was so high as 48s. the quarter, that market was not, even in times of\r\nconsiderable scarcity, allowed to enjoy the whole of that growth. The temporary\r\nlaws, prohibiting, for a limited time, the exportation of corn, and taking off,\r\nfor a limited time, the duties upon its importation, expedients to which Great\r\nBritain has been obliged so frequently to have recourse, sufficiently\r\ndemonstrate the impropriety of her general system. Had that system been good,\r\nshe would not so frequently have been reduced to the necessity of departing\r\nfrom it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWere all nations to follow the liberal system of free exportation and free\r\nimportation, the different states into which a great continent was divided,\r\nwould so far resemble the different provinces of a great empire. As among the\r\ndifferent provinces of a great empire, the freedom of the inland trade appears,\r\nboth from reason and experience, not only the best palliative of a dearth, but\r\nthe most effectual preventive of a famine; so would the freedom of the\r\nexportation and importation trade be among the different states into which a\r\ngreat continent was divided. The larger the continent, the easier the\r\ncommunication through all the different parts of it, both by land and by water,\r\nthe less would any one particular part of it ever be exposed to either of these\r\ncalamities, the scarcity of any one country being more likely to be relieved by\r\nthe plenty of some other. But very few countries have entirely adopted this\r\nliberal system. The freedom of the corn trade is almost everywhere more or less\r\nrestrained, and in many countries is confined by such absurd regulations, as\r\nfrequently aggravate the unavoidable misfortune of a dearth into the dreadful\r\ncalamity of a famine. The demand of such countries for corn may frequently\r\nbecome so great and so urgent, that a small state in their neighbourhood, which\r\nhappened at the same time to be labouring under some degree of dearth, could\r\nnot venture to supply them without exposing itself to the like dreadful\r\ncalamity. The very bad policy of one country may thus render it, in some\r\nmeasure, dangerous and imprudent to establish what would otherwise be the best\r\npolicy in another. The unlimited freedom of exportation, however, would be much\r\nless dangerous in great states, in which the growth being much greater, the\r\nsupply could seldom be much affected by any quantity or corn that was likely to\r\nbe exported. In a Swiss canton, or in some of the little states in Italy, it\r\nmay, perhaps, sometimes be necessary to restrain the exportation of corn. In\r\nsuch great countries as France or England, it scarce ever can. To hinder,\r\nbesides, the farmer from sending his goods at all times to the best market, is\r\nevidently to sacrifice the ordinary laws of justice to an idea of public\r\nutility, to a sort of reasons of state; an act or legislative authority which\r\nought to be exercised only, which can be pardoned only, in cases of the most\r\nurgent necessity. The price at which exportation of corn is prohibited, if it\r\nis ever to be prohibited, ought always to be a very high price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe laws concerning corn may everywhere be compared to the laws concerning\r\nreligion. The people feel themselves so much interested in what relates either\r\nto their subsistence in this life, or to their happiness in a life to come,\r\nthat government must yield to their prejudices, and, in order to preserve the\r\npublic tranquillity, establish that system which they approve of. It is upon\r\nthis account, perhaps, that we so seldom find a reasonable system established\r\nwith regard to either of those two capital objects.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIV. The trade of the merchant-carrier, or of the importer of foreign corn, in\r\norder to export it again, contributes to the plentiful supply of the home\r\nmarket. It is not, indeed, the direct purpose of his trade to sell his corn\r\nthere; but he will generally be willing to do so, and even for a good deal less\r\nmoney than he might expect in a foreign market; because he saves in this manner\r\nthe expense of loading and unloading, of freight and insurance. The inhabitants\r\nof the country which, by means of the carrying trade, becomes the magazine and\r\nstorehouse for the supply of other countries, can very seldom be in want\r\nthemselves. Though the carrying trade must thus contribute to reduce the\r\naverage money price of corn in the home market, it would not thereby lower its\r\nreal value; it would only raise somewhat the real value of silver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe carrying trade was in effect prohibited in Great Britain, upon all ordinary\r\noccasions, by the high duties upon the importation of foreign corn, of the\r\ngreater part of which there was no drawback; and upon extraordinary occasions,\r\nwhen a scarcity made it necessary to suspend those duties by temporary\r\nstatutes, exportation was always prohibited. By this system of laws, therefore,\r\nthe carrying trade was in effect prohibited.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat system of laws, therefore, which is connected with the establishment of\r\nthe bounty, seems to deserve no part of the praise which has been bestowed upon\r\nit. The improvement and prosperity of Great Britain, which has been so often\r\nascribed to those laws, may very easily be accounted for by other causes. That\r\nsecurity which the laws in Great Britain give to every man, that he shall enjoy\r\nthe fruits of his own labour, is alone sufficient to make any country flourish,\r\nnotwithstanding these and twenty other absurd regulations of commerce; and this\r\nsecurity was perfected by the Revolution, much about the same time that the\r\nbounty was established. The natural effort of every individual to better his\r\nown condition, when suffered to exert itself with freedom and security, is so\r\npowerful a principle, that it is alone, and without any assistance, not only\r\ncapable of carrying on the society to wealth and prosperity, but of surmounting\r\na hundred impertinent obstructions, with which the folly of human laws too\r\noften encumbers its operations: though the effect of those obstructions is\r\nalways, more or less, either to encroach upon its freedom, or to diminish its\r\nsecurity. In Great Britain industry is perfectly secure; and though it is far\r\nfrom being perfectly free, it is as free or freer than in any other part of\r\nEurope.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the period of the greatest prosperity and improvement of Great Britain\r\nhas been posterior to that system of laws which is connected with the bounty,\r\nwe must not upon that account, impute it to those laws. It has been posterior\r\nlikewise to the national debt; but the national debt has most assuredly not\r\nbeen the cause of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the system of laws which is connected with the bounty, has exactly the\r\nsame tendency with the practice of Spain and Portugal, to lower somewhat the\r\nvalue of the precious metals in the country where it takes place; yet Great\r\nBritain is certainly one of the richest countries in Europe, while Spain and\r\nPortugal are perhaps amongst the most beggarly. This difference of situation,\r\nhowever, may easily be accounted for from two different causes. First, the tax\r\nin Spain, the prohibition in Portugal of exporting gold and silver, and the\r\nvigilant police which watches over the execution of those laws, must, in two\r\nvery poor countries, which between them import annually upwards of six millions\r\nsterling, operate not only more directly, but much more forcibly, in reducing\r\nthe value of those metals there, than the corn laws can do in Great Britain.\r\nAnd, secondly, this bad policy is not in those countries counterbalanced by the\r\ngeneral liberty and security of the people. Industry is there neither free nor\r\nsecure; and the civil and ecclesiastical governments of both Spain and Portugal\r\nare such as would alone be sufficient to perpetuate their present state of\r\npoverty, even though their regulations of commerce were as wise as the greatest\r\npart of them are absurd and foolish.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe 13th of the present king, c. 43, seems to have established a new system\r\nwith regard to the corn laws, in many respects better than the ancient one, but\r\nin one or two respects perhaps not quite so good.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy this statute, the high duties upon importation for home consumption are\r\ntaken off, so soon as the price of middling wheat rises to 48s. the quarter;\r\nthat of middling rye, pease, or beans, to 32s.; that of barley to 24s.; and\r\nthat of oats to 16s.; and instead of them, a small duty is imposed of only 6d\r\nupon the quarter of wheat, and upon that or other grain in proportion. With\r\nregard to all those different sorts of grain, but particularly with regard to\r\nwheat, the home market is thus opened to foreign supplies, at prices\r\nconsiderably lower than before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the same statute, the old bounty of 5s. upon the exportation of wheat,\r\nceases so soon as the price rises to 44s. the quarter, instead of 48s. the\r\nprice at which it ceased before; that of 2s:6d. upon the exportation of barley,\r\nceases so soon as the price rises to 22s. instead of 24s. the price at which it\r\nceased before; that of 2s:6d. upon the exportation of oatmeal, ceases so soon\r\nas the price rises to 14s. instead of 15s. the price at which it ceased before.\r\nThe bounty upon rye is reduced from 3s:6d. to 3s. and it ceases so soon as the\r\nprice rises to 28s. instead of 32s. the price at which it ceased before. If\r\nbounties are as improper as I have endeavoured to prove them to be, the sooner\r\nthey cease, and the lower they are, so much the better.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same statute permits, at the lowest prices, the importation of corn in\r\norder to be exported again, duty free, provided it is in the mean time lodged\r\nin a warehouse under the joint locks of the king and the importer. This\r\nliberty, indeed, extends to no more than twenty-five of the different ports of\r\nGreat Britain. They are, however, the principal ones; and there may not,\r\nperhaps, be warehouses proper for this purpose in the greater part of the\r\nothers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far this law seems evidently an improvement upon the ancient system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut by the same law, a bounty of 2s. the quarter is given for the exportation\r\nof oats, whenever the price does not exceed fourteen shillings. No bounty had\r\never been given before for the exportation of this grain, no more than for that\r\nof pease or beans.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the same law, too, the exportation of wheat is prohibited so soon as the\r\nprice rises to forty-four shillings the quarter; that of rye so soon as it\r\nrises to twenty-eight shillings; that of barley so soon as it rises to\r\ntwenty-two shillings; and that of oats so soon as they rise to fourteen\r\nshillings. Those several prices seem all of them a good deal too low; and there\r\nseems to be an impropriety, besides, in prohibiting exportation altogether at\r\nthose precise prices at which that bounty, which was given in order to force\r\nit, is withdrawn. The bounty ought certainly either to have been withdrawn at a\r\nmuch lower price, or exportation ought to have been allowed at a much higher.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSo far, therefore, this law seems to be inferior to the ancient system. With\r\nall its imperfections, however, we may perhaps say of it what was said of the\r\nlaws of Solon, that though not the best in itself, it is the best which the\r\ninterest, prejudices, and temper of the times, would admit of. It may perhaps\r\nin due time prepare the way for a better.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap31\"\u003e\u003c/a\u003eCHAPTER VI.\u003cbr\u003e\r\nOF TREATIES OF COMMERCE.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nWhen a nation binds itself by treaty, either to permit the entry of certain\r\ngoods from one foreign country which it prohibits from all others, or to exempt\r\nthe goods of one country from duties to which it subjects those of all others,\r\nthe country, or at least the merchants and manufacturers of the country, whose\r\ncommerce is so favoured, must necessarily derive great advantage from the\r\ntreaty. Those merchants and manufacturers enjoy a sort of monopoly in the\r\ncountry which is so indulgent to them. That country becomes a market, both more\r\nextensive and more advantageous for their goods: more extensive, because the\r\ngoods of other nations being either excluded or subjected to heavier duties, it\r\ntakes off a greater quantity of theirs; more advantageous, because the\r\nmerchants of the favoured country, enjoying a sort of monopoly there, will\r\noften sell their goods for a better price than if exposed to the free\r\ncompetition of all other nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch treaties, however, though they may be advantageous to the merchants and\r\nmanufacturers of the favoured, are necessarily disadvantageous to those of the\r\nfavouring country. A monopoly is thus granted against them to a foreign nation;\r\nand they must frequently buy the foreign goods they have occasion for, dearer\r\nthan if the free competition of other nations was admitted. That part of its\r\nown produce with which such a nation purchases foreign goods, must consequently\r\nbe sold cheaper; because, when two things are exchanged for one another, the\r\ncheapness of the one is a necessary consequence, or rather is the same thing,\r\nwith the dearness of the other. The exchangeable value of its annual produce,\r\ntherefore, is likely to be diminished by every such treaty. This diminution,\r\nhowever, can scarce amount to any positive loss, but only to a lessening of the\r\ngain which it might otherwise make. Though it sells its goods cheaper than it\r\notherwise might do, it will not probably sell them for less than they cost;\r\nnor, as in the case of bounties, for a price which will not replace the capital\r\nemployed in bringing them to market, together with the ordinary profits of\r\nstock. The trade could not go on long if it did. Even the favouring country,\r\ntherefore, may still gain by the trade, though less than if there was a free\r\ncompetition.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome treaties of commerce, however, have been supposed advantageous, upon\r\nprinciples very different from these; and a commercial country has sometimes\r\ngranted a monopoly of this kind, against itself, to certain goods of a foreign\r\nnation, because it expected, that in the whole commerce between them, it would\r\nannually sell more than it would buy, and that a balance in gold and silver\r\nwould be annually returned to it. It is upon this principle that the treaty of\r\ncommerce between England and Portugal, concluded in 1703 by Mr Methuen, has\r\nbeen so much commended. The following is a literal translation of that treaty,\r\nwhich consists of three articles only.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nART. I. His sacred royal majesty of Portugal promises, both in his own name and\r\nthat of his successors, to admit for ever hereafter, into Portugal, the woollen\r\ncloths, and the rest of the woollen manufactures of the British, as was\r\naccustomed, till they were prohibited by the law; nevertheless upon this\r\ncondition:\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nART. II. That is to say, that her sacred royal majesty of Great Britain shall,\r\nin her own name, and that of her successors, be obliged, for ever hereafter, to\r\nadmit the wines of the growth of Portugal into Britain; so that at no time,\r\nwhether there shall be peace or war between the kingdoms of Britain and France,\r\nany thing more shall be demanded for these wines by the name of custom or duty,\r\nor by whatsoever other title, directly or indirectly, whether they shall be\r\nimported into Great Britain in pipes or hogsheads, or other casks, than what\r\nshall be demanded for the like quantity or measure of French wine, deducting or\r\nabating a third part of the custom or duty. But if, at any time, this deduction\r\nor abatement of customs, which is to be made as aforesaid, shall in any manner\r\nbe attempted and prejudiced, it shall be just and lawful for his sacred royal\r\nmajesty of Portugal, again to prohibit the woollen cloths, and the rest of the\r\nBritish woollen manufactures.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nART. III. The most excellent lords the plenipotentiaries promise and take upon\r\nthemselves, that their above named masters shall ratify this treaty; and within\r\nthe space of two months the ratification shall be exchanged.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy this treaty, the crown of Portugal becomes bound to admit the English\r\nwoollens upon the same footing as before the prohibition; that is, not to raise\r\nthe duties which had been paid before that time. But it does not become bound\r\nto admit them upon any better terms than those of any other nation, of France\r\nor Holland, for example. The crown of Great Britain, on the contrary, becomes\r\nbound to admit the wines of Portugal, upon paying only two-thirds of the duty\r\nwhich is paid for those of France, the wines most likely to come into\r\ncompetition with them. So far this treaty, therefore, is evidently advantageous\r\nto Portugal, and disadvantageous to Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been celebrated, however, as a masterpiece of the commercial policy of\r\nEngland. Portugal receives annually from the Brazils a greater quantity of gold\r\nthan can be employed in its domestic commerce, whether in the shape of coin or\r\nof plate. The surplus is too valuable to be allowed to lie idle and locked up\r\nin coffers; and as it can find no advantageous market at home, it must,\r\nnotwithstanding; any prohibition, be sent abroad, and exchanged for something\r\nfor which there is a more advantageous market at home. A large share of it\r\ncomes annually to England, in return either for English goods, or for those of\r\nother European nations that receive their returns through England. Mr Barretti\r\nwas informed, that the weekly packet-boat from Lisbon brings, one week with\r\nanother, more than £50,000 in gold to England. The sum had probably been\r\nexaggerated. It would amount to more than £2,600,000 a year, which is more than\r\nthe Brazils are supposed to afford.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur merchants were, some years ago, out of humour with the crown of Portugal.\r\nSome privileges which had been granted them, not by treaty, but by the free\r\ngrace of that crown, at the solicitation, indeed, it is probable, and in return\r\nfor much greater favours, defence and protection from the crown of Great\r\nBritain, had been either infringed or revoked. The people, therefore, usually\r\nmost interested in celebrating the Portugal trade, were then rather disposed to\r\nrepresent it as less advantageous than it had commonly been imagined. The far\r\ngreater part, almost the whole, they pretended, of this annual importation of\r\ngold, was not on account of Great Britain, but of other European nations; the\r\nfruits and wines of Portugal annually imported into Great Britain nearly\r\ncompensating the value of the British goods sent thither.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLet us suppose, however, that the whole was on account of Great Britain, and\r\nthat it amounted to a still greater sum than Mr Barretti seems to imagine; this\r\ntrade would not, upon that account, be more advantageous than any other, in\r\nwhich, for the same value sent out, we received an equal value of consumable\r\ngoods in return.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is but a very small part of this importation which, it can be supposed, is\r\nemployed as an annual addition, either to the plate or to the coin of the\r\nkingdom. The rest must all be sent abroad, and exchanged for consumable goods\r\nof some kind or other. But if those consumable goods were purchased directly\r\nwith the produce of English industry, it would be more for the advantage of\r\nEngland, than first to purchase with that produce the gold of Portugal, and\r\nafterwards to purchase with that gold those consumable goods. A direct foreign\r\ntrade of consumption is always more advantageous than a round-about one; and to\r\nbring the same value of foreign goods to the home market requires a much\r\nsmaller capital in the one way than in the ether. If a smaller share of its\r\nindustry, therefore, had been employed in producing goods fit for the Portugal\r\nmarket, and a greater in producing those lit for the other markets, where those\r\nconsumable goods for which there is a demand in Great Britain are to be had, it\r\nwould have been more for the advantage of England. To procure both the gold\r\nwhich it wants for its own use, and the consumable goods, would, in this way,\r\nemploy a much smaller capital than at present. There would be a spare capital,\r\ntherefore, to be employed for other purposes, in exciting an additional\r\nquantity of industry, and in raising a greater annual produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough Britain were entirely excluded from the Portugal trade, it could find\r\nvery little difficulty in procuring all the annual supplies of gold which it\r\nwants, either for the purposes of plate, or of coin, or of foreign trade. Gold,\r\nlike every other commodity, is always somewhere or another to be got for its\r\nvalue by those who have that value to give for it. The annual surplus of gold\r\nin Portugal, besides, would still be sent abroad, and though not carried away\r\nby Great Britain, would be carried away by some other nation, which would be\r\nglad to sell it again for its price, in the same manner as Great Britain does\r\nat present. In buying gold of Portugal, indeed, we buy it at the first hand;\r\nwhereas, in buying it of any other nation, except Spain, we should buy it at\r\nthe second, and might pay somewhat dearer. This difference, however, would\r\nsurely be too insignificant to deserve the public attention.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAlmost all our gold, it is said, comes from Portugal. With other nations, the\r\nbalance of trade is either against as, or not much in our favour. But we should\r\nremember, that the more gold we import from one country, the less we must\r\nnecessarily import from all others. The effectual demand for gold, like that\r\nfor every other commodity, is in every country limited to a certain quantity.\r\nIf nine-tenths of this quantity are imported from one country, there remains a\r\ntenth only to be imported from all others. The more gold, besides, that is\r\nannually imported from some particular countries, over and above what is\r\nrequisite for plate and for coin, the more must necessarily be exported to some\r\nothers: and the more that most insignificant object of modern policy, the\r\nbalance of trade, appears to be in our favour with some particular countries,\r\nthe more it must necessarily appear to be against us with many others.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was upon this silly notion, however, that England could not subsist without\r\nthe Portugal trade, that, towards the end of the late war, France and Spain,\r\nwithout pretending either offence or provocation, required the king of Portugal\r\nto exclude all British ships from his ports, and, for the security of this\r\nexclusion, to receive into them French or Spanish garrisons. Had the king of\r\nPortugal submitted to those ignominious terms which his brother-in-law the king\r\nof Spain proposed to him, Britain would have been freed from a much greater\r\ninconveniency than the loss of the Portugal trade, the burden of supporting a\r\nvery weak ally, so unprovided of every thing for his own defence, that the\r\nwhole power of England, had it been directed to that single purpose, could\r\nscarce, perhaps, have defended him for another campaign. The loss of the\r\nPortugal trade would, no doubt, have occasioned a considerable embarrassment to\r\nthe merchants at that time engaged in it, who might not, perhaps, have found\r\nout, for a year or two, any other equally advantageous method of employing\r\ntheir capitals; and in this would probably have consisted all the inconveniency\r\nwhich England could have suffered from this notable piece of commercial policy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great annual importation of gold and silver is neither for the purpose of\r\nplate nor of coin, but of foreign trade. A round-about foreign trade of\r\nconsumption can be carried on more advantageously by means of these metals than\r\nof almost any other goods. As they are the universal instruments of commerce,\r\nthey are more readily received in return for all commodities than any other\r\ngoods; and, on account of their small bulk and great value, it costs less to\r\ntransport them backward and forward from one place to another than almost any\r\nother sort of merchandize, and they lose less of their value by being so\r\ntransported. Of all the commodities, therefore, which are bought in one foreign\r\ncountry, for no other purpose but to be sold or exchanged again for some other\r\ngoods in another, there are none so convenient as gold and silver. In\r\nfacilitating all the different round-about foreign trades of consumption which\r\nare carried on in Great Britain, consists the principal advantage of the\r\nPortugal trade; and though it is not a capital advantage, it is, no doubt, a\r\nconsiderable one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat any annual addition which, it can reasonably be supposed, is made either\r\nto the plate or to the coin of the kingdom, could require but a very small\r\nannual importation of gold and silver, seems evident enough; and though we had\r\nno direct trade with Portugal, this small quantity could always, somewhere or\r\nanother, be very easily got.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the goldsmiths trade be very considerable in Great Britain, the far\r\ngreater part of the new plate which they annually sell, is made from other old\r\nplate melted down; so that the addition annually made to the whole plate of the\r\nkingdom cannot be very great, and could require but a very small annual\r\nimportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is the same case with the coin. Nobody imagines, I believe, that even the\r\ngreater part of the annual coinage, amounting, for ten years together, before\r\nthe late reformation of the gold coin, to upwards of £800,000 a-year in gold,\r\nwas an annual addition to the money before current in the kingdom. In a country\r\nwhere the expense of the coinage is defrayed by the government, the value of\r\nthe coin, even when it contains its full standard weight of gold and silver,\r\ncan never be much greater than that of an equal quantity of those metals\r\nuncoined, because it requires only the trouble of going to the mint, and the\r\ndelay, perhaps, of a few weeks, to procure for any quantity of uncoined gold\r\nand silver an equal quantity of those metals in coin; but in every country the\r\ngreater part of the current coin is almost always more or less worn, or\r\notherwise degenerated from its standard. In Great Britain it was, before the\r\nlate reformation, a good deal so, the gold being more than two per cent., and\r\nthe silver more than eight per cent. below its standard weight. But if\r\nforty-four guineas and a-half, containing their full standard weight, a pound\r\nweight of gold, could purchase very little more than a pound weight of uncoined\r\ngold; forty-four guineas and a-half, wanting a part of their weight, could not\r\npurchase a pound weight, and something was to be added, in order to make up the\r\ndeficiency. The current price of gold bullion at market, therefore, instead of\r\nbeing the same with the mint price, or £46:14:6, was then about £47:14s., and\r\nsometimes about £48. When the greater part of the coin, however, was in this\r\ndegenerate condition, forty four guineas and a-half, fresh from the mint, would\r\npurchase no more goods in the market than any other ordinary guineas; because,\r\nwhen they came into the coffers of the merchant, being confounded with other\r\nmoney, they could not afterwards be distinguished without more trouble than the\r\ndifference was worth. Like other guineas, they were worth no more than\r\n£46:14:6. If thrown into the melting pot, however, they produced, without any\r\nsensible loss, a pound weight of standard gold, which could be sold at any time\r\nfor between £47:14s. and £48, either in gold or silver, as fit for all the\r\npurposes of coin as that which had been melted down. There was an evident\r\nprofit, therefore, in melting down new-coined money; and it was done so\r\ninstantaneously, that no precaution of government could prevent it. The\r\noperations of the mint were, upon this account, somewhat like the web of\r\nPenelope; the work that was done in the day was undone in the night. The mint\r\nwas employed, not so much in making daily additions to the coin, as in\r\nreplacing the very best part of it, which was daily melted down.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWere the private people who carry their gold and silver to the mint to pay\r\nthemselves for the coinage, it would add to the value of those metals, in the\r\nsame manner as the fashion does to that of plate. Coined gold and silver would\r\nbe more valuable than uncoined. The seignorage, if it was not exorbitant, would\r\nadd to the bullion the whole value of the duty; because, the government having\r\neverywhere the exclusive privilege of coining, no coin can come to market\r\ncheaper than they think proper to afford it. If the duty was exorbitant,\r\nindeed, that is, if it was very much above the real value of the labour and\r\nexpense requisite for coinage, false coiners, both at home and abroad, might be\r\nencouraged, by the great difference between the value of bullion and that of\r\ncoin, to pour in so great a quantity of counterfeit money as might reduce the\r\nvalue of the government money. In France, however, though the seignorage is\r\neight per cent., no sensible inconveniency of this kind is found to arise from\r\nit. The dangers to which a false coiner is everywhere exposed, if he lives in\r\nthe country of which he counterfeits the coin, and to which his agents or\r\ncorrespondents are exposed, if he lives in a foreign country, are by far too\r\ngreat to be incurred for the sake of a profit of six or seven per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe seignorage in France raises the value of the coin higher than in proportion\r\nto the quantity of pure gold which it contains. Thus, by the edict of January\r\n1726, the mint price of fine gold of twenty-four carats was fixed at seven\r\nhundred and forty livres nine sous and one denier one-eleventh the mark of\r\neight Paris ounces. {See Dictionnaire des Monnoies, tom. ii. article\r\nSeigneurage, p. 439, par 81. Abbot de Bazinghen, Conseiller-Commissaire en la\r\nCour des Monnoies à Paris.} The gold coin of France, making an allowance for\r\nthe remedy of the mint, contains twenty-one carats and three-fourths of fine\r\ngold, and two carats one-fourth of alloy. The mark of standard gold, therefore,\r\nis worth no more than about six hundred and seventy-one livres ten deniers. But\r\nin France this mark of standard gold is coined into thirty louis d’ors of\r\ntwenty-four livres each, or into seven hundred and twenty livres. The coinage,\r\ntherefore, increases the value of a mark of standard gold bullion, by the\r\ndifference between six hundred and seventy-one livres ten deniers and seven\r\nhundred and twenty livres, or by forty-eight livres nineteen sous and two\r\ndeniers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA seignorage will, in many cases, take away altogether, and will in all cases\r\ndiminish, the profit of melting down the new coin. This profit always arises\r\nfrom the difference between the quantity of bullion which the common currency\r\nought to contain and that which it actually does contain. If this difference is\r\nless than the seignorage, there will be loss instead of profit. If it is equal\r\nto the seignorage, there will be neither profit nor loss. If it is greater than\r\nthe seignorage, there will, indeed, be some profit, but less than if there was\r\nno seignorage. If, before the late reformation of the gold coin, for example,\r\nthere had been a seignorage of five per cent. upon the coinage, there would\r\nhave been a loss of three per cent. upon the melting down of the gold coin. If\r\nthe seignorage had been two per cent., there would have been neither profit nor\r\nloss. If the seignorage had been one per cent., there would have been a profit\r\nbut of one per cent. only, instead of two per cent. Wherever money is received\r\nby tale, therefore, and not by weight, a seignorage is the most effectual\r\npreventive of the melting down of the coin, and, for the same reason, of its\r\nexportation. It is the best and heaviest pieces that are commonly either melted\r\ndown or exported, because it is upon such that the largest profits are made.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe law for the encouragement of the coinage, by rendering it duty-free, was\r\nfirst enacted during the reign of Charles II. for a limited time, and\r\nafterwards continued, by different prolongations, till 1769, when it was\r\nrendered perpetual. The bank of England, in order to replenish their coffers\r\nwith money, are frequently obliged to carry bullion to the mint; and it was\r\nmore for their interest, they probably imagined, that the coinage should be at\r\nthe expense of the government than at their own. It was probably out of\r\ncomplaisance to this great company, that the government agreed to render this\r\nlaw perpetual. Should the custom of weighing gold, however, come to be disused,\r\nas it is very likely to be on account of its inconveniency; should the gold\r\ncoin of England come to be received by tale, as it was before the late\r\nrecoinage this great company may, perhaps, find that they have, upon this, as\r\nupon some other occasions, mistaken their own interest not a little.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the late recoinage, when the gold currency of England was two per cent.\r\nbelow its standard weight, as there was no seignorage, it was two per cent.\r\nbelow the value of that quantity of standard gold bullion which it ought to\r\nhave contained. When this great company, therefore, bought gold bullion in\r\norder to have it coined, they were obliged to pay for it two per cent. more\r\nthan it was worth after the coinage. But if there had been a seignorage of two\r\nper cent. upon the coinage, the common gold currency, though two per cent.\r\nbelow its standard weight, would, notwithstanding, have been equal in value to\r\nthe quantity of standard gold which it ought to have contained; the value of\r\nthe fashion compensating in this case the diminution of the weight. They would,\r\nindeed, have had the seignorage to pay, which being two per cent., their loss\r\nupon the whole transaction would have been two per cent., exactly the same, but\r\nno greater than it actually was.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the seignorage had been five per cent. and the gold currency only two per\r\ncent. below its standard weight, the bank would, in this case, have gained\r\nthree per cent. upon the price of the bullion; but as they would have had a\r\nseignorage of five per cent. to pay upon the coinage, their loss upon the whole\r\ntransaction would, in the same manner, have been exactly two per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the seignorage had been only one per cent., and the gold currency two per\r\ncent. below its standard weight, the bank would, in this case, have lost only\r\none per cent. upon the price of the bullion; but as they would likewise have\r\nhad a seignorage of one per cent. to pay, their loss upon the whole transaction\r\nwould have been exactly two per cent., in the same manner as in all other\r\ncases.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf there was a reasonable seignorage, while at the same time the coin contained\r\nits full standard weight, as it has done very nearly since the late recoinage,\r\nwhatever the bank might lose by the seignorage, they would gain upon the price\r\nof the bullion; and whatever they might gain upon the price of the bullion,\r\nthey would lose by the seignorage. They would neither lose nor gain, therefore,\r\nupon the whole transaction, and they would in this, as in all the foregoing\r\ncases, be exactly in the same situation as if there was no seignorage.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the tax upon a commodity is so moderate as not to encourage smuggling, the\r\nmerchant who deals in it, though he advances, does not properly pay the tax, as\r\nhe gets it back in the price of the commodity. The tax is finally paid by the\r\nlast purchaser or consumer. But money is a commodity, with regard to which\r\nevery man is a merchant. Nobody buys it but in order to sell it again; and with\r\nregard to it there is, in ordinary cases, no last purchaser or consumer. When\r\nthe tax upon coinage, therefore, is so moderate as not to encourage false\r\ncoining, though every body advances the tax, nobody finally pays it; because\r\nevery body gets it back in the advanced value of the coin.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA moderate seignorage, therefore, would not, in any case, augment the expense\r\nof the bank, or of any other private persons who carry their bullion to the\r\nmint in order to be coined; and the want of a moderate seignorage does not in\r\nany case diminish it. Whether there is or is not a seignorage, if the currency\r\ncontains its full standard weight, the coinage costs nothing to anybody; and if\r\nit is short of that weight, the coinage must always cost the difference between\r\nthe quantity of bullion which ought to be contained in it, and that which\r\nactually is contained in it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe government, therefore, when it defrays the expense of coinage, not only\r\nincurs some small expense, but loses some small revenue which it might get by a\r\nproper duty; and neither the bank, nor any other private persons, are in the\r\nsmallest degree benefited by this useless piece of public generosity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe directors of the bank, however, would probably be unwilling to agree to the\r\nimposition of a seignorage upon the authority of a speculation which promises\r\nthem no gain, but only pretends to insure them from any loss. In the present\r\nstate of the gold coin, and as long as it continues to be received by weight,\r\nthey certainly would gain nothing by such a change. But if the custom of\r\nweighing the gold coin should ever go into disuse, as it is very likely to do,\r\nand if the gold coin should ever fall into the same state of degradation in\r\nwhich it was before the late recoinage, the gain, or more properly the savings,\r\nof the bank, in consequence of the imposition of a seignorage, would probably\r\nbe very considerable. The bank of England is the only company which sends any\r\nconsiderable quantity of bullion to the mint, and the burden of the annual\r\ncoinage falls entirely, or almost entirely, upon it. If this annual coinage had\r\nnothing to do but to repair the unavoidable losses and necessary wear and tear\r\nof the coin, it could seldom exceed fifty thousand, or at most a hundred\r\nthousand pounds. But when the coin is degraded below its standard weight, the\r\nannual coinage must, besides this, fill up the large vacuities which\r\nexportation and the melting pot are continually making in the current coin. It\r\nwas upon this account, that during the ten or twelve years immediately\r\npreceding the late reformation of the gold coin, the annual coinage amounted,\r\nat an average, to more than £850,000. But if there had been a seignorage of\r\nfour or five per cent. upon the gold coin, it would probably, even in the state\r\nin which things then were, have put an effectual stop to the business both of\r\nexportation and of the melting pot. The bank, instead of losing every year\r\nabout two and a half per cent. upon the bullion which was to be coined into\r\nmore than eight hundred and fifty thousand pounds, or incurring an annual loss\r\nof more than £21,250 pounds, would not probably have incurred the tenth part of\r\nthat loss.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue allotted by parliament for defraying the expense of the coinage is\r\nbut fourteen thousand pounds a-year; and the real expense which it costs the\r\ngovernment, or the fees of the officers of the mint, do not, upon ordinary\r\noccasions, I am assured, exceed the half of that sum. The saving of so very\r\nsmall a sum, or even the gaining of another, which could not well be much\r\nlarger, are objects too inconsiderable, it may be thought, to deserve the\r\nserious attention of government. But the saving of eighteen or twenty thousand\r\npounds a-year, in case of an event which is not improbable, which has\r\nfrequently happened before, and which is very likely to happen again, is surely\r\nan object which well deserves the serious attention, even of so great a company\r\nas the bank of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome of the foregoing reasonings and observations might, perhaps, have been\r\nmore properly placed in those chapters of the first book which treat of the\r\norigin and use of money, and of the difference between the real and the nominal\r\nprice of commodities. But as the law for the encouragement of coinage derives\r\nits origin from those vulgar prejudices which have been introduced by the\r\nmercantile system, I judged it more proper to reserve them for this chapter.\r\nNothing could be more agreeable to the spirit of that system than a sort of\r\nbounty upon the production of money, the very thing which, it supposes,\r\nconstitutes the wealth of every nation. It is one of its many admirable\r\nexpedients for enriching the country.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap32\"\u003e\u003c/a\u003eCHAPTER VII.\u003cbr\u003e\r\nOF COLONIES.\u003c/h2\u003e\r\n\r\n\u003ch3\u003ePART I. Of the Motives for Establishing New Colonies.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe interest which occasioned the first settlement of the different European\r\ncolonies in America and the West Indies, was not altogether so plain and\r\ndistinct as that which directed the establishment of those of ancient Greece\r\nand Rome.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the different states of ancient Greece possessed, each of them, but a very\r\nsmall territory; and when the people in anyone of them multiplied beyond what\r\nthat territory could easily maintain, a part of them were sent in quest of a\r\nnew habitation, in some remote and distant part of the world; the warlike\r\nneighbours who surrounded them on all sides, rendering it difficult for any of\r\nthem to enlarge very much its territory at home. The colonies of the Dorians\r\nresorted chiefly to Italy and Sicily, which, in the times preceding the\r\nfoundation of Rome, were inhabited by barbarous and uncivilized nations; those\r\nof the Ionians and Aeolians, the two other great tribes of the Greeks, to Asia\r\nMinor and the islands of the Aegean sea, of which the inhabitants sewn at that\r\ntime to have been pretty much in the same state as those of Sicily and Italy.\r\nThe mother city, though she considered the colony as a child, at all times\r\nentitled to great favour and assistance, and owing in return much gratitude and\r\nrespect, yet considered it as an emancipated child, over whom she pretended to\r\nclaim no direct authority or jurisdiction. The colony settled its own form of\r\ngovernment, enacted its own laws, elected its own magistrates, and made peace\r\nor war with its neighbours, as an independent state, which had no occasion to\r\nwait for the approbation or consent of the mother city. Nothing can be more\r\nplain and distinct than the interest which directed every such establishment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRome, like most of the other ancient republics, was originally founded upon an\r\nagrarian law, which divided the public territory, in a certain proportion,\r\namong the different citizens who composed the state. The course of human\r\naffairs, by marriage, by succession, and by alienation, necessarily deranged\r\nthis original division, and frequently threw the lands which had been allotted\r\nfor the maintenance of many different families, into the possession of a single\r\nperson. To remedy this disorder, for such it was supposed to be, a law was\r\nmade, restricting the quantity of land which any citizen could possess to five\r\nhundred jugera; about 350 English acres. This law, however, though we read of\r\nits having been executed upon one or two occasions, was either neglected or\r\nevaded, and the inequality of fortunes went on continually increasing. The\r\ngreater part of the citizens had no land; and without it the manners and\r\ncustoms of those times rendered it difficult for a freeman to maintain his\r\nindependency. In the present times, though a poor man has no land of his own,\r\nif he has a little stock, he may either farm the lands of another, or he may\r\ncarry on some little retail trade; and if he has no stock, he may find\r\nemployment either as a country labourer, or as an artificer. But among the\r\nancient Romans, the lands of the rich were all cultivated by slaves, who\r\nwrought under an overseer, who was likewise a slave; so that a poor freeman had\r\nlittle chance of being employed either as a farmer or as a labourer. All trades\r\nand manufactures, too, even the retail trade, were carried on by the slaves of\r\nthe rich for the benefit of their masters, whose wealth, authority, and\r\nprotection, made it difficult for a poor freeman to maintain the competition\r\nagainst them. The citizens, therefore, who had no land, had scarce any other\r\nmeans of subsistence but the bounties of the candidates at the annual\r\nelections. The tribunes, when they had a mind to animate the people against the\r\nrich and the great, put them in mind of the ancient divisions of lands, and\r\nrepresented that law which restricted this sort of private property as the\r\nfundamental law of the republic. The people became clamorous to get land, and\r\nthe rich and the great, we may believe, were perfectly determined not to give\r\nthem any part of theirs. To satisfy them in some measure, therefore, they\r\nfrequently proposed to send out a new colony. But conquering Rome was, even\r\nupon such occasions, under no necessity of turning out her citizens to seek\r\ntheir fortune, if one may so, through the wide world, without knowing where\r\nthey were to settle. She assigned them lands generally in the conquered\r\nprovinces of Italy, where, being within the dominions of the republic, they\r\ncould never form any independent state, but were at best but a sort of\r\ncorporation, which, though it had the power of enacting bye-laws for its own\r\ngovernment, was at all times subject to the correction, jurisdiction, and\r\nlegislative authority of the mother city. The sending out a colony of this kind\r\nnot only gave some satisfaction to the people, but often established a sort of\r\ngarrison, too, in a newly conquered province, of which the obedience might\r\notherwise have been doubtful. A Roman colony, therefore, whether we consider\r\nthe nature of the establishment itself, or the motives for making it, was\r\naltogether different from a Greek one. The words, accordingly, which in the\r\noriginal languages denote those different establishments, have very different\r\nmeanings. The Latin word (colonia) signifies simply a plantation. The Greek\r\nword (apoixia), on the contrary, signifies a separation of dwelling, a\r\ndeparture from home, a going out of the house. But though the Roman colonies\r\nwere, in many respects, different from the Greek ones, the interest which\r\nprompted to establish them was equally plain and distinct. Both institutions\r\nderived their origin, either from irresistible necessity, or from clear and\r\nevident utility.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe establishment of the European colonies in America and the West Indies arose\r\nfrom no necessity; and though the utility which has resulted from them has been\r\nvery great, it is not altogether so clear and evident. It was not understood at\r\ntheir first establishment, and was not the motive, either of that\r\nestablishment, or of the discoveries which gave occasion to it; and the nature,\r\nextent, and limits of that utility, are not, perhaps, well understood at this\r\nday.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Venetians, during the fourteenth and fifteenth centuries, carried on a very\r\nadvantageous commerce in spiceries and other East India goods, which they\r\ndistributed among the other nations of Europe. They purchased them chiefly in\r\nEgypt, at that time under the dominion of the Mamelukes, the enemies of the\r\nTurks, of whom the Venetians were the enemies; and this union of interest,\r\nassisted by the money of Venice, formed such a connexion as gave the Venetians\r\nalmost a monopoly of the trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great profits of the Venetians tempted the avidity of the Portuguese. They\r\nhad been endeavouring, during the course of the fifteenth century, to find out\r\nby sea a way to the countries from which the Moors brought them ivory and gold\r\ndust across the desert. They discovered the Madeiras, the Canaries, the Azores,\r\nthe Cape de Verd islands, the coast of Guinea, that of Loango, Congo, Angola,\r\nand Benguela, and, finally, the Cape of Good Hope. They had long wished to\r\nshare in the profitable traffic of the Venetians, and this last discovery\r\nopened to them a probable prospect of doing so. In 1497, Vasco de Gamo sailed\r\nfrom the port of Lisbon with a fleet of four ships, and, after a navigation of\r\neleven months, arrived upon the coast of Indostan; and thus completed a course\r\nof discoveries which had been pursued with great steadiness, and with very\r\nlittle interruption, for near a century together.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome years before this, while the expectations of Europe were in suspense about\r\nthe projects of the Portuguese, of which the success appeared yet to be\r\ndoubtful, a Genoese pilot formed the yet more daring project of sailing to the\r\nEast Indies by the west. The situation of those countries was at that time very\r\nimperfectly known in Europe. The few European travellers who had been there,\r\nhad magnified the distance, perhaps through simplicity and ignorance; what was\r\nreally very great, appearing almost infinite to those who could not measure it;\r\nor, perhaps, in order to increase somewhat more the marvellous of their own\r\nadventures in visiting regions so immensely remote from Europe. The longer the\r\nway was by the east, Columbus very justly concluded, the shorter it would be by\r\nthe west. He proposed, therefore, to take that way, as both the shortest and\r\nthe surest, and he had the good fortune to convince Isabella of Castile of the\r\nprobability of his project. He sailed from the port of Palos in August 1492,\r\nnear five years before the expedition of Vasco de Gamo set out from Portugal;\r\nand, after a voyage of between two and three months, discovered first some of\r\nthe small Bahama or Lucyan islands, and afterwards the great island of St.\r\nDomingo.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the countries which Columbus discovered, either in this or in any of his\r\nsubsequent voyages, had no resemblance to those which he had gone in quest of.\r\nInstead of the wealth, cultivation, and populousness of China and Indostan, he\r\nfound, in St. Domingo, and in all the other parts of the new world which he\r\never visited, nothing but a country quite covered with wood, uncultivated, and\r\ninhabited only by some tribes of naked and miserable savages. He was not very\r\nwilling, however, to believe that they were not the same with some of the\r\ncountries described by Marco Polo, the first European who had visited, or at\r\nleast had left behind him any description of China or the East Indies; and a\r\nvery slight resemblance, such as that which he found between the name of Cibao,\r\na mountain in St. Domingo, and that of Cipange, mentioned by Marco Polo, was\r\nfrequently sufficient to make him return to this favourite prepossession,\r\nthough contrary to the clearest evidence. In his letters to Ferdinand and\r\nIsabella, he called the countries which he had discovered the Indies. He\r\nentertained no doubt but that they were the extremity of those which had been\r\ndescribed by Marco Polo, and that they were not very distant from the Ganges,\r\nor from the countries which had been conquered by Alexander. Even when at last\r\nconvinced that they were different, he still flattered himself that those rich\r\ncountries were at no great distance; and in a subsequent voyage, accordingly,\r\nwent in quest of them along the coast of Terra Firma, and towards the Isthmus\r\nof Darien.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of this mistake of Columbus, the name of the Indies has stuck to\r\nthose unfortunate countries ever since; and when it was at last clearly\r\ndiscovered that the new were altogether different from the old Indies, the\r\nformer were called the West, in contradistinction to the latter, which were\r\ncalled the East Indies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was of importance to Columbus, however, that the countries which he had\r\ndiscovered, whatever they were, should be represented to the court of Spain as\r\nof very great consequence; and, in what constitutes the real riches of every\r\ncountry, the animal and vegetable productions of the soil, there was at that\r\ntime nothing which could well justify such a representation of them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe cori, something between a rat and a rabbit, and supposed by Mr Buffon to be\r\nthe same with the aperea of Brazil, was the largest viviparous quadruped in St.\r\nDomingo. This species seems never to have been very numerous; and the dogs and\r\ncats of the Spaniards are said to have long ago almost entirely extirpated it,\r\nas well as some other tribes of a still smaller size. These, however, together\r\nwith a pretty large lizard, called the ivana or iguana, constituted the\r\nprincipal part of the animal food which the land afforded.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe vegetable food of the inhabitants, though, from their want of industry, not\r\nvery abundant, was not altogether so scanty. It consisted in Indian corn, yams,\r\npotatoes, bananas, etc., plants which were then altogether unknown in Europe,\r\nand which have never since been very much esteemed in it, or supposed to yield\r\na sustenance equal to what is drawn from the common sorts of grain and pulse,\r\nwhich have been cultivated in this part of the world time out of mind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe cotton plant, indeed, afforded the material of a very important\r\nmanufacture, and was at that time, to Europeans, undoubtedly the most valuable\r\nof all the vegetable productions of those islands. But though, in the end of\r\nthe fifteenth century, the muslins and other cotton goods of the East Indies\r\nwere much esteemed in every part of Europe, the cotton manufacture itself was\r\nnot cultivated in any part of it. Even this production, therefore, could not at\r\nthat time appear in the eyes of Europeans to be of very great consequence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFinding nothing, either in the animals or vegetables of the newly discovered\r\ncountries which could justify a very advantageous representation of them,\r\nColumbus turned his view towards their minerals; and in the richness of their\r\nproductions of this third kingdom, he flattered himself he had found a full\r\ncompensation for the insignificancy of those of the other two. The little bits\r\nof gold with which the inhabitants ornamented their dress, and which, he was\r\ninformed, they frequently found in the rivulets and torrents which fell from\r\nthe mountains, were sufficient to satisfy him that those mountains abounded\r\nwith the richest gold mines. St. Domingo, therefore, was represented as a\r\ncountry abounding with gold, and upon that account (according to the prejudices\r\nnot only of the present times, but of those times), an inexhaustible source of\r\nreal wealth to the crown and kingdom of Spain. When Columbus, upon his return\r\nfrom his first voyage, was introduced with a sort of triumphal honours to the\r\nsovereigns of Castile and Arragon, the principal productions of the countries\r\nwhich he had discovered were carried in solemn procession before him. The only\r\nvaluable part of them consisted in some little fillets, bracelets, and other\r\nornaments of gold, and in some bales of cotton. The rest were mere objects of\r\nvulgar wonder and curiosity; some reeds of an extraordinary size, some birds of\r\na very beautiful plumage, and some stuffed skins of the huge alligator and\r\nmanati; all of which were preceded by six or seven of the wretched natives,\r\nwhose singular colour and appearance added greatly to the novelty of the show.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of the representations of Columbus, the council of Castile\r\ndetermined to take possession of the countries of which the inhabitants were\r\nplainly incapable of defending themselves. The pious purpose of converting them\r\nto Christianity sanctified the injustice of the project. But the hope of\r\nfinding treasures of gold there was the sole motive which prompted to undertake\r\nit; and to give this motive the greater weight, it was proposed by Columbus,\r\nthat the half of all the gold and silver that should be found there, should\r\nbelong to the crown. This proposal was approved of by the council.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs long as the whole, or the greater part of the gold which the first\r\nadventurers imported into Europe was got by so very easy a method as the\r\nplundering of the defenceless natives, it was not perhaps very difficult to pay\r\neven this heavy tax; but when the natives were once fairly stript of all that\r\nthey had, which, in St. Domingo, and in all the other countries discovered by\r\nColumbus, was done completely in six or eight years, and when, in order to find\r\nmore, it had become necessary to dig for it in the mines, there was no longer\r\nany possibility of paying this tax. The rigorous exaction of it, accordingly,\r\nfirst occasioned, it is said, the total abandoning of the mines of St. Domingo,\r\nwhich have never been wrought since. It was soon reduced, therefore, to a\r\nthird; then to a fifth; afterwards to a tenth; and at last to a twentieth part\r\nof the gross produce of the gold mines. The tax upon silver continued for a\r\nlong time to be a fifth of the gross produce. It was reduced to a tenth only in\r\nthe course of the present century. But the first adventurers do not appear to\r\nhave been much interested about silver. Nothing less precious than gold seemed\r\nworthy of their attention.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the other enterprizes of the Spaniards in the New World, subsequent to\r\nthose of Columbus, seem to have been prompted by the same motive. It was the\r\nsacred thirst of gold that carried Ovieda, Nicuessa, and Vasco Nugnes de\r\nBalboa, to the Isthmus of Darien; that carried Cortes to Mexico, Almagro and\r\nPizarro to Chili and Peru. When those adventurers arrived upon any unknown\r\ncoast, their first inquiry was always if there was any gold to be found there;\r\nand according to the information which they received concerning this\r\nparticular, they determined either to quit the country or to settle in it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf all those expensive and uncertain projects, however, which bring bankruptcy\r\nupon the greater part of the people who engage in them, there is none, perhaps,\r\nmore perfectly ruinous than the search after new silver and gold mines. It is,\r\nperhaps, the most disadvantageous lottery in the world, or the one in which the\r\ngain of those who draw the prizes bears the least proportion to the loss of\r\nthose who draw the blanks; for though the prizes are few, and the blanks many,\r\nthe common price of a ticket is the whole fortune of a very rich man. Projects\r\nof mining, instead of replacing the capital employed in them, together with the\r\nordinary profits of stock, commonly absorb both capital and profit. They are\r\nthe projects, therefore, to which, of all others, a prudent lawgiver, who\r\ndesired to increase the capital of his nation, would least choose to give any\r\nextraordinary encouragement, or to turn towards them a greater share of that\r\ncapital than what would go to them of its own accord. Such, in reality, is the\r\nabsurd confidence which almost all men have in their own good fortune, that\r\nwherever there is the least probability of success, too great a share of it is\r\napt to go to them of its own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the judgment of sober reason and experience concerning such projects\r\nhas always been extremely unfavourable, that of human avidity has commonly been\r\nquite otherwise. The same passion which has suggested to so many people the\r\nabsurd idea of the philosopher’s stone, has suggested to others the\r\nequally absurd one of immense rich mines of gold and silver. They did not\r\nconsider that the value of those metals has, in all ages and nations, arisen\r\nchiefly from their scarcity, and that their scarcity has arisen from the very\r\nsmall quantities of them which nature has anywhere deposited in one place, from\r\nthe hard and intractable substances with which she has almost everywhere\r\nsurrounded those small quantities, and consequently from the labour and expense\r\nwhich are everywhere necessary in order to penetrate, and get at them. They\r\nflattered themselves that veins of those metals might in many places be found,\r\nas large and as abundant as those which are commonly found of lead, or copper,\r\nor tin, or iron. The dream of Sir Waiter Raleigh, concerning the golden city\r\nand country of El Dorado, may satisfy us, that even wise men are not always\r\nexempt from such strange delusions. More than a hundred years after the death\r\nof that great man, the Jesuit Gumila was still convinced of the reality of that\r\nwonderful country, and expressed, with great warmth, and, I dare say, with\r\ngreat sincerity, how happy he should be to carry the light of the gospel to a\r\npeople who could so well reward the pious labours of their missionary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the countries first discovered by the Spaniards, no gold and silver mines\r\nare at present known which are supposed to be worth the working. The quantities\r\nof those metals which the first adventurers are said to have found there, had\r\nprobably been very much magnified, as well as the fertility of the mines which\r\nwere wrought immediately after the first discovery. What those adventurers were\r\nreported to have found, however, was sufficient to inflame the avidity of all\r\ntheir countrymen. Every Spaniard who sailed to America expected to find an El\r\nDorado. Fortune, too, did upon this what she has done upon very few other\r\noccasions. She realized in some measure the extravagant hopes of her votaries;\r\nand in the discovery and conquest of Mexico and Peru (of which the one happened\r\nabout thirty, and the other about forty, years after the first expedition of\r\nColumbus), she presented them with something not very unlike that profusion of\r\nthe precious metals which they sought for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA project of commerce to the East Indies, therefore, gave occasion to the first\r\ndiscovery of the West. A project of conquest gave occasion to all the\r\nestablishments of the Spaniards in those newly discovered countries. The motive\r\nwhich excited them to this conquest was a project of gold and silver mines; and\r\na course of accidents which no human wisdom could foresee, rendered this\r\nproject much more successful than the undertakers had any reasonable grounds\r\nfor expecting.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first adventurers of all the other nations of Europe who attempted to make\r\nsettlements in America, were animated by the like chimerical views; but they\r\nwere not equally successful. It was more than a hundred years after the first\r\nsettlement of the Brazils, before any silver, gold, or diamond mines, were\r\ndiscovered there. In the English, French, Dutch, and Danish colonies, none have\r\never yet been discovered, at least none that are at present supposed to be\r\nworth the working. The first English settlers in North America, however,\r\noffered a fifth of all the gold and silver which should be found there to the\r\nking, as a motive for granting them their patents. In the patents of Sir Waiter\r\nRaleigh, to the London and Plymouth companies, to the council of Plymouth, etc.\r\nthis fifth was accordingly reserved to the crown. To the expectation of finding\r\ngold and silver mines, those first settlers, too, joined that of discovering a\r\nnorth-west passage to the East Indies. They have hitherto been disappointed in\r\nboth.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II. Causes of the Prosperity of New Colonies.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe colony of a civilized nation which takes possession either of a waste\r\ncountry, or of one so thinly inhabited that the natives easily give place to\r\nthe new settlers, advances more rapidly to wealth and greatness than any other\r\nhuman society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe colonies carry out with them a knowledge of agriculture and of other useful\r\narts, superior to what can grow up of its own accord, in the course of many\r\ncenturies, among savage and barbarous nations. They carry out with them, too,\r\nthe habit of subordination, some notion of the regular government which takes\r\nplace in their own country, of the system of laws which support it, and of a\r\nregular administration of justice; and they naturally establish something of\r\nthe same kind in the new settlement. But among savage and barbarous nations,\r\nthe natural progress of law and government is still slower than the natural\r\nprogress of arts, after law and government have been so far established as is\r\nnecessary for their protection. Every colonist gets more land than he can\r\npossibly cultivate. He has no rent, and scarce any taxes, to pay. No landlord\r\nshares with him in its produce, and, the share of the sovereign is commonly but\r\na trifle. He has every motive to render as great as possible a produce which is\r\nthus to be almost entirely his own. But his land is commonly so extensive,\r\nthat, with all his own industry, and with all the industry of other people whom\r\nhe can get to employ, he can seldom make it produce the tenth part of what it\r\nis capable of producing. He is eager, therefore, to collect labourers from all\r\nquarters, and to reward them with the most liberal wages. But those liberal\r\nwages, joined to the plenty and cheapness of land, soon make those labourers\r\nleave him, in order to become landlords themselves, and to reward with equal\r\nliberality other labourers, who soon leave them for the same reason that they\r\nleft their first master. The liberal reward of labour encourages marriage. The\r\nchildren, during the tender years of infancy, are well fed and properly taken\r\ncare of; and when they are grown up, the value of their labour greatly overpays\r\ntheir maintenance. When arrived at maturity, the high price of labour, and the\r\nlow price of land, enable them to establish themselves in the same manner as\r\ntheir fathers did before them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn other countries, rent and profit eat up wages, and the two superior orders\r\nof people oppress the inferior one; but in new colonies, the interest of the\r\ntwo superior orders obliges them to treat the inferior one with more generosity\r\nand humanity, at least where that inferior one is not in a state of slavery.\r\nWaste lands, of the greatest natural fertility, are to be had for a trifle. The\r\nincrease of revenue which the proprietor, who is always the undertaker, expects\r\nfrom their improvement, constitutes his profit, which, in these circumstances,\r\nis commonly very great; but this great profit cannot be made, without employing\r\nthe labour of other people in clearing and cultivating the land; and the\r\ndisproportion between the great extent of the land and the small number of the\r\npeople, which commonly takes place in new colonies, makes it difficult for him\r\nto get this labour. He does not, therefore, dispute about wages, but is willing\r\nto employ labour at any price. The high wages of labour encourage population.\r\nThe cheapness and plenty of good land encourage improvement, and enable the\r\nproprietor to pay those high wages. In those wages consists almost the whole\r\nprice of the land; and though they are high, considered as the wages of labour,\r\nthey are low, considered as the price of what is so very valuable. What\r\nencourages the progress of population and improvement, encourages that of real\r\nwealth and greatness.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe progress of many of the ancient Greek colonies towards wealth and greatness\r\nseems accordingly to have been very rapid. In the course of a century or two,\r\nseveral of them appear to have rivalled, and even to have surpassed, their\r\nmother cities. Syracuse and Agrigentum in Sicily, Tarentum and Locri in Italy,\r\nEphesus and Miletus in Lesser Asia, appear, by all accounts, to have been at\r\nleast equal to any of the cities of ancient Greece. Though posterior in their\r\nestablishment, yet all the arts of refinement, philosophy, poetry, and\r\neloquence, seem to have been cultivated as early, and to have been improved as\r\nhighly in them as in any part of the mother country. The schools of the two\r\noldest Greek philosophers, those of Thales and Pythagoras, were established, it\r\nis remarkable, not in ancient Greece, but the one in an Asiatic, the other in\r\nan Italian colony. All those colonies had established themselves in countries\r\ninhabited by savage and barbarous nations, who easily gave place to the new\r\nsettlers. They had plenty of good land; and as they were altogether independent\r\nof the mother city, they were at liberty to manage their own affairs in the way\r\nthat they judged was most suitable to their own interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe history of the Roman colonies is by no means so brilliant. Some of them,\r\nindeed, such as Florence, have, in the course of many ages, and after the fall\r\nof the mother city, grown up to be considerable states. But the progress of no\r\none of them seems ever to have been very rapid. They were all established in\r\nconquered provinces, which in most cases had been fully inhabited before. The\r\nquantity of land assigned to each colonist was seldom very considerable, and,\r\nas the colony was not independent, they were not always at liberty to manage\r\ntheir own affairs in the way that they judged was most suitable to their own\r\ninterest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the plenty of good land, the European colonies established in America and\r\nthe West Indies resemble, and even greatly surpass, those of ancient Greece. In\r\ntheir dependency upon the mother state, they resemble those of ancient Rome;\r\nbut their great distance from Europe has in all of them alleviated more or less\r\nthe effects of this dependency. Their situation has placed them less in the\r\nview, and less in the power of their mother country. In pursuing their interest\r\ntheir own way, their conduct has upon many occasions been overlooked, either\r\nbecause not known or not understood in Europe; and upon some occasions it has\r\nbeen fairly suffered and submitted to, because their distance rendered it\r\ndifficult to restrain it. Even the violent and arbitrary government of Spain\r\nhas, upon many occasions, been obliged to recall or soften the orders which had\r\nbeen given for the government of her colonies, for fear of a general\r\ninsurrection. The progress of all the European colonies in wealth, population,\r\nand improvement, has accordingly been very great.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe crown of Spain, by its share of the gold and silver, derived some revenue\r\nfrom its colonies from the moment of their first establishment. It was a\r\nrevenue, too, of a nature to excite in human avidity the most extravagant\r\nexpectation of still greater riches. The Spanish colonies, therefore, from the\r\nmoment of their first establishment, attracted very much the attention of their\r\nmother country; while those of the other European nations were for a long time\r\nin a great measure neglected. The former did not, perhaps, thrive the better in\r\nconsequence of this attention, nor the latter the worse in consequence of this\r\nneglect. In proportion to the extent of the country which they in some measure\r\npossess, the Spanish colonies are considered as less populous and thriving than\r\nthose of almost any other European nation. The progress even of the Spanish\r\ncolonies, however, in population and improvement, has certainly been very rapid\r\nand very great. The city of Lima, founded since the conquest, is represented by\r\nUlloa as containing fifty thousand inhabitants near thirty years ago. Quito,\r\nwhich had been but a miserable hamlet of Indians, is represented by the same\r\nauthor as in his time equally populous. Gemel i Carreri, a pretended traveller,\r\nit is said, indeed, but who seems everywhere to have written upon extreme good\r\ninformation, represents the city of Mexico as containing a hundred thousand\r\ninhabitants; a number which, in spite of all the exaggerations of the Spanish\r\nwriters, is probably more than five times greater than what it contained in the\r\ntime of Montezuma. These numbers exceed greatly those of Boston, New York, and\r\nPhiladelphia, the three greatest cities of the English colonies. Before the\r\nconquest of the Spaniards, there were no cattle fit for draught, either in\r\nMexico or Peru. The lama was their only beast of burden, and its strength seems\r\nto have been a good deal inferior to that of a common ass. The plough was\r\nunknown among them. They were ignorant of the use of iron. They had no coined\r\nmoney, nor any established instrument of commerce of any kind. Their commerce\r\nwas carried on by barter. A sort of wooden spade was their principal instrument\r\nof agriculture. Sharp stones served them for knives and hatchets to cut with;\r\nfish bones, and the hard sinews of certain animals, served them with needles to\r\nsew with; and these seem to have been their principal instruments of trade. In\r\nthis state of things, it seems impossible that either of those empires could\r\nhave been so much improved or so well cultivated as at present, when they are\r\nplentifully furnished with all sorts of European cattle, and when the use of\r\niron, of the plough, and of many of the arts of Europe, have been introduced\r\namong them. But the populousness of every country must be in proportion to the\r\ndegree of its improvement and cultivation. In spite of the cruel destruction of\r\nthe natives which followed the conquest, these two great empires are probably\r\nmore populous now than they ever were before; and the people are surely very\r\ndifferent; for we must acknowledge, I apprehend, that the Spanish creoles are\r\nin many respects superior to the ancient Indians.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter the settlements of the Spaniards, that of the Portuguese in Brazil is the\r\noldest of any European nation in America. But as for a long time after the\r\nfirst discovery neither gold nor silver mines were found in it, and as it\r\nafforded upon that account little or no revenue to the crown, it was for a long\r\ntime in a great measure neglected; and during this state of neglect, it grew up\r\nto be a great and powerful colony. While Portugal was under the dominion of\r\nSpain, Brazil was attacked by the Dutch, who got possession of seven of the\r\nfourteen provinces into which it is divided. They expected soon to conquer the\r\nother seven, when Portugal recovered its independency by the elevation of the\r\nfamily of Braganza to the throne. The Dutch, then, as enemies to the Spaniards,\r\nbecame friends to the Portuguese, who were likewise the enemies of the\r\nSpaniards. They agreed, therefore, to leave that part of Brazil which they had\r\nnot conquered to the king of Portugal, who agreed to leave that part which they\r\nhad conquered to them, as a matter not worth disputing about, with such good\r\nallies. But the Dutch government soon began to oppress the Portuguese\r\ncolonists, who, instead of amusing themselves with complaints, took arms\r\nagainst their new masters, and by their own valour and resolution, with the\r\nconnivance, indeed, but without any avowed assistance from the mother country,\r\ndrove them out of Brazil. The Dutch, therefore, finding it impossible to keep\r\nany part of the country to themselves, were contented that it should be\r\nentirely restored to the crown of Portugal. In this colony there are said to be\r\nmore than six hundred thousand people, either Portuguese or descended from\r\nPortuguese, creoles, mulattoes, and a mixed race between Portuguese and\r\nBrazilians. No one colony in America is supposed to contain so great a number\r\nof people of European extraction.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTowards the end of the fifteenth, and during the greater part of the sixteenth\r\ncentury, Spain and Portugal were the two great naval powers upon the ocean; for\r\nthough the commerce of Venice extended to every part of Europe, its fleet had\r\nscarce ever sailed beyond the Mediterranean. The Spaniards, in virtue of the\r\nfirst discovery, claimed all America as their own; and though they could not\r\nhinder so great a naval power as that of Portugal from settling in Brazil, such\r\nwas at that time the terror of their name, that the greater part of the other\r\nnations of Europe were afraid to establish themselves in any other part of that\r\ngreat continent. The French, who attempted to settle in Florida, were all\r\nmurdered by the Spaniards. But the declension of the naval power of this latter\r\nnation, in consequence of the defeat or miscarriage of what they called their\r\ninvincible armada, which happened towards the end of the sixteenth century, put\r\nit out of their power to obstruct any longer the settlements of the other\r\nEuropean nations. In the course of the seventeenth century, therefore, the\r\nEnglish, French, Dutch, Danes, and Swedes, all the great nations who had any\r\nports upon the ocean, attempted to make some settlements in the new world.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Swedes established themselves in New Jersey; and the number of Swedish\r\nfamilies still to be found there sufficiently demonstrates, that this colony\r\nwas very likely to prosper, had it been protected by the mother country. But\r\nbeing neglected by Sweden, it was soon swallowed up by the Dutch colony of New\r\nYork, which again, in 1674, fell under the dominion of the English.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe small islands of St. Thomas and Santa Cruz, are the only countries in the\r\nnew world that have ever been possessed by the Danes. These little settlements,\r\ntoo, were under the government of an exclusive company, which had the sole\r\nright, both of purchasing the surplus produce of the colonies, and of supplying\r\nthem with such goods of other countries as they wanted, and which, therefore,\r\nboth in its purchases and sales, had not only the power of oppressing them, but\r\nthe greatest temptation to do so. The government of an exclusive company of\r\nmerchants is, perhaps, the worst of all governments for any country whatever.\r\nIt was not, however, able to stop altogether the progress of these colonies,\r\nthough it rendered it more slow and languid. The late king of Denmark dissolved\r\nthis company, and since that time the prosperity of these colonies has been\r\nvery great.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Dutch settlements in the West, as well as those in the East Indies, were\r\noriginally put under the government of an exclusive company. The progress of\r\nsome of them, therefore, though it has been considerable in comparison with\r\nthat of almost any country that has been long peopled and established, has been\r\nlanguid and slow in comparison with that of the greater part of new colonies.\r\nThe colony of Surinam, though very considerable, is still inferior to the\r\ngreater part of the sugar colonies of the other European nations. The colony of\r\nNova Belgia, now divided into the two provinces of New York and New Jersey,\r\nwould probably have soon become considerable too, even though it had remained\r\nunder the government of the Dutch. The plenty and cheapness of good land are\r\nsuch powerful causes of prosperity, that the very worst government is scarce\r\ncapable of checking altogether the efficacy of their operation. The great\r\ndistance, too, from the mother country, would enable the colonists to evade\r\nmore or less, by smuggling, the monopoly which the company enjoyed against\r\nthem. At present, the company allows all Dutch ships to trade to Surinam, upon\r\npaying two and a-half per cent. upon the value of their cargo for a license;\r\nand only reserves to itself exclusively, the direct trade from Africa to\r\nAmerica, which consists almost entirely in the slave trade. This relaxation in\r\nthe exclusive privileges of the company, is probably the principal cause of\r\nthat degree of prosperity which that colony at present enjoys. Curacoa and\r\nEustatia, the two principal islands belonging to the Dutch, are free ports,\r\nopen to the ships of all nations; and this freedom, in the midst of better\r\ncolonies, whose ports are open to those of one nation only, has been the great\r\ncause of the prosperity of those two barren islands.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe French colony of Canada was, during the greater part of the last century,\r\nand some part of the present, under the government of an exclusive company.\r\nUnder so unfavourable an administration, its progress was necessarily very\r\nslow, in comparison with that of other new colonies; but it became much more\r\nrapid when this company was dissolved, after the fall of what is called the\r\nMississippi scheme. When the English got possession of this country, they found\r\nin it near double the number of inhabitants which father Charlevoix had\r\nassigned to it between twenty and thirty years before. That jesuit had\r\ntravelled over the whole country, and had no inclination to represent it as\r\nless inconsiderable than it really was.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe French colony of St. Domingo was established by pirates and freebooters,\r\nwho, for a long time, neither required the protection, nor acknowledged the\r\nauthority of France; and when that race of banditti became so far citizens as\r\nto acknowledge this authority, it was for a long time necessary to exercise it\r\nwith very great gentleness. During this period, the population and improvement\r\nof this colony increased very fast. Even the oppression of the exclusive\r\ncompany, to which it was for some time subjected with all the other colonies of\r\nFrance, though it no doubt retarded, had not been able to stop its progress\r\naltogether. The course of its prosperity returned as soon as it was relieved\r\nfrom that oppression. It is now the most important of the sugar colonies of the\r\nWest Indies, and its produce is said to be greater than that of all the English\r\nsugar colonies put together. The other sugar colonies of France are in general\r\nall very thriving.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut there are no colonies of which the progress has been more rapid than that\r\nof the English in North America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPlenty of good land, and liberty to manage their own affairs their own way,\r\nseem to be the two great causes of the prosperity of all new colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the plenty of good land, the English colonies of North America, though no\r\ndoubt very abundantly provided, are, however, inferior to those of the\r\nSpaniards and Portuguese, and not superior to some of those possessed by the\r\nFrench before the late war. But the political institutions of the English\r\ncolonies have been more favourable to the improvement and cultivation of this\r\nland, than those of the other three nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, The engrossing of uncultivated land, though it has by no means been\r\nprevented altogether, has been more restrained in the English colonies than in\r\nany other. The colony law, which imposes upon every proprietor the obligation\r\nof improving and cultivating, within a limited time, a certain proportion of\r\nhis lands, and which, in case of failure, declares those neglected lands\r\ngrantable to any other person; though it has not perhaps been very strictly\r\nexecuted, has, however, had some effect.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, In Pennsylvania there is no right of primogeniture, and lands, like\r\nmoveables, are divided equally among all the children of the family. In three\r\nof the provinces of New England, the oldest has only a double share, as in the\r\nMosaical law. Though in those provinces, therefore, too great a quantity of\r\nland should sometimes be engrossed by a particular individual, it is likely, in\r\nthe course of a generation or two, to be sufficiently divided again. In the\r\nother English colonies, indeed, the right of primogeniture takes place, as in\r\nthe law of England: But in all the English colonies, the tenure of the lands,\r\nwhich are all held by free soccage, facilitates alienation; and the grantee of\r\nan extensive tract of land generally finds it for his interest to alienate, as\r\nfast as he can, the greater part of it, reserving only a small quit-rent. In\r\nthe Spanish and Portuguese colonies, what is called the right of majorazzo\r\ntakes place in the succession of all those great estates to which any title of\r\nhonour is annexed. Such estates go all to one person, and are in effect\r\nentailed and unalienable. The French colonies, indeed, are subject to the\r\ncustom of Paris, which, in the inheritance of land, is much more favourable to\r\nthe younger children than the law of England. But, in the French colonies, if\r\nany part of an estate, held by the noble tenure of chivalry and homage, is\r\nalienated, it is, for a limited time, subject to the right of redemption,\r\neither by the heir of the superior, or by the heir of the family; and all the\r\nlargest estates of the country are held by such noble tenures, which\r\nnecessarily embarrass alienation. But, in a new colony, a great uncultivated\r\nestate is likely to be much more speedily divided by alienation than by\r\nsuccession. The plenty and cheapness of good land, it has already been\r\nobserved, are the principal causes of the rapid prosperity of new colonies. The\r\nengrossing of land, in effect, destroys this plenty and cheapness. The\r\nengrossing of uncultivated land, besides, is the greatest obstruction to its\r\nimprovement; but the labour that is employed in the improvement and cultivation\r\nof land affords the greatest and most valuable produce to the society. The\r\nproduce of labour, in this case, pays not only its own wages and the profit of\r\nthe stock which employs it, but the rent of the land too upon which it is\r\nemployed. The labour of the English colonies, therefore, being more employed in\r\nthe improvement and cultivation of land, is likely to afford a greater and more\r\nvaluable produce than that of any of the other three nations, which, by the\r\nengrossing of land, is more or less diverted towards other employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, The labour of the English colonists is not only likely to afford a\r\ngreater and more valuable produce, but, in consequence of the moderation of\r\ntheir taxes, a greater proportion of this produce belongs to themselves, which\r\nthey may store up and employ in putting into motion a still greater quantity of\r\nlabour. The English colonists have never yet contributed any thing towards the\r\ndefence of the mother country, or towards the support of its civil government.\r\nThey themselves, on the contrary, have hitherto been defended almost entirely\r\nat the expense of the mother country; but the expense of fleets and armies is\r\nout of all proportion greater than the necessary expense of civil government.\r\nThe expense of their own civil government has always been very moderate. It has\r\ngenerally been confined to what was necessary for paying competent salaries to\r\nthe governor, to the judges, and to some other officers of police, and for\r\nmaintaining a few of the most useful public works. The expense of the civil\r\nestablishment of Massachusetts Bay, before the commencement of the present\r\ndisturbances, used to be but about £18;000 a-year; that of New Hampshire and\r\nRhode Island, £3500 each; that of Connecticut, £4000; that of New York and\r\nPennsylvania, £4500 each; that of New Jersey, £1200; that of Virginia and South\r\nCarolina, £8000 each. The civil establishments of Nova Scotia and Georgia are\r\npartly supported by an annual grant of parliament; but Nova Scotia pays,\r\nbesides, about £7000 a-year towards the public expenses of the colony, and\r\nGeorgia about £2500 a-year. All the different civil establishments in North\r\nAmerica, in short, exclusive of those of Maryland and North Carolina, of which\r\nno exact account has been got, did not, before the commencement of the present\r\ndisturbances, cost the inhabitants above £64,700 a-year; an ever memorable\r\nexample, at how small an expense three millions of people may not only be\r\ngoverned but well governed. The most important part of the expense of\r\ngovernment, indeed, that of defence and protection, has constantly fallen upon\r\nthe mother country. The ceremonial, too, of the civil government in the\r\ncolonies, upon the reception of a new governor, upon the opening of a new\r\nassembly, etc. though sufficiently decent, is not accompanied with any\r\nexpensive pomp or parade. Their ecclesiastical government is conducted upon a\r\nplan equally frugal. Tithes are unknown among them; and their clergy, who are\r\nfar from being numerous, are maintained either by moderate stipends, or by the\r\nvoluntary contributions of the people. The power of Spain and Portugal, on the\r\ncontrary, derives some support from the taxes levied upon their colonies.\r\nFrance, indeed, has never drawn any considerable revenue from its colonies, the\r\ntaxes which it levies upon them being generally spent among them. But the\r\ncolony government of all these three nations is conducted upon a much more\r\nextensive plan, and is accompanied with a much more expensive ceremonial. The\r\nsums spent upon the reception of a new viceroy of Peru, for example, have\r\nfrequently been enormous. Such ceremonials are not only real taxes paid by the\r\nrich colonists upon those particular occasions, but they serve to introduce\r\namong them the habit of vanity and expense upon all other occasions. They are\r\nnot only very grievous occasional taxes, but they contribute to establish\r\nperpetual taxes, of the same kind, still more grievous; the ruinous taxes of\r\nprivate luxury and extravagance. In the colonies of all those three nations,\r\ntoo, the ecclesiastical government is extremely oppressive. Tithes take place\r\nin all of them, and are levied with the utmost rigour in those of Spain and\r\nPortugal. All of them, besides, are oppressed with a numerous race of mendicant\r\nfriars, whose beggary being not only licensed but consecrated by religion, is a\r\nmost grievous tax upon the poor people, who are most carefully taught that it\r\nis a duty to give, and a very great sin to refuse them their charity. Over and\r\nabove all this, the clergy are, in all of them, the greatest engrossers of\r\nland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, In the disposal of their surplus produce, or of what is over and\r\nabove their own consumption, the English colonies have been more favoured, and\r\nhave been allowed a more extensive market, than those of any other European\r\nnation. Every European nation has endeavoured, more or less, to monopolize to\r\nitself the commerce of its colonies, and, upon that account, has prohibited the\r\nships of foreign nations from trading to them, and has prohibited them from\r\nimporting European goods from any foreign nation. But the manner in which this\r\nmonopoly has been exercised in different nations, has been very different.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome nations have given up the whole commerce of their colonies to an exclusive\r\ncompany, of whom the colonists were obliged to buy all such European goods as\r\nthey wanted, and to whom they were obliged to sell the whole of their surplus\r\nproduce. It was the interest of the company, therefore, not only to sell the\r\nformer as dear, and to buy the latter as cheap as possible, but to buy no more\r\nof the latter, even at this low price, than what they could dispose of for a\r\nvery high price in Europe. It was their interest not only to degrade in all\r\ncases the value of the surplus produce of the colony, but in many cases to\r\ndiscourage and keep down the natural increase of its quantity. Of all the\r\nexpedients that can well be contrived to stunt the natural growth of a new\r\ncolony, that of an exclusive company is undoubtedly the most effectual. This,\r\nhowever, has been the policy of Holland, though their company, in the course of\r\nthe present century, has given up in many respects the exertion of their\r\nexclusive privilege. This, too, was the policy of Denmark, till the reign of\r\nthe late king. It has occasionally been the policy of France; and of late,\r\nsince 1755, after it had been abandoned by all other nations on account of its\r\nabsurdity, it has become the policy of Portugal, with regard at least to two of\r\nthe principal provinces of Brazil, Pernambucco, and Marannon.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOther nations, without establishing an exclusive company, have confined the\r\nwhole commerce of their colonies to a particular port of the mother country,\r\nfrom whence no ship was allowed to sail, but either in a fleet and at a\r\nparticular season, or, if single, in consequence of a particular license, which\r\nin most cases was very well paid for. This policy opened, indeed, the trade of\r\nthe colonies to all the natives of the mother country, provided they traded\r\nfrom the proper port, at the proper season, and in the proper vessels. But as\r\nall the different merchants, who joined their stocks in order to fit out those\r\nlicensed vessels, would find it for their interest to act in concert, the trade\r\nwhich was carried on in this manner would necessarily be conducted very nearly\r\nupon the same principles as that of an exclusive company. The profit of those\r\nmerchants would be almost equally exorbitant and oppressive. The colonies would\r\nbe ill supplied, and would be obliged both to buy very dear, and to sell very\r\ncheap. This, however, till within these few years, had always been the policy\r\nof Spain; and the price of all European goods, accordingly, is said to have\r\nbeen enormous in the Spanish West Indies. At Quito, we are told by Ulloa, a\r\npound of iron sold for about 4s:6d., and a pound of steel for about 6s:9d.\r\nsterling. But it is chiefly in order to purchase European goods that the\r\ncolonies part with their own produce. The more, therefore, they pay for the\r\none, the less they really get for the other, and the dearness of the one is the\r\nsame thing with the cheapness of the other. The policy of Portugal is, in this\r\nrespect, the same as the ancient policy of Spain, with regard to all its\r\ncolonies, except Pernambucco and Marannon; and with regard to these it has\r\nlately adopted a still worse.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOther nations leave the trade of their colonies free to all their subjects, who\r\nmay carry it on from all the different ports of the mother country, and who\r\nhave occasion for no other license than the common despatches of the\r\ncustom-house. In this case the number and dispersed situation of the different\r\ntraders renders it impossible for them to enter into any general combination,\r\nand their competition is sufficient to hinder them from making very exorbitant\r\nprofits. Under so liberal a policy, the colonies are enabled both to sell their\r\nown produce, and to buy the goods of Europe at a reasonable price; but since\r\nthe dissolution of the Plymouth company, when our colonies were but in their\r\ninfancy, this has always been the policy of England. It has generally, too,\r\nbeen that of France, and has been uniformly so since the dissolution of what in\r\nEngland is commonly called their Mississippi company. The profits of the trade,\r\ntherefore, which France and England carry on with their colonies, though no\r\ndoubt somewhat higher than if the competition were free to all other nations,\r\nare, however, by no means exorbitant; and the price of European goods,\r\naccordingly, is not extravagantly high in the greater past of the colonies of\r\neither of those nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the exportation of their own surplus produce, too, it is only with regard to\r\ncertain commodities that the colonies of Great Britain are confined to the\r\nmarket of the mother country. These commodities having been enumerated in the\r\nact of navigation, and in some other subsequent acts, have upon that account\r\nbeen called enumerated commodities. The rest are called non-enumerated, and may\r\nbe exported directly to other countries, provided it is in British or\r\nplantation ships, of which the owners and three fourths of the mariners are\r\nBritish subjects.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong the non-enumerated commodities are some of the most important productions\r\nof America and the West Indies, grain of all sorts, lumber, salt provisions,\r\nfish, sugar, and rum.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGrain is naturally the first and principal object of the culture of all new\r\ncolonies. By allowing them a very extensive market for it, the law encourages\r\nthem to extend this culture much beyond the consumption of a thinly inhabited\r\ncountry, and thus to provide beforehand an ample subsistence for a continually\r\nincreasing population.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country quite covered with wood, where timber consequently is of little or\r\nno value, the expense of clearing the ground is the principal obstacle to\r\nimprovement. By allowing the colonies a very extensive market for their lumber,\r\nthe law endeavours to facilitate improvement by raising the price of a\r\ncommodity which would otherwise be of little value, and thereby enabling them\r\nto make some profit of what would otherwise be mere expense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country neither half peopled nor half cultivated, cattle naturally\r\nmultiply beyond the consumption of the inhabitants, and are often, upon that\r\naccount, of little or no value. But it is necessary, it has already been shown,\r\nthat the price of cattle should bear a certain proportion to that of corn,\r\nbefore the greater part of the lands of any country can be improved. By\r\nallowing to American cattle, in all shapes, dead and alive, a very extensive\r\nmarket, the law endeavours to raise the value of a commodity, of which the high\r\nprice is so very essential to improvement. The good effects of this liberty,\r\nhowever, must be somewhat diminished by the 4th of Geo. III. c. 15, which puts\r\nhides and skins among the enumerated commodities, and thereby tends to reduce\r\nthe value of American cattle.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo increase the shipping and naval power of Great Britain by the extension of\r\nthe fisheries of our colonies, is an object which the legislature seems to have\r\nhad almost constantly in view. Those fisheries, upon this account, have had all\r\nthe encouragement which freedom can give them, and they have flourished\r\naccordingly. The New England fishery, in particular, was, before the late\r\ndisturbances, one of the most important, perhaps, in the world. The whale\r\nfishery which, notwithstanding an extravagant bounty, is in Great Britain\r\ncarried on to so little purpose, that in the opinion of many people ( which I\r\ndo not, however, pretend to warrant), the whole produce does not much exceed\r\nthe value of the bounties which are annually paid for it, is in New England\r\ncarried on, without any bounty, to a very great extent. Fish is one of the\r\nprincipal articles with which the North Americans trade to Spain, Portugal, and\r\nthe Mediterranean.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSugar was originally an enumerated commodity, which could only be exported to\r\nGreat Britain; but in 1751, upon a representation of the sugar-planters, its\r\nexportation was permitted to all parts of the world. The restrictions, however,\r\nwith which this liberty was granted, joined to the high price of sugar in Great\r\nBritain, have rendered it in a great measure ineffectual. Great Britain and her\r\ncolonies still continue to be almost the sole market for all sugar produced in\r\nthe British plantations. Their consumption increases so fast, that, though in\r\nconsequence of the increasing improvement of Jamaica, as well as of the ceded\r\nislands, the importation of sugar has increased very greatly within these\r\ntwenty years, the exportation to foreign countries is said to be not much\r\ngreater than before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRum is a very important article in the trade which the Americans carry on to\r\nthe coast of Africa, from which they bring back negro slaves in return.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the whole surplus produce of America, in grain of all sorts, in salt\r\nprovisions, and in fish, had been put into the enumeration, and thereby forced\r\ninto the market of Great Britain, it would have interfered too much with the\r\nproduce of the industry of our own people. It was probably not so much from any\r\nregard to the interest of America, as from a jealousy of this interference,\r\nthat those important commodities have not only been kept out of the\r\nenumeration, but that the importation into Great Britain of all grain, except\r\nrice, and of all salt provisions, has, in the ordinary state of the law, been\r\nprohibited.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe non-enumerated commodities could originally be exported to all parts of the\r\nworld. Lumber and rice having been once put into the enumeration, when they\r\nwere afterwards taken out of it, were confined, as to the European market, to\r\nthe countries that lie south of Cape Finisterre. By the 6th of George III. c.\r\n52, all non-enumerated commodities were subjected to the like restriction. The\r\nparts of Europe which lie south of Cape Finisterre are not manufacturing\r\ncountries, and we are less jealous of the colony ships carrying home from them\r\nany manufactures which could interfere with our own.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe enumerated commodities are of two sorts; first, such as are either the\r\npeculiar produce of America, or as cannot be produced, or at least are not\r\nproduced in the mother country. Of this kind are molasses, coffee, cocoa-nuts,\r\ntobacco, pimento, ginger, whalefins, raw silk, cotton, wool, beaver, and other\r\npeltry of America, indigo, fustick, and other dyeing woods; secondly, such as\r\nare not the peculiar produce of America, but which are, and may be produced in\r\nthe mother country, though not in such quantities as to supply the greater part\r\nof her demand, which is principally supplied from foreign countries. Of this\r\nkind are all naval stores, masts, yards, and bowsprits, tar, pitch, and\r\nturpentine, pig and bar iron, copper ore, hides and skins, pot and pearl ashes.\r\nThe largest importation of commodities of the first kind could not discourage\r\nthe growth, or interfere with the sale, of any part of the produce of the\r\nmother country. By confining them to the home market, our merchants, it was\r\nexpected, would not only be enabled to buy them cheaper in the plantations, and\r\nconsequently to sell them with a better profit at home, but to establish\r\nbetween the plantations and foreign countries an advantageous carrying trade,\r\nof which Great Britain was necessarily to be the centre or emporium, as the\r\nEuropean country into which those commodities were first to be imported. The\r\nimportation of commodities of the second kind might be so managed too, it was\r\nsupposed, as to interfere, not with the sale of those of the same kind which\r\nwere produced at home, but with that of those which were imported from foreign\r\ncountries; because, by means of proper duties, they might be rendered always\r\nsomewhat dearer than the former, and yet a good deal cheaper than the latter.\r\nBy confining such commodities to the home market, therefore, it was proposed to\r\ndiscourage the produce, not of Great Britain, but of some foreign countries\r\nwith which the balance of trade was believed to be unfavourable to Great\r\nBritain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe prohibition of exporting from the colonies to any other country but Great\r\nBritain, masts, yards, and bowsprits, tar, pitch, and turpentine, naturally\r\ntended to lower the price of timber in the colonies, and consequently to\r\nincrease the expense of clearing their lands, the principal obstacle to their\r\nimprovement. But about the beginning of the present century, in 1703, the pitch\r\nand tar company of Sweden endeavoured to raise the price of their commodities\r\nto Great Britain, by prohibiting their exportation, except in their own ships,\r\nat their own price, and in such quantities as they thought proper. In order to\r\ncounteract this notable piece of mercantile policy, and to render herself as\r\nmuch as possible independent, not only of Sweden, but of all the other northern\r\npowers, Great Britain gave a bounty upon the importation of naval stores from\r\nAmerica; and the effect of this bounty was to raise the price of timber in\r\nAmerica much more than the confinement to the home market could lower it; and\r\nas both regulations were enacted at the same time, their joint effect was\r\nrather to encourage than to discourage the clearing of land in America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough pig and bar iron, too, have been put among the enumerated commodities,\r\nyet as, when imported from America, they are exempted from considerable duties\r\nto which they are subject when imported front any other country, the one part\r\nof the regulation contributes more to encourage the erection of furnaces in\r\nAmerica than the other to discourage it. There is no manufacture which\r\noccasions so great a consumption of wood as a furnace, or which can contribute\r\nso much to the clearing of a country overgrown with it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tendency of some of these regulations to raise the value of timber in\r\nAmerica, and thereby to facilitate the clearing of the land, was neither,\r\nperhaps, intended nor understood by the legislature. Though their beneficial\r\neffects, however, have been in this respect accidental, they have not upon that\r\naccount been less real.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe most perfect freedom of trade is permitted between the British colonies of\r\nAmerica and the West Indies, both in the enumerated and in the non-enumerated\r\ncommodities Those colonies are now become so populous and thriving, that each\r\nof them finds in some of the others a great and extensive market for every part\r\nof its produce. All of them taken together, they make a great internal market\r\nfor the produce of one another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe liberality of England, however, towards the trade of her colonies, has been\r\nconfined chiefly to what concerns the market for their produce, either in its\r\nrude state, or in what may be called the very first stage of manufacture. The\r\nmore advanced or more refined manufactures, even of the colony produce, the\r\nmerchants and manufacturers of Great Britain chuse to reserve to themselves,\r\nand have prevailed upon the legislature to prevent their establishment in the\r\ncolonies, sometimes by high duties, and sometimes by absolute prohibitions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhile, for example, Muscovado sugars from the British plantations pay, upon\r\nimportation, only 6s:4d. the hundred weight, white sugars pay £1:1:1; and\r\nrefined, either double or single, in loaves, £4:2:5 8/20ths. When those high\r\nduties were imposed, Great Britain was the sole, and she still continues to be,\r\nthe principal market, to which the sugars of the British colonies could be\r\nexported. They amounted, therefore, to a prohibition, at first of claying or\r\nrefining sugar for any foreign market, and at present of claying or refining it\r\nfor the market which takes off, perhaps, more than nine-tenths of the whole\r\nproduce. The manufacture of claying or refining sugar, accordingly, though it\r\nhas flourished in all the sugar colonies of France, has been little cultivated\r\nin any of those of England, except for the market of the colonies themselves.\r\nWhile Grenada was in the hands of the French, there was a refinery of sugar, by\r\nclaying, at least upon almost every plantation. Since it fell into those of the\r\nEnglish, almost all works of this kind have been given up; and there are at\r\npresent (October 1773), I am assured, not above two or three remaining in the\r\nisland. At present, however, by an indulgence of the custom-house, clayed or\r\nrefined sugar, if reduced from loaves into powder, is commonly imported as\r\nMuscovado.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhile Great Britain encourages in America the manufacturing of pig and bar\r\niron, by exempting them from duties to which the like commodities are subject\r\nwhen imported from any other country, she imposes an absolute prohibition upon\r\nthe erection of steel furnaces and slit-mills in any of her American\r\nplantations. She will not suffer her colonies to work in those more refined\r\nmanufactures, even for their own consumption; but insists upon their purchasing\r\nof her merchants and manufacturers all goods of this kind which they have\r\noccasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nShe prohibits the exportation from one province to another by water, and even\r\nthe carriage by land upon horseback, or in a cart, of hats, of wools, and\r\nwoollen goods, of the produce of America; a regulation which effectually\r\nprevents the establishment of any manufacture of such commodities for distant\r\nsale, and confines the industry of her colonists in this way to such coarse and\r\nhousehold manufactures as a private family commonly makes for its own use, or\r\nfor that of some of its neighbours in the same province.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo prohibit a great people, however, from making all that they can of every\r\npart of their own produce, or from employing their stock and industry in the\r\nway that they judge most advantageous to themselves, is a manifest violation of\r\nthe most sacred rights of mankind. Unjust, however, as such prohibitions may\r\nbe, they have not hitherto been very hurtful to the colonies. Land is still so\r\ncheap, and, consequently, labour so dear among them, that they can import from\r\nthe mother country almost all the more refined or more advanced manufactures\r\ncheaper than they could make them for themselves. Though they had not,\r\ntherefore, been prohibited from establishing such manufactures, yet, in their\r\npresent state of improvement, a regard to their own interest would probably\r\nhave prevented them from doing so. In their present state of improvement, those\r\nprohibitions, perhaps, without cramping their industry, or restraining it from\r\nany employment to which it would have gone of its own accord, are only\r\nimpertinent badges of slavery imposed upon them, without any sufficient reason,\r\nby the groundless jealousy of the merchants and manufacturers of the mother\r\ncountry. In a more advanced state, they might be really oppressive and\r\ninsupportable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGreat Britain, too, as she confines to her own market some of the most\r\nimportant productions of the colonies, so, in compensation, she gives to some\r\nof them an advantage in that market, sometimes by imposing higher duties upon\r\nthe like productions when imported from other countries, and sometimes by\r\ngiving bounties upon their importation from the colonies. In the first way, she\r\ngives an advantage in the home market to the sugar, tobacco, and iron of her\r\nown colonies; and, in the second, to their raw silk, to their hemp and flax, to\r\ntheir indigo, to their naval stores, and to their building timber. This second\r\nway of encouraging the colony produce, by bounties upon importation, is, so far\r\nas I have been able to learn, peculiar to Great Britain: the first is not.\r\nPortugal does not content herself with imposing higher duties upon the\r\nimportation of tobacco from any other country, but prohibits it under the\r\nseverest penalties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWith regard to the importation of goods from Europe, England has likewise dealt\r\nmore liberally with her colonies than any other nation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGreat Britain allows a part, almost always the half, generally a larger\r\nportion, and sometimes the whole, of the duty which is paid upon the\r\nimportation of foreign goods, to be drawn back upon their exportation to any\r\nforeign country. No independent foreign country, it was easy to foresee, would\r\nreceive them, if they came to it loaded with the heavy duties to which almost\r\nall foreign goods are subjected on their importation into Great Britain.\r\nUnless, therefore, some part of those duties was drawn back upon exportation,\r\nthere was an end of the carrying trade; a trade so much favoured by the\r\nmercantile system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur colonies, however, are by no means independent foreign countries; and Great\r\nBritain having assumed to herself the exclusive right of supplying them with\r\nall goods from Europe, might have forced them (in the same manner as other\r\ncountries have done their colonies) to receive such goods loaded with all the\r\nsame duties which they paid in the mother country. But, on the contrary, till\r\n1763, the same drawbacks were paid upon the exportation of the greater part of\r\nforeign goods to our colonies, as to any independent foreign country. In 1763,\r\nindeed, by the 4th of Geo. III. c. 15, this indulgence was a good deal abated,\r\nand it was enacted, “That no part of the duty called the old subsidy\r\nshould be drawn back for any goods of the growth, production, or manufacture of\r\nEurope or the East Indies, which should be exported from this kingdom to any\r\nBritish colony or plantation in America; wines, white calicoes, and muslins,\r\nexcepted.” Before this law, many different sorts of foreign goods might\r\nhave been bought cheaper in the plantations than in the mother country, and\r\nsome may still.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf the greater part of the regulations concerning the colony trade, the\r\nmerchants who carry it on, it must be observed, have been the principal\r\nadvisers. We must not wonder, therefore, if, in a great part of them, their\r\ninterest has been more considered than either that of the colonies or that of\r\nthe mother country. In their exclusive privilege of supplying the colonies with\r\nall the goods which they wanted from Europe, and of purchasing all such parts\r\nof their surplus produce as could not interfere with any of the trades which\r\nthey themselves carried on at home, the interest of the colonies was sacrificed\r\nto the interest of those merchants. In allowing the same drawbacks upon the\r\nre-exportation of the greater part of European and East India goods to the\r\ncolonies, as upon their re-exportation to any independent country, the interest\r\nof the mother country was sacrificed to it, even according to the mercantile\r\nideas of that interest. It was for the interest of the merchants to pay as\r\nlittle as possible for the foreign goods which they sent to the colonies, and,\r\nconsequently, to get back as much as possible of the duties which they advanced\r\nupon their importation into Great Britain. They might thereby be enabled to\r\nsell in the colonies, either the same quantity of goods with a greater profit,\r\nor a greater quantity with the same profit, and, consequently, to gain\r\nsomething either in the one way or the other. It was likewise for the interest\r\nof the colonies to get all such goods as cheap, and in as great abundance as\r\npossible. But this might not always be for the interest of the mother country.\r\nShe might frequently suffer, both in her revenue, by giving back a great part\r\nof the duties which had been paid upon the importation of such goods; and in\r\nher manufactures, by being undersold in the colony market, in consequence of\r\nthe easy terms upon which foreign manufactures could be carried thither by\r\nmeans of those drawbacks. The progress of the linen manufacture of Great\r\nBritain, it is commonly said, has been a good deal retarded by the drawbacks\r\nupon the re-exportation of German linen to the American colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the policy of Great Britain, with regard to the trade of her\r\ncolonies, has been dictated by the same mercantile spirit as that of other\r\nnations, it has, however, upon the whole, been less illiberal and oppressive\r\nthan that of any of them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every thing except their foreign trade, the liberty of the English colonists\r\nto manage their own affairs their own way, is complete. It is in every respect\r\nequal to that of their fellow-citizens at home, and is secured in the same\r\nmanner, by an assembly of the representatives of the people, who claim the sole\r\nright of imposing taxes for the support of the colony government. The authority\r\nof this assembly overawes the executive power; and neither the meanest nor the\r\nmost obnoxious colonist, as long as he obeys the law, has any thing to fear\r\nfrom the resentment, either of the governor, or of any other civil or military\r\nofficer in the province. The colony assemblies, though, like the house of\r\ncommons in England, they are not always a very equal representation of the\r\npeople, yet they approach more nearly to that character; and as the executive\r\npower either has not the means to corrupt them, or, on account of the support\r\nwhich it receives from the mother country, is not under the necessity of doing\r\nso, they are, perhaps, in general more influenced by the inclinations of their\r\nconstituents. The councils, which, in the colony legislatures, correspond to\r\nthe house of lords in Great Britain, are not composed of a hereditary nobility.\r\nIn some of the colonies, as in three of the governments of New England, those\r\ncouncils are not appointed by the king, but chosen by the representatives of\r\nthe people. In none of the English colonies is there any hereditary nobility.\r\nIn all of them, indeed, as in all other free countries, the descendant of an\r\nold colony family is more respected than an upstart of equal merit and fortune;\r\nbut he is only more respected, and he has no privileges by which he can be\r\ntroublesome to his neighbours. Before the commencement of the present\r\ndisturbances, the colony assemblies had not only the legislative, but a part of\r\nthe executive power. In Connecticut and Rhode Island, they elected the\r\ngovernor. In the other colonies, they appointed the revenue officers, who\r\ncollected the taxes imposed by those respective assemblies, to whom those\r\nofficers were immediately responsible. There is more equality, therefore, among\r\nthe English colonists than among the inhabitants of the mother country. Their\r\nmanners are more re publican; and their governments, those of three of the\r\nprovinces of New England in particular, have hitherto been more republican too.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe absolute governments of Spain, Portugal, and France, on the contrary, take\r\nplace in their colonies; and the discretionary powers which such governments\r\ncommonly delegate to all their inferior officers are, on account of the great\r\ndistance, naturally exercised there with more than ordinary violence. Under all\r\nabsolute governments, there is more liberty in the capital than in any other\r\npart of the country. The sovereign himself can never have either interest or\r\ninclination to pervert the order of justice, or to oppress the great body of\r\nthe people. In the capital, his presence overawes, more or less, all his\r\ninferior officers, who, in the remoter provinces, from whence the complaints of\r\nthe people are less likely to reach him, can exercise their tyranny with much\r\nmore safety. But the European colonies in America are more remote than the most\r\ndistant provinces of the greatest empires which had ever been known before. The\r\ngovernment of the English colonies is, perhaps, the only one which, since the\r\nworld began, could give perfect security to the inhabitants of so very distant\r\na province. The administration of the French colonies, however, has always been\r\nconducted with much more gentleness and moderation than that of the Spanish and\r\nPortuguese. This superiority of conduct is suitable both to the character of\r\nthe French nation, and to what forms the character of every nation, the nature\r\nof their government, which, though arbitrary and violent in comparison with\r\nthat of Great Britain, is legal and free in comparison with those of Spain and\r\nPortugal.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in the progress of the North American colonies, however, that the\r\nsuperiority of the English policy chiefly appears. The progress of the sugar\r\ncolonies of France has been at least equal, perhaps superior, to that of the\r\ngreater part of those of England; and yet the sugar colonies of England enjoy a\r\nfree government, nearly of the same kind with that which takes place in her\r\ncolonies of North America. But the sugar colonies of France are not\r\ndiscouraged, like those of England, from refining their own sugar; and what is\r\nstill of greater importance, the genius of their government naturally\r\nintroduces a better management of their negro slaves.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all European colonies, the culture of the sugar-cane is carried on by negro\r\nslaves. The constitution of those who have been born in the temperate climate\r\nof Europe could not, it is supposed, support the labour of digging the ground\r\nunder the burning sun of the West Indies; and the culture of the sugar-cane, as\r\nit is managed at present, is all hand labour; though, in the opinion of many,\r\nthe drill plough might be introduced into it with great advantage. But, as the\r\nprofit and success of the cultivation which is carried on by means of cattle,\r\ndepend very much upon the good management of those cattle; so the profit and\r\nsuccess of that which is carried on by slaves must depend equally upon the good\r\nmanagement of those slaves; and in the good management of their slaves the\r\nFrench planters, I think it is generally allowed, are superior to the English.\r\nThe law, so far as it gives some weak protection to the slave against the\r\nviolence of his master, is likely to be better executed in a colony where the\r\ngovernment is in a great measure arbitrary, than in one where it is altogether\r\nfree. In every country where the unfortunate law of slavery is established, the\r\nmagistrate, when he protects the slave, intermeddles in some measure in the\r\nmanagement of the private property of the master; and, in a free country, where\r\nthe master is, perhaps, either a member of the colony assembly, or an elector\r\nof such a member, he dares not do this but with the greatest caution and\r\ncircumspection. The respect which he is obliged to pay to the master, renders\r\nit more difficult for him to protect the slave. But in a country where the\r\ngovernment is in a great measure arbitrary, where it is usual for the\r\nmagistrate to intermeddle even in the management of the private property of\r\nindividuals, and to send them, perhaps, a lettre de cachet, if they do not\r\nmanage it according to his liking, it is much easier for him to give some\r\nprotection to the slave; and common humanity naturally disposes him to do so.\r\nThe protection of the magistrate renders the slave less contemptible in the\r\neyes of his master, who is thereby induced to consider him with more regard,\r\nand to treat him with more gentleness. Gentle usage renders the slave not only\r\nmore faithful, but more intelligent, and, therefore, upon a double account,\r\nmore useful. He approaches more to the condition of a free servant, and may\r\npossess some degree of integrity and attachment to his master’s interest;\r\nvirtues which frequently belong to free servants, but which never can belong to\r\na slave, who is treated as slaves commonly are in countries where the master is\r\nperfectly free and secure.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the condition of a slave is better under an arbitrary than under a free\r\ngovernment, is, I believe, supported by the history of all ages and nations. In\r\nthe Roman history, the first time we read of the magistrate interposing to\r\nprotect the slave from the violence of his master, is under the emperors. When\r\nVidius Pollio, in the presence of Augustus, ordered one of his slaves, who had\r\ncommitted a slight fault, to be cut into pieces and thrown into his fish-pond,\r\nin order to feed his fishes, the emperor commanded him, with indignation, to\r\nemancipate immediately, not only that slave, but all the others that belonged\r\nto him. Under the republic no magistrate could have had authority enough to\r\nprotect the slave, much less to punish the master.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe stock, it is to be observed, which has improved the sugar colonies of\r\nFrance, particularly the great colony of St Domingo, has been raised almost\r\nentirely from the gradual improvement and cultivation of those colonies. It has\r\nbeen almost altogether the produce of the soil and of the industry of the\r\ncolonists, or, what comes to the same thing, the price of that produce,\r\ngradually accumulated by good management, and employed in raising a still\r\ngreater produce. But the stock which has improved and cultivated the sugar\r\ncolonies of England, has, a great part of it, been sent out from England, and\r\nhas by no means been altogether the produce of the soil and industry of the\r\ncolonists. The prosperity of the English sugar colonies has been in a great\r\nmeasure owing to the great riches of England, of which a part has overflowed,\r\nif one may say so, upon these colonies. But the prosperity of the sugar\r\ncolonies of France has been entirely owing to the good conduct of the\r\ncolonists, which must therefore have had some superiority over that of the\r\nEnglish; and this superiority has been remarked in nothing so much as in the\r\ngood management of their slaves.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch have been the general outlines of the policy of the different European\r\nnations with regard to their colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe policy of Europe, therefore, has very little to boast of, either in the\r\noriginal establishment, or, so far as concerns their internal government, in\r\nthe subsequent prosperity of the colonies of America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFolly and injustice seem to have been the principles which presided over and\r\ndirected the first project of establishing those colonies; the folly of hunting\r\nafter gold and silver mines, and the injustice of coveting the possession of a\r\ncountry whose harmless natives, far from having ever injured the people of\r\nEurope, had received the first adventurers with every mark of kindness and\r\nhospitality.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe adventurers, indeed, who formed some of the latter establishments, joined\r\nto the chimerical project of finding gold and silver mines, other motives more\r\nreasonable and more laudable; but even these motives do very little honour to\r\nthe policy of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe English puritans, restrained at home, fled for freedom to America, and\r\nestablished there the four governments of New England. The English catholics,\r\ntreated with much greater injustice, established that of Maryland; the quakers,\r\nthat of Pennsylvania. The Portuguese Jews, persecuted by the inquisition,\r\nstript of their fortunes, and banished to Brazil, introduced, by their example,\r\nsome sort of order and industry among the transported felons and strumpets by\r\nwhom that colony was originally peopled, and taught them the culture of the\r\nsugar-cane. Upon all these different occasions, it was not the wisdom and\r\npolicy, but the disorder and injustice of the European governments, which\r\npeopled and cultivated America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn effectuation some of the most important of these establishments, the\r\ndifferent governments of Europe had as little merit as in projecting them. The\r\nconquest of Mexico was the project, not of the council of Spain, but of a\r\ngovernor of Cuba; and it was effectuated by the spirit of the bold adventurer\r\nto whom it was entrusted, in spite of every thing which that governor, who soon\r\nrepented of having trusted such a person, could do to thwart it. The conquerors\r\nof Chili and Peru, and of almost all the other Spanish settlements upon the\r\ncontinent of America, carried out with them no other public encouragement, but\r\na general permission to make settlements and conquests in the name of the king\r\nof Spain. Those adventures were all at the private risk and expense of the\r\nadventurers. The government of Spain contributed scarce any thing to any of\r\nthem. That of England contributed as little towards effectuating the\r\nestablishment of some of its most important colonies in North America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen those establishments were effectuated, and had become so considerable as\r\nto attract the attention of the mother country, the first regulations which she\r\nmade with regard to them, had always in view to secure to herself the monopoly\r\nof their commerce; to confine their market, and to enlarge her own at their\r\nexpense, and, consequently, rather to damp and discourage, than to quicken and\r\nforward the course of their prosperity. In the different ways in which this\r\nmonopoly has been exercised, consists one of the most essential differences in\r\nthe policy of the different European nations with regard to their colonies. The\r\nbest of them all, that of England, is only somewhat less illiberal and\r\noppressive than that of any of the rest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn what way, therefore, has the policy of Europe contributed either to the\r\nfirst establishment, or to the present grandeur of the colonies of America? In\r\none way, and in one way only, it has contributed a good deal. Magna virum\r\nmater! It bred and formed the men who were capable of achieving such great\r\nactions, and of laying the foundation of so great an empire; and there is no\r\nother quarter of the world; of which the policy is capable of forming, or has\r\never actually, and in fact, formed such men. The colonies owe to the policy of\r\nEurope the education and great views of their active and enterprizing founders;\r\nand some of the greatest and most important of them, so far as concerns their\r\ninternal government, owe to it scarce anything else.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART III. Of the Advantages which Europe has derived From the Discovery of\r\nAmerica, and from that of a Passage to the East Indies by the Cape of Good\r\nHope.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nSuch are the advantages which the colonies of America have derived from the\r\npolicy of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat are those which Europe has derived from the discovery and colonization of\r\nAmerica?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose advantages may be divided, first, into the general advantages which\r\nEurope, considered as one great country, has derived from those great events;\r\nand, secondly, into the particular advantages which each colonizing country has\r\nderived from the colonies which particularly belong to it, in consequence of\r\nthe authority or dominion which it exercises over them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe general advantages which Europe, considered as one great country, has\r\nderived from the discovery and colonization of America, consist, first, in the\r\nincrease of its enjoyments; and, secondly, in the augmentation of its industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe surplus produce of America imported into Europe, furnishes the inhabitants\r\nof this great continent with a variety of commodities which they could not\r\notherwise have possessed; some for conveniency and use, some for pleasure, and\r\nsome for ornament; and thereby contributes to increase their enjoyments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discovery and colonization of America, it will readily be allowed, have\r\ncontributed to augment the industry, first, of all the countries which trade to\r\nit directly, such as Spain, Portugal, France, and England; and, secondly, of\r\nall those which, without trading to it directly, send, through the medium of\r\nother countries, goods to it of their own produce, such as Austrian Flanders,\r\nand some provinces of Germany, which, through the medium of the countries\r\nbefore mentioned, send to it a considerable quantity of linen and other goods.\r\nAll such countries have evidently gained a more extensive market for their\r\nsurplus produce, and must consequently have been encouraged to increase its\r\nquantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut that those great events should likewise have contributed to encourage the\r\nindustry of countries such as Hungary and Poland, which may never, perhaps,\r\nhave sent a single commodity of their own produce to America, is not, perhaps,\r\naltogether so evident. That those events have done so, however, cannot be\r\ndoubted. Some part of the produce of America is consumed in Hungary and Poland,\r\nand there is some demand there for the sugar, chocolate, and tobacco, of that\r\nnew quarter of the world. But those commodities must be purchased with\r\nsomething which is either the produce of the industry of Hungary and Poland, or\r\nwith something which had been purchased with some part of that produce. Those\r\ncommodities of America are new values, new equivalents, introduced into Hungary\r\nand Poland, to be exchanged there for the surplus produce of these countries.\r\nBy being carried thither, they create a new and more extensive market for that\r\nsurplus produce. They raise its value, and thereby contribute to encourage its\r\nincrease. Though no part of it may ever be carried to America, it may be\r\ncarried to other countries, which purchase it with a part of their share of the\r\nsurplus produce of America, and it may find a market by means of the\r\ncirculation of that trade which was originally put into motion by the surplus\r\nproduce of America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose great events may even have contributed to increase the enjoyments, and to\r\naugment the industry, of countries which not only never sent any commodities to\r\nAmerica, but never received any from it. Even such countries may have received\r\na greater abundance of other commodities from countries, of which the surplus\r\nproduce had been augmented by means of the American trade. This greater\r\nabundance, as it must necessarily have increased their enjoyments, so it must\r\nlikewise have augmented their industry. A greater number of new equivalents, of\r\nsome kind or other, must have been presented to them to be exchanged for the\r\nsurplus produce of that industry. A more extensive market must have been\r\ncreated for that surplus produce, so as to raise its value, and thereby\r\nencourage its increase. The mass of commodities annually thrown into the great\r\ncircle of European commerce, and by its various revolutions annually\r\ndistributed among all the different nations comprehended within it, must have\r\nbeen augmented by the whole surplus produce of America. A greater share of this\r\ngreater mass, therefore, is likely to have fallen to each of those nations, to\r\nhave increased their enjoyments, and augmented their industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exclusive trade of the mother countries tends to diminish, or at least to\r\nkeep down below what they would otherwise rise to, both the enjoyments and\r\nindustry of all those nations in general, and of the American colonies in\r\nparticular. It is a dead weight upon the action of one of the great springs\r\nwhich puts into motion a great part of the business of mankind. By rendering\r\nthe colony produce dearer in all other countries, it lessens its consumption,\r\nand thereby cramps the industry of the colonies, and both the enjoyments and\r\nthe industry of all other countries, which both enjoy less when they pay more\r\nfor what they enjoy, and produce less when they get less for what they produce.\r\nBy rendering the produce of all other countries dearer in the colonies, it\r\ncramps in the same manner the industry of all other colonies, and both the\r\nenjoyments and the industry of the colonies. It is a clog which, for the\r\nsupposed benefit of some particular countries, embarrasses the pleasures and\r\nencumbers the industry of all other countries, but of the colonies more than of\r\nany other. It not only excludes as much as possible all other countries from\r\none particular market, but it confines as much as possible the colonies to one\r\nparticular market; and the difference is very great between being excluded from\r\none particular market when all others are open, and being confined to one\r\nparticular market when all others are shut up. The surplus produce of the\r\ncolonies, however, is the original source of all that increase of enjoyments\r\nand industry which Europe derives from the discovery and colonization of\r\nAmerica, and the exclusive trade of the mother countries tends to render this\r\nsource much less abundant than it otherwise would be.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe particular advantages which each colonizing country derives from the\r\ncolonies which particularly belong to it, are of two different kinds; first,\r\nthose common advantages which every empire derives from the provinces subject\r\nto its dominion; and, secondly, those peculiar advantages which are supposed to\r\nresult from provinces of so very peculiar a nature as the European colonies of\r\nAmerica.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe common advantages which every empire derives from the provinces subject to\r\nits dominion consist, first, in the military force which they furnish for its\r\ndefence; and, secondly, in the revenue which they furnish for the support of\r\nits civil government. The Roman colonies furnished occasionally both the one\r\nand the other. The Greek colonies sometimes furnished a military force, but\r\nseldom any revenue. They seldom acknowledged themselves subject to the dominion\r\nof the mother city. They were generally her allies in war, but very seldom her\r\nsubjects in peace.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe European colonies of America have never yet furnished any military force\r\nfor the defence of the mother country. The military force has never yet been\r\nsufficient for their own defence; and in the different wars in which the mother\r\ncountries have been engaged, the defence of their colonies has generally\r\noccasioned a very considerable distraction of the military force of those\r\ncountries. In this respect, therefore, all the European colonies have, without\r\nexception, been a cause rather of weakness than of strength to their respective\r\nmother countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe colonies of Spain and Portugal only have contributed any revenue towards\r\nthe defence of the mother country, or the support of her civil government. The\r\ntaxes which have been levied upon those of other European nations, upon those\r\nof England in particular, have seldom been equal to the expense laid out upon\r\nthem in time of peace, and never sufficient to defray that which they\r\noccasioned in time of war. Such colonies, therefore, have been a source of\r\nexpense, and not of revenue, to their respective mother countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe advantages of such colonies to their respective mother countries, consist\r\naltogether in those peculiar advantages which are supposed to result from\r\nprovinces of so very peculiar a nature as the European colonies of America; and\r\nthe exclusive trade, it is acknowledged, is the sole source of all those\r\npeculiar advantages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of this exclusive trade, all that part of the surplus produce of\r\nthe English colonies, for example, which consists in what are called enumerated\r\ncommodities, can be sent to no other country but England. Other countries must\r\nafterwards buy it of her. It must be cheaper, therefore, in England than it can\r\nbe in any other country, and must contribute more to increase the enjoyments of\r\nEngland than those of any other country. It must likewise contribute more to\r\nencourage her industry. For all those parts of her own surplus produce which\r\nEngland exchanges for those enumerated commodities, she must get a better price\r\nthan any other countries can get for the like parts of theirs, when they\r\nexchange them for the same commodities. The manufactures of England, for\r\nexample, will purchase a greater quantity of the sugar and tobacco of her own\r\ncolonies than the like manufactures of other countries can purchase of that\r\nsugar and tobacco. So far, therefore, as the manufactures of England and those\r\nof other countries are both to be exchanged for the sugar and tobacco of the\r\nEnglish colonies, this superiority of price gives an encouragement to the\r\nformer beyond what the latter can, in these circumstances, enjoy. The exclusive\r\ntrade of the colonies, therefore, as it diminishes, or at least keeps down\r\nbelow what they would otherwise rise to, both the enjoyments and the industry\r\nof the countries which do not possess it, so it gives an evident advantage to\r\nthe countries which do possess it over those other countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis advantage, however, will, perhaps, be found to be rather what may be\r\ncalled a relative than an absolute advantage, and to give a superiority to the\r\ncountry which enjoys it, rather by depressing the industry and produce of other\r\ncountries, than by raising those of that particular country above what they\r\nwould naturally rise to in the case of a free trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tobacco of Maryland and Virginia, for example, by means of the monopoly\r\nwhich England enjoys of it, certainly comes cheaper to England than it can do\r\nto France to whom England commonly sells a considerable part of it. But had\r\nFrance and all other European countries been at all times allowed a free trade\r\nto Maryland and Virginia, the tobacco of those colonies might by this time have\r\ncome cheaper than it actually does, not only to all those other countries, but\r\nlikewise to England. The produce of tobacco, in consequence of a market so much\r\nmore extensive than any which it has hitherto enjoyed, might, and probably\r\nwould, by this time have been so much increased as to reduce the profits of a\r\ntobacco plantation to their natural level with those of a corn plantation,\r\nwhich it is supposed they are still somewhat above. The price of tobacco might,\r\nand probably would, by this time have fallen somewhat lower than it is at\r\npresent. An equal quantity of the commodities, either of England or of those\r\nother countries, might have purchased in Maryland and Virginia a greater\r\nquantity of tobacco than it can do at present, and consequently have been sold\r\nthere for so much a better price. So far as that weed, therefore, can, by its\r\ncheapness and abundance, increase the enjoyments, or augment the industry,\r\neither of England or of any other country, it would probably, in the case of a\r\nfree trade, have produced both these effects in somewhat a greater degree than\r\nit can do at present. England, indeed, would not, in this case, have had any\r\nadvantage over other countries. She might have bought the tobacco of her\r\ncolonies somewhat cheaper, and consequently have sold some of her own\r\ncommodities somewhat dearer, than she actually does; but she could neither have\r\nbought the one cheaper, nor sold the other dearer, than any other country might\r\nhave done. She might, perhaps, have gained an absolute, but she would certainly\r\nhave lost a relative advantage.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order, however, to obtain this relative advantage in the colony trade, in\r\norder to execute the invidious and malignant project of excluding, as much as\r\npossible, other nations from any share in it, England, there are very probable\r\nreasons for believing, has not only sacrificed a part of the absolute advantage\r\nwhich she, as well as every other nation, might have derived from that trade,\r\nbut has subjected herself both to an absolute and to a relative disadvantage in\r\nalmost every other branch of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, by the act of navigation, England assumed to herself the monopoly of the\r\ncolony trade, the foreign capitals which had before been employed in it, were\r\nnecessarily withdrawn from it. The English capital, which had before carried on\r\nbut a part of it, was now to carry on the whole. The capital which had before\r\nsupplied the colonies with but a part of the goods which they wanted from\r\nEurope, was now all that was employed to supply them with the whole. But it\r\ncould not supply them with the whole; and the goods with which it did supply\r\nthem were necessarily sold very dear. The capital which had before bought but a\r\npart of the surplus produce of the colonies, was now all that was employed to\r\nbuy the whole. But it could not buy the whole at any thing near the old price;\r\nand therefore, whatever it did buy, it necessarily bought very cheap. But in an\r\nemployment of capital, in which the merchant sold very dear, and bought very\r\ncheap, the profit must have been very great, and much above the ordinary level\r\nof profit in other branches of trade. This superiority of profit in the colony\r\ntrade could not fail to draw from other branches of trade a part of the capital\r\nwhich had before been employed in them. But this revulsion of capital, as it\r\nmust have gradually increased the competition of capitals in the colony trade,\r\nso it must have gradually diminished that competition in all those other\r\nbranches of trade; as it must have gradually lowered the profits of the one, so\r\nit must have gradually raised those of the other, till the profits of all came\r\nto a new level, different from, and somewhat higher, than that at which they\r\nhad been before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis double effect of drawing capital from all other trades, and of raising the\r\nrate of profit somewhat higher than it otherwise would have been in all trades,\r\nwas not only produced by this monopoly upon its first establishment, but has\r\ncontinued to be produced by it ever since.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, This monopoly has been continually drawing capital from all other\r\ntrades, to be employed in that of the colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the wealth of Great Britain has increased very much since the\r\nestablishment of the act of navigation, it certainly has not increased in the\r\nsame proportion as that or the colonies. But the foreign trade of every country\r\nnaturally increases in proportion to its wealth, its surplus produce in\r\nproportion to its whole produce; and Great Britain having engrossed to herself\r\nalmost the whole of what may be called the foreign trade of the colonies, and\r\nher capital not having increased in the same proportion as the extent of that\r\ntrade, she could not carry it on without continually withdrawing from other\r\nbranches of trade some part of the capital which had before been employed in\r\nthem, as well as withholding from them a great deal more which would otherwise\r\nhave gone to them. Since the establishment of the act of navigation,\r\naccordingly, the colony trade has been continually increasing, while many other\r\nbranches of foreign trade, particularly of that to other parts of Europe, have\r\nbeen continually decaying. Our manufactures for foreign sale, instead of being\r\nsuited, as before the act of navigation, to the neighbouring market of Europe,\r\nor to the more distant one of the countries which lie round the Mediterranean\r\nsea, have the greater part of them, been accommodated to the still more distant\r\none of the colonies; to the market in which they have the monopoly, rather than\r\nto that in which they have many competitors. The causes of decay in other\r\nbranches of foreign trade, which, by Sir Matthew Decker and other writers, have\r\nbeen sought for in the excess and improper mode of taxation, in the high price\r\nof labour, in the increase of luxury, etc. may all be found in the overgrowth\r\nof the colony trade. The mercantile capital of Great Britain, though very\r\ngreat, yet not being infinite, and though greatly increased since the act of\r\nnavigation, yet not being increased in the same proportion as the colony trade,\r\nthat trade could not possibly be carried on without withdrawing some part of\r\nthat capital from other branches of trade, nor consequently without some decay\r\nof those other branches.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEngland, it must be observed, was a great trading country, her mercantile\r\ncapital was very great, and likely to become still greater and greater every\r\nday, not only before the act of navigation had established the monopoly of the\r\ncorn trade, but before that trade was very considerable. In the Dutch war,\r\nduring the government of Cromwell, her navy was superior to that of Holland;\r\nand in that which broke out in the beginning of the reign of Charles II., it\r\nwas at least equal, perhaps superior to the united navies of France and\r\nHolland. Its superiority, perhaps, would scarce appear greater in the present\r\ntimes, at least if the Dutch navy were to bear the same proportion to the Dutch\r\ncommerce now which it did then. But this great naval power could not, in either\r\nof those wars, be owing to the act of navigation. During the first of them, the\r\nplan of that act had been but just formed; and though, before the breaking out\r\nof the second, it had been fully enacted by legal authority, yet no part of it\r\ncould have had time to produce any considerable effect, and least of all that\r\npart which established the exclusive trade to the colonies. Both the colonies\r\nand their trade were inconsiderable then, in comparison of what they are how.\r\nThe island of Jamaica was an unwholesome desert, little inhabited, and less\r\ncultivated. New York and New Jersey were in the possession of the Dutch, the\r\nhalf of St. Christopher’s in that of the French. The island of Antigua,\r\nthe two Carolinas, Pennsylvania, Georgia, and Nova Scotia, were not planted.\r\nVirginia, Maryland, and New England were planted; and though they were very\r\nthriving colonies, yet there was not perhaps at that time, either in Europe or\r\nAmerica, a single person who foresaw, or even suspected, the rapid progress\r\nwhich they have since made in wealth, population, and improvement. The island\r\nof Barbadoes, in short, was the only British colony of any consequence, of\r\nwhich the condition at that time bore any resemblance to what it is at present.\r\nThe trade of the colonies, of which England, even for some time after the act\r\nof navigation, enjoyed but a part (for the act of navigation was not very\r\nstrictly executed till several years after it was enacted), could not at that\r\ntime be the cause of the great trade of England, nor of the great naval power\r\nwhich was supported by that trade. The trade which at that time supported that\r\ngreat naval power was the trade of Europe, and of the countries which lie round\r\nthe Mediterranean sea. But the share which Great Britain at present enjoys of\r\nthat trade could not support any such great naval power. Had the growing trade\r\nof the colonies been left free to all nations, whatever share of it might have\r\nfallen to Great Britain, and a very considerable share would probably have\r\nfallen to her, must have been all an addition to this great trade of which she\r\nwas before in possession. In consequence of the monopoly, the increase of the\r\ncolony trade has not so much occasioned an addition to the trade which Great\r\nBritain had before, as a total change in its direction.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, This monopoly has necessarily contributed to keep up the rate of\r\nprofit, in all the different branches of British trade, higher than it\r\nnaturally would have been, had all nations been allowed a free trade to the\r\nBritish colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, as it necessarily drew towards that trade a\r\ngreater proportion of the capital of Great Britain than what would have gone to\r\nit of its own accord, so, by the expulsion of all foreign capitals, it\r\nnecessarily reduced the whole quantity of capital employed in that trade below\r\nwhat it naturally would have been in the case of a free trade. But, by\r\nlessening the competition of capitals in that branch of trade, it necessarily\r\nraised the rate of profit in that branch. By lessening, too, the competition of\r\nBritish capitals in all other branches of trade, it necessarily raised the rate\r\nof British profit in all those other branches. Whatever may have been, at any\r\nparticular period since the establishment of the act of navigation, the state\r\nor extent of the mercantile capital of Great Britain, the monopoly of the\r\ncolony trade must, during the continuance of that state, have raised the\r\nordinary rate of British profit higher than it otherwise would have been, both\r\nin that and in all the other branches of British trade. If, since the\r\nestablishment of the act of navigation, the ordinary rate of British profit has\r\nfallen considerably, as it certainly has, it must have fallen still lower, had\r\nnot the monopoly established by that act contributed to keep it up.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut whatever raises, in any country, the ordinary rate of profit higher than it\r\notherwise would be, necessarily subjects that country both to an absolute, and\r\nto a relative disadvantage in every branch of trade of which she has not the\r\nmonopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt subjects her to an absolute disadvantage; because, in such branches of\r\ntrade, her merchants cannot get this greater profit without selling dearer than\r\nthey otherwise would do, both the goods of foreign countries which they import\r\ninto their own, and the goods of their own country which they export to foreign\r\ncountries. Their own country must both buy dearer and sell dearer; must both\r\nbuy less, and sell less; must both enjoy less and produce less, than she\r\notherwise would do.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt subjects her to a relative disadvantage; because, in such branches of trade,\r\nit sets other countries, which are not subject to the same absolute\r\ndisadvantage, either more above her or less below her, than they otherwise\r\nwould be. It enables them both to enjoy more and to produce more, in proportion\r\nto what she enjoys and produces. It renders their superiority greater, or their\r\ninferiority less, than it otherwise would be. By raising the price of her\r\nproduce above what it otherwise would be, it enables the merchants of other\r\ncountries to undersell her in foreign markets, and thereby to justle her out of\r\nalmost all those branches of trade, of which she has not the monopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur merchants frequently complain of the high wages of British labour, as the\r\ncause of their manufactures being undersold in foreign markets; but they are\r\nsilent about the high profits of stock. They complain of the extravagant gain\r\nof other people; but they say nothing of their own. The high profits of British\r\nstock, however, may contribute towards raising the price of British\r\nmanufactures, in many cases, as much, and in some perhaps more, than the high\r\nwages of British labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in this manner that the capital of Great Britain, one may justly say, has\r\npartly been drawn and partly been driven from the greater part of the different\r\nbranches of trade of which she has not the monopoly; from the trade of Europe,\r\nin particular, and from that of the countries which lie round the Mediterranean\r\nsea.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has partly been drawn from those branches of trade, by the attraction of\r\nsuperior profit in the colony trade, in consequence of the continual increase\r\nof that trade, and of the continual insufficiency of the capital which had\r\ncarried it on one year to carry it on the next.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has partly been driven from them, by the advantage which the high rate of\r\nprofit established in Great Britain gives to other countries, in all the\r\ndifferent branches of trade of which Great Britain has not the monopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the monopoly of the colony trade has drawn from those other branches a part\r\nof the British capital, which would otherwise have been employed in them, so it\r\nhas forced into them many foreign capitals which would never have gone to them,\r\nhad they not been expelled from the colony trade. In those other branches of\r\ntrade, it has diminished the competition of British capitals, and thereby\r\nraised the rate of British profit higher than it otherwise would have been. On\r\nthe contrary, it has increased the competition of foreign capitals, and thereby\r\nsunk the rate of foreign profit lower than it otherwise would have been. Both\r\nin the one way and in the other, it must evidently have subjected Great Britain\r\nto a relative disadvantage in all those other branches of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe colony trade, however, it may perhaps be said, is more advantageous to\r\nGreat Britain than any other; and the monopoly, by forcing into that trade a\r\ngreater proportion of the capital of Great Britain than what would otherwise\r\nhave gone to it, has turned that capital into an employment, more advantageous\r\nto the country than any other which it could have found.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe most advantageous employment of any capital to the country to which it\r\nbelongs, is that which maintains there the greatest quantity of productive\r\nlabour, and increases the most the annual produce of the land and labour of\r\nthat country. But the quantity of productive labour which any capital employed\r\nin the foreign trade of consumption can maintain, is exactly in proportion, it\r\nhas been shown in the second book, to the frequency of its returns. A capital\r\nof a thousand pounds, for example, employed in a foreign trade of consumption,\r\nof which the returns are made regularly once in the year, can keep in constant\r\nemployment, in the country to which it belongs, a quantity of productive\r\nlabour, equal to what a thousand pounds can maintain there for a year. If the\r\nreturns are made twice or thrice in the year, it can keep in constant\r\nemployment a quantity of productive labour, equal to what two or three thousand\r\npounds can maintain there for a year. A foreign trade of consumption carried on\r\nwith a neighbouring, is, upon that account, in general, more advantageous than\r\none carried on with a distant country; and, for the same reason, a direct\r\nforeign trade of consumption, as it has likewise been shown in the second book,\r\nis in general more advantageous than a round-about one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut the monopoly of the colony trade, so far as it has operated upon the\r\nemployment of the capital of Great Britain, has, in all cases, forced some part\r\nof it from a foreign trade of consumption carried on with a neighbouring, to\r\none carried on with a more distant country, and in many cases from a direct\r\nforeign trade of consumption to a round-about one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, The monopoly of the colony trade has, in all cases, forced some part of\r\nthe capital of Great Britain from a foreign trade of consumption carried on\r\nwith a neighbouring, to one carried on with a more distant country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has, in all cases, forced some part of that capital from the trade with\r\nEurope, and with the countries which lie round the Mediterranean sea, to that\r\nwith the more distant regions of America and the West Indies; from which the\r\nreturns are necessarily less frequent, not only on account of the greater\r\ndistance, but on account of the peculiar circumstances of those countries. New\r\ncolonies, it has already been observed, are always understocked. Their capital\r\nis always much less than what they could employ with great profit and advantage\r\nin the improvement and cultivation of their land. They have a constant demand,\r\ntherefore, for more capital than they have of their own; and, in order to\r\nsupply the deficiency of their own, they endeavour to borrow as much as they\r\ncan of the mother country, to whom they are, therefore, always in debt. The\r\nmost common way in which the colonies contract this debt, is not by borrowing\r\nupon bond of the rich people of the mother country, though they sometimes do\r\nthis too, but by running as much in arrear to their correspondents, who supply\r\nthem with goods from Europe, as those correspondents will allow them. Their\r\nannual returns frequently do not amount to more than a third, and sometimes not\r\nto so great a proportion of what they owe. The whole capital, therefore, which\r\ntheir correspondents advance to them, is seldom returned to Britain in less\r\nthan three, and sometimes not in less than four or five years. But a British\r\ncapital of a thousand pounds, for example, which is returned to Great Britain\r\nonly once in five years, can keep in constant employment only one-fifth part of\r\nthe British industry which it could maintain, if the whole was returned once in\r\nthe year; and, instead of the quantity of industry which a thousand pounds\r\ncould maintain for a year, can keep in constant employment the quantity only\r\nwhich two hundred pounds can maintain for a year. The planter, no doubt, by the\r\nhigh price which he pays for the goods from Europe, by the interest upon the\r\nbills which he grants at distant dates, and by the commission upon the renewal\r\nof those which he grants at near dates, makes up, and probably more than makes\r\nup, all the loss which his correspondent can sustain by this delay. But, though\r\nhe make up the loss of his correspondent, he cannot make up that of Great\r\nBritain. In a trade of which the returns are very distant, the profit of the\r\nmerchant may be as great or greater than in one in which they are very frequent\r\nand near; but the advantage of the country in which he resides, the quantity of\r\nproductive labour constantly maintained there, the annual produce of the land\r\nand labour, must always be much less. That the returns of the trade to America,\r\nand still more those of that to the West Indies, are, in general, not only more\r\ndistant, but more irregular and more uncertain, too, than those of the trade to\r\nany part of Europe, or even of the countries which lie round the Mediterranean\r\nsea, will readily be allowed, I imagine, by everybody who has any experience of\r\nthose different branches of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, The monopoly of the colony trade, has, in many cases, forced some\r\npart of the capital of Great Britain from a direct foreign trade of\r\nconsumption, into a round-about one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong the enumerated commodities which can be sent to no other market but Great\r\nBritain, there are several of which the quantity exceeds very much the\r\nconsumption of Great Britain, and of which, a part, therefore, must be exported\r\nto other countries. But this cannot be done without forcing some part of the\r\ncapital of Great Britain into a round-about foreign trade of consumption.\r\nMaryland, and Virginia, for example, send annually to Great Britain upwards of\r\nninety-six thousand hogsheads of tobacco, and the consumption of Great Britain\r\nis said not to exceed fourteen thousand. Upwards of eighty-two thousand\r\nhogsheads, therefore, must be exported to other countries, to France, to\r\nHolland, and, to the countries which lie round the Baltic and Mediterranean\r\nseas. But that part of the capital of Great Britain which brings those\r\neighty-two thousand hogsheads to Great Britain, which re-exports them from\r\nthence to those other countries, and which brings back from those other\r\ncountries to Great Britain either goods or money in return, is employed in a\r\nround-about foreign trade of consumption; and is necessarily forced into this\r\nemployment, in order to dispose of this great surplus. If we would compute in\r\nhow many years the whole of this capital is likely to come back to Great\r\nBritain, we must add to the distance of the American returns that of the\r\nreturns from those other countries. If, in the direct foreign trade of\r\nconsumption which we carry on with America, the whole capital employed\r\nfrequently does not come back in less than three or four years, the whole\r\ncapital employed in this round-about one is not likely to come back in less\r\nthan four or five. If the one can keep in constant employment but a third or a\r\nfourth part of the domestic industry which could be maintained by a capital\r\nreturned once in the year, the other can keep in constant employment but a\r\nfourth or a fifth part of that industry. At some of the outports a credit is\r\ncommonly given to those foreign correspondents to whom they export them\r\ntobacco. At the port of London, indeed, it is commonly sold for ready money:\r\nthe rule is Weigh and pay. At the port of London, therefore, the final returns\r\nof the whole round-about trade are more distant than the returns from America,\r\nby the time only which the goods may lie unsold in the warehouse; where,\r\nhowever, they may sometimes lie long enough. But, had not the colonies been\r\nconfined to the market of Great Britain for the sale of their tobacco, very\r\nlittle more of it would probably have come to us than what was necessary for\r\nthe home consumption. The goods which Great Britain purchases at present for\r\nher own consumption with the great surplus of tobacco which she exports to\r\nother countries, she would, in this case, probably have purchased with the\r\nimmediate produce of her own industry, or with some part of her own\r\nmanufactures. That produce, those manufactures, instead of being almost\r\nentirely suited to one great market, as at present, would probably have been\r\nfitted to a great number of smaller markets. Instead of one great round-about\r\nforeign trade of consumption, Great Britain would probably have carried on a\r\ngreat number of small direct foreign trades of the same kind. On account of the\r\nfrequency of the returns, a part, and probably but a small part, perhaps not\r\nabove a third or a fourth of the capital which at present carries on this great\r\nround-about trade, might have been sufficient to carry on all those small\r\ndirect ones; might have kept in constant employment an equal quantity of\r\nBritish industry; and have equally supported the annual produce of the land and\r\nlabour of Great Britain. All the purposes of this trade being, in this manner,\r\nanswered by a much smaller capital, there would have been a large spare capital\r\nto apply to other purposes; to improve the lands, to increase the manufactures,\r\nand to extend the commerce of Great Britain; to come into competition at least\r\nwith the other British capitals employed in all those different ways, to reduce\r\nthe rate of profit in them all, and thereby to give to Great Britain, in all of\r\nthem, a superiority over other countries, still greater than what she at\r\npresent enjoys.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, too, has forced some part of the capital of\r\nGreat Britain from all foreign trade of consumption to a carrying trade; and,\r\nconsequently from supporting more or less the industry of Great Britain, to be\r\nemployed altogether in supporting partly that of the colonies, and partly that\r\nof some other countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe goods, for example, which are annually purchased with the great surplus of\r\neighty-two thousand hogsheads of tobacco annually re-exported from Great\r\nBritain, are not all consumed in Great Britain. Part of them, linen from\r\nGermany and Holland, for example, is returned to the colonies for their\r\nparticular consumption. But that part of the capital of Great Britain which\r\nbuys the tobacco with which this linen is afterwards bought, is necessarily\r\nwithdrawn from supporting the industry of Great Britain, to be employed\r\naltogether in supporting, partly that of the colonies, and partly that of the\r\nparticular countries who pay for this tobacco with the produce of their own\r\nindustry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, besides, by forcing towards it a much greater\r\nproportion of the capital of Great Britain than what would naturally have gone\r\nto it, seems to have broken altogether that natural balance which would\r\notherwise have taken place among all the different branches of British\r\nindustry. The industry of Great Britain, instead of being accommodated to a\r\ngreat number of small markets, has been principally suited to one great market.\r\nHer commerce, instead of running in a great number of small channels, has been\r\ntaught to run principally in one great channel. But the whole system of her\r\nindustry and commerce has thereby been rendered less secure; the whole state of\r\nher body politic less healthful than it otherwise would have been. In her\r\npresent condition, Great Britain resembles one of those unwholesome bodies in\r\nwhich some of the vital parts are overgrown, and which, upon that account, are\r\nliable to many dangerous disorders, scarce incident to those in which all the\r\nparts are more properly proportioned. A small stop in that great blood-vessel,\r\nwhich has been artificially swelled beyond its natural dimensions, and through\r\nwhich an unnatural proportion of the industry and commerce of the country has\r\nbeen forced to circulate, is very likely to bring on the most dangerous\r\ndisorders upon the whole body politic. The expectation of a rupture with the\r\ncolonies, accordingly, has struck the people of Great Britain with more terror\r\nthan they ever felt for a Spanish armada, or a French invasion. It was this\r\nterror, whether well or ill grounded, which rendered the repeal of the stamp\r\nact, among the merchants at least, a popular measure. In the total exclusion\r\nfrom the colony market, was it to last only for a few years, the greater part\r\nof our merchants used to fancy that they foresaw an entire stop to their trade;\r\nthe greater part of our master manufacturers, the entire ruin of their\r\nbusiness; and the greater part of our workmen, an end of their employment. A\r\nrupture with any of our neighbours upon the continent, though likely, too, to\r\noccasion some stop or interruption in the employments of some of all these\r\ndifferent orders of people, is foreseen, however, without any such general\r\nemotion. The blood, of which the circulation is stopt in some of the smaller\r\nvessels, easily disgorges itself into the greater, without occasioning any\r\ndangerous disorder; but, when it is stopt in any of the greater vessels,\r\nconvulsions, apoplexy, or death, are the immediate and unavoidable\r\nconsequences. If but one of those overgrown manufactures, which, by means\r\neither of bounties or of the monopoly of the home and colony markets, have been\r\nartificially raised up to any unnatural height, finds some small stop or\r\ninterruption in its employment, it frequently occasions a mutiny and disorder\r\nalarming to government, and embarrassing even to the deliberations of the\r\nlegislature. How great, therefore, would be the disorder and confusion, it was\r\nthought, which must necessarily be occasioned by a sudden and entire stop in\r\nthe employment of so great a proportion of our principal manufacturers?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome moderate and gradual relaxation of the laws which give to Great Britain\r\nthe exclusive trade to the colonies, till it is rendered in a great measure\r\nfree, seems to be the only expedient which can, in all future times, deliver\r\nher from this danger; which can enable her, or even force her, to withdraw some\r\npart of her capital from this overgrown employment, and to turn it, though with\r\nless profit, towards other employments; and which, by gradually diminishing one\r\nbranch of her industry, and gradually increasing all the rest, can, by degrees,\r\nrestore all the different branches of it to that natural, healthful, and proper\r\nproportion, which perfect liberty necessarily establishes, and which perfect\r\nliberty can alone preserve. To open the colony trade all at once to all\r\nnations, might not only occasion some transitory inconveniency, but a great\r\npermanent loss, to the greater part of those whose industry or capital is at\r\npresent engaged in it. The sudden loss of the employment, even of the ships\r\nwhich import the eighty-two thousand hogsheads of tobacco, which are over and\r\nabove the consumption of Great Britain, might alone be felt very sensibly. Such\r\nare the unfortunate effects of all the regulations of the mercantile system.\r\nThey not only introduce very dangerous disorders into the state of the body\r\npolitic, but disorders which it is often difficult to remedy, without\r\noccasioning, for a time at least, still greater disorders. In what manner,\r\ntherefore, the colony trade ought gradually to be opened; what are the\r\nrestraints which ought first, and what are those which ought last, to be taken\r\naway; or in what manner the natural system of perfect liberty and justice ought\r\ngradually to be restored, we must leave to the wisdom of future statesmen and\r\nlegislators to determine.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFive different events, unforeseen and unthought of, have very fortunately\r\nconcurred to hinder Great Britain from feeling, so sensibly as it was generally\r\nexpected she would, the total exclusion which has now taken place for more than\r\na year (from the first of December 1774) from a very important branch of the\r\ncolony trade, that of the twelve associated provinces of North America. First,\r\nthose colonies, in preparing themselves for their non-importation agreement,\r\ndrained Great Britain completely of all the commodities which were fit for\r\ntheir market; secondly, the extra ordinary demand of the Spanish flota has,\r\nthis year, drained Germany and the north of many commodities, linen in\r\nparticular, which used to come into competition, even in the British market,\r\nwith the manufactures of Great Britain; thirdly, the peace between Russia and\r\nTurkey has occasioned an extraordinary demand from the Turkey market, which,\r\nduring the distress of the country, and while a Russian fleet was cruizing in\r\nthe Archipelago, had been very poorly supplied; fourthly, the demand of the\r\nnorth of Europe for the manufactures of Great Britain has been increasing from\r\nyear to year, for some time past; and, fifthly, the late partition, and\r\nconsequential pacification of Poland, by opening the market of that great\r\ncountry, have, this year, added an extraordinary demand from thence to the\r\nincreasing demand of the north. These events are all, except the fourth, in\r\ntheir nature transitory and accidental; and the exclusion from so important a\r\nbranch of the colony trade, if unfortunately it should continue much longer,\r\nmay still occasion some degree of distress. This distress, however, as it will\r\ncome on gradually, will be felt much less severely than if it had come on all\r\nat once; and, in the mean time, the industry and capital of the country may\r\nfind a new employment and direction, so as to prevent this distress from ever\r\nrising to any considerable height.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, therefore, so far as it has turned towards\r\nthat trade a greater proportion of the capital of Great Britain than what would\r\notherwise have gone to it, has in all cases turned it, from a foreign trade of\r\nconsumption with a neighbouring, into one with a more distant country; in many\r\ncases from a direct foreign trade of consumption into a round-about one; and,\r\nin some cases, from all foreign trade of consumption into a carrying trade. It\r\nhas, in all cases, therefore, turned it from a direction in which it would have\r\nmaintained a greater quantity of productive labour, into one in which it can\r\nmaintain a much smaller quantity. By suiting, besides, to one particular market\r\nonly, so great a part of the industry and commerce of Great Britain, it has\r\nrendered the whole state of that industry and commerce more precarious and less\r\nsecure, than if their produce had been accommodated to a greater variety of\r\nmarkets.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWe must carefully distinguish between the effects of the colony trade and those\r\nof the monopoly of that trade. The former are always and necessarily\r\nbeneficial; the latter always and necessarily hurtful. But the former are so\r\nbeneficial, that the colony trade, though subject to a monopoly, and,\r\nnotwithstanding the hurtful effects of that monopoly, is still, upon the whole,\r\nbeneficial, and greatly beneficial, though a good deal less so than it\r\notherwise would be.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe effect of the colony trade, in its natural and free state, is to open a\r\ngreat though distant market, for such parts of the produce of British industry\r\nas may exceed the demand of the markets nearer home, of those of Europe, and of\r\nthe countries which lie round the Mediterranean sea. In its natural and free\r\nstate, the colony trade, without drawing from those markets any part of the\r\nproduce which had ever been sent to them, encourages Great Britain to increase\r\nthe surplus continually, by continually presenting new equivalents to be\r\nexchanged for it. In its natural and free state, the colony trade tends to\r\nincrease the quantity of productive labour in Great Britain, but without\r\naltering in any respect the direction of that which had been employed there\r\nbefore. In the natural and free state of the colony trade, the competition of\r\nall other nations would hinder the rate of profit from rising above the common\r\nlevel, either in the new market, or in the new employment. The new market,\r\nwithout drawing any thing from the old one, would create, if one may say so, a\r\nnew produce for its own supply; and that new produce would constitute a new\r\ncapital for carrying on the new employment, which, in the same manner, would\r\ndraw nothing from the old one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, on the contrary, by excluding the competition\r\nof other nations, and thereby raising the rate of profit, both in the new\r\nmarket and in the new employment, draws produce from the old market, and\r\ncapital from the old employment. To augment our share of the colony trade\r\nbeyond what it otherwise would be, is the avowed purpose of the monopoly. If\r\nour share of that trade were to be no greater with, than it would have been\r\nwithout the monopoly, there could have been no reason for establishing the\r\nmonopoly. But whatever forces into a branch of trade, of which the returns are\r\nslower and more distant than those of the greater part of other trades, a\r\ngreater proportion of the capital of any country, than what of its own accord\r\nwould go to that branch, necessarily renders the whole quantity of productive\r\nlabour annually maintained there, the whole annual produce of the land and\r\nlabour of that country, less than they otherwise would be. It keeps down the\r\nrevenue of the inhabitants of that country below what it would naturally rise\r\nto, and thereby diminishes their power of accumulation. It not only hinders, at\r\nall times, their capital from maintaining so great a quantity of productive\r\nlabour as it would otherwise maintain, but it hinders it from increasing so\r\nfast as it would otherwise increase, and, consequently, from maintaining a\r\nstill greater quantity of productive labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe natural good effects of the colony trade, however, more than counterbalance\r\nto Great Britain the bad effects of the monopoly; so that, monopoly and\r\naltogether, that trade, even as it is carried on at present, is not only\r\nadvantageous, but greatly advantageous. The new market and the new employment\r\nwhich are opened by the colony trade, are of much greater extent than that\r\nportion of the old market and of the old employment which is lost by the\r\nmonopoly. The new produce and the new capital which has been created, if one\r\nmay say so, by the colony trade, maintain in Great Britain a greater quantity\r\nof productive labour than what can have been thrown out of employment by the\r\nrevulsion of capital from other trades of which the returns are more frequent.\r\nIf the colony trade, however, even as it is carried on at present, is\r\nadvantageous to Great Britain, it is not by means of the monopoly, but in spite\r\nof the monopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is rather for the manufactured than for the rude produce of Europe, that the\r\ncolony trade opens a new market. Agriculture is the proper business of all new\r\ncolonies; a business which the cheapness of land renders more advantageous than\r\nany other. They abound, therefore, in the rude produce of land; and instead of\r\nimporting it from other countries, they have generally a large surplus to\r\nexport. In new colonies, agriculture either draws hands from all other\r\nemployments, or keeps them from going to any other employment. There are few\r\nhands to spare for the necessary, and none for the ornamental manufactures. The\r\ngreater part of the manufactures of both kinds they find it cheaper to purchase\r\nof other countries than to make for themselves. It is chiefly by encouraging\r\nthe manufactures of Europe, that the colony trade indirectly encourages its\r\nagriculture. The manufacturers of Europe, to whom that trade gives employment,\r\nconstitute a new market for the produce of the land, and the most advantageous\r\nof all markets; the home market for the corn and cattle, for the bread and\r\nbutcher’s meat of Europe, is thus greatly extended by means of the trade\r\nto America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut that the monopoly of the trade of populous and thriving colonies is not\r\nalone sufficient to establish, or even to maintain, manufactures in any\r\ncountry, the examples of Spain and Portugal sufficiently demonstrate. Spain and\r\nPortugal were manufacturing countries before they had any considerable\r\ncolonies. Since they had the richest and most fertile in the world, they have\r\nboth ceased to be so.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Spain and Portugal, the bad effects of the monopoly, aggravated by other\r\ncauses, have, perhaps, nearly overbalanced the natural good effects of the\r\ncolony trade. These causes seem to be other monopolies of different kinds: the\r\ndegradation of the value of gold and silver below what it is in most other\r\ncountries; the exclusion from foreign markets by improper taxes upon\r\nexportation, and the narrowing of the home market, by still more improper taxes\r\nupon the transportation of goods from one part of the country to another; but\r\nabove all, that irregular and partial administration of justice which often\r\nprotects the rich and powerful debtor from the pursuit of his injured creditor,\r\nand which makes the industrious part of the nation afraid to prepare goods for\r\nthe consumption of those haughty and great men, to whom they dare not refuse to\r\nsell upon credit, and from whom they are altogether uncertain of repayment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, on the contrary, the natural good effects of the colony trade,\r\nassisted by other causes, have in a great measure conquered the bad effects of\r\nthe monopoly. These causes seem to be, the general liberty of trade, which,\r\nnotwithstanding some restraints, is at least equal, perhaps superior, to what\r\nit is in any other country; the liberty of exporting, duty free, almost all\r\nsorts of goods which are the produce of domestic industry, to almost any\r\nforeign country; and what, perhaps, is of still greater importance, the\r\nunbounded liberty of transporting them from one part of our own country to any\r\nother, without being obliged to give any account to any public office, without\r\nbeing liable to question or examination of any kind; but, above all, that equal\r\nand impartial administration of justice, which renders the rights of the\r\nmeanest British subject respectable to the greatest, and which, by securing to\r\nevery man the fruits of his own industry, gives the greatest and most effectual\r\nencouragement to every sort of industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the manufactures of Great Britain, however, have been advanced, as they\r\ncertainly have, by the colony trade, it has not been by means of the monopoly\r\nof that trade, but in spite of the monopoly. The effect of the monopoly has\r\nbeen, not to augment the quantity, but to alter the quality and shape of a part\r\nof the manufactures of Great Britain, and to accommodate to a market, from\r\nwhich the returns are slow and distant, what would otherwise have been\r\naccommodated to one from which the returns are frequent and near. Its effect\r\nhas consequently been, to turn a part of the capital of Great Britain from an\r\nemployment in which it would have maintained a greater quantity of\r\nmanufacturing industry, to one in which it maintains a much smaller, and\r\nthereby to diminish, instead of increasing, the whole quantity of manufacturing\r\nindustry maintained in Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly of the colony trade, therefore, like all the other mean and\r\nmalignant expedients of the mercantile system, depresses the industry of all\r\nother countries, but chiefly that of the colonies, without in the least\r\nincreasing, but on the contrary diminishing, that of the country in whose\r\nfavour it is established.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly hinders the capital of that country, whatever may, at any\r\nparticular time, be the extent of that capital, from maintaining so great a\r\nquantity of productive labour as it would otherwise maintain, and from\r\naffording so great a revenue to the industrious inhabitants as it would\r\notherwise afford. But as capital can be increased only by savings from revenue,\r\nthe monopoly, by hindering it from affording so great a revenue as it would\r\notherwise afford, necessarily hinders it from increasing so fast as it would\r\notherwise increase, and consequently from maintaining a still greater quantity\r\nof productive labour, and affording a still greater revenue to the industrious\r\ninhabitants of that country. One great original source of revenue, therefore,\r\nthe wages of labour, the monopoly must necessarily have rendered, at all times,\r\nless abundant than it otherwise would have been.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy raising the rate of mercantile profit, the monopoly discourages the\r\nimprovement of land. The profit of improvement depends upon the difference\r\nbetween what the land actually produces, and what, by the application of a\r\ncertain capital, it can be made to produce. If this difference affords a\r\ngreater profit than what can be drawn from an equal capital in any mercantile\r\nemployment, the improvement of land will draw capital from all mercantile\r\nemployments. If the profit is less, mercantile employments will draw capital\r\nfrom the improvement of land. Whatever, therefore, raises the rate of\r\nmercantile profit, either lessens the superiority, or increases the inferiority\r\nof the profit of improvement: and, in the one case, hinders capital from going\r\nto improvement, and in the other draws capital from it; but by discouraging\r\nimprovement, the monopoly necessarily retards the natural increase of another\r\ngreat original source of revenue, the rent of land. By raising the rate of\r\nprofit, too, the monopoly necessarily keeps up the market rate of interest\r\nhigher than it otherwise would be. But the price of land, in proportion to the\r\nrent which it affords, the number of years purchase which is commonly paid for\r\nit, necessarily falls as the rate of interest rises, and rises as the rate of\r\ninterest falls. The monopoly, therefore, hurts the interest of the landlord two\r\ndifferent ways, by retarding the natural increase, first, of his rent, and,\r\nsecondly, of the price which he would get for his land, in proportion to the\r\nrent which it affords.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe monopoly, indeed, raises the rate of mercantile profit and thereby augments\r\nsomewhat the gain of our merchants. But as it obstructs the natural increase of\r\ncapital, it tends rather to diminish than to increase the sum total of the\r\nrevenue which the inhabitants of the country derive from the profits of stock;\r\na small profit upon a great capital generally affording a greater revenue than\r\na great profit upon a small one. The monopoly raises the rate of profit, but it\r\nhinders the sum of profit from rising so high as it otherwise would do.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the original sources of revenue, the wages of labour, the rent of land, and\r\nthe profits of stock, the monopoly renders much less abundant than they\r\notherwise would be. To promote the little interest of one little order of men\r\nin one country, it hurts the interest of all other orders of men in that\r\ncountry, and of all the men in all other countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is solely by raising the ordinary rate of profit, that the monopoly either\r\nhas proved, or could prove, advantageous to any one particular order of men.\r\nBut besides all the bad effects to the country in general, which have already\r\nbeen mentioned as necessarily resulting from a higher rate of profit, there is\r\none more fatal, perhaps, than all these put together, but which, if we may\r\njudge from experience, is inseparably connected with it. The high rate of\r\nprofit seems everywhere to destroy that parsimony which, in other\r\ncircumstances, is natural to the character of the merchant. When profits are\r\nhigh, that sober virtue seems to be superfluous, and expensive luxury to suit\r\nbetter the affluence of his situation. But the owners of the great mercantile\r\ncapitals are necessarily the leaders and conductors of the whole industry of\r\nevery nation; and their example has a much greater influence upon the manners\r\nof the whole industrious part of it than that of any other order of men. If his\r\nemployer is attentive and parsimonious, the workman is very likely to be so\r\ntoo; but if the master is dissolute and disorderly, the servant, who shapes his\r\nwork according to the pattern which his master prescribes to him, will shape\r\nhis life, too, according to the example which he sets him. Accumulation is thus\r\nprevented in the hands of all those who are naturally the most disposed to\r\naccumulate; and the funds destined for the maintenance of productive labour,\r\nreceive no augmentation from the revenue of those who ought naturally to\r\naugment them the most. The capital of the country, instead of increasing,\r\ngradually dwindles away, and the quantity of productive labour maintained in it\r\ngrows every day less and less. Have the exorbitant profits of the merchants of\r\nCadiz and Lisbon augmented the capital of Spain and Portugal? Have they\r\nalleviated the poverty, have they promoted the industry, of those two beggarly\r\ncountries? Such has been the tone of mercantile expense in those two trading\r\ncities, that those exorbitant profits, far from augmenting the general capital\r\nof the country, seem scarce to have been sufficient to keep up the capitals\r\nupon which they were made. Foreign capitals are every day intruding themselves,\r\nif I may say so, more and more into the trade of Cadiz and Lisbon. It is to\r\nexpel those foreign capitals from a trade which their own grows every day more\r\nand more insufficient for carrying on, that the Spaniards and Portuguese\r\nendeavour every day to straiten more and more the galling bands of their absurd\r\nmonopoly. Compare the mercantile manners of Cadiz and Lisbon with those of\r\nAmsterdam, and you will be sensible how differently the conduct and character\r\nof merchants are affected by the high and by the low profits of stock. The\r\nmerchants of London, indeed, have not yet generally become such magnificent\r\nlords as those of Cadiz and Lisbon; but neither are they in general such\r\nattetitive and parsimonious burghers as those of Amsterdam. They are supposed,\r\nhowever, many of them, to be a good deal richer than the greater part of the\r\nformer, and not quire so rich as many of the latter: but the rate of their\r\nprofit is commonly much lower than that of the former, and a good deal higher\r\nthan that of the latter. Light come, light go, says the proverb; and the\r\nordinary tone of expense seems everywhere to be regulated, not so much\r\naccording to the real ability of spending, as to the supposed facility of\r\ngetting money to spend.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that the single advantage which the monopoly procures to a single\r\norder of men, is in many different ways hurtful to the general interest of the\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo found a great empire for the sole purpose of raising up a people of\r\ncustomers, may at first sight, appear a project fit only for a nation of\r\nshopkeepers. It is, however, a project altogether unfit for a nation of\r\nshopkeepers, but extremely fit for a nation whose government is influenced by\r\nshopkeepers. Such statesmen, and such statesmen only, are capable of fancying\r\nthat they will find some advantage in employing the blood and treasure of their\r\nfellow-citizens, to found and maintain such an empire. Say to a shopkeeper, Buy\r\nme a good estate, and I shall always buy my clothes at your shop, even though I\r\nshould pay somewhat dearer than what I can have them for at other shops; and\r\nyou will not find him very forward to embrace your proposal. But should any\r\nother person buy you such an estate, the shopkeeper will be much obliged to\r\nyour benefactor if he would enjoin you to buy all your clothes at his shop.\r\nEngland purchased for some of her subjects, who found themselves uneasy at\r\nhome, a great estate in a distant country. The price, indeed, was very small,\r\nand instead of thirty years purchase, the ordinary price of land in the present\r\ntimes, it amounted to little more than the expense of the different equipments\r\nwhich made the first discovery, reconnoitered the coast, and took a fictitious\r\npossession of the country. The land was good, and of great extent; and the\r\ncultivators having plenty of good ground to work upon, and being for some time\r\nat liberty to sell their produce where they pleased, became, in the course of\r\nlittle more than thirty or forty years (between 1620 and 1660), so numerous and\r\nthriving a people, that the shopkeepers and other traders of England wished to\r\nsecure to themselves the monopoly of their custom. Without pretending,\r\ntherefore, that they had paid any part, either of the original purchase money,\r\nor of the subsequent expense of improvement, they petitioned the parliament,\r\nthat the cultivators of America might for the future be confined to their shop;\r\nfirst, for buying all the goods which they wanted from Europe; and, secondly,\r\nfor selling all such parts of their own produce as those traders might find it\r\nconvenient to buy. For they did not find it convenient to buy every part of it.\r\nSome parts of it imported into England, might have interfered with some of the\r\ntrades which they themselves carried on at home. Those particular parts of it,\r\ntherefore, they were willing that the colonists should sell where they could;\r\nthe farther off the better; and upon that account proposed that their market\r\nshould be confined to the countries south of Cape Finisterre. A clause in the\r\nfamous act of navigation established this truly shopkeeper proposal into a law.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe maintenance of this monopoly has hitherto been the principal, or more\r\nproperly, perhaps, the sole end and purpose of the dominion which Great Britain\r\nassumes over her colonies. In the exclusive trade, it is supposed, consists the\r\ngreat advantage of provinces, which have never yet afforded either revenue or\r\nmilitary force for the support of the civil government, or the defence of the\r\nmother country. The monopoly is the principal badge of their dependency, and it\r\nis the sole fruit which has hitherto been gathered from that dependency.\r\nWhatever expense Great Britain has hitherto laid out in maintaining this\r\ndependency, has really been laid out in order to support this monopoly. The\r\nexpense of the ordinary peace establishment of the colonies amounted, before\r\nthe commencement of the present disturbances to the pay of twenty regiments of\r\nfoot; to the expense of the artillery, stores, and extraordinary provisions,\r\nwith which it was necessary to supply them; and to the expense of a very\r\nconsiderable naval force, which was constantly kept up, in order to guard from\r\nthe smuggling vessels of other nations, the immense coast of North America, and\r\nthat of our West Indian islands. The whole expense of this peace establishment\r\nwas a charge upon the revenue of Great Britain, and was, at the same time, the\r\nsmallest part of what the dominion of the colonies has cost the mother country.\r\nIf we would know the amount of the whole, we must add to the annual expense of\r\nthis peace establishment, the interest of the sums which, in consequence of\r\ntheir considering her colonies as provinces subject to her dominion, Great\r\nBritain has, upon different occasions, laid out upon their defence. We must add\r\nto it, in particular, the whole expense of the late war, and a great part of\r\nthat of the war which preceded it. The late war was altogether a colony\r\nquarrel; and the whole expense of it, in whatever part of the world it might\r\nhave been laid out, whether in Germany or the East Indies, ought justly to be\r\nstated to the account of the colonies. It amounted to more than ninety millions\r\nsterling, including not only the new debt which was contracted, but the two\r\nshillings in the pound additional land tax, and the sums which were every year\r\nborrowed from the sinking fund. The Spanish war which began in 1739 was\r\nprincipally a colony quarrel. Its principal object was to prevent the search of\r\nthe colony ships, which carried on a contraband trade with the Spanish Main.\r\nThis whole expense is, in reality, a bounty which has been given in order to\r\nsupport a monopoly. The pretended purpose of it was to encourage the\r\nmanufactures, and to increase the commerce of Great Britain. But its real\r\neffect has been to raise the rate of mercantile profit, and to enable our\r\nmerchants to turn into a branch of trade, of which the returns are more slow\r\nand distant than those of the greater part of other trades, a greater\r\nproportion of their capital than they otherwise would have done; two events\r\nwhich, if a bounty could have prevented, it might perhaps have been very well\r\nworth while to give such a bounty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nUnder the present system of management, therefore, Great Britain derives\r\nnothing but loss from the dominion which she assumes over her colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo propose that Great Britain should voluntarily give up all authority over her\r\ncolonies, and leave them to elect their own magistrates, to enact their own\r\nlaws, and to make peace and war, as they might think proper, would be to\r\npropose such a measure as never was, and never will be, adopted by any nation\r\nin the world. No nation ever voluntarily gave up the dominion of any province,\r\nhow troublesome soever it might be to govern it, and how small soever the\r\nrevenue which it afforded might be in proportion to the expense which it\r\noccasioned. Such sacrifices, though they might frequently be agreeable to the\r\ninterest, are always mortifying to the pride of every nation; and, what is\r\nperhaps of still greater consequence, they are always contrary to the private\r\ninterest of the governing part of it, who would thereby be deprived of the\r\ndisposal of many places of trust and profit, of many opportunities of acquiring\r\nwealth and distinction, which the possession of the most turbulent, and, to the\r\ngreat body of the people, the most unprofitable province, seldom fails to\r\nafford. The most visionary enthusiasts would scarce be capable of proposing\r\nsuch a measure, with any serious hopes at least of its ever being adopted. If\r\nit was adopted, however, Great Britain would not only be immediately freed from\r\nthe whole annual expense of the peace establishment of the colonies, but might\r\nsettle with them such a treaty of commerce as would effectually secure to her a\r\nfree trade, more advantageous to the great body of the people, though less so\r\nto the merchants, than the monopoly which she at present enjoys. By thus\r\nparting good friends, the natural affection of the colonies to the mother\r\ncountry, which, perhaps, our late dissensions have well nigh extinguished,\r\nwould quickly revive. It might dispose them not only to respect, for whole\r\ncenturies together, that treaty of commerce which they had concluded with us at\r\nparting, but to favour us in war as well as in trade, and instead of turbulent\r\nand factious subjects, to become our most faithful, affectionate, and generous\r\nallies; and the same sort of parental affection on the one side, and filial\r\nrespect on the other, might revive between Great Britain and her colonies,\r\nwhich used to subsist between those of ancient Greece and the mother city from\r\nwhich they descended.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to render any province advantageous to the empire to which it belongs,\r\nit ought to afford, in time of peace, a revenue to the public, sufficient not\r\nonly for defraying the whole expense of its own peace establishment, but for\r\ncontributing its proportion to the support of the general government of the\r\nempire. Every province necessarily contributes, more or less, to increase the\r\nexpense of that general government. If any particular province, therefore, does\r\nnot contribute its share towards defraying this expense, an unequal burden must\r\nbe thrown upon some other part of the empire. The extraordinary revenue, too,\r\nwhich every province affords to the public in time of war, ought, from parity\r\nof reason, to bear the same proportion to the extraordinary revenue of the\r\nwhole empire, which its ordinary revenue does in time of peace. That neither\r\nthe ordinary nor extraordinary revenue which Great Britain derives from her\r\ncolonies, bears this proportion to the whole revenue of the British empire,\r\nwill readily be allowed. The monopoly, it has been supposed, indeed, by\r\nincreasing the private revenue of the people of Great Britain, and thereby\r\nenabling them to pay greater taxes, compensates the deficiency of the public\r\nrevenue of the colonies. But this monopoly, I have endeavoured to show, though\r\na very grievous tax upon the colonies, and though it may increase the revenue\r\nof a particular order of men in Great Britain, diminishes, instead of\r\nincreasing, that of the great body of the people, and consequently diminishes,\r\ninstead of increasing, the ability of the great body of the people to pay\r\ntaxes. The men, too, whose revenue the monopoly increases, constitute a\r\nparticular order, which it is both absolutely impossible to tax beyond the\r\nproportion of other orders, and extremely impolitic even to attempt to tax\r\nbeyond that proportion, as I shall endeavour to show in the following book. No\r\nparticular resource, therefore, can be drawn from this particular order.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe colonies may be taxed either by their own assemblies, or by the parliament\r\nof Great Britain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the colony assemblies can never be so managed as to levy upon their\r\nconstituents a public revenue, sufficient, not only to maintain at all times\r\ntheir own civil and military establishment, but to pay their proper proportion\r\nof the expense of the general government of the British empire, seems not very\r\nprobable. It was a long time before even the parliament of England, though\r\nplaced immediately under the eye of the sovereign, could be brought under such\r\na system of management, or could be rendered sufficiently liberal in their\r\ngrants for supporting the civil and military establishments even of their own\r\ncountry. It was only by distributing among the particular members of parliament\r\na great part either of the offices, or of the disposal of the offices arising\r\nfrom this civil and military establishment, that such a system of management\r\ncould be established, even with regard to the parliament of England. But the\r\ndistance of the colony assemblies from the eye of the sovereign, their number,\r\ntheir dispersed situation, and their various constitutions, would render it\r\nvery difficult to manage them in the same manner, even though the sovereign had\r\nthe same means of doing it; and those means are wanting. It would be absolutely\r\nimpossible to distribute among all the leading members of all the colony\r\nassemblies such a share, either of the offices, or of the disposal of the\r\noffices, arising from the general government of the British empire, as to\r\ndispose them to give up their popularity at home, and to tax their constituents\r\nfor the support of that general government, of which almost the whole\r\nemoluments were to be divided among people who were strangers to them. The\r\nunavoidable ignorance of administration, besides, concerning the relative\r\nimportance of the different members of those different assemblies, the offences\r\nwhich must frequently be given, the blunders which must constantly be\r\ncommitted, in attempting to manage them in this manner, seems to render such a\r\nsystem of management altogether impracticable with regard to them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe colony assemblies, besides, cannot be supposed the proper judges of what is\r\nnecessary for the defence and support of the whole empire. The care of that\r\ndefence and support is not entrusted to them. It is not their business, and\r\nthey have no regular means of information concerning it. The assembly of a\r\nprovince, like the vestry of a parish, may judge very properly concerning the\r\naffairs of its own particular district, but can have no proper means of judging\r\nconcerning those of the whole empire. It cannot even judge properly concerning\r\nthe proportion which its own province bears to the whole empire, or concerning\r\nthe relative degree of its wealth and importance, compared with the other\r\nprovinces; because those other provinces are not under the inspection and\r\nsuperintendency of the assembly of a particular province. What is necessary for\r\nthe defence and support of the whole empire, and in what proportion each part\r\nought to contribute, can be judged of only by that assembly which inspects and\r\nsuper-intends the affairs of the whole empire.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been proposed, accordingly, that the colonies should be taxed by\r\nrequisition, the parliament of Great Britain determining the sum which each\r\ncolony ought to pay, and the provincial assembly assessing and levying it in\r\nthe way that suited best the circumstances of the province. What concerned the\r\nwhole empire would in this way be determined by the assembly which inspects and\r\nsuperintends the affairs of the whole empire; and the provincial affairs of\r\neach colony might still be regulated by its own assembly. Though the colonies\r\nshould, in this case, have no representatives in the British parliament, yet,\r\nif we may judge by experience, there is no probability that the parliamentary\r\nrequisition would be unreasonable. The parliament of England has not, upon any\r\noccasion, shewn the smallest disposition to overburden those parts of the\r\nempire which are not represented in parliament. The islands of Guernsey and\r\nJersey, without any means of resisting the authority of parliament, are more\r\nlightly taxed than any part of Great Britain. Parliament, in attempting to\r\nexercise its supposed right, whether well or ill grounded, of taxing the\r\ncolonies, has never hitherto demanded of them anything which even approached to\r\na just proportion to what was paid by their fellow subjects at home. If the\r\ncontribution of the colonies, besides, was to rise or fall in proportion to the\r\nrise or fall of the land-tax, parliament could not tax them without taxing, at\r\nthe same time, its own constituents, and the colonies might, in this case, be\r\nconsidered as virtually represented in parliament.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nExamples are not wanting of empires in which all the different provinces are\r\nnot taxed, if I may be allowed the expression, in one mass; but in which the\r\nsovereign regulates the sum which each province ought to pay, and in some\r\nprovinces assesses and levies it as he thinks proper; while in others he leaves\r\nit to be assessed and levied as the respective states of each province shall\r\ndetermine. In some provinces of France, the king not only imposes what taxes he\r\nthinks proper, but assesses and levies them in the way he thinks proper. From\r\nothers he demands a certain sum, but leaves it to the states of each province\r\nto assess and levy that sum as they think proper. According to the scheme of\r\ntaxing by requisition, the parliament of Great Britain would stand nearly in\r\nthe same situation towards the colony assemblies, as the king of France does\r\ntowards the states of those provinces which still enjoy the privilege of having\r\nstates of their own, the provinces of France which are supposed to be the best\r\ngoverned.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though, according to this scheme, the colonies could have no just reason to\r\nfear that their share of the public burdens should ever exceed the proper\r\nproportion to that of their fellow-citizens at home, Great Britain might have\r\njust reason to fear that it never would amount to that proper proportion. The\r\nparliament of Great Britain has not, for some time past, had the same\r\nestablished authority in the colonies, which the French king has in those\r\nprovinces of France which still enjoy the privilege of having states of their\r\nown. The colony assemblies, if they were not very favourably disposed (and\r\nunless more skilfully managed than they ever have been hitherto, they are not\r\nvery likely to be so), might still find many pretences for evading or rejecting\r\nthe most reasonable requisitions of parliament. A French war breaks out, we\r\nshall suppose; ten millions must immediately be raised, in order to defend the\r\nseat of the empire. This sum must be borrowed upon the credit of some\r\nparliamentary fund mortgaged for paying the interest. Part of this fund\r\nparliament proposes to raise by a tax to be levied in Great Britain; and part\r\nof it by a requisition to all the different colony assemblies of America and\r\nthe West Indies. Would people readily advance their money upon the credit of a\r\nfund which partly depended upon the good humour of all those assemblies, far\r\ndistant from the seat of the war, and sometimes, perhaps, thinking themselves\r\nnot much concerned in the event of it? Upon such a fund, no more money would\r\nprobably be advanced than what the tax to be levied in Great Britain might be\r\nsupposed to answer for. The whole burden of the debt contracted on account of\r\nthe war would in this manner fall, as it always has done hitherto, upon Great\r\nBritain; upon a part of the empire, and not upon the whole empire. Great\r\nBritain is, perhaps, since the world began, the only state which, as it has\r\nextended its empire, has only increased its expense, without once augmenting\r\nits resources. Other states have generally disburdened themselves, upon their\r\nsubject and subordinate provinces, of the most considerable part of the expense\r\nof defending the empire. Great Britain has hitherto suffered her subject and\r\nsubordinate provinces to disburden themselves upon her of almost this whole\r\nexpense. In order to put Great Britain upon a footing of equality with her own\r\ncolonies, which the law has hitherto supposed to be subject and subordinate, it\r\nseems necessary, upon the scheme of taxing them by parliamentary requisition,\r\nthat parliament should have some means of rendering its requisitions\r\nimmediately effectual, in case the colony assemblies should attempt to evade or\r\nreject them; and what those means are, it is not very easy to conceive, and it\r\nhas not yet been explained.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nShould the parliament of Great Britain, at the same time, be ever fully\r\nestablished in the right of taxing the colonies, even independent of the\r\nconsent of their own assemblies, the importance of those assemblies would, from\r\nthat moment, be at an end, and with it, that of all the leading men of British\r\nAmerica. Men desire to have some share in the management of public affairs,\r\nchiefly on account of the importance which it gives them. Upon the power which\r\nthe greater part of the leading men, the natural aristocracy of every country,\r\nhave of preserving or defending their respective importance, depends the\r\nstability and duration of every system of free government. In the attacks which\r\nthose leading men are continually making upon the importance of one another,\r\nand in the defence of their own, consists the whole play of domestic faction\r\nand ambition. The leading men of America, like those of all other countries,\r\ndesire to preserve their own importance. They feel, or imagine, that if their\r\nassemblies, which they are fond of calling parliaments, and of considering as\r\nequal in authority to the parliament of Great Britain, should be so far\r\ndegraded as to become the humble ministers and executive officers of that\r\nparliament, the greater part of their own importance would be at an end. They\r\nhave rejected, therefore, the proposal of being taxed by parliamentary\r\nrequisition, and, like other ambitious and high-spirited men, have rather\r\nchosen to draw the sword in defence of their own importance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTowards the declension of the Roman republic, the allies of Rome, who had borne\r\nthe principal burden of defending the state and extending the empire, demanded\r\nto be admitted to all the privileges of Roman citizens. Upon being refused, the\r\nsocial war broke out. During the course of that war, Rome granted those\r\nprivileges to the greater part of them, one by one, and in proportion as they\r\ndetached themselves from the general confederacy. The parliament of Great\r\nBritain insists upon taxing the colonies; and they refuse to be taxed by a\r\nparliament in which they are not represented. If to each colony which should\r\ndetach itself from the general confederacy, Great Britain should allow such a\r\nnumber of representatives as suited the proportion of what it contributed to\r\nthe public revenue of the empire, in consequence of its being subjected to the\r\nsame taxes, and in compensation admitted to the same freedom of trade with its\r\nfellow-subjects at home; the number of its representatives to be augmented as\r\nthe proportion of its contribution might afterwards augment; a new method of\r\nacquiring importance, a new and more dazzling object of ambition, would be\r\npresented to the leading men of each colony. Instead of piddling for the little\r\nprizes which are to be found in what may be called the paltry raffle of colony\r\nfaction, they might then hope, from the presumption which men naturally have in\r\ntheir own ability and good fortune, to draw some of the great prizes which\r\nsometimes come from the wheel of the great state lottery of British politics.\r\nUnless this or some other method is fallen upon, and there seems to be none\r\nmore obvious than this, of preserving the importance and of gratifying the\r\nambition of the leading men of America, it is not very probable that they will\r\never voluntarily submit to us; and we ought to consider, that the blood which\r\nmust be shed in forcing them to do so, is, every drop of it, the blood either\r\nof those who are, or of those whom we wish to have for our fellow citizens.\r\nThey are very weak who flatter themselves that, in the state to which things\r\nhave come, our colonies will be easily conquered by force alone. The persons\r\nwho now govern the resolutions of what they call their continental congress,\r\nfeel in themselves at this moment a degree of importance which, perhaps, the\r\ngreatest subjects in Europe scarce feel. From shopkeepers, trades men, and\r\nattorneys, they are become statesmen and legislators, and are employed in\r\ncontriving a new form of government for an extensive empire, which, they\r\nflatter themselves, will become, and which, indeed, seems very likely to\r\nbecome, one of the greatest and most formidable that ever was in the world.\r\nFive hundred different people, perhaps, who, in different ways, act immediately\r\nunder the continental congress, and five hundred thousand, perhaps, who act\r\nunder those five hundred, all feel, in the same manner, a proportionable rise\r\nin their own importance. Almost every individual of the governing party in\r\nAmerica fills, at present, in his own fancy, a station superior, not only to\r\nwhat he had ever filled before, but to what he had ever expected to fill; and\r\nunless some new object of ambition is presented either to him or to his\r\nleaders, if he has the ordinary spirit of a man, he will die in defence of that\r\nstation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is a remark of the President Heynaut, that we now read with pleasure the\r\naccount of many little transactions of the Ligue, which, when they happened,\r\nwere not, perhaps, considered as very important pieces of news. But everyman\r\nthen, says he, fancied himself of some importance; and the innumerable memoirs\r\nwhich have come down to us from those times, were the greater part of them\r\nwritten by people who took pleasure in recording and magnifying events, in\r\nwhich they flattered themselves they had been considerable actors. How\r\nobstinately the city of Paris, upon that occasion, defended itself, what a\r\ndreadful famine it supported, rather than submit to the best, and afterwards\r\nthe most beloved of all the French kings, is well known. The greater part of\r\nthe citizens, or those who governed the greater part of them, fought in defence\r\nof their own importance, which, they foresaw, was to be at an end whenever the\r\nancient government should be re-established. Our colonies, unless they can be\r\ninduced to consent to a union, are very likely to defend themselves, against\r\nthe best of all mother countries, as obstinately as the city of Paris did\r\nagainst one of the best of kings.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe idea of representation was unknown in ancient times. When the people of one\r\nstate were admitted to the right of citizenship in another, they had no other\r\nmeans of exercising that right, but by coming in a body to vote and deliberate\r\nwith the people of that other state. The admission of the greater part of the\r\ninhabitants of Italy to the privileges of Roman citizens, completely ruined the\r\nRoman republic. It was no longer possible to distinguish between who was, and\r\nwho was not, a Roman citizen. No tribe could know its own members. A rabble of\r\nany kind could be introduced into the assemblies of the people, could drive out\r\nthe real citizens, and decide upon the affairs of the republic, as if they\r\nthemselves had been such. But though America were to send fifty or sixty new\r\nrepresentatives to parliament, the door-keeper of the house of commons could\r\nnot find any great difficulty in distinguishing between who was and who was not\r\na member. Though the Roman constitution, therefore, was necessarily ruined by\r\nthe union of Rome with the allied states of Italy, there is not the least\r\nprobability that the British constitution would be hurt by the union of Great\r\nBritain with her colonies. That constitution, on the contrary, would be\r\ncompleted by it, and seems to be imperfect without it. The assembly which\r\ndeliberates and decides concerning the affairs of every part of the empire, in\r\norder to be properly informed, ought certainly to have representatives from\r\nevery part of it. That this union, however, could be easily effectuated, or\r\nthat difficulties, and great difficulties, might not occur in the execution, I\r\ndo not pretend. I have yet heard of none, however, which appear insurmountable.\r\nThe principal, perhaps, arise, not from the nature of things, but from the\r\nprejudices and opinions of the people, both on this and on the other side of\r\nthe Atlantic.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWe on this side the water are afraid lest the multitude of American\r\nrepresentatives should overturn the balance of the constitution, and increase\r\ntoo much either the influence of the crown on the one hand, or the force of the\r\ndemocracy on the other. But if the number of American representatives were to\r\nbe in proportion to the produce of American taxation, the number of people to\r\nbe managed would increase exactly in proportion to the means of managing them,\r\nand the means of managing to the number of people to be managed. The\r\nmonarchical and democratical parts of the constitution would, after the union,\r\nstand exactly in the same degree of relative force with regard to one another\r\nas they had done before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe people on the other side of the water are afraid lest their distance from\r\nthe seat of government might expose them to many oppressions; but their\r\nrepresentatives in parliament, of which the number ought from the first to be\r\nconsiderable, would easily be able to protect them from all oppression. The\r\ndistance could not much weaken the dependency of the representative upon the\r\nconstituent, and the former would still feel that he owed his seat in\r\nparliament, and all the consequence which he derived from it, to the good-will\r\nof the latter. It would be the interest of the former, therefore, to cultivate\r\nthat good-will, by complaining, with all the authority of a member of the\r\nlegislature, of every outrage which any civil or military officer might be\r\nguilty of in those remote parts of the empire. The distance of America from the\r\nseat of government, besides, the natives of that country might flatter\r\nthemselves, with some appearance of reason too, would not be of very long\r\ncontinuance. Such has hitherto been the rapid progress of that country in\r\nwealth, population, and improvement, that in the course of little more than a\r\ncentury, perhaps, the produce of the American might exceed that of the British\r\ntaxation. The seat of the empire would then naturally remove itself to that\r\npart of the empire which contributed most to the general defence and support of\r\nthe whole.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discovery of America, and that of a passage to the East Indies by the Cape\r\nof Good Hope, are the two greatest and most important events recorded in the\r\nhistory of mankind. Their consequences have already been great; but, in the\r\nshort period of between two and three centuries which has elapsed since these\r\ndiscoveries were made, it is impossible that the whole extent of their\r\nconsequences can have been seen. What benefits or what misfortunes to mankind\r\nmay hereafter result from those great events, no human wisdom can foresee. By\r\nuniting in some measure the most distant parts of the world, by enabling them\r\nto relieve one another’s wants, to increase one another’s\r\nenjoyments, and to encourage one another’s industry, their general\r\ntendency would seem to be beneficial. To the natives, however, both of the East\r\nand West Indies, all the commercial benefits which can have resulted from those\r\nevents have been sunk and lost in the dreadful misfortunes which they have\r\noccasioned. These misfortunes, however, seem to have arisen rather from\r\naccident than from any thing in the nature of those events themselves. At the\r\nparticular time when these discoveries were made, the superiority of force\r\nhappened to be so great on the side of the Europeans, that they were enabled to\r\ncommit with impunity every sort of injustice in those remote countries.\r\nHereafter, perhaps, the natives of those countries may grow stronger, or those\r\nof Europe may grow weaker; and the inhabitants of all the different quarters of\r\nthe world may arrive at that equality of courage and force which, by inspiring\r\nmutual fear, can alone overawe the injustice of independent nations into some\r\nsort of respect for the rights of one another. But nothing seems more likely to\r\nestablish this equality of force, than that mutual communication of knowledge,\r\nand of all sorts of improvements, which an extensive commerce from all\r\ncountries to all countries naturally, or rather necessarily, carries along with\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the mean time, one of the principal effects of those discoveries has been,\r\nto raise the mercantile system to a degree of splendour and glory which it\r\ncould never otherwise have attained to. It is the object of that system to\r\nenrich a great nation, rather by trade and manufactures than by the improvement\r\nand cultivation of land, rather by the industry of the towns than by that of\r\nthe country. But in consequence of those discoveries, the commercial towns of\r\nEurope, instead of being the manufacturers and carriers for but a very small\r\npart of the world (that part of Europe which is washed by the Atlantic ocean,\r\nand the countries which lie round the Baltic and Mediterranean seas), have now\r\nbecome the manufacturers for the numerous and thriving cultivators of America,\r\nand the carriers, and in some respects the manufacturers too, for almost all\r\nthe different nations of Asia, Africa, and America. Two new worlds have been\r\nopened to their industry, each of them much greater and more extensive than the\r\nold one, and the market of one of them growing still greater and greater every\r\nday.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe countries which possess the colonies of America, and which trade directly\r\nto the East Indies, enjoy indeed the whole show and splendour of this great\r\ncommerce. Other countries, however, notwithstanding all the invidious\r\nrestraints by which it is meant to exclude them, frequently enjoy a greater\r\nshare of the real benefit of it. The colonies of Spain and Portugal, for\r\nexample, give more real encouragement to the industry of other countries than\r\nto that of Spain and Portugal. In the single article of linen alone, the\r\nconsumption of those colonies amounts, it is said (but I do not pretend to\r\nwarrant the quantity ), to more than three millions sterling a-year. But this\r\ngreat consumption is almost entirely supplied by France, Flanders, Holland, and\r\nGermany. Spain and Portugal furnish but a small part of it. The capital which\r\nsupplies the colonies with this great quantity of linen, is annually\r\ndistributed among, and furnishes a revenue to, the inhabitants of those other\r\ncountries. The profits of it only are spent in Spain and Portugal, where they\r\nhelp to support the sumptuous profusion of the merchants of Cadiz and Lisbon.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven the regulations by which each nation endeavours to secure to itself the\r\nexclusive trade of its own colonies, are frequently more hurtful to the\r\ncountries in favour of which they are established, than to those against which\r\nthey are established. The unjust oppression of the industry of other countries\r\nfalls back, if I may say so, upon the heads of the oppressors, and crushes\r\ntheir industry more than it does that of those other countries. By those\r\nregulations, for example, the merchant of Hamburg must send the linen which he\r\ndestines for the American market to London, and he must bring back from thence\r\nthe tobacco which he destines for the German market; because he can neither\r\nsend the one directly to America, nor bring the other directly from thence. By\r\nthis restraint he is probably obliged to sell the one somewhat cheaper, and to\r\nbuy the other somewhat dearer, than he otherwise might have done; and his\r\nprofits are probably somewhat abridged by means of it. In this trade, however,\r\nbetween Hamburg and London, he certainly receives the returns of his capital\r\nmuch more quickly than he could possibly have done in the direct trade to\r\nAmerica, even though we should suppose, what is by no means the case, that the\r\npayments of America were as punctual as those of London. In the trade,\r\ntherefore, to which those regulations confine the merchant of Hamburg, his\r\ncapital can keep in constant employment a much greater quantity of German\r\nindustry than he possibly could have done in the trade from which he is\r\nexcluded. Though the one employment, therefore, may to him perhaps be less\r\nprofitable than the other, it cannot be less advantageous to his country. It is\r\nquite otherwise with the employment into which the monopoly naturally attracts,\r\nif I may say so, the capital of the London merchant. That employment may,\r\nperhaps, be more profitable to him than the greater part of other employments;\r\nbut on account of the slowness of the returns, it cannot be more advantageous\r\nto his country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter all the unjust attempts, therefore, of every country in Europe to engross\r\nto itself the whole advantage of the trade of its own colonies, no country has\r\nyet been able to engross to itself any thing but the expense of supporting in\r\ntime of peace, and of defending in time of war, the oppressive authority which\r\nit assumes over them. The inconveniencies resulting from the possession of its\r\ncolonies, every country has engrossed to itself completely. The advantages\r\nresulting from their trade, it has been obliged to share with many other\r\ncountries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt first sight, no doubt, the monopoly of the great commerce of America\r\nnaturally seems to be an acquisition of the highest value. To the undiscerning\r\neye of giddy ambition it naturally presents itself, amidst the confused\r\nscramble of politics and war, as a very dazzling object to fight for. The\r\ndazzling splendour of the object, however, the immense greatness of the\r\ncommerce, is the very quality which renders the monopoly of it hurtful, or\r\nwhich makes one employment, in its own nature necessarily less advantageous to\r\nthe country than the greater part of other employments, absorb a much greater\r\nproportion of the capital of the country than what would otherwise have gone to\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe mercantile stock of every country, it has been shown in the second book,\r\nnaturally seeks, if one may say so, the employment most advantageous to that\r\ncountry. If it is employed in the carrying trade, the country to which it\r\nbelongs becomes the emporium of the goods of all the countries whose trade that\r\nstock carries on. But the owner of that stock necessarily wishes to dispose of\r\nas great a part of those goods as he can at home. He thereby saves himself the\r\ntrouble, risk, and expense of exportation; and he will upon that account be\r\nglad to sell them at home, not only for a much smaller price, but with somewhat\r\na smaller profit, than he might expect to make by sending them abroad. He\r\nnaturally, therefore, endeavours as much as he can to turn his carrying trade\r\ninto a foreign trade of consumption, If his stock, again, is employed in a\r\nforeign trade of consumption, he will, for the same reason, be glad to dispose\r\nof, at home, as great a part as he can of the home goods which he collects in\r\norder to export to some foreign market, and he will thus endeavour, as much as\r\nhe can, to turn his foreign trade of consumption into a home trade. The\r\nmercantile stock of every country naturally courts in this manner the near, and\r\nshuns the distant employment: naturally courts the employment in which the\r\nreturns are frequent, and shuns that in which they are distant and slow;\r\nnaturally courts the employment in which it can maintain the greatest quantity\r\nof productive labour in the country to which it belongs, or in which its owner\r\nresides, and shuns that in which it can maintain there the smallest quantity.\r\nIt naturally courts the employment which in ordinary cases is most\r\nadvantageous, and shuns that which in ordinary cases is least advantageous to\r\nthat country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if, in any one of those distant employments, which in ordinary cases are\r\nless advantageous to the country, the profit should happen to rise somewhat\r\nhigher than what is sufficient to balance the natural preference which is given\r\nto nearer employments, this superiority of profit will draw stock from those\r\nnearer employments, till the profits of all return to their proper level. This\r\nsuperiority of profit, however, is a proof that, in the actual circumstances of\r\nthe society, those distant employments are somewhat understocked in proportion\r\nto other employments, and that the stock of the society is not distributed in\r\nthe properest manner among all the different employments carried on in it. It\r\nis a proof that something is either bought cheaper or sold dearer than it ought\r\nto be, and that some particular class of citizens is more or less oppressed,\r\neither by paying more, or by getting less than what is suitable to that\r\nequality which ought to take place, and which naturally does take place, among\r\nall the different classes of them. Though the same capital never will maintain\r\nthe same quantity of productive labour in a distant as in a near employment,\r\nyet a distant employment maybe as necessary for the welfare of the society as a\r\nnear one; the goods which the distant employment deals in being necessary,\r\nperhaps, for carrying on many of the nearer employments. But if the profits of\r\nthose who deal in such goods are above their proper level, those goods will be\r\nsold dearer than they ought to be, or somewhat above their natural price, and\r\nall those engaged in the nearer employments will be more or less oppressed by\r\nthis high price. Their interest, therefore, in this case, requires, that some\r\nstock should be withdrawn from those nearer employments, and turned towards\r\nthat distant one, in order to reduce its profits to their proper level, and the\r\nprice of the goods which it deals in to their natural price. In this\r\nextraordinary case, the public interest requires that some stock should be\r\nwithdrawn from those employments which, in ordinary cases, are more\r\nadvantageous, and turned towards one which, in ordinary cases, is less\r\nadvantageous to the public; and, in this extraordinary case, the natural\r\ninterests and inclinations of men coincide as exactly with the public interests\r\nas in all other ordinary cases, and lead them to withdraw stock from the near,\r\nand to turn it towards the distant employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that the private interests and passions of individuals naturally\r\ndispose them to turn their stock towards the employments which in ordinary\r\ncases, are most advantageous to the society. But if from this natural\r\npreference they should turn too much of it towards those employments, the fall\r\nof profit in them, and the rise of it in all others, immediately dispose them\r\nto alter this faulty distribution. Without any intervention of law, therefore,\r\nthe private interests and passions of men naturally lead them to divide and\r\ndistribute the stock of every society among all the different employments\r\ncarried on in it; as nearly as possible in the proportion which is most\r\nagreeable to the interest of the whole society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the different regulations of the mercantile system necessarily derange more\r\nor less this natural and most advantageous distribution of stock. But those\r\nwhich concern the trade to America and the East Indies derange it, perhaps,\r\nmore than any other; because the trade to those two great continents absorbs a\r\ngreater quantity of stock than any two other branches of trade. The\r\nregulations, however, by which this derangement is effected in those two\r\ndifferent branches of trade, are not altogether the same. Monopoly is the great\r\nengine of both; but it is a different sort of monopoly. Monopoly of one kind or\r\nanother, indeed, seems to be the sole engine of the mercantile system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the trade to America, every nation endeavours to engross as much as possible\r\nthe whole market of its own colonies, by fairly excluding all other nations\r\nfrom any direct trade to them. During the greater part of the sixteenth\r\ncentury, the Portuguese endeavoured to manage the trade to the East Indies in\r\nthe same manner, by claiming the sole right of sailing in the Indian seas, on\r\naccount of the merit of having first found out the road to them. The Dutch\r\nstill continue to exclude all other European nations from any direct trade to\r\ntheir spice islands. Monopolies of this kind are evidently established against\r\nall other European nations, who are thereby not only excluded from a trade to\r\nwhich it might be convenient for them to turn some part of their stock, but are\r\nobliged to buy the goods which that trade deals in, somewhat dearer than if\r\nthey could import them themselves directly from the countries which produced\r\nthem.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut since the fall of the power of Portugal, no European nation has claimed the\r\nexclusive right of sailing in the Indian seas, of which the principal ports are\r\nnow open to the ships of all European nations. Except in Portugal, however, and\r\nwithin these few years in France, the trade to the East Indies has, in every\r\nEuropean country, been subjected to an exclusive company. Monopolies of this\r\nkind are properly established against the very nation which erects them. The\r\ngreater part of that nation are thereby not only excluded from a trade to which\r\nit might be convenient for them to turn some part of their stock, but are\r\nobliged to buy the goods which that trade deals in somewhat dearer than if it\r\nwas open and free to all their countrymen. Since the establishment of the\r\nEnglish East India company, for example, the other inhabitants of England, over\r\nand above being excluded from the trade, must have paid, in the price of the\r\nEast India goods which they have consumed, not only for all the extraordinary\r\nprofits which the company may have made upon those goods in consequence of\r\ntheir monopoly, but for all the extraordinary waste which the fraud and abuse\r\ninseparable from the management of the affairs of so great a company must\r\nnecessarily have occasioned. The absurdity of this second kind of monopoly,\r\ntherefore, is much more manifest than that of the first.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth these kinds of monopolies derange more or less the natural distribution of\r\nthe stock of the society; but they do not always derange it in the same way.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMonopolies of the first kind always attract to the particular trade in which\r\nthey are established a greater proportion of the stock of the society than what\r\nwould go to that trade of its own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMonopolies of the second kind may sometimes attract stock towards the\r\nparticular trade in which they are established, and sometimes repel it from\r\nthat trade, according to different circumstances. In poor countries, they\r\nnaturally attract towards that trade more stock than would otherwise go to it.\r\nIn rich countries, they naturally repel from it a good deal of stock which\r\nwould otherwise go to it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch poor countries as Sweden and Denmark, for example, would probably have\r\nnever sent a single ship to the East Indies, had not the trade been subjected\r\nto an exclusive company. The establishment of such a company necessarily\r\nencourages adventurers. Their monopoly secures them against all competitors in\r\nthe home market, and they have the same chance for foreign markets with the\r\ntraders of other nations. Their monopoly shows them the certainty of a great\r\nprofit upon a considerable quantity of goods, and the chance of a considerable\r\nprofit upon a great quantity. Without such extraordinary encouragement, the\r\npoor traders of such poor countries would probably never have thought of\r\nhazarding their small capitals in so very distant and uncertain an adventure as\r\nthe trade to the East Indies must naturally have appeared to them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch a rich country as Holland, on the contrary, would probably, in the case of\r\na free trade, send many more ships to the East Indies than it actually does.\r\nThe limited stock of the Dutch East India company probably repels from that\r\ntrade many great mercantile capitals which would otherwise go to it. The\r\nmercantile capital of Holland is so great, that it is, as it were, continually\r\noverflowing, sometimes into the public funds of foreign countries, sometimes\r\ninto loans to private traders and adventurers of foreign countries, sometimes\r\ninto the most round-about foreign trades of consumption, and sometimes into the\r\ncarrying trade. All near employments being completely filled up, all the\r\ncapital which can be placed in them with any tolerable profit being already\r\nplaced in them, the capital of Holland necessarily flows towards the most\r\ndistant employments. The trade to the East Indies, if it were altogether free,\r\nwould probably absorb the greater part of this redundant capital. The East\r\nIndies offer a market both for the manufactures of Europe, and for the gold and\r\nsilver, as well as for the several other productions of America, greater and\r\nmore extensive than both Europe and America put together.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery derangement of the natural distribution of stock is necessarily hurtful\r\nto the society in which it takes place; whether it be by repelling from a\r\nparticular trade the stock which would otherwise go to it, or by attracting\r\ntowards a particular trade that which would not otherwise come to it. If,\r\nwithout any exclusive company, the trade of Holland to the East Indies would be\r\ngreater than it actually is, that country must suffer a considerable loss, by\r\npart of its capital being excluded from the employment most convenient for that\r\nport. And, in the same manner, if, without an exclusive company, the trade of\r\nSweden and Denmark to the East Indies would be less than it actually is, or,\r\nwhat perhaps is more probable, would not exist at all, those two countries must\r\nlikewise suffer a considerable loss, by part of their capital being drawn into\r\nan employment which must be more or less unsuitable to their present\r\ncircumstances. Better for them, perhaps, in the present circumstances, to buy\r\nEast India goods of other nations, even though they should pay somewhat dearer,\r\nthan to turn so great a part of their small capital to so very distant a trade,\r\nin which the returns are so very slow, in which that capital can maintain so\r\nsmall a quantity of productive labour at home, where productive labour is so\r\nmuch wanted, where so little is done, and where so much is to do.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough without an exclusive company, therefore, a particular country should not\r\nbe able to carry on any direct trade to the East Indies, it will not from\r\nthence follow, that such a company ought to be established there, but only that\r\nsuch a country ought not, in these circumstances, to trade directly to the East\r\nIndies. That such companies are not in general necessary for carrying on the\r\nEast India trade, is sufficiently demonstrated by the experience of the\r\nPortuguese, who enjoyed almost the whole of it for more than a century\r\ntogether, without any exclusive company.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo private merchant, it has been said, could well have capital sufficient to\r\nmaintain factors and agents in the different ports of the East Indies, in order\r\nto provide goods for the ships which he might occasionally send thither; and\r\nyet, unless he was able to do this, the difficulty of finding a cargo might\r\nfrequently make his ships lose the season for returning; and the expense of so\r\nlong a delay would not only eat up the whole profit of the adventure, but\r\nfrequently occasion a very considerable loss. This argument, however, if it\r\nproved any thing at all, would prove that no one great branch of trade could be\r\ncarried on without an exclusive company, which is contrary to the experience of\r\nall nations. There is no great branch of trade, in which the capital of any one\r\nprivate merchant is sufficient for carrying on all the subordinate branches\r\nwhich must be carried on, in order to carry on the principal one. But when a\r\nnation is ripe for any great branch of trade, some merchants naturally turn\r\ntheir capitals towards the principal, and some towards the subordinate branches\r\nof it; and though all the different branches of it are in this manner carried\r\non, yet it very seldom happens that they are all carried on by the capital of\r\none private merchant. If a nation, therefore, is ripe for the East India trade,\r\na certain portion of its capital will naturally divide itself among all the\r\ndifferent branches of that trade. Some of its merchants will find it for their\r\ninterest to reside in the East Indies, and to employ their capitals there in\r\nproviding goods for the ships which are to be sent out by other merchants who\r\nreside in Europe. The settlements which different European nations have\r\nobtained in the East Indies, if they were taken from the exclusive companies to\r\nwhich they at present belong, and put under the immediate protection of the\r\nsovereign, would render this residence both safe and easy, at least to the\r\nmerchants of the particular nations to whom those settlements belong. If, at\r\nany particular time, that part of the capital of any country which of its own\r\naccord tended and inclined, if I may say so, towards the East India trade, was\r\nnot sufficient for carrying on all those different branches of it, it would be\r\na proof that, at that particular time, that country was not ripe for that\r\ntrade, and that it would do better to buy for some time, even at a higher\r\nprice, from other European nations, the East India goods it had occasion for,\r\nthan to import them itself directly from the East Indies. What it might lose by\r\nthe high price of those goods, could seldom be equal to the loss which it would\r\nsustain by the distraction of a large portion of its capital from other\r\nemployments more necessary, or more useful, or more suitable to its\r\ncircumstances and situation, than a direct trade to the East Indies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the Europeans possess many considerable settlements both upon the coast\r\nof Africa and in the East Indies, they have not yet established, in either of\r\nthose countries, such numerous and thriving colonies as those in the islands\r\nand continent of America. Africa, however, as well as several of the countries\r\ncomprehended under the general name of the East Indies, is inhabited by\r\nbarbarous nations. But those nations were by no means so weak and defenceless\r\nas the miserable and helpless Americans; and in proportion to the natural\r\nfertility of the countries which they inhabited, they were, besides, much more\r\npopulous. The most barbarous nations either of Africa or of the East Indies,\r\nwere shepherds; even the Hottentots were so. But the natives of every part of\r\nAmerica, except Mexico and Peru, were only hunters and the difference is very\r\ngreat between the number of shepherds and that of hunters whom the same extent\r\nof equally fertile territory can maintain. In Africa and the East Indies,\r\ntherefore, it was more difficult to displace the natives, and to extend the\r\nEuropean plantations over the greater part of the lands of the original\r\ninhabitants. The genius of exclusive companies, besides, is unfavourable, it\r\nhas already been observed, to the growth of new colonies, and has probably been\r\nthe principal cause of the little progress which they have made in the East\r\nIndies. The Portuguese carried on the trade both to Africa and the East Indies,\r\nwithout any exclusive companies; and their settlements at Congo, Angola, and\r\nBenguela, on the coast of Africa, and at Goa in the East Indies though much\r\ndepressed by superstition and every sort of bad government, yet bear some\r\nresemblance to the colonies of America, and are partly inhabited by Portuguese\r\nwho have been established there for several generations. The Dutch settlements\r\nat the Cape of Good Hope and at Batavia, are at present the most considerable\r\ncolonies which the Europeans have established, either in Africa or in the East\r\nIndies; and both those settlements are peculiarly fortunate in their situation.\r\nThe Cape of Good Hope was inhabited by a race of people almost as barbarous,\r\nand quite as incapable of defending themselves, as the natives of America. It\r\nis, besides, the half-way house, if one may say so, between Europe and the East\r\nIndies, at which almost every European ship makes some stay, both in going and\r\nreturning. The supplying of those ships with every sort of fresh provisions,\r\nwith fruit, and sometimes with wine, affords alone a very extensive market for\r\nthe surplus produce of the colonies. What the Cape of Good Hope is between\r\nEurope and every part of the East Indies, Batavia is between the principal\r\ncountries of the East Indies. It lies upon the most frequented road from\r\nIndostan to China and Japan, and is nearly about mid-way upon that road. Almost\r\nall the ships too, that sail between Europe and China, touch at Batavia; and it\r\nis, over and above all this, the centre and principal mart of what is called\r\nthe country trade of the East Indies; not only of that part of it which is\r\ncarried on by Europeans, but of that which is carried on by the native Indians;\r\nand vessels navigated by the inhabitants of China and Japan, of Tonquin,\r\nMalacca, Cochin-China, and the island of Celebes, are frequently to be seen in\r\nits port. Such advantageous situations have enabled those two colonies to\r\nsurmount all the obstacles which the oppressive genius of an exclusive company\r\nmay have occasionally opposed to their growth. They have enabled Batavia to\r\nsurmount the additional disadvantage of perhaps the most unwholesome climate in\r\nthe world.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe English and Dutch companies, though they have established no considerable\r\ncolonies, except the two above mentioned, have both made considerable conquests\r\nin the East Indies. But in the manner in which they both govern their new\r\nsubjects, the natural genius of an exclusive company has shewn itself most\r\ndistinctly. In the spice islands, the Dutch are said to burn all the spiceries\r\nwhich a fertile season produces, beyond what they expect to dispose of in\r\nEurope with such a profit as they think sufficient. In the islands where they\r\nhave no settlements, they give a premium to those who collect the young\r\nblossoms and green leaves of the clove and nutmeg trees, which naturally grow\r\nthere, but which this savage policy has now, it is said, almost completely\r\nextirpated. Even in the islands where they have settlements, they have very\r\nmuch reduced, it is said, the number of those trees. If the produce even of\r\ntheir own islands was much greater than what suited their market, the natives,\r\nthey suspect, might find means to convey some part of it to other nations; and\r\nthe best way, they imagine, to secure their own monopoly, is to take care that\r\nno more shall grow than what they themselves carry to market. By different arts\r\nof oppression, they have reduced the population of several of the Moluccas\r\nnearly to the number which is sufficient to supply with fresh provisions, and\r\nother necessaries of life, their own insignificant garrisons, and such of their\r\nships as occasionally come there for a cargo of spices. Under the government\r\neven of the Portuguese, however, those islands are said to have been tolerably\r\nwell inhabited. The English company have not yet had time to establish in\r\nBengal so perfectly destructive a system. The plan of their government,\r\nhowever, has had exactly the same tendency. It has not been uncommon, I am well\r\nassured, for the chief, that is, the first clerk or a factory, to order a\r\npeasant to plough up a rich field of poppies, and sow it with rice, or some\r\nother grain. The pretence was, to prevent a scarcity of provisions; but the\r\nreal reason, to give the chief an opportunity of selling at a better price a\r\nlarge quantity of opium which he happened then to have upon hand. Upon other\r\noccasions, the order has been reversed; and a rich field of rice or other grain\r\nhas been ploughed up, in order to make room for a plantation of poppies, when\r\nthe chief foresaw that extraordinary profit was likely to be made by opium. The\r\nservants of the company have, upon several occasions, attempted to establish in\r\ntheir own favour the monopoly of some of the most important branches, not only\r\nof the foreign, but of the inland trade of the country. Had they been allowed\r\nto go on, it is impossible that they should not, at some time or another, have\r\nattempted to restrain the production of the particular articles of which they\r\nhad thus usurped the monopoly, not only to the quantity which they themselves\r\ncould purchase, but to that which they could expect to sell with such a profit\r\nas they might think sufficient. In the course of a century or two, the policy\r\nof the English company would, in this manner, have probably proved as\r\ncompletely destructive as that of the Dutch.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNothing, however, can be more directly contrary to the real interest of those\r\ncompanies, considered as the sovereigns of the countries which they have\r\nconquered, than this destructive plan. In almost all countries, the revenue of\r\nthe sovereign is drawn from that of the people. The greater the revenue of the\r\npeople, therefore, the greater the annual produce of their land and labour, the\r\nmore they can afford to the sovereign. It is his interest, therefore, to\r\nincrease as much as possible that annual produce. But if this is the interest\r\nof every sovereign, it is peculiarly so of one whose revenue, like that of the\r\nsovereign of Bengal, arises chiefly from a land-rent. That rent must\r\nnecessarily be in proportion to the quantity and value of the produce; and both\r\nthe one and the other must depend upon the extent of the market. The quantity\r\nwill always be suited, with more or less exactness, to the consumption of those\r\nwho can afford to pay for it; and the price which they will pay will always be\r\nin proportion to the eagerness of their competition. It is the interest of such\r\na sovereign, therefore, to open the most extensive market for the produce of\r\nhis country, to allow the most perfect freedom of commerce, in order to\r\nincrease as much as possible the number and competition of buyers; and upon\r\nthis account to abolish, not only all monopolies, but all restraints upon the\r\ntransportation of the home produce from one part of the country to another,\r\nupon its exportation to foreign countries, or upon the importation of goods of\r\nany kind for which it can be exchanged. He is in this manner most likely to\r\nincrease both the quantity and value of that produce, and consequently of his\r\nown share of it, or of his own revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut a company of merchants, are, it seems, incapable of considering themselves\r\nas sovereigns, even after they have become such. Trade, or buying in order to\r\nsell again, they still consider as their principal business, and by a strange\r\nabsurdity, regard the character of the sovereign as but an appendix to that of\r\nthe merchant; as something which ought to be made subservient to it, or by\r\nmeans of which they may be enabled to buy cheaper in India, and thereby to sell\r\nwith a better profit in Europe. They endeavour, for this purpose, to keep out\r\nas much as possible all competitors from the market of the countries which are\r\nsubject to their government, and consequently to reduce, at least, some part of\r\nthe surplus produce of those countries to what is barely sufficient for\r\nsupplying their own demand, or to what they can expect to sell in Europe, with\r\nsuch a profit as they may think reasonable. Their mercantile habits draw them\r\nin this manner, almost necessarily, though perhaps insensibly, to prefer, upon\r\nall ordinary occasions, the little and transitory profit of the monopolist to\r\nthe great and permanent revenue of the sovereign; and would gradually lead them\r\nto treat the countries subject to their government nearly as the Dutch treat\r\nthe Moluccas. It is the interest of the East India company, considered as\r\nsovereigns, that the European goods which are carried to their Indian dominions\r\nshould be sold there as cheap as possible; and that the Indian goods which are\r\nbrought from thence should bring there as good a price, or should be sold there\r\nas dear as possible. But the reverse of this is their interest as merchants. As\r\nsovereigns, their interest is exactly the same with that of the country which\r\nthey govern. As merchants, their interest is directly opposite to that\r\ninterest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if the genius of such a government, even as to what concerns its direction\r\nin Europe, is in this manner essentially, and perhaps incurably faulty, that of\r\nits administration in India is still more so. That administration is\r\nnecessarily composed of a council of merchants, a profession no doubt extremely\r\nrespectable, but which in no country in the world carries along with it that\r\nsort of authority which naturally overawes the people, and without force\r\ncommands their willing obedience. Such a council can command obedience only by\r\nthe military force with which they are accompanied; and their government is,\r\ntherefore, necessarily military and despotical. Their proper business, however,\r\nis that of merchants. It is to sell, upon their master’s account, the\r\nEuropean goods consigned to them, and to buy, in return, Indian goods for the\r\nEuropean market. It is to sell the one as dear, and to buy the other as cheap\r\nas possible, and consequently to exclude, as much as possible, all rivals from\r\nthe particular market where they keep their shop. The genius of the\r\nadministration, therefore, so far as concerns the trade of the company, is the\r\nsame as that of the direction. It tends to make government subservient to the\r\ninterest of monopoly, and consequently to stunt the natural growth of some\r\nparts, at least, of the surplus produce of the country, to what is barely\r\nsufficient for answering the demand of the company.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll the members of the administration besides, trade more or less upon their\r\nown account; and it is in vain to prohibit them from doing so. Nothing can be\r\nmore completely foolish than to expect that the clerk of a great\r\ncounting-house, at ten thousand miles distance, and consequently almost quite\r\nout of sight, should, upon a simple order from their master, give up at once\r\ndoing any sort of business upon their own account abandon for ever all hopes of\r\nmaking a fortune, of which they have the means in their hands; and content\r\nthemselves with the moderate salaries which those masters allow them, and\r\nwhich, moderate as they are, can seldom be augmented, being commonly as large\r\nas the real profits of the company trade can afford. In such circumstances, to\r\nprohibit the servants of the company from trading upon their own account, can\r\nhave scarce any other effect than to enable its superior servants, under\r\npretence of executing their master’s order, to oppress such of the\r\ninferior ones as have had the misfortune to fall under their displeasure. The\r\nservants naturally endeavour to establish the same monopoly in favour of their\r\nown private trade as of the public trade of the company. If they are suffered\r\nto act as they could wish, they will establish this monopoly openly and\r\ndirectly, by fairly prohibiting all other people from trading in the articles\r\nin which they choose to deal; and this, perhaps, is the best and least\r\noppressive way of establishing it. But if, by an order from Europe, they are\r\nprohibited from doing this, they will, notwithstanding, endeavour to establish\r\na monopoly of the same kind secretly and indirectly, in a way that is much more\r\ndestructive to the country. They will employ the whole authority of government,\r\nand pervert the administration of Justice, in order to harass and ruin those\r\nwho interfere with them in any branch of commerce, which by means of agents,\r\neither concealed, or at least not publicly avowed, they may choose to carry on.\r\nBut the private trade of the servants will naturally extend to a much greater\r\nvariety of articles than the public trade of the company. The public trade of\r\nthe company extends no further than the trade with Europe, and comprehends a\r\npart only of the foreign trade of the country. But the private trade of the\r\nservants may extend to all the different branches both of its inland and\r\nforeign trade. The monopoly of the company can tend only to stunt the natural\r\ngrowth of that part of the surplus produce which, in the case of a free trade,\r\nwould be exported to Europe. That of the servants tends to stunt the natural\r\ngrowth of every part of the produce in which they choose to deal; of what is\r\ndestined for home consumption, as well as of what is destined for exportation;\r\nand consequently to degrade the cultivation of the whole country, and to reduce\r\nthe number of its inhabitants. It tends to reduce the quantity of every sort of\r\nproduce, even that of the necessaries of life, whenever the servants of the\r\ncountry choose to deal in them, to what those servants can both afford to buy\r\nand expect to sell with such a profit as pleases them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom the nature of their situation, too, the servants must be more disposed to\r\nsupport with rigourous severity their own interest, against that of the country\r\nwhich they govern, than their masters can be to support theirs. The country\r\nbelongs to their masters, who cannot avoid having some regard for the interest\r\nof what belongs to them; but it does not belong to the servants. The real\r\ninterest of their masters, if they were capable of understanding it, is the\r\nsame with that of the country; {The interest of every proprietor of India\r\nstock, however, is by no means the same with that of the country in the\r\ngovernment of which his vote gives him some influence.—See book v, chap.\r\n1, part ii.}and it is from ignorance chiefly, and the meanness of mercantile\r\nprejudice, that they ever oppress it. But the real interest of the servants is\r\nby no means the same with that of the country, and the most perfect information\r\nwould not necessarily put an end to their oppressions. The regulations,\r\naccordingly, which have been sent out from Europe, though they have been\r\nfrequently weak, have upon most occasions been well meaning. More intelligence,\r\nand perhaps less good meaning, has sometimes appeared in those established by\r\nthe servants in India. It is a very singular government in which every member\r\nof the administration wishes to get out of the country, and consequently to\r\nhave done with the government, as soon as he can, and to whose interest, the\r\nday after he has left it, and carried his whole fortune with him, it is\r\nperfectly indifferent though the whole country was swallowed up by an\r\nearthquake.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nI mean not, however, by any thing which I have here said, to throw any odious\r\nimputation upon the general character of the servants of the East India\r\ncompany, and touch less upon that of any particular persons. It is the system\r\nof government, the situation in which they are placed, that I mean to censure,\r\nnot the character of those who have acted in it. They acted as their situation\r\nnaturally directed, and they who have clamoured the loudest against them would\r\nprobably not have acted better themselves. In war and negotiation, the councils\r\nof Madras and Calcutta, have upon several occasions, conducted themselves with\r\na resolution and decisive wisdom, which would have done honour to the senate of\r\nRome in the best days of that republic. The members of those councils, however,\r\nhad been bred to professions very different from war and politics. But their\r\nsituation alone, without education, experience, or even example, seems to have\r\nformed in them all at once the great qualities which it required, and to have\r\ninspired them both with abilities and virtues which they themselves could not\r\nwell know that they possessed. If upon some occasions, therefore, it has\r\nanimated them to actions of magnanimity which could not well have been expected\r\nfrom them, we should not wonder if, upon others, it has prompted them to\r\nexploits of somewhat a different nature.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch exclusive companies, therefore, are nuisances in every respect; always\r\nmore or less inconvenient to the countries in which they are established, and\r\ndestructive to those which have the misfortune to fall under their government.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap33\"\u003e\u003c/a\u003eCHAPTER VIII.\u003cbr\u003e\r\nCONCLUSION OF THE MERCANTILE SYSTEM.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThough the encouragement of exportation, and the discouragement of importation,\r\nare the two great engines by which the mercantile system proposes to enrich\r\nevery country, yet, with regard to some particular commodities, it seems to\r\nfollow an opposite plan: to discourage exportation, and to encourage\r\nimportation. Its ultimate object, however, it pretends, is always the same, to\r\nenrich the country by an advantageous balance of trade. It discourages the\r\nexportation of the materials of manufacture, and of the instruments of trade,\r\nin order to give our own workmen an advantage, and to enable them to undersell\r\nthose of other nations in all foreign markets; and by restraining, in this\r\nmanner, the exportation of a few commodities, of no great price, it proposes to\r\noccasion a much greater and more valuable exportation of others. It encourages\r\nthe importation of the materials of manufacture, in order that our own people\r\nmay be enabled to work them up more cheaply, and thereby prevent a greater and\r\nmore valuable importation of the manufactured commodities. I do not observe, at\r\nleast in our statute book, any encouragement given to the importation of the\r\ninstruments of trade. When manufactures have advanced to a certain pitch of\r\ngreatness, the fabrication of the instruments of trade becomes itself the\r\nobject of a great number of very important manufactures. To give any particular\r\nencouragement to the importation of such instruments, would interfere too much\r\nwith the interest of those manufactures. Such importation, therefore, instead\r\nof being encouraged, has frequently been prohibited. Thus the importation of\r\nwool cards, except from Ireland, or when brought in as wreck or prize goods,\r\nwas prohibited by the 3rd of Edward IV.; which prohibition was renewed by the\r\n39th of Elizabeth, and has been continued and rendered perpetual by subsequent\r\nlaws.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe importation of the materials of manufacture has sometimes been encouraged\r\nby an exemption from the duties to which other goods are subject, and sometimes\r\nby bounties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe importation of sheep’s wool from several different countries, of\r\ncotton wool from all countries, of undressed flax, of the greater part of\r\ndyeing drugs, of the greater part of undressed hides from Ireland, or the\r\nBritish colonies, of seal skins from the British Greenland fishery, of pig and\r\nbar iron from the British colonies, as well as of several other materials of\r\nmanufacture, has been encouraged by an exemption from all duties, if properly\r\nentered at the custom-house. The private interest of our merchants and\r\nmanufacturers may, perhaps, have extorted from the legislature these\r\nexemptions, as well as the greater part of our other commercial regulations.\r\nThey are, however, perfectly just and reasonable; and if, consistently with the\r\nnecessities of the state, they could be extended to all the other materials of\r\nmanufacture, the public would certainly be a gainer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe avidity of our great manufacturers, however, has in some cases extended\r\nthese exemptions a good deal beyond what can justly be considered as the rude\r\nmaterials of their work. By the 24th Geo. II. chap. 46, a small duty of only\r\n1d. the pound was imposed upon the importation of foreign brown linen yarn,\r\ninstead of much higher duties, to which it had been subjected before, viz. of\r\n6d. the pound upon sail yarn, of 1s. the pound upon all French and Dutch yarn,\r\nand of £2:13:4 upon the hundred weight of all spruce or Muscovia yarn. But our\r\nmanufacturers were not long satisfied with this reduction: by the 29th of the\r\nsame king, chap. 15, the same law which gave a bounty upon the exportation of\r\nBritish and Irish linen, of which the price did not exceed 18d. the yard, even\r\nthis small duty upon the importation of brown linen yarn was taken away. In the\r\ndifferent operations, however, which are necessary for the preparation of linen\r\nyarn, a good deal more industry is employed, than in the subsequent operation\r\nof preparing linen cloth from linen yarn. To say nothing of the industry of the\r\nflax-growers and flaxdressers, three or four spinners at least are necessary in\r\norder to keep one weaver in constant employment; and more than four-fifths of\r\nthe whole quantity of labour necessary for the preparation of linen cloth, is\r\nemployed in that of linen yarn; but our spinners are poor people; women\r\ncommonly scattered about in all different parts of the country, without support\r\nor protection. It is not by the sale of their work, but by that of the complete\r\nwork of the weavers, that our great master manufacturers make their profits. As\r\nit is their interest to sell the complete manufacture as dear, so it is to buy\r\nthe materials as cheap as possible. By extorting from the legislature bounties\r\nupon the exportation of their own linen, high duties upon the importation of\r\nall foreign linen, and a total prohibition of the home consumption of some\r\nsorts of French linen, they endeavour to sell their own goods as dear as\r\npossible. By encouraging the importation of foreign linen yarn, and thereby\r\nbringing it into competition with that which is made by our own people, they\r\nendeavour to buy the work of the poor spinners as cheap as possible. They are\r\nas intent to keep down the wages of their own weavers, as the earnings of the\r\npoor spinners; and it is by no means for the benefit of the workmen that they\r\nendeavour either to raise the price of the complete work, or to lower that of\r\nthe rude materials. It is the industry which is carried on for the benefit of\r\nthe rich and the powerful, that is principally encouraged by our mercantile\r\nsystem. That which is carried on for the benefit of the poor and the indigent\r\nis too often either neglected or oppressed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth the bounty upon the exportation of linen, and the exemption from the duty\r\nupon the importation of foreign yarn, which were granted only for fifteen\r\nyears, but continued by two different prolongations, expire with the end of the\r\nsession of parliament which shall immediately follow the 24th of June 1786.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe encouragement given to the importation of the materials of manufacture by\r\nbounties, has been principally confined to such as were imported from our\r\nAmerican plantations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first bounties of this kind were those granted about the beginning of the\r\npresent century, upon the importation of naval stores from America. Under this\r\ndenomination were comprehended timber fit for masts, yards, and bowsprits;\r\nhemp, tar, pitch, and turpentine. The bounty, however, of £1 the ton upon\r\nmasting-timber, and that of £6 the ton upon hemp, were extended to such as\r\nshould be imported into England from Scotland. Both these bounties continued,\r\nwithout any variation, at the same rate, till they were severally allowed to\r\nexpire; that upon hemp on the 1st of January 1741, and that upon masting-timber\r\nat the end of the session of parliament immediately following the 24th June\r\n1781.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bounties upon the importation of tar, pitch, and turpentine, underwent,\r\nduring their continuance, several alterations. Originally, that upon tar was £4\r\nthe ton; that upon pitch the same; and that upon turpentine £3 the ton. The\r\nbounty of £4 the ton upon tar was afterwards confined to such as had been\r\nprepared in a particular manner; that upon other good, clean, and merchantable\r\ntar was reduced to £2:4s. the ton. The bounty upon pitch was likewise reduced\r\nto £1, and that upon turpentine to £1:10s. the ton.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second bounty upon the importation of any of the materials of manufacture,\r\naccording to the order of time, was that granted by the 21st Geo. II. chap.30,\r\nupon the importation of indigo from the British plantations. When the\r\nplantation indigo was worth three-fourths of the price of the best French\r\nindigo, it was, by this act, entitled to a bounty of 6d. the pound. This\r\nbounty, which, like most others, was granted only for a limited time, was\r\ncontinued by several prolongations, but was reduced to 4d. the pound. It was\r\nallowed to expire with the end of the session of parliament which followed the\r\n25th March 1781.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe third bounty of this kind was that granted (much about the time that we\r\nwere beginning sometimes to court, and sometimes to quarrel with our American\r\ncolonies), by the 4th. Geo. III. chap. 26, upon the importation of hemp, or\r\nundressed flax, from the British plantations. This bounty was granted for\r\ntwenty-one years, from the 24th June 1764 to the 24th June 1785. For the first\r\nseven years, it was to be at the rate of £8 the ton; for the second at £6; and\r\nfor the third at £4. It was not extended to Scotland, of which the climate\r\n(although hemp is sometimes raised there in small quantities, and of an\r\ninferior quality) is not very fit for that produce. Such a bounty upon the\r\nimportation of Scotch flax in England would have been too great a\r\ndiscouragement to the native produce of the southern part of the united\r\nkingdom.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fourth bounty of this kind was that granted by the 5th Geo. III. chap. 45,\r\nupon the importation of wood from America. It was granted for nine years from\r\nthe 1st January 1766 to the 1st January 1775. During the first three years, it\r\nwas to be for every hundred-and-twenty good deals, at the rate of £1, and for\r\nevery load containing fifty cubic feet of other square timber, at the rate of\r\n12s. For the second three years, it was for deals, to be at the rate of 15s.,\r\nand for other squared timber at the rate of 8s.; and for the third three years,\r\nit was for deals, to be at the rate of 10s.; and for every other squared timber\r\nat the rate of 5s.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fifth bounty of this kind was that granted by the 9th Geo. III. chap. 38,\r\nupon the importation of raw silk from the British plantations. It was granted\r\nfor twenty-one years, from the 1st January 1770, to the 1st January 1791. For\r\nthe first seven years, it was to be at the rate of £25 for every hundred pounds\r\nvalue; for the second, at £20; and for the third, at £15. The management of the\r\nsilk-worm, and the preparation of silk, requires so much hand-labour, and\r\nlabour is so very dear in America, that even this great bounty, I have been\r\ninformed, was not likely to produce any considerable effect.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sixth Bounty of this kind was that granted by 11th Geo. III. chap. 50, for\r\nthe importation of pipe, hogshead, and barrelstaves and leading from the\r\nBritish plantations. It was granted for nine years, from 1st January 1772 to\r\nthe 1st January 1781. For the first three years, it was, for a certain quantity\r\nof each, to be at the rate of £6; for the second three years at £4; and for the\r\nthird three years at £2.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe seventh and last bounty of this kind was that granted by the 19th Geo. III\r\nchap. 37, upon the importation of hemp from Ireland. It was granted in the same\r\nmanner as that for the importation of hemp and undressed flax from America, for\r\ntwenty-one years, from the 24th June 1779 to the 24th June 1800. The term is\r\ndivided likewise into three periods, of seven years each; and in each of those\r\nperiods, the rate of the Irish bounty is the same with that of the American. It\r\ndoes not, however, like the American bounty, extend to the importation of\r\nundressed flax. It would have been too great a discouragement to the\r\ncultivation of that plant in Great Britain. When this last bounty was granted,\r\nthe British and Irish legislatures were not in much better humour with one\r\nanother, than the British and American had been before. But this boon to\r\nIreland, it is to be hoped, has been granted under more fortunate auspices than\r\nall those to America. The same commodities, upon which we thus gave bounties,\r\nwhen imported from America, were subjected to considerable duties when imported\r\nfrom any other country. The interest of our American colonies was regarded as\r\nthe same with that of the mother country. Their wealth was considered as our\r\nwealth. Whatever money was sent out to them, it was said, came all back to us\r\nby the balance of trade, and we could never become a farthing the poorer by any\r\nexpense which we could lay out upon them. They were our own in every respect,\r\nand it was an expense laid out upon the improvement of our own property, and\r\nfor the profitable employment of our own people. It is unnecessary, I\r\napprehend, at present to say anything further, in order to expose the folly of\r\na system which fatal experience has now sufficiently exposed. Had our American\r\ncolonies really been a part of Great Britain, those bounties might have been\r\nconsidered as bounties upon production, and would still have been liable to all\r\nthe objections to which such bounties are liable, but to no other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exportation of the materials of manufacture is sometimes discouraged by\r\nabsolute prohibitions, and sometimes by high duties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur woollen manufacturers have been more successful than any other class of\r\nworkmen, in persuading the legislature that the prosperity of the nation\r\ndepended upon the success and extension of their particular business. They have\r\nnot only obtained a monopoly against the consumers, by an absolute prohibition\r\nof importing woollen cloths from any foreign country; but they have likewise\r\nobtained another monopoly against the sheep farmers and growers of wool, by a\r\nsimilar prohibition of the exportation of live sheep and wool. The severity of\r\nmany of the laws which have been enacted for the security of the revenue is\r\nvery justly complained of, as imposing heavy penalties upon actions which,\r\nantecedent to the statutes that declared them to be crimes, had always been\r\nunderstood to be innocent. But the cruellest of our revenue laws, I will\r\nventure to affirm, are mild and gentle, in comparison to some of those which\r\nthe clamour of our merchants and manufacturers has extorted from the\r\nlegislature, for the support of their own absurd and oppressive monopolies.\r\nLike the laws of Draco, these laws may be said to be all written in blood.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 8th of Elizabeth, chap. 3, the exporter of sheep, lambs, or rams, was\r\nfor the first offence, to forfeit all his goods for ever, to suffer a\r\nyear’s imprisonment, and then to have his left hand cut off in a market\r\ntown, upon a market day, to be there nailed up; and for the second offence, to\r\nbe adjudged a felon, and to suffer death accordingly. To prevent the breed of\r\nour sheep from being propagated in foreign countries, seems to have been the\r\nobject of this law. By the 13th and 14th of Charles II. chap. 18, the\r\nexportation of wool was made felony, and the exporter subjected to the same\r\npenalties and forfeitures as a felon.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFor the honour of the national humanity, it is to be hoped that neither of\r\nthese statutes was ever executed. The first of them, however, so far as I know,\r\nhas never been directly repealed, and serjeant Hawkins seems to consider it as\r\nstill in force. It may, however, perhaps be considered as virtually repealed by\r\nthe 12th of Charles II. chap. 32, sect. 3, which, without expressly taking away\r\nthe penalties imposed by former statutes, imposes a new penalty, viz. that of\r\n20s. for every sheep exported, or attempted to be exported, together with the\r\nforfeiture of the sheep, and of the owner’s share of the sheep. The\r\nsecond of them was expressly repealed by the 7th and 8th of William III. chap.\r\n28, sect. 4, by which it is declared that “Whereas the statute of the\r\n13th and 14th of king Charles II. made against the exportation of wool, among\r\nother things in the said act mentioned, doth enact the same to be deemed\r\nfelony, by the severity of which penalty the prosecution of offenders hath not\r\nbeen so effectually put in execution; be it therefore enacted, by the authority\r\naforesaid, that so much of the said act, which relates to the making the said\r\noffence felony, be repealed and made void.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe penalties, however, which are either imposed by this milder statute, or\r\nwhich, though imposed by former statutes, are not repealed by this one, are\r\nstill sufficiently severe. Besides the forfeiture of the goods, the exporter\r\nincurs the penalty of 3s. for every pound weight of wool, either exported or\r\nattempted to be exported, that is, about four or five times the value. Any\r\nmerchant, or other person convicted of this offence, is disabled from requiring\r\nany debt or account belonging to him from any factor or other person. Let his\r\nfortune be what it will, whether he is or is not able to pay those heavy\r\npenalties, the law means to ruin him completely. But, as the morals of the\r\ngreat body of the people are not yet so corrupt as those of the contrivers of\r\nthis statute, I have not heard that any advantage has ever been taken of this\r\nclause. If the person convicted of this offence is not able to pay the\r\npenalties within three months after judgment, he is to be transported for seven\r\nyears; and if he returns before the expiration of that term, he is liable to\r\nthe pains of felony, without benefit of clergy. The owner of the ship, knowing\r\nthis offence, forfeits all his interest in the ship and furniture. The master\r\nand mariners, knowing this offence, forfeit all their goods and chattels, and\r\nsuffer three months imprisonment. By a subsequent statute, the master suffers\r\nsix months imprisonment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order to prevent exportation, the whole inland commerce of wool is laid\r\nunder very burdensome and oppressive restrictions. It cannot be packed in any\r\nbox, barrel, cask, case, chest, or any other package, but only in packs of\r\nleather or pack-cloth, on which must be marked on the outside the words WOOL or\r\nYARN, in large letters, not less than three inches long, on pain of forfeiting\r\nthe same and the package, and 8s. for every pound weight, to be paid by the\r\nowner or packer. It cannot be loaden on any horse or cart, or carried by land\r\nwithin five miles of the coast, but between sun-rising, and sun-setting, on\r\npain of forfeiting the same, the horses and carriages. The hundred next\r\nadjoining to the sea coast, out of, or through which the wool is carried or\r\nexported, forfeits £20, if the wool is under the value of £10; and if of\r\ngreater value, then treble that value, together with treble costs, to be sued\r\nfor within the year. The execution to be against any two of the inhabitants,\r\nwhom the sessions must reimburse, by an assessment on the other inhabitants, as\r\nin the cases of robbery. And if any person compounds with the hundred for less\r\nthan this penalty, he is to be imprisoned for five years; and any other person\r\nmay prosecute. These regulations take place through the whole kingdom.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in the particular counties of Kent and Sussex, the restrictions are still\r\nmore troublesome. Every owner of wool within ten miles of the sea coast must\r\ngive an account in writing, three days after shearing, to the next officer of\r\nthe customs, of the number of his fleeces, and of the places where they are\r\nlodged. And before he removes any part of them, he must give the like notice of\r\nthe number and weight of the fleeces, and of the name and abode of the person\r\nto whom they are sold, and of the place to which it is intended they should be\r\ncarried. No person within fifteen miles of the sea, in the said counties, can\r\nbuy any wool, before he enters into bond to the king, that no part of the wool\r\nwhich he shall so buy shall be sold by him to any other person within fifteen\r\nmiles of the sea. If any wool is found carrying towards the sea side in the\r\nsaid counties, unless it has been entered and security given as aforesaid, it\r\nis forfeited, and the offender also forfeits 3s. for every pound weight, if any\r\nperson lay any wool, not entered as aforesaid, within fifteen miles of the sea,\r\nit must be seized and forfeited; and if, after such seizure, any person shall\r\nclaim the same, he must give security to the exchequer, that if he is cast upon\r\ntrial he shall pay treble costs, besides all other penalties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen such restrictions are imposed upon the inland trade, the coasting trade,\r\nwe may believe, cannot be left very free. Every owner of wool, who carrieth, or\r\ncauseth to be carried, any wool to any port or place on the sea coast, in order\r\nto be from thence transported by sea to any other place or port on the coast,\r\nmust first cause an entry thereof to be made at the port from whence it is\r\nintended to be conveyed, containing the weight, marks, and number, of the\r\npackages, before he brings the same within five miles of that port, on pain of\r\nforfeiting the same, and also the horses, carts, and other carriages; and also\r\nof suffering and forfeiting, as by the other laws in force against the\r\nexportation of wool. This law, however (1st of William III. chap. 32), is so\r\nvery indulgent as to declare, that this shall not hinder any person from\r\ncarrying his wool home from the place of shearing, though it be within five\r\nmiles of the sea, provided that in ten days after shearing, and before he\r\nremove the wool, he do under his hand certify to the next officer of the\r\ncustoms the true number of fleeces, and where it is housed; and do not remove\r\nthe same, without certifying to such officer, under his hand, his intention so\r\nto do, three days before. Bond must be given that the wool to be carried\r\ncoast-ways is to be landed at the particular port for which it is entered\r\noutwards; and if my part of it is landed without the presence of an officer,\r\nnot only the forfeiture of the wool is incurred, as in other goods, but the\r\nusual additional penalty of 3s. for every pound weight is likewise incurred.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOur woollen manufacturers, in order to justify their demand of such\r\nextraordinary restrictions and regulations, confidently asserted, that English\r\nwool was of a peculiar quality, superior to that of any other country; that the\r\nwool of other countries could not, without some mixture of it, be wrought up\r\ninto any tolerable manufacture; that fine cloth could not be made without it;\r\nthat England, therefore, if the exportation of it could be totally prevented,\r\ncould monopolize to herself almost the whole woollen trade of the world; and\r\nthus, having no rivals, could sell at what price she pleased, and in a short\r\ntime acquire the most incredible degree of wealth by the most advantageous\r\nbalance of trade. This doctrine, like most other doctrines which are\r\nconfidently asserted by any considerable number of people, was, and still\r\ncontinues to be, most implicitly believed by a much greater number: by almost\r\nall those who are either unacquainted with the woollen trade, or who have not\r\nmade particular inquiries. It is, however, so perfectly false, that English\r\nwool is in any respect necessary for the making of fine cloth, that it is\r\naltogether unfit for it. Fine cloth is made altogether of Spanish wool. English\r\nwool, cannot be even so mixed with Spanish wool, as to enter into the\r\ncomposition without spoiling and degrading, in some degree, the fabric of the\r\ncloth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been shown in the foregoing part of this work, that the effect of these\r\nregulations has been to depress the price of English wool, not only below what\r\nit naturally would be in the present times, but very much below what it\r\nactually was in the time of Edward III. The price of Scotch wool, when, in\r\nconsequence of the Union, it became subject to the same regulations, is said to\r\nhave fallen about one half. It is observed by the very accurate and intelligent\r\nauthor of the Memoirs of Wool, the Reverend Mr. John Smith, that the price of\r\nthe best English wool in England, is generally below what wool of a very\r\ninferior quality commonly sells for in the market of Amsterdam. To depress the\r\nprice of this commodity below what may be called its natural and proper price,\r\nwas the avowed purpose of those regulations; and there seems to be no doubt of\r\ntheir having produced the effect that was expected from them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis reduction of price, it may perhaps be thought, by discouraging the growing\r\nof wool, must have reduced very much the annual produce of that commodity,\r\nthough not below what it formerly was, yet below what, in the present state of\r\nthings, it would probably have been, had it, in consequence of an open and free\r\nmarket, been allowed to rise to the natural and proper price. I am, however,\r\ndisposed to believe, that the quantity of the annual produce cannot have been\r\nmuch, though it may, perhaps, have been a little affected by these regulations.\r\nThe growing of wool is not the chief purpose for which the sheep farmer employs\r\nhis industry and stock. He expects his profit, not so much from the price of\r\nthe fleece, as from that of the carcase; and the average or ordinary price of\r\nthe latter must even, in many cases, make up to him whatever deficiency there\r\nmay be in the average or ordinary price of the former. It has been observed, in\r\nthe foregoing part of this work, that ‘whatever regulations tend to sink\r\nthe price, either of wool or of raw hides, below what it naturally would be,\r\nmust, in an improved and cultivated country, have some tendency to raise the\r\nprice of butcher’s meat. The price, both of the great and small cattle\r\nwhich are fed on improved and cultivated land, must be sufficient to pay the\r\nrent which the landlord, and the profit which the farmer, has reason to expect\r\nfrom improved and cultivated land. If it is not, they will soon cease to feed\r\nthem. Whatever part of this price, therefore, is not paid by the wool and the\r\nhide, must be paid by the carcase. The less there is paid for the one, the more\r\nmust be paid for the other. In what manner this price is to be divided upon the\r\ndifferent parts of the beast, is indifferent to the landlords and farmers,\r\nprovided it is all paid to them. In an improved and cultivated country,\r\ntherefore, their interest as landlords and farmers cannot be much affected by\r\nsuch regulations, though their interest as consumers may, by the rise in the\r\nprice of provisions.’ According to this reasoning, therefore, this\r\ndegradation in the price of wool is not likely, in an improved and cultivated\r\ncountry, to occasion any diminution in the annual produce of that commodity;\r\nexcept so far as, by raising the price of mutton, it may somewhat diminish the\r\ndemand for, and consequently the production of, that particular species of\r\nbutcher’s meat, Its effect, however, even in this way, it is probable, is\r\nnot very considerable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though its effect upon the quantity of the annual produce may not have been\r\nvery considerable, its effect upon the quality, it may perhaps be thought, must\r\nnecessarily have been very great. The degradation in the quality of English\r\nwool, if not below what it was in former times, yet below what it naturally\r\nwould have been in the present state of improvement and cultivation, must have\r\nbeen, it may perhaps be supposed, very nearly in proportion to the degradation\r\nof price. As the quality depends upon the breed, upon the pasture, and upon the\r\nmanagement and cleanliness of the sheep, during the whole progress of the\r\ngrowth of the fleece, the attention to these circumstances, it may naturally\r\nenough be imagined, can never be greater than in proportion to the recompence\r\nwhich the price of the fleece is likely to make for the labour and expense\r\nwhich that attention requires. It happens, however, that the goodness of the\r\nfleece depends, in a great measure, upon the health, growth, and bulk of the\r\nanimal: the same attention which is necessary for the improvement of the\r\ncarcase is, in some respect, sufficient for that of the fleece. Notwithstanding\r\nthe degradation of price, English wool is said to have been improved\r\nconsiderably during the course even of the present century. The improvement,\r\nmight, perhaps, have been greater if the price had been better; but the lowness\r\nof price, though it may have obstructed, yet certainly it has not altogether\r\nprevented that improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe violence of these regulations, therefore, seems to have affected neither\r\nthe quantity nor the quality of the annual produce of wool, so much as it might\r\nhave been expected to do (though I think it probable that it may have affected\r\nthe latter a good deal more than the former); and the interest of the growers\r\nof wool, though it must have been hurt in some degree, seems upon the whole, to\r\nhave been much less hurt than could well have been imagined.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese considerations, however, will not justify the absolute prohibition of the\r\nexportation of wool; but they will fully justify the imposition of a\r\nconsiderable tax upon that exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo hurt, in any degree, the interest of any one order of citizens, for no other\r\npurpose but to promote that of some other, is evidently contrary to that\r\njustice and equality of treatment which the sovereign owes to all the different\r\norders of his subjects. But the prohibition certainly hurts, in some degree,\r\nthe interest of the growers of wool, for no other purpose but to promote that\r\nof the manufacturers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEvery different order of citizens is bound to contribute to the support of the\r\nsovereign or commonwealth. A tax of five, or even of ten shillings, upon the\r\nexportation of every tod of wool, would produce a very considerable revenue to\r\nthe sovereign. It would hurt the interest of the growers somewhat less than the\r\nprohibition, because it would not probably lower the price of wool quite so\r\nmuch. It would afford a sufficient advantage to the manufacturer, because,\r\nthough he might not buy his wool altogether so cheap as under the prohibition,\r\nhe would still buy it at least five or ten shillings cheaper than any foreign\r\nmanufacturer could buy it, besides saving the freight and insurance which the\r\nother would be obliged to pay. It is scarce possible to devise a tax which\r\ncould produce any considerable revenue to the sovereign, and at the same time\r\noccasion so little inconveniency to anybody.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe prohibition, notwithstanding all the penalties which guard it, does not\r\nprevent the exportation of wool. It is exported, it is well known, in great\r\nquantities. The great difference between the price in the home and that in the\r\nforeign market, presents such a temptation to smuggling, that all the rigour of\r\nthe law cannot prevent it. This illegal exportation is advantageous to nobody\r\nbut the smuggler. A legal exportation, subject to a tax, by affording a revenue\r\nto the sovereign, and thereby saving the imposition of some other, perhaps more\r\nburdensome and inconvenient taxes, might prove advantageous to all the\r\ndifferent subjects of the state.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exportation of fuller’s earth, or fuller’s clay, supposed to be\r\nnecessary for preparing and cleansing the woollen manufactures, has been\r\nsubjected to nearly the same penalties as the exportation of wool. Even\r\ntobacco-pipe clay, though acknowledged to be different from fuller’s\r\nclay, yet, on account of their resemblance, and because fuller’s clay\r\nmight sometimes be exported as tobacco-pipe clay, has been laid under the same\r\nprohibitions and penalties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 13th and 14th of Charles II. chap, 7, the exportation, not only of raw\r\nhides, but of tanned leather, except in the shape of boots, shoes, or slippers,\r\nwas prohibited; and the law gave a monopoly to our boot-makers and shoe-makers,\r\nnot only against our graziers, but against our tanners. By subsequent statutes,\r\nour tanners have got themselves exempted from this monopoly, upon paying a\r\nsmall tax of only one shilling on the hundred weight of tanned leather,\r\nweighing one hundred and twelve pounds. They have obtained likewise the\r\ndrawback of two-thirds of the excise duties imposed upon their commodity, even\r\nwhen exported without further manufacture. All manufactures of leather may be\r\nexported duty free; and the exporter is besides entitled to the drawback of the\r\nwhole duties of excise. Our graziers still continue subject to the old\r\nmonopoly. Graziers, separated from one another, and dispersed through all the\r\ndifferent corners of the country, cannot, without great difficulty, combine\r\ntogether for the purpose either of imposing monopolies upon their\r\nfellow-citizens, or of exempting themselves from such as may have been imposed\r\nupon them by other people. Manufacturers of all kinds, collected together in\r\nnumerous bodies in all great cities, easily can. Even the horns of cattle are\r\nprohibited to be exported; and the two insignificant trades of the horner and\r\ncomb-maker enjoy, in this respect, a monopoly against the graziers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRestraints, either by prohibitions, or by taxes, upon the exportation of goods\r\nwhich are partially, but not completely manufactured, are not peculiar to the\r\nmanufacture of leather. As long as anything remains to be done, in order to fit\r\nany commodity for immediate use and consumption, our manufacturers think that\r\nthey themselves ought to have the doing of it. Woollen yarn and worsted are\r\nprohibited to be exported, under the same penalties as wool even white cloths\r\nwe subject to a duty upon exportation; and our dyers have so far obtained a\r\nmonopoly against our clothiers. Our clothiers would probably have been able to\r\ndefend themselves against it; but it happens that the greater part of our\r\nprincipal clothiers are themselves likewise dyers. Watch-cases, clock-cases,\r\nand dial-plates for clocks and watches, have been prohibited to be exported.\r\nOur clock-makers and watch-makers are, it seems, unwilling that the price of\r\nthis sort of workmanship should be raised upon them by the competition of\r\nforeigners.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy some old statutes of Edward III, Henry VIII. and Edward VI. the exportation\r\nof all metals was prohibited. Lead and tin were alone excepted, probably on\r\naccount of the great abundance of those metals; in the exportation of which a\r\nconsiderable part of the trade of the kingdom in those days consisted. For the\r\nencouragement of the mining trade, the 5th of William and Mary, chap.17,\r\nexempted from this prohibition iron, copper, and mundic metal made from British\r\nore. The exportation of all sorts of copper bars, foreign as well as British,\r\nwas afterwards permitted by the 9th and 10th of William III. chap 26. The\r\nexportation of unmanufactured brass, of what is called gun-metal, bell-metal,\r\nand shroff metal, still continues to be prohibited. Brass manufactures of all\r\nsorts may be exported duty free.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exportation of the materials of manufacture, where it is not altogether\r\nprohibited, is, in many cases, subjected to considerable duties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the 8th Geo. I. chap.15, the exportation of all goods, the produce of\r\nmanufacture of Great Britain, upon which any duties had been imposed by former\r\nstatutes, was rendered duty free. The following goods, however, were excepted:\r\nalum, lead, lead-ore, tin, tanned leather, copperas, coals, wool, cards, white\r\nwoollen cloths, lapis calaminaris, skins of all sorts, glue, coney hair or\r\nwool, hares wool, hair of all sorts, horses, and litharge of lead. If you\r\nexcept horses, all these are either materials of manufacture, or incomplete\r\nmanufactures (which may be considered as materials for still further\r\nmanufacture), or instruments of trade. This statute leaves them subject to all\r\nthe old duties which had ever been imposed upon them, the old subsidy, and one\r\nper cent. outwards.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the same statute, a great number of foreign drugs for dyers use are exempted\r\nfrom all duties upon importation. Each of them, however, is afterwards\r\nsubjected to a certain duty, not indeed a very heavy one, upon exportation. Our\r\ndyers, it seems, while they thought it for their interest to encourage the\r\nimportation of those drugs, by an exemption from all duties, thought it\r\nlikewise for their own interest to throw some small discouragement upon their\r\nexportation. The avidity, however, which suggested this notable piece of\r\nmercantile ingenuity, most probably disappointed itself of its object. It\r\nnecessarily taught the importers to be more careful than they might otherwise\r\nhave been, that their importation should not exceed what was necessary for the\r\nsupply of the home market. The home market was at all times likely to be more\r\nscantily supplied; the commodities were at all times likely to be somewhat\r\ndearer there than they would have been, had the exportation been rendered as\r\nfree as the importation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the above-mentioned statute, gum senega, or gum arabic, being among the\r\nenumerated dyeing drugs, might be imported duty free. They were subjected,\r\nindeed, to a small poundage duty, amounting only to threepence in the hundred\r\nweight, upon their re-exportation. France enjoyed, at that time, an exclusive\r\ntrade to the country most productive of those drugs, that which lies in the\r\nneighbourhood of the Senegal; and the British market could not be easily\r\nsupplied by the immediate importation of them from the place of growth. By the\r\n25th Geo. II. therefore, gum senega was allowed to be imported (contrary to the\r\ngeneral dispositions of the act of navigation) from any part of Europe. As the\r\nlaw, however, did not mean to encourage this species of trade, so contrary to\r\nthe general principles of the mercantile policy of England, it imposed a duty\r\nof ten shillings the hundred weight upon such importation, and no part of this\r\nduty was to be afterwards drawn back upon its exportation. The successful war\r\nwhich began in 1755 gave Great Britain the same exclusive trade to those\r\ncountries which France had enjoyed before. Our manufactures, as soon as the\r\npeace was made, endeavoured to avail themselves of this advantage, and to\r\nestablish a monopoly in their own favour both against the growers and against\r\nthe importers of this commodity. By the 5th of Geo. III. therefore, chap. 37,\r\nthe exportation of gum senega, from his majesty’s dominions in Africa,\r\nwas confined to Great Britain, and was subjected to all the same restrictions,\r\nregulations, forfeitures, and penalties, as that of the enumerated commodities\r\nof the British colonies in America and the West Indies. Its importation,\r\nindeed, was subjected to a small duty of sixpence the hundred weight; but its\r\nre-exportation was subjected to the enormous duty of one pound ten shillings\r\nthe hundred weight. It was the intention of our manufacturers, that the whole\r\nproduce of those countries should be imported into Great Britain; and in order\r\nthat they themselves might be enabled to buy it at their own price, that no\r\npart of it should be exported again, but at such an expense as would\r\nsufficiently discourage that exportation. Their avidity, however, upon this, as\r\nwell as upon many other occasions, disappointed itself of its object. This\r\nenormous duty presented such a temptation to smuggling, that great quantities\r\nof this commodity were clandestinely exported, probably to all the\r\nmanufacturing countries of Europe, but particularly to Holland, not only from\r\nGreat Britain, but from Africa. Upon this account, by the 14th Geo. III.\r\nchap.10, this duty upon exportation was reduced to five shillings the hundred\r\nweight.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the book of rates, according to which the old subsidy was levied, beaver\r\nskins were estimated at six shillings and eight pence a piece; and the\r\ndifferent subsidies and imposts which, before the year 1722, had been laid upon\r\ntheir importation, amounted to one-fifth part of the rate, or to sixteen pence\r\nupon each skin; all of which, except half the old subsidy, amounting only to\r\ntwopence, was drawn back upon exportation. This duty, upon the importation of\r\nso important a material of manufacture, had been thought too high; and, in the\r\nyear 1722, the rate was reduced to two shillings and sixpence, which reduced\r\nthe duty upon importation to sixpence, and of this only one-half was to be\r\ndrawn back upon exportation. The same successful war put the country most\r\nproductive of beaver under the dominion of Great Britain; and beaver skins\r\nbeing among the enumerated commodities, the exportation from America was\r\nconsequently confined to the market of Great Britain. Our manufacturers soon\r\nbethought themselves of the advantage which they might make of this\r\ncircumstance; and in the year 1764, the duty upon the importation of beaver\r\nskin was reduced to one penny, but the duty upon exportation was raised to\r\nsevenpence each skin, without any drawback of the duty upon importation. By the\r\nsame law, a duty of eighteen pence the pound was imposed upon the exportation\r\nof beaver wool or woumbs, without making any alteration in the duty upon the\r\nimportation of that commodity, which, when imported by British, and in British\r\nshipping, amounted at that time to between fourpence and fivepence the piece.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCoals may be considered both as a material of manufacture, and as an instrument\r\nof trade. Heavy duties, accordingly, have been imposed upon their exportation,\r\namounting at present (1783) to more than five shillings the ton, or more than\r\nfifteen shillings the chaldron, Newcastle measure; which is, in most cases,\r\nmore than the original value of the commodity at the coal-pit, or even at the\r\nshipping port for exportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe exportation, however, of the instruments of trade, properly so called, is\r\ncommonly restrained, not by high duties, but by absolute prohibitions. Thus, by\r\nthe 7th and 8th of William III chap.20, sect.8, the exportation of frames or\r\nengines for knitting gloves or stockings, is prohibited, under the penalty, not\r\nonly of the forfeiture of such frames or engines, so exported, or attempted to\r\nbe exported, but of forty pounds, one half to the king, the other to the person\r\nwho shall inform or sue for the same. In the same manner, by the 14th Geo. III.\r\nchap. 71, the exportation to foreign parts, of any utensils made use of in the\r\ncotton, linen, woollen, and silk manufactures, is prohibited under the penalty,\r\nnot only of the forfeiture of such utensils, but of two hundred pounds, to be\r\npaid by the person who shall offend in this manner; and likewise of two hundred\r\npounds, to be paid by the master of the ship, who shall knowingly suffer such\r\nutensils to be loaded on board his ship.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen such heavy penalties were imposed upon the exportation of the dead\r\ninstruments of trade, it could not well be expected that the living instrument,\r\nthe artificer, should be allowed to go free. Accordingly, by the 5th Geo. I.\r\nchap. 27, the person who shall be convicted of enticing any artificer, of or in\r\nany of the manufactures of Great Britain, to go into any foreign parts, in\r\norder to practise or teach his trade, is liable, for the first offence, to be\r\nfined in any sum not exceeding one hundred pounds, and to three months\r\nimprisonment, and until the fine shall be paid; and for the second offence, to\r\nbe fined in any sum, at the discretion of the court, and to imprisonment for\r\ntwelve months, and until the fine shall be paid. By the 23d Geo. II. chap. 13,\r\nthis penalty is increased, for the first offence, to five hundred pounds for\r\nevery artificer so enticed, and to twelve months imprisonment, and until the\r\nfine shall be paid; and for the second offence, to one thousand pounds, and to\r\ntwo years imprisonment, and until the fine shall be paid.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the former of these two statutes, upon proof that any person has been\r\nenticing any artificer, or that any artificer has promised or contracted to go\r\ninto foreign parts, for the purposes aforesaid, such artificer may be obliged\r\nto give security, at the discretion of the court, that he shall not go beyond\r\nthe seas, and may be committed to prison until he give such security.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf any artificer has gone beyond the seas, and is exercising or teaching his\r\ntrade in any foreign country, upon warning being given to him by any of his\r\nmajesty’s ministers or consuls abroad, or by one of his majesty’s\r\nsecretaries of state, for the time being, if he does not, within six months\r\nafter such warning, return into this realm, and from henceforth abide and\r\ninhabit continually within the same, he is from thenceforth declared incapable\r\nof taking any legacy devised to him within this kingdom, or of being executor\r\nor administrator to any person, or of taking any lands within this kingdom, by\r\ndescent, devise, or purchase. He likewise forfeits to the king all his lands,\r\ngoods, and chattels; is declared an alien in every respect; and is put out of\r\nthe king’s protection.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is unnecessary, I imagine, to observe how contrary such regulations are to\r\nthe boasted liberty of the subject, of which we affect to be so very jealous;\r\nbut which, in this case, is so plainly sacrificed to the futile interests of\r\nour merchants and manufacturers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe laudable motive of all these regulations, is to extend our own\r\nmanufactures, not by their own improvement, but by the depression of those of\r\nall our neighbours, and by putting an end, as much as possible, to the\r\ntroublesome competition of such odious and disagreeable rivals. Our master\r\nmanufacturers think it reasonable that they themselves should have the monopoly\r\nof the ingenuity of all their countrymen. Though by restraining, in some\r\ntrades, the number of apprentices which can be employed at one time, and by\r\nimposing the necessity of a long apprenticeship in all trades, they endeavour,\r\nall of them, to confine the knowledge of their respective employments to as\r\nsmall a number as possible; they are unwilling, however, that any part of this\r\nsmall number should go abroad to instruct foreigners.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nConsumption is the sole end and purpose of all production; and the interest of\r\nthe producer ought to be attended to, only so far as it may be necessary for\r\npromoting that of the consumer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe maxim is so perfectly self-evident, that it would be absurd to attempt to\r\nprove it. But in the mercantile system, the interest of the consumer is almost\r\nconstantly sacrificed to that of the producer; and it seems to consider\r\nproduction, and not consumption, as the ultimate end and object of all industry\r\nand commerce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the restraints upon the importation of all foreign commodities which can\r\ncome into competition with those of our own growth or manufacture, the interest\r\nof the home consumer is evidently sacrificed to that of the producer. It is\r\naltogether for the benefit of the latter, that the former is obliged to pay\r\nthat enhancement of price which this monopoly almost always occasions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is altogether for the benefit of the producer, that bounties are granted\r\nupon the exportation of some of his productions. The home consumer is obliged\r\nto pay, first the tax which is necessary for paying the bounty; and, secondly,\r\nthe still greater tax which necessarily arises from the enhancement of the\r\nprice of the commodity in the home market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the famous treaty of commerce with Portugal, the consumer is prevented by\r\nduties from purchasing of a neighbouring country, a commodity which our own\r\nclimate does not produce; but is obliged to purchase it of a distant country,\r\nthough it is acknowledged, that the commodity of the distant country is of a\r\nworse quality than that of the near one. The home consumer is obliged to submit\r\nto this inconvenience, in order that the producer may import into the distant\r\ncountry some of his productions, upon more advantageous terms than he otherwise\r\nwould have been allowed to do. The consumer, too, is obliged to pay whatever\r\nenhancement in the price of those very productions this forced exportation may\r\noccasion in the home market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut in the system of laws which has been established for the management of our\r\nAmerican and West Indian colonies, the interest of the home consumer has been\r\nsacrificed to that of the producer, with a more extravagant profusion than in\r\nall our other commercial regulations. A great empire has been established for\r\nthe sole purpose of raising up a nation of customers, who should be obliged to\r\nbuy, from the shops of our different producers, all the goods with which these\r\ncould supply them. For the sake of that little enhancement of price which this\r\nmonopoly might afford our producers, the home consumers have been burdened with\r\nthe whole expense of maintaining and defending that empire. For this purpose,\r\nand for this purpose only, in the two last wars, more than two hundred millions\r\nhave been spent, and a new debt of more than a hundred and seventy millions has\r\nbeen contracted, over and above all that had been expended for the same purpose\r\nin former wars. The interest of this debt alone is not only greater than the\r\nwhole extraordinary profit which, it never could be pretended, was made by the\r\nmonopoly of the colony trade, but than the whole value of that trade, or than\r\nthe whole value of the goods which, at an average, have been annually exported\r\nto the colonies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt cannot be very difficult to determine who have been the contrivers of this\r\nwhole mercantile system; not the consumers, we may believe, whose interest has\r\nbeen entirely neglected; but the producers, whose interest has been so\r\ncarefully attended to; and among this latter class, our merchants and\r\nmanufacturers have been by far the principal architects. In the mercantile\r\nregulations which have been taken notice of in this chapter, the interest of\r\nour manufacturers has been most peculiarly attended to; and the interest, not\r\nso much of the consumers, as that of some other sets of producers, has been\r\nsacrificed to it.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap34\"\u003e\u003c/a\u003eCHAPTER IX.\u003cbr\u003e\r\nOF THE AGRICULTURAL SYSTEMS, OR OF THOSE SYSTEMS OF POLITICAL ECONOMY WHICH\r\nREPRESENT THE PRODUCE OF LAND, AS EITHER THE SOLE OR THE PRINCIPAL SOURCE OF\r\nTHE REVENUE AND WEALTH OF EVERY COUNTRY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe agricultural systems of political economy will not require so long an\r\nexplanation as that which I have thought it necessary to bestow upon the\r\nmercantile or commercial system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat system which represents the produce of land as the sole source of the\r\nrevenue and wealth of every country, has so far as I know, never been adopted\r\nby any nation, and it at present exists only in the speculations of a few men\r\nof great learning and ingenuity in France. It would not, surely, be worth while\r\nto examine at great length the errors of a system which never has done, and\r\nprobably never will do, any harm in any part of the world. I shall endeavour to\r\nexplain, however, as distinctly as I can, the great outlines of this very\r\ningenious system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMr. Colbert, the famous minister of Lewis XIV. was a man of probity, of great\r\nindustry, and knowledge of detail; of great experience and acuteness in the\r\nexamination of public accounts; and of abilities, in short, every way fitted\r\nfor introducing method and good order into the collection and expenditure of\r\nthe public revenue. That minister had unfortunately embraced all the prejudices\r\nof the mercantile system, in its nature and essence a system of restraint and\r\nregulation, and such as could scarce fail to be agreeable to a laborious and\r\nplodding man of business, who had been accustomed to regulate the different\r\ndepartments of public offices, and to establish the necessary checks and\r\ncontrols for confining each to its proper sphere. The industry and commerce of\r\na great country, he endeavoured to regulate upon the same model as the\r\ndepartments of a public office; and instead of allowing every man to pursue his\r\nown interest his own way, upon the liberal plan of equality, liberty, and\r\njustice, he bestowed upon certain branches of industry extraordinary\r\nprivileges, while he laid others under as extraordinary restraints. He was not\r\nonly disposed, like other European ministers, to encourage more the industry of\r\nthe towns than that of the country; but, in order to support the industry of\r\nthe towns, he was willing even to depress and keep down that of the country. In\r\norder to render provisions cheap to the inhabitants of the towns, and thereby\r\nto encourage manufactures and foreign commerce, he prohibited altogether the\r\nexportation of corn, and thus excluded the inhabitants of the country from\r\nevery foreign market, for by far the most important part of the produce of\r\ntheir industry. This prohibition, joined to the restraints imposed by the\r\nancient provincial laws of France upon the transportation of corn from one\r\nprovince to another, and to the arbitrary and degrading taxes which are levied\r\nupon the cultivators in almost all the provinces, discouraged and kept down the\r\nagriculture of that country very much below the state to which it would\r\nnaturally have risen in so very fertile a soil, and so very happy a climate.\r\nThis state of discouragement and depression was felt more or less in every\r\ndifferent part of the country, and many different inquiries were set on foot\r\nconcerning the causes of it. One of those causes appeared to be the preference\r\ngiven, by the institutions of Mr. Colbert, to the industry of the towns above\r\nthat of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the rod be bent too much one way, says the proverb, in order to make it\r\nstraight, you must bend it as much the other. The French philosophers, who have\r\nproposed the system which represents agriculture as the sole source of the\r\nrevenue and wealth of every country, seem to have adopted this proverbial\r\nmaxim; and, as in the plan of Mr. Colbert, the industry of the towns was\r\ncertainly overvalued in comparison with that of the country, so in their system\r\nit seems to be as certainly under-valued.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe different orders of people, who have ever been supposed to contribute in\r\nany respect towards the annual produce of the land and labour of the country,\r\nthey divide into three classes. The first is the class of the proprietors of\r\nland. The second is the class of the cultivators, of farmers and country\r\nlabourers, whom they honour with the peculiar appellation of the productive\r\nclass. The third is the class of artificers, manufacturers, and merchants, whom\r\nthey endeavour to degrade by the humiliating appellation of the barren or\r\nunproductive class.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe class of proprietors contributes to the annual produce, by the expense\r\nwhich they may occasionally lay out upon the improvement of the land, upon the\r\nbuildings, drains, inclosures, and other ameliorations, which they may either\r\nmake or maintain upon it, and by means of which the cultivators are enabled,\r\nwith the same capital, to raise a greater produce, and consequently to pay a\r\ngreater rent. This advanced rent may be considered as the interest or profit\r\ndue to the proprietor, upon the expense or capital which he thus employs in the\r\nimprovement of his land. Such expenses are in this system called ground\r\nexpenses (depenses foncieres).\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe cultivators or farmers contribute to the annual produce, by what are in\r\nthis system called the original and annual expenses (depenses primitives, et\r\ndepenses annuelles), which they lay out upon the cultivation of the land. The\r\noriginal expenses consist in the instruments of husbandry, in the stock of\r\ncattle, in the seed, and in the maintenance of the farmer’s family,\r\nservants, and cattle, during at least a great part of the first year of his\r\noccupancy, or till he can receive some return from the land. The annual\r\nexpenses consist in the seed, in the wear and tear of instruments of husbandry,\r\nand in the annual maintenance of the farmer’s servants and cattle, and of\r\nhis family too, so far as any part of them can be considered as servants\r\nemployed in cultivation. That part of the produce of the land which remains to\r\nhim after paying the rent, ought to be sufficient, first, to replace to him,\r\nwithin a reasonable time, at least during the term of his occupancy, the whole\r\nof his original expenses, together with the ordinary profits of stock; and,\r\nsecondly, to replace to him annually the whole of his annual expenses, together\r\nlikewise with the ordinary profits of stock. Those two sorts of expenses are\r\ntwo capitals which the farmer employs in cultivation; and unless they are\r\nregularly restored to him, together with a reasonable profit, he cannot carry\r\non his employment upon a level with other employments; but, from a regard to\r\nhis own interest, must desert it as soon as possible, and seek some other. That\r\npart of the produce of the land which is thus necessary for enabling the farmer\r\nto continue his business, ought to be considered as a fund sacred to\r\ncultivation, which, if the landlord violates, he necessarily reduces the\r\nproduce of his own land, and, in a few years, not only disables the farmer from\r\npaying this racked rent, but from paying the reasonable rent which he might\r\notherwise have got for his land. The rent which properly belongs to the\r\nlandlord, is no more than the neat produce which remains after paying, in the\r\ncompletest manner, all the necessary expenses which must be previously laid\r\nout, in order to raise the gross or the whole produce. It is because the labour\r\nof the cultivators, over and above paying completely all those necessary\r\nexpenses, affords a neat produce of this kind, that this class of people are in\r\nthis system peculiarly distinguished by the honourable appellation of the\r\nproductive class. Their original and annual expenses are for the same reason\r\ncalled, In this system, productive expenses, because, over and above replacing\r\ntheir own value, they occasion the annual reproduction of this neat produce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ground expenses, as they are called, or what the landlord lays out upon the\r\nimprovement of his land, are, in this system, too, honoured with the\r\nappellation of productive expenses. Till the whole of those expenses, together\r\nwith the ordinary profits of stock, have been completely repaid to him by the\r\nadvanced rent which he gets from his land, that advanced rent ought to be\r\nregarded as sacred and inviolable, both by the church and by the king; ought to\r\nbe subject neither to tithe nor to taxation. If it is otherwise, by\r\ndiscouraging the improvement of land, the church discourages the future\r\nincrease of her own tithes, and the king the future increase of his own taxes.\r\nAs in a well ordered state of things, therefore, those ground expenses, over\r\nand above reproducing in the completest manner their own value, occasion\r\nlikewise, after a certain time, a reproduction of a neat produce, they are in\r\nthis system considered as productive expenses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ground expenses of the landlord, however, together with the original and\r\nthe annual expenses of the farmer, are the only three sorts of expenses which\r\nin this system are considered as productive. All other expenses, and all other\r\norders of people, even those who, in the common apprehensions of men, are\r\nregarded as the most productive, are, in this account of things, represented as\r\naltogether barren and unproductive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nArtificers and manufacturers, in particular, whose industry, in the common\r\napprehensions of men, increases so much the value of the rude produce of land,\r\nare in this system represented as a class of people altogether barren and\r\nunproductive. Their labour, it is said, replaces only the stock which employs\r\nthem, together with its ordinary profits. That stock consists in the materials,\r\ntools, and wages, advanced to them by their employer; and is the fund destined\r\nfor their employment and maintenance. Its profits are the fund destined for the\r\nmaintenance of their employer. Their employer, as he advances to them the stock\r\nof materials, tools, and wages, necessary for their employment, so he advances\r\nto himself what is necessary for his own maintenance; and this maintenance he\r\ngenerally proportions to the profit which he expects to make by the price of\r\ntheir work. Unless its price repays to him the maintenance which he advances to\r\nhimself, as well as the materials, tools, and wages, which he advances to his\r\nworkmen, it evidently does not repay to him the whole expense which he lays out\r\nupon it. The profits of manufacturing stock, therefore, are not, like the rent\r\nof land, a neat produce which remains after completely repaying the whole\r\nexpense which must be laid out in order to obtain them. The stock of the farmer\r\nyields him a profit, as well as that of the master manufacturer; and it yields\r\na rent likewise to another person, which that of the master manufacturer does\r\nnot. The expense, therefore, laid out in employing and maintaining artificers\r\nand manufacturers, does no more than continue, if one may say so, the existence\r\nof its own value, and does not produce any new value. It is, therefore,\r\naltogether a barren and unproductive expense. The expense, on the contrary,\r\nlaid out in employing farmers and country labourers, over and above continuing\r\nthe existence of its own value, produces a new value the rent of the landlord.\r\nIt is, therefore, a productive expense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMercantile stock is equally barren and unproductive with manufacturing stock.\r\nIt only continues the existence of its own value, without producing any new\r\nvalue. Its profits are only the repayment of the maintenance which its employer\r\nadvances to himself during the time that he employs it, or till he receives the\r\nreturns of it. They are only the repayment of a part of the expense which must\r\nbe laid out in employing it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe labour of artificers and manufacturers never adds any thing to the value of\r\nthe whole annual amount of the rude produce of the land. It adds, indeed,\r\ngreatly to the value of some particular parts of it. But the consumption which,\r\nin the mean time, it occasions of other parts, is precisely equal to the value\r\nwhich it adds to those parts; so that the value of the whole amount is not, at\r\nany one moment of time, in the least augmented by it. The person who works the\r\nlace of a pair of fine ruffles for example, will sometimes raise the value of,\r\nperhaps, a pennyworth of flax to £30 sterling. But though, at first sight, he\r\nappears thereby to multiply the value of a part of the rude produce about seven\r\nthousand and two hundred times, he in reality adds nothing to the value of the\r\nwhole annual amount of the rude produce. The working of that lace costs him,\r\nperhaps, two years labour. The £30 which he gets for it when it is finished, is\r\nno more than the repayment of the subsistence which he advances to himself\r\nduring the two years that he is employed about it. The value which, by every\r\nday’s, month’s, or year’s labour, he adds to the flax, does\r\nno more than replace the value of his own consumption during that day, month,\r\nor year. At no moment of time, therefore, does he add any thing to the value of\r\nthe whole annual amount of the rude produce of the land: the portion of that\r\nproduce which he is continually consuming, being always equal to the value\r\nwhich he is continually producing. The extreme poverty of the greater part of\r\nthe persons employed in this expensive, though trifling manufacture, may\r\nsatisfy us that the price of their work does not, in ordinary cases, exceed the\r\nvalue of their subsistence. It is otherwise with the work of farmers and\r\ncountry labourers. The rent of the landlord is a value which, in ordinary\r\ncases, it is continually producing over and above replacing, in the most\r\ncomplete manner, the whole consumption, the whole expense laid out upon the\r\nemployment and maintenance both of the workmen and of their employer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nArtificers, manufacturers, and merchants, can augment the revenue and wealth of\r\ntheir society by parsimony only; or, as it is expressed in this system, by\r\nprivation, that is, by depriving themselves of a part of the funds destined for\r\ntheir own subsistence. They annually reproduce nothing but those funds. Unless,\r\ntherefore, they annually save some part of them, unless they annually deprive\r\nthemselves of the enjoyment of some part of them, the revenue and wealth of\r\ntheir society can never be, in the smallest degree, augmented by means of their\r\nindustry. Farmers and country labourers, on the contrary, may enjoy completely\r\nthe whole funds destined for their own subsistence, and yet augment, at the\r\nsame time, the revenue and wealth of their society. Over and above what is\r\ndestined for their own subsistence, their industry annually affords a neat\r\nproduce, of which the augmentation necessarily augments the revenue and wealth\r\nof their society. Nations, therefore, which, like France or England, consist in\r\na great measure, of proprietors and cultivators, can be enriched by industry\r\nand enjoyment. Nations, on the contrary, which, like Holland and Hamburgh, are\r\ncomposed chiefly of merchants, artificers, and manufacturers, can grow rich\r\nonly through parsimony and privation. As the interest of nations so differently\r\ncircumstanced is very different, so is likewise the common character of the\r\npeople. In those of the former kind, liberality, frankness, and good\r\nfellowship, naturally make a part of their common character; in the latter,\r\nnarrowness, meanness, and a selfish disposition, averse to all social pleasure\r\nand enjoyment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe unproductive class, that of merchants, artificers, and manufacturers, is\r\nmaintained and employed altogether at the expense of the two other classes, of\r\nthat of proprietors, and of that of cultivators. They furnish it both with the\r\nmaterials of its work, and with the fund of its subsistence, with the corn and\r\ncattle which it consumes while it is employed about that work. The proprietors\r\nand cultivators finally pay both the wages of all the workmen of the\r\nunproductive class, and the profits of all their employers. Those workmen and\r\ntheir employers are properly the servants of the proprietors and cultivators.\r\nThey are only servants who work without doors, as menial servants work within.\r\nBoth the one and the other, however, are equally maintained at the expense of\r\nthe same masters. The labour of both is equally unproductive. It adds nothing\r\nto the value of the sum total of the rude produce of the land. Instead of\r\nincreasing the value of that sum total, it is a charge and expense which must\r\nbe paid out of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe unproductive class, however, is not only useful, but greatly useful, to the\r\nother two classes. By means of the industry of merchants, artificers, and\r\nmanufacturers, the proprietors and cultivators can purchase both the foreign\r\ngoods and the manufactured produce of their own country, which they have\r\noccasion for, with the produce of a much smaller quantity of their own labour,\r\nthan what they would be obliged to employ, if they were to attempt, in an\r\nawkward and unskilful manner, either to import the one, or to make the other,\r\nfor their own use. By means of the unproductive class, the cultivators are\r\ndelivered from many cares, which would otherwise distract their attention from\r\nthe cultivation of land. The superiority of produce, which in consequence of\r\nthis undivided attention, they are enabled to raise, is fully sufficient to pay\r\nthe whole expense which the maintenance and employment of the unproductive\r\nclass costs either the proprietors or themselves. The industry of merchants,\r\nartificers, and manufacturers, though in its own nature altogether\r\nunproductive, yet contributes in this manner indirectly to increase the produce\r\nof the land. It increases the productive powers of productive labour, by\r\nleaving it at liberty to confine itself to its proper employment, the\r\ncultivation of land; and the plough goes frequently the easier and the better,\r\nby means of the labour of the man whose business is most remote from the\r\nplough.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt can never be the interest of the proprietors and cultivators, to restrain or\r\nto discourage, in any respect, the industry of merchants, artificers, and\r\nmanufacturers. The greater the liberty which this unproductive class enjoys,\r\nthe greater will be the competition in all the different trades which compose\r\nit, and the cheaper will the other two classes be supplied, both with foreign\r\ngoods and with the manufactured produce of their own country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt can never be the interest of the unproductive class to oppress the other two\r\nclasses. It is the surplus produce of the land, or what remains after deducting\r\nthe maintenance, first of the cultivators, and afterwards of the proprietors,\r\nthat maintains and employs the unproductive class. The greater this surplus,\r\nthe greater must likewise be the maintenance and employment of that class. The\r\nestablishment of perfect justice, of perfect liberty, and of perfect equality,\r\nis the very simple secret which most effectually secures the highest degree of\r\nprosperity to all the three classes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe merchants, artificers, and manufacturers of those mercantile states, which,\r\nlike Holland and Hamburgh, consist chiefly of this unproductive class, are in\r\nthe same manner maintained and employed altogether at the expense of the\r\nproprietors and cultivators of land. The only difference is, that those\r\nproprietors and cultivators are, the greater part of them, placed at a most\r\ninconvenient distance from the merchants, artificers, and manufacturers, whom\r\nthey supply with the materials of their work and the fund of their subsistence;\r\nare the inhabitants of other countries, and the subjects of other governments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch mercantile states, however, are not only useful, but greatly useful, to\r\nthe inhabitants of those other countries. They fill up, in some measure, a very\r\nimportant void; and supply the place of the merchants, artificers, and\r\nmanufacturers, whom the inhabitants of those countries ought to find at home,\r\nbut whom, from some defect in their policy, they do not find at home.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt can never be the interest of those landed nations, if I may call them so, to\r\ndiscourage or distress the industry of such mercantile states, by imposing high\r\nduties upon their trade, or upon the commodities which they furnish. Such\r\nduties, by rendering those commodities dearer, could serve only to sink the\r\nreal value of the surplus produce of their own land, with which, or, what comes\r\nto the same thing, with the price of which those commodities are purchased.\r\nSuch duties could only serve to discourage the increase of that surplus\r\nproduce, and consequently the improvement and cultivation of their own land.\r\nThe most effectual expedient, on the contrary, for raising the value of that\r\nsurplus produce, for encouraging its increase, and consequently the improvement\r\nand cultivation of their own land, would be to allow the most perfect freedom\r\nto the trade of all such mercantile nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis perfect freedom of trade would even be the most effectual expedient for\r\nsupplying them, in due time, with all the artificers, manufacturers, and\r\nmerchants, whom they wanted at home; and for filling up, in the properest and\r\nmost advantageous manner, that very important void which they felt there.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe continual increase of the surplus produce of their land would, in due time,\r\ncreate a greater capital than what would be employed with the ordinary rate of\r\nprofit in the improvement and cultivation of land; and the surplus part of it\r\nwould naturally turn itself to the employment of artificers and manufacturers,\r\nat home. But these artificers and manufacturers, finding at home both the\r\nmaterials of their work and the fund of their subsistence, might immediately,\r\neven with much less art and skill be able to work as cheap as the little\r\nartificers and manufacturers of such mercantile states, who had both to bring\r\nfrom a greater distance. Even though, from want of art and skill, they might\r\nnot for some time be able to work as cheap, yet, finding a market at home, they\r\nmight be able to sell their work there as cheap as that of the artificers and\r\nmanufacturers of such mercantile states, which could not be brought to that\r\nmarket but from so great a distance; and as their art and skill improved, they\r\nwould soon be able to sell it cheaper. The artificers and manufacturers of such\r\nmercantile states, therefore, would immediately be rivalled in the market of\r\nthose landed nations, and soon after undersold and justled out of it\r\naltogether. The cheapness of the manufactures of those landed nations, in\r\nconsequence of the gradual improvements of art and skill, would, in due time,\r\nextend their sale beyond the home market, and carry them to many foreign\r\nmarkets, from which they would, in the same manner, gradually justle out many\r\nof the manufacturers of such mercantile nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis continual increase, both of the rude and manufactured produce of those\r\nlanded nations, would, in due time, create a greater capital than could, with\r\nthe ordinary rate of profit, be employed either in agriculture or in\r\nmanufactures. The surplus of this capital would naturally turn itself to\r\nforeign trade and be employed in exporting, to foreign countries, such parts of\r\nthe rude and manufactured produce of its own country, as exceeded the demand of\r\nthe home market. In the exportation of the produce of their own country, the\r\nmerchants of a landed nation would have an advantage of the same kind over\r\nthose of mercantile nations, which its artificers and manufacturers had over\r\nthe artificers and manufacturers of such nations; the advantage of finding at\r\nhome that cargo, and those stores and provisions, which the others were obliged\r\nto seek for at a distance. With inferior art and skill in navigation,\r\ntherefore, they would be able to sell that cargo as cheap in foreign markets as\r\nthe merchants of such mercantile nations; and with equal art and skill they\r\nwould be able to sell it cheaper. They would soon, therefore, rival those\r\nmercantile nations in this branch of foreign trade, and, in due time, would\r\njustle them out of it altogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAccording to this liberal and generous system, therefore, the most advantageous\r\nmethod in which a landed nation can raise up artificers, manufacturers, and\r\nmerchants of its own, is to grant the most perfect freedom of trade to the\r\nartificers, manufacturers, and merchants of all other nations. It thereby\r\nraises the value of the surplus produce of its own land, of which the continual\r\nincrease gradually establishes a fund, which, in due time, necessarily raises\r\nup all the artificers, manufacturers, and merchants, whom it has occasion for.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a landed nation on the contrary, oppresses, either by high duties or by\r\nprohibitions, the trade of foreign nations, it necessarily hurts its own\r\ninterest in two different ways. First, by raising the price of all foreign\r\ngoods, and of all sorts of manufactures, it necessarily sinks the real value of\r\nthe surplus produce of its own land, with which, or, what comes to the same\r\nthing, with the price of which, it purchases those foreign goods and\r\nmanufactures. Secondly, by giving a sort of monopoly of the home market to its\r\nown merchants, artificers, and manufacturers, it raises the rate of mercantile\r\nand manufacturing profit, in proportion to that of agricultural profit; and,\r\nconsequently, either draws from agriculture a part of the capital which had\r\nbefore been employed in it, or hinders from going to it a part of what would\r\notherwise have gone to it. This policy, therefore, discourages agriculture in\r\ntwo different ways; first, by sinking the real value of its produce, and\r\nthereby lowering the rate of its profits; and, secondly, by raising the rate of\r\nprofit in all other employments. Agriculture is rendered less advantageous, and\r\ntrade and manufactures more advantageous, than they otherwise would be; and\r\nevery man is tempted by his own interest to turn, as much as he can, both his\r\ncapital and his industry from the former to the latter employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough, by this oppressive policy, a landed nation should be able to raise up\r\nartificers, manufacturers, and merchants of its own, somewhat sooner than it\r\ncould do by the freedom of trade; a matter, however, which is not a little\r\ndoubtful; yet it would raise them up, if one may say so, prematurely, and\r\nbefore it was perfectly ripe for them. By raising up too hastily one species of\r\nindustry, it would depress another more valuable species of industry. By\r\nraising up too hastily a species of industry which duly replaces the stock\r\nwhich employs it, together with the ordinary profit, it would depress a species\r\nof industry which, over and above replacing that stock, with its profit,\r\naffords likewise a neat produce, a free rent to the landlord. It would depress\r\nproductive labour, by encouraging too hastily that labour which is altogether\r\nbarren and unproductive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn what manner, according to this system, the sum total of the annual produce\r\nof the land is distributed among the three classes above mentioned, and in what\r\nmanner the labour of the unproductive class does no more than replace the value\r\nof its own consumption, without increasing in any respect the value of that sum\r\ntotal, is represented by Mr Quesnai, the very ingenious and profound author of\r\nthis system, in some arithmetical formularies. The first of these formularies,\r\nwhich, by way of eminence, he peculiarly distinguishes by the name of the\r\nEconomical Table, represents the manner in which he supposes this distribution\r\ntakes place, in a state of the most perfect liberty, and, therefore, of the\r\nhighest prosperity; in a state where the annual produce is such as to afford\r\nthe greatest possible neat produce, and where each class enjoys its proper\r\nshare of the whole annual produce. Some subsequent formularies represent the\r\nmanner in which he supposes this distribution is made in different states of\r\nrestraint and regulation; in which, either the class of proprietors, or the\r\nbarren and unproductive class, is more favoured than the class of cultivators;\r\nand in which either the one or the other encroaches, more or less, upon the\r\nshare which ought properly to belong to this productive class. Every such\r\nencroachment, every violation of that natural distribution, which the most\r\nperfect liberty would establish, must, according to this system, necessarily\r\ndegrade, more or less, from one year to another, the value and sum total of the\r\nannual produce, and must necessarily occasion a gradual declension in the real\r\nwealth and revenue of the society; a declension, of which the progress must be\r\nquicker or slower, according to the degree of this encroachment, according as\r\nthat natural distribution, which the most perfect liberty would establish, is\r\nmore or less violated. Those subsequent formularies represent the different\r\ndegrees of declension which, according to this system, correspond to the\r\ndifferent degrees in which this natural distribution of things is violated.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome speculative physicians seem to have imagined that the health of the human\r\nbody could be preserved only by a certain precise regimen of diet and exercise,\r\nof which every, the smallest violation, necessarily occasioned some degree of\r\ndisease or disorder proportionate to the degree of the violation. Experience,\r\nhowever, would seem to shew, that the human body frequently preserves, to all\r\nappearance at least, the most perfect state of health under a vast variety of\r\ndifferent regimens; even under some which are generally believed to be very far\r\nfrom being perfectly wholesome. But the healthful state of the human body, it\r\nwould seem, contains in itself some unknown principle of preservation, capable\r\neither of preventing or of correcting, in many respects, the bad effects even\r\nof a very faulty regimen. Mr Quesnai, who was himself a physician, and a very\r\nspeculative physician, seems to have entertained a notion of the same kind\r\nconcerning the political body, and to have imagined that it would thrive and\r\nprosper only under a certain precise regimen, the exact regimen of perfect\r\nliberty and perfect justice. He seems not to have considered, that in the\r\npolitical body, the natural effort which every man is continually making to\r\nbetter his own condition, is a principle of preservation capable of preventing\r\nand correcting, in many respects, the bad effects of a political economy, in\r\nsome degree both partial and oppressive. Such a political economy, though it no\r\ndoubt retards more or less, is not always capable of stopping altogether, the\r\nnatural progress of a nation towards wealth and prosperity, and still less of\r\nmaking it go backwards. If a nation could not prosper without the enjoyment of\r\nperfect liberty and perfect justice, there is not in the world a nation which\r\ncould ever have prospered. In the political body, however, the wisdom of nature\r\nhas fortunately made ample provision for remedying many of the bad effects of\r\nthe folly and injustice of man; it the same manner as it has done in the\r\nnatural body, for remedying those of his sloth and intemperance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe capital error of this system, however, seems to lie in its representing the\r\nclass of artificers, manufacturers, and merchants, as altogether barren and\r\nunproductive. The following observations may serve to shew the impropriety of\r\nthis representation:—\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, this class, it is acknowledged, reproduces annually the value of its own\r\nannual consumption, and continues, at least, the existence of the stock or\r\ncapital which maintains and employs it. But, upon this account alone, the\r\ndenomination of barren or unproductive should seem to be very improperly\r\napplied to it. We should not call a marriage barren or unproductive, though it\r\nproduced only a son and a daughter, to replace the father and mother, and\r\nthough it did not increase the number of the human species, but only continued\r\nit as it was before. Farmers and country labourers, indeed, over and above the\r\nstock which maintains and employs them, reproduce annually a neat produce, a\r\nfree rent to the landlord. As a marriage which affords three children is\r\ncertainly more productive than one which affords only two, so the labour of\r\nfarmers and country labourers is certainly more productive than that of\r\nmerchants, artificers, and manufacturers. The superior produce of the one\r\nclass, however, does not, render the other barren or unproductive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, it seems, on this account, altogether improper to consider\r\nartificers, manufacturers, and merchants, in the same light as menial servants.\r\nThe labour of menial servants does not continue the existence of the fund which\r\nmaintains and employs them. Their maintenance and employment is altogether at\r\nthe expense of their masters, and the work which they perform is not of a\r\nnature to repay that expense. That work consists in services which perish\r\ngenerally in the very instant of their performance, and does not fix or realize\r\nitself in any vendible commodity, which can replace the value of their wages\r\nand maintenance. The labour, on the contrary, of artificers, manufacturers, and\r\nmerchants, naturally does fix and realize itself in some such vendible\r\ncommodity. It is upon this account that, in the chapter in which I treat of\r\nproductive and unproductive labour, I have classed artificers, manufacturers,\r\nand merchants among the productive labourers, and menial servants among the\r\nbarren or unproductive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, it seems, upon every supposition, improper to say, that the labour of\r\nartificers, manufacturers, and merchants, does not increase the real revenue of\r\nthe society. Though we should suppose, for example, as it seems to be supposed\r\nin this system, that the value of the daily, monthly, and yearly consumption of\r\nthis class was exactly equal to that of its daily, monthly, and yearly\r\nproduction; yet it would not from thence follow, that its labour added nothing\r\nto the real revenue, to the real value of the annual produce of the land and\r\nlabour of the society. An artificer, for example, who, in the first six months\r\nafter harvest, executes ten pounds worth of work, though he should, in the same\r\ntime, consume ten pounds worth of corn and other necessaries, yet really adds\r\nthe value of ten pounds to the annual produce of the land and labour of the\r\nsociety. While he has been consuming a half-yearly revenue of ten pounds worth\r\nof corn and other necessaries, he has produced an equal value of work, capable\r\nof purchasing, either to himself, or to some other person, an equal half-yearly\r\nrevenue. The value, therefore, of what has been consumed and produced during\r\nthese six months, is equal, not to ten, but to twenty pounds. It is possible,\r\nindeed, that no more than ten pounds worth of this value may ever have existed\r\nat any one moment of time. But if the ten pounds worth of corn and other\r\nnecessaries which were consumed by the artificer, had been consumed by a\r\nsoldier, or by a menial servant, the value of that part of the annual produce\r\nwhich existed at the end of the six months, would have been ten pounds less\r\nthan it actually is in consequence of the labour of the artificer. Though the\r\nvalue of what the artificer produces, therefore, should not, at any one moment\r\nof time, be supposed greater than the value he consumes, yet, at every moment\r\nof time, the actually existing value of goods in the market is, in consequence\r\nof what he produces, greater than it otherwise would be.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the patrons of this system assert, that the consumption of artificers,\r\nmanufacturers, and merchants, is equal to the value of what they produce, they\r\nprobably mean no more than that their revenue, or the fund destined for their\r\nconsumption, is equal to it. But if they had expressed themselves more\r\naccurately, and only asserted, that the revenue of this class was equal to the\r\nvalue of what they produced, it might readily have occurred to the reader, that\r\nwhat would naturally be saved out of this revenue, must necessarily increase\r\nmore or less the real wealth of the society. In order, therefore, to make out\r\nsomething like an argument, it was necessary that they should express\r\nthemselves as they have done; and this argument, even supposing things actually\r\nwere as it seems to presume them to be, turns out to be a very inconclusive\r\none.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, farmers and country labourers can no more augment, without parsimony,\r\nthe real revenue, the annual produce of the land and labour of their society,\r\nthan artificers, manufacturers, and merchants. The annual produce of the land\r\nand labour of any society can be augmented only in two ways; either, first, by\r\nsome improvement in the productive powers of the useful labour actually\r\nmaintained within it; or, secondly, by some increase in the quantity of that\r\nlabour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe improvement in the productive powers of useful labour depends, first, upon\r\nthe improvement in the ability of the workman; and, secondly, upon that of the\r\nmachinery with which he works. But the labour of artificers and manufacturers,\r\nas it is capable of being more subdivided, and the labour of each workman\r\nreduced to a greater simplicity of operation, than that of farmers and country\r\nlabourers; so it is likewise capable of both these sorts of improvement in a\r\nmuch higher degree {See book i chap. 1.} In this respect, therefore, the class\r\nof cultivators can have no sort of advantage over that of artificers and\r\nmanufacturers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe increase in the quantity of useful labour actually employed within any\r\nsociety must depend altogether upon the increase of the capital which employs\r\nit; and the increase of that capital, again, must be exactly equal to the\r\namount of the savings from the revenue, either of the particular persons who\r\nmanage and direct the employment of that capital, or of some other persons, who\r\nlend it to them. If merchants, artificers, and manufacturers are, as this\r\nsystem seems to suppose, naturally more inclined to parsimony and saving than\r\nproprietors and cultivators, they are, so far, more likely to augment the\r\nquantity of useful labour employed within their society, and consequently to\r\nincrease its real revenue, the annual produce of its land and labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFifthly and lastly, though the revenue of the inhabitants of every country was\r\nsupposed to consist altogether, as this system seems to suppose, in the\r\nquantity of subsistence which their industry could procure to them; yet, even\r\nupon this supposition, the revenue of a trading and manufacturing country must,\r\nother things being equal, always be much greater than that of one without trade\r\nor manufactures. By means of trade and manufactures, a greater quantity of\r\nsubsistence can be annually imported into a particular country, than what its\r\nown lands, in the actual state of their cultivation, could afford. The\r\ninhabitants of a town, though they frequently possess no lands of their own,\r\nyet draw to themselves, by their industry, such a quantity of the rude produce\r\nof the lands of other people, as supplies them, not only with the materials of\r\ntheir work, but with the fund of their subsistence. What a town always is with\r\nregard to the country in its neighbourhood, one independent state or country\r\nmay frequently be with regard to other independent states or countries. It is\r\nthus that Holland draws a great part of its subsistence from other countries;\r\nlive cattle from Holstein and Jutland, and corn from almost all the different\r\ncountries of Europe. A small quantity of manufactured produce, purchases a\r\ngreat quantity of rude produce. A trading and manufacturing country, therefore,\r\nnaturally purchases, with a small part of its manufactured produce, a great\r\npart of the rude produce of other countries; while, on the contrary, a country\r\nwithout trade and manufactures is generally obliged to purchase, at the expense\r\nof a great part of its rude produce, a very small part of the manufactured\r\nproduce of other countries. The one exports what can subsist and accommodate\r\nbut a very few, and imports the subsistence and accommodation of a great\r\nnumber. The other exports the accommodation and subsistence of a great number,\r\nand imports that of a very few only. The inhabitants of the one must always\r\nenjoy a much greater quantity of subsistence than what their own lands, in the\r\nactual state of their cultivation, could afford. The inhabitants of the other\r\nmust always enjoy a much smaller quantity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis system, however, with all its imperfections, is perhaps the nearest\r\napproximation to the truth that has yet been published upon the subject of\r\npolitical economy; and is upon that account, well worth the consideration of\r\nevery man who wishes to examine with attention the principles of that very\r\nimportant science. Though in representing the labour which is employed upon\r\nland as the only productive labour, the notions which it inculcates are,\r\nperhaps, too narrow and confined; yet in representing the wealth of nations as\r\nconsisting, not in the unconsumable riches of money, but in the consumable\r\ngoods annually reproduced by the labour of the society, and in representing\r\nperfect liberty as the only effectual expedient for rendering this annual\r\nreproduction the greatest possible, its doctrine seems to be in every respect\r\nas just as it is generous and liberal. Its followers are very numerous; and as\r\nmen are fond of paradoxes, and of appearing to understand what surpasses the\r\ncomprehensions of ordinary people, the paradox which it maintains, concerning\r\nthe unproductive nature of manufacturing labour, has not, perhaps, contributed\r\na little to increase the number of its admirers. They have for some years past\r\nmade a pretty considerable sect, distinguished in the French republic of\r\nletters by the name of the Economists. Their works have certainly been of some\r\nservice to their country; not only by bringing into general discussion, many\r\nsubjects which had never been well examined before, but by influencing, in some\r\nmeasure, the public administration in favour of agriculture. It has been in\r\nconsequence of their representations, accordingly, that the agriculture of\r\nFrance has been delivered from several of the oppressions which it before\r\nlaboured under. The term, during which such a lease can be granted, as will be\r\nvalid against every future purchaser or proprietor of the land, has been\r\nprolonged from nine to twenty-seven years. The ancient provincial restraints\r\nupon the transportation of corn from one province of the kingdom to another,\r\nhave been entirely taken away; and the liberty of exporting it to all foreign\r\ncountries, has been established as the common law of the kingdom in all\r\nordinary cases. This sect, in their works, which are very numerous, and which\r\ntreat not only of what is properly called Political Economy, or of the nature\r\nand causes or the wealth of nations, but of every other branch of the system of\r\ncivil government, all follow implicitly, and without any sensible variation,\r\nthe doctrine of Mr. Qttesnai. There is, upon this account, little variety in\r\nthe greater part of their works. The most distinct and best connected account\r\nof this doctrine is to be found in a little book written by Mr. Mercier de la\r\nRiviere, some time intendant of Martinico, entitled, The natural and essential\r\nOrder of Political Societies. The admiration of this whole sect for their\r\nmaster, who was himself a man of the greatest modesty and simplicity, is not\r\ninferior to that of any of the ancient philosophers for the founders of their\r\nrespective systems. ‘There have been since the world began,’ says a\r\nvery diligent and respectable author, the Marquis de Mirabeau, ‘three\r\ngreat inventions which have principally given stability to political societies,\r\nindependent of many other inventions which have enriched and adorned them. The\r\nfirst is the invention of writing, which alone gives human nature the power of\r\ntransmitting, without alteration, its laws, its contracts, its annals, and its\r\ndiscoveries. The second is the invention of money, which binds together all the\r\nrelations between civilized societies. The third is the economical table, the\r\nresult of the other two, which completes them both by perfecting their object;\r\nthe great discovery of our age, but of which our posterity will reap the\r\nbenefit.’\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the political economy of the nations of modern Europe has been more\r\nfavourable to manufactures and foreign trade, the industry of the towns, than\r\nto agriculture, the industry of the country; so that of other nations has\r\nfollowed a different plan, and has been more favourable to agriculture than to\r\nmanufactures and foreign trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe policy of China favours agriculture more than all other employments. In\r\nChina, the condition of a labourer is said to be as much superior to that of an\r\nartificer, as in most parts of Europe that of an artificer is to that of a\r\nlabourer. In China, the great ambition of every man is to get possession of a\r\nlittle bit of land, either in property or in lease; and leases are there said\r\nto be granted upon very moderate terms, and to be sufficiently secured to the\r\nlessees. The Chinese have little respect for foreign trade. Your beggarly\r\ncommerce! was the language in which the mandarins of Pekin used to talk to Mr.\r\nDe Lange, the Russian envoy, concerning it {See the Journal of Mr. De Lange, in\r\nBell’s Travels, vol. ii. p. 258, 276, 293.}. Except with Japan, the\r\nChinese carry on, themselves, and in their own bottoms, little or no foreign\r\ntrade; and it is only into one or two ports of their kingdom that they even\r\nadmit the ships of foreign nations. Foreign trade, therefore, is, in China,\r\nevery way confined within a much narrower circle than that to which it would\r\nnaturally extend itself, if more freedom was allowed to it, either in their own\r\nships, or in those of foreign nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nManufactures, as in a small bulk they frequently contain a great value, and can\r\nupon that account be transported at less expense from one country to another\r\nthan most parts of rude produce, are, in almost all countries, the principal\r\nsupport of foreign trade. In countries, besides, less extensive, and less\r\nfavourably circumstanced for inferior commerce than China, they generally\r\nrequire the support of foreign trade. Without an extensive foreign market, they\r\ncould not well flourish, either in countries so moderately extensive as to\r\nafford but a narrow home market, or in countries where the communication\r\nbetween one province and another was so difficult, as to render it impossible\r\nfor the goods of any particular place to enjoy the whole of that home market\r\nwhich the country could afford. The perfection of manufacturing industry, it\r\nmust be remembered, depends altogether upon the division of labour; and the\r\ndegree to which the division of labour can be introduced into any manufacture,\r\nis necessarily regulated, it has already been shewn, by the extent of the\r\nmarket. But the great extent of the empire of China, the vast multitude of its\r\ninhabitants, the variety of climate, and consequently of productions in its\r\ndifferent provinces, and the easy communication by means of water-carriage\r\nbetween the greater part of them, render the home market of that country of so\r\ngreat extent, as to be alone sufficient to support very great manufactures, and\r\nto admit of very considerable subdivisions of labour. The home market of China\r\nis, perhaps, in extent, not much inferior to the market of all the different\r\ncountries of Europe put together. A more extensive foreign trade, however,\r\nwhich to this great home market added the foreign market of all the rest of the\r\nworld, especially if any considerable part of this trade was carried on in\r\nChinese ships, could scarce fail to increase very much the manufactures of\r\nChina, and to improve very much the productive powers of its manufacturing\r\nindustry. By a more extensive navigation, the Chinese would naturally learn the\r\nart of using and constructing, themselves, all the different machines made use\r\nof in other countries, as well as the other improvements of art and industry\r\nwhich are practised in all the different parts of the world. Upon their present\r\nplan, they have little opportunity of improving themselves by the example of\r\nany other nation, except that of the Japanese.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe policy of ancient Egypt, too, and that of the Gentoo government of\r\nIndostan, seem to have favoured agriculture more than all other employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBoth in ancient Egypt and Indostan, the whole body of the people was divided\r\ninto different casts or tribes each of which was confined, from father to son,\r\nto a particular employment, or class of employments. The son of a priest was\r\nnecessarily a priest; the son of a soldier, a soldier; the son of a labourer, a\r\nlabourer; the son of a weaver, a weaver; the son of a tailor, a tailor, etc. In\r\nboth countries, the cast of the priests holds the highest rank, and that of the\r\nsoldiers the next; and in both countries the cast of the farmers and labourers\r\nwas superior to the casts of merchants and manufacturers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe government of both countries was particularly attentive to the interest of\r\nagriculture. The works constructed by the ancient sovereigns of Egypt, for the\r\nproper distribution of the waters of the Nile, were famous in antiquity, and\r\nthe ruined remains of some of them are still the admiration of travellers.\r\nThose of the same kind which were constructed by the ancient sovereigns of\r\nIndostan, for the proper distribution of the waters of the Ganges, as well as\r\nof many other rivers, though they have been less celebrated, seem to have been\r\nequally great. Both countries, accordingly, though subject occasionally to\r\ndearths, have been famous for their great fertility. Though both were extremely\r\npopulous, yet, in years of moderate plenty, they were both able to export great\r\nquantities of grain to their neighbours.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient Egyptians had a superstitious aversion to the sea; and as the\r\nGentoo religion does not permit its followers to light a fire, nor consequently\r\nto dress any victuals, upon the water, it, in effect, prohibits them from all\r\ndistant sea voyages. Both the Egyptians and Indians must have depended almost\r\naltogether upon the navigation of other nations for the exportation of their\r\nsurplus produce; and this dependency, as it must have confined the market, so\r\nit must have discouraged the increase of this surplus produce. It must have\r\ndiscouraged, too, the increase of the manufactured produce, more than that of\r\nthe rude produce. Manufactures require a much more extensive market than the\r\nmost important parts of the rude produce of the land. A single shoemaker will\r\nmake more than 300 pairs of shoes in the year; and his own family will not,\r\nperhaps, wear out six pairs. Unless, therefore, he has the custom of, at least,\r\n50 such families as his own, he cannot dispose of the whole product of his own\r\nlabour. The most numerous class of artificers will seldom, in a large country,\r\nmake more than one in 50, or one in a 100, of the whole number of families\r\ncontained in it. But in such large countries, as France and England, the number\r\nof people employed in agriculture has, by some authors been computed at a half,\r\nby others at a third and by no author that I know of, at less that a fifth of\r\nthe whole inhabitants of the country. But as the produce of the agriculture of\r\nboth France and England is, the far greater part of it, consumed at home, each\r\nperson employed in it must, according to these computations, require little\r\nmore than the custom of one, two, or, at most, of four such families as his\r\nown, in order to dispose of the whole produce of his own labour. Agriculture,\r\ntherefore, can support itself under the discouragement of a confined market\r\nmuch better than manufactures. In both ancient Egypt and Indostan, indeed, the\r\nconfinement of the foreign market was in some measure compensated by the\r\nconveniency of many inland navigations, which opened, in the most advantageous\r\nmanner, the whole extent of the home market to every part of the produce of\r\nevery different district of those countries. The great extent of Indostan, too,\r\nrendered the home market of that country very great, and sufficient to support\r\na great variety of manufactures. But the small extent of ancient Egypt, which\r\nwas never equal to England, must at all times, have rendered the home market of\r\nthat country too narrow for supporting any great variety of manufactures.\r\nBengal accordingly, the province of Indostan which commonly exports the\r\ngreatest quantity of rice, has always been more remarkable for the exportation\r\nof a great variety of manufactures, than for that of its grain. Ancient Egypt,\r\non the contrary, though it exported some manufactures, fine linen in\r\nparticular, as well as some other goods, was always most distinguished for its\r\ngreat exportation of grain. It was long the granary of the Roman empire.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sovereigns of China, of ancient Egypt, and of the different kingdoms into\r\nwhich Indostan has, at different times, been divided, have always derived the\r\nwhole, or by far the most considerable part, of their revenue, from some sort\r\nof land tax or land rent. This land tax, or land rent, like the tithe in\r\nEurope, consisted in a certain proportion, a fifth, it is said, of the produce\r\nof the land, which was either delivered in kind, or paid in money, according to\r\na certain valuation, and which, therefore, varied from year to year, according\r\nto all the variations of the produce. It was natural, therefore, that the\r\nsovereigns of those countries should be particularly attentive to the interests\r\nof agriculture, upon the prosperity or declension of which immediately depended\r\nthe yearly increase or diminution of their own revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe policy of the ancient republics of Greece, and that of Rome, though it\r\nhonoured agriculture more than manufactures or foreign trade, yet seems rather\r\nto have discouraged the latter employments, than to have given any direct or\r\nintentional encouragement to the former. In several of the ancient states of\r\nGreece, foreign trade was prohibited altogether; and in several others, the\r\nemployments of artificers and manufacturers were considered as hurtful to the\r\nstrength and agility of the human body, as rendering it incapable of those\r\nhabits which their military and gymnastic exercises endeavoured to form in it,\r\nand as thereby disqualifying it, more or less, for undergoing the fatigues and\r\nencountering the dangers of war. Such occupations were considered as fit only\r\nfor slaves, and the free citizens of the states were prohibited from exercising\r\nthem. Even in those states where no such prohibition took place, as in Rome and\r\nAthens, the great body of the people were in effect excluded from all the\r\ntrades which are now commonly exercised by the lower sort of the inhabitants of\r\ntowns. Such trades were, at Athens and Rome, all occupied by the slaves of the\r\nrich, who exercised them for the benefit of their masters, whose wealth, power,\r\nand protection, made it almost impossible for a poor freeman to find a market\r\nfor his work, when it came into competition with that of the slaves of the\r\nrich. Slaves, however, are very seldom inventive; and all the most important\r\nimprovements, either in machinery, or in the arrangement and distribution of\r\nwork, which facilitate and abridge labour have been the discoveries of freemen.\r\nShould a slave propose any improvement of this kind, his master would be very\r\napt to consider the proposal as the suggestion of laziness, and of a desire to\r\nsave his own labour at the master’s expense. The poor slave, instead of\r\nreward would probably meet with much abuse, perhaps with some punishment. In\r\nthe manufactures carried on by slaves, therefore, more labour must generally\r\nhave been employed to execute the same quantity of work, than in those carried\r\non by freemen. The work of the farmer must, upon that account, generally have\r\nbeen dearer than that of the latter. The Hungarian mines, it is remarked by Mr.\r\nMontesquieu, though not richer, have always been wrought with less expense, and\r\ntherefore with more profit, than the Turkish mines in their neighbourhood. The\r\nTurkish mines are wrought by slaves; and the arms of those slaves are the only\r\nmachines which the Turks have ever thought of employing. The Hungarian mines\r\nare wrought by freemen, who employ a great deal of machinery, by which they\r\nfacilitate and abridge their own labour. From the very little that is known\r\nabout the price of manufactures in the times of the Greeks and Romans, it would\r\nappear that those of the finer sort were excessively dear. Silk sold for its\r\nweight in gold. It was not, indeed, in those times an European manufacture; and\r\nas it was all brought from the East Indies, the distance of the carriage may in\r\nsome measure account for the greatness of the price. The price, however, which\r\na lady, it is said, would sometimes pay for a piece of very fine linen, seems\r\nto have been equally extravagant; and as linen was always either an European,\r\nor at farthest, an Egyptian manufacture, this high price can be accounted for\r\nonly by the great expense of the labour which must have been employed about It,\r\nand the expense of this labour again could arise from nothing but the\r\nawkwardness of the machinery which is made use of. The price of fine woollens,\r\ntoo, though not quite so extravagant, seems, however, to have been much above\r\nthat of the present times. Some cloths, we are told by Pliny {Plin. 1.\r\nix.c.39.}, dyed in a particular manner, cost a hundred denarii, or £3:6s:8d.\r\nthe pound weight. Others, dyed in another manner, cost a thousand denarii the\r\npound weight, or £33:6s:8d. The Roman pound, it must be remembered, contained\r\nonly twelve of our avoirdupois ounces. This high price, indeed, seems to have\r\nbeen principally owing to the dye. But had not the cloths themselves been much\r\ndearer than any which are made in the present times, so very expensive a dye\r\nwould not probably have been bestowed upon them. The disproportion would have\r\nbeen too great between the value of the accessory and that of the principal.\r\nThe price mentioned by the same author {Plin. 1. viii.c.48.}, of some\r\ntriclinaria, a sort of woollen pillows or cushions made use of to lean upon as\r\nthey reclined upon their couches at table, passes all credibility; some of them\r\nbeing said to have cost more than £30,000, others more than £300,000. This high\r\nprice, too, is not said to have arisen from the dye. In the dress of the people\r\nof fashion of both sexes, there seems to have been much less variety, it is\r\nobserved by Dr. Arbuthnot, in ancient than in modern times; and the very little\r\nvariety which we find in that of the ancient statues, confirms his observation.\r\nHe infers from this, that their dress must, upon the whole, have been cheaper\r\nthan ours; but the conclusion does not seem to follow. When the expense of\r\nfashionable dress is very great, the variety must be very small. But when, by\r\nthe improvements in the productive powers of manufacturing art and industry,\r\nthe expense of any one dress comes to be very moderate, the variety will\r\nnaturally be very great. The rich, not being able to distinguish themselves by\r\nthe expense of any one dress, will naturally endeavour to do so by the\r\nmultitude and variety of their dresses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe greatest and most important branch of the commerce of every nation, it has\r\nalready been observed, is that which is carried on between the inhabitants of\r\nthe town and those of the country. The inhabitants of the town draw from the\r\ncountry the rude produce, which constitutes both the materials of their work\r\nand the fund of their subsistence; and they pay for this rude produce, by\r\nsending back to the country a certain portion of it manufactured and prepared\r\nfor immediate use. The trade which is carried on between these two different\r\nsets of people, consists ultimately in a certain quantity of rude produce\r\nexchanged for a certain quantity of manufactured produce. The dearer the\r\nlatter, therefore, the cheaper the former; and whatever tends in any country to\r\nraise the price of manufactured produce, tends to lower that of the rude\r\nproduce of the land, and thereby to discourage agriculture. The smaller the\r\nquantity of manufactured produce, which any given quantity of rude produce, or,\r\nwhat comes to the same thing, which the price of any given quantity of rude\r\nproduce, is capable of purchasing, the smaller the exchangeable value of that\r\ngiven quantity of rude produce; the smaller the encouragement which either the\r\nlandlord has to increase its quantity by improving, or the farmer by\r\ncultivating the land. Whatever, besides, tends to diminish in any country the\r\nnumber of artificers and manufacturers, tends to diminish the home market, the\r\nmost important of all markets, for the rude produce of the land, and thereby\r\nstill further to discourage agriculture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose systems, therefore, which preferring agriculture to all other\r\nemployments, in order to promote it, impose restraints upon manufactures and\r\nforeign trade, act contrary to the very end which they propose, and indirectly\r\ndiscourage that very species of industry which they mean to promote. They are\r\nso far, perhaps, more inconsistent than even the mercantile system. That\r\nsystem, by encouraging manufactures and foreign trade more than agriculture,\r\nturns a certain portion of the capital of the society, from supporting a more\r\nadvantageous, to support a less advantageous species of industry. But still it\r\nreally, and in the end, encourages that species of industry which it means to\r\npromote. Those agricultural systems, on the contrary, really, and in the end,\r\ndiscourage their own favourite species of industry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that every system which endeavours, either, by extraordinary\r\nencouragements to draw towards a particular species of industry a greater share\r\nof the capital of the society than what would naturally go to it, or, by\r\nextraordinary restraints, to force from a particular species of industry some\r\nshare of the capital which would otherwise be employed in it, is, in reality,\r\nsubversive of the great purpose which it means to promote. It retards, instead\r\nof accelerating the progress of the society towards real wealth and greatness;\r\nand diminishes, instead of increasing, the real value of the annual produce of\r\nits land and labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll systems, either of preference or of restraint, therefore, being thus\r\ncompletely taken away, the obvious and simple system of natural liberty\r\nestablishes itself of its own accord. Every man, as long as he does not violate\r\nthe laws of justice, is left perfectly free to pursue his own interest his own\r\nway, and to bring both his industry and capital into competition with those of\r\nany other man, or order of men. The sovereign is completely discharged from a\r\nduty, in the attempting to perform which he must always be exposed to\r\ninnumerable delusions, and for the proper performance of which, no human wisdom\r\nor knowledge could ever be sufficient; the duty of superintending the industry\r\nof private people, and of directing it towards the employments most suitable to\r\nthe interests of the society. According to the system of natural liberty, the\r\nsovereign has only three duties to attend to; three duties of great importance,\r\nindeed, but plain and intelligible to common understandings: first, the duty of\r\nprotecting the society from the violence and invasion of other independent\r\nsocieties; secondly, the duty of protecting, as far as possible, every member\r\nof the society from the injustice or oppression of every other member of it, or\r\nthe duty of establishing an exact administration of justice; and, thirdly, the\r\nduty of erecting and maintaining certain public works, and certain public\r\ninstitutions, which it can never be for the interest of any individual, or\r\nsmall number of individuals to erect and maintain; because the profit could\r\nnever repay the expense to any individual, or small number of individuals,\r\nthough it may frequently do much more than repay it to a great society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proper performance of those several duties of the sovereign necessarily\r\nsupposes a certain expense; and this expense again necessarily requires a\r\ncertain revenue to support it. In the following book, therefore, I shall\r\nendeavour to explain, first, what are the necessary expenses of the sovereign\r\nor commonwealth; and which of those expenses ought to be defrayed by the\r\ngeneral contribution of the whole society; and which of them, by that of some\r\nparticular part only, or of some particular members of the society: secondly,\r\nwhat are the different methods in which the whole society may be made to\r\ncontribute towards defraying the expenses incumbent on the whole society; and\r\nwhat are the principal advantages and inconveniencies of each of those methods:\r\nand thirdly, what are the reasons and causes which have induced almost all\r\nmodern governments to mortgage some part of this revenue, or to contract debts;\r\nand what have been the effects of those debts upon the real wealth, the annual\r\nproduce of the land and labour of the society. The following book, therefore,\r\nwill naturally be divided into three chapters.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003eAPPENDIX TO BOOK IV\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe two following accounts are subjoined, in order to illustrate and confirm\r\nwhat is said in the fifth chapter of the fourth book, concerning the Tonnage\r\nBounty to the Whit-herring Fishery. The reader, I believe, may depend upon the\r\naccuracy of both accounts.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn account of Busses fitted out in Scotland for eleven Years, with the Number\r\nof empty Barrels carried out, and the Number of Barrels of Herrings caught;\r\nalso the Bounty, at a Medium, on each Barrel of Sea-sricks, and on each Barrel\r\nwhen fully packed.\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n Years Number of Empty Barrels Barrels of Her- Bounty paid on\r\n Busses carried out rings caught the Busses\r\n £. s. d.\r\n 1771 29 5,948 2,832 2,885 0 0\r\n 1772 168 41,316 22,237 11,055 7 6\r\n 1773 190 42,333 42,055 12,510 8 6\r\n 1774 240 59,303 56,365 26,932 2 6\r\n 1775 275 69,144 52,879 19,315 15 0\r\n 1776 294 76,329 51,863 21,290 7 6\r\n 1777 240 62,679 43,313 17,592 2 6\r\n 1778 220 56,390 40,958 16,316 2 6\r\n 1779 206 55,194 29,367 15,287 0 0\r\n 1780 181 48,315 19,885 13,445 12 6\r\n 1781 135 33,992 16,593 9,613 15 6\r\n\r\n Totals 2,186 550,943 378,347 £165,463 14 0\r\n\r\n Sea-sticks 378,347 Bounty, at a medium, for each\r\n barrel of sea-sticks, £ 0 8 2¼\r\n But a barrel of sea-sticks\r\n being only reckoned two thirds\r\n of a barrel fully packed, one\r\n third to be deducted, which\r\n ¹/³deducted 126,115 brings the bounty to £ 0 12 3¾\r\n Barrels fully\r\n packed 252,231\r\n\r\n And if the herrings are exported, there is besides a\r\n premium of £ 0 2 8\r\n So the bounty paid by government in money for each\r\n barrel is £ 0 14 11¾\r\n\r\n But if to this, the duty of the salt usually taken\r\n credit for as expended in curing each barrel, which\r\n at a medium, is, of foreign, one bushel and one-\r\n fourth of a bushel, at 10s. a-bushel, be added, viz 0 12 6\r\n the bounty on each barrel would amount to £ 1 7 5¾\r\n\r\n If the herrings are cured with British salt, it will\r\n stand thus, viz.\r\n Bounty as before £ 0 14 11¾\r\n But if to this bounty, the duty on two bushels of\r\n Scotch salt, at 1s.6d. per bushel, supposed to be\r\n the quantity, at a medium, used in curing each\r\n barrel is added, viz. 0 3 0\r\n The bounty on each barrel will amount to £ 0 17 11¾\r\n\r\n And when buss herrings are entered for home\r\n consumption in Scotland, and pay the shilling a\r\n barrel of duty, the bounty stands thus, to wit,\r\n as before £ 0 12 3¾\r\n From which the shilling a barrel is to be deducted 0 1 0\r\n £ 0 11 3¾\r\n\r\n But to that there is to be added again, the duty of\r\n the foreign salt used curing a barrel of herring viz 0 12 6\r\n So that the premium allowed for each barrel of her-\r\n rings entered for home consumption is £ 1 3 9¾\r\n\u003c/div\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n If the herrings are cured in British salt, it will\r\n stand as follows viz.\r\n Bounty on each barrel brought in by the busses, as\r\n above £ 0 12 3¾\r\n From which deduct 1s. a-barrel, paid at the time\r\n they are entered for home consumption 0 1 0\r\n £ 0 11 3¾\r\n\r\n But if to the bounty, the the duty on two bushel\r\n of Scotch salt, at 1s.6d. per bushel supposed to\r\n be the quantity, at a medium, used in curing each\r\n barrel, is added, viz 0 3 0\r\n the premium for each barrel entered for home\r\n consumption will be £ 1 14 3¾\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nThough the loss of duties upon herrings exported cannot, perhaps, properly be\r\nconsidered as bounty, that upon herrings entered for home consumption certainly\r\nmay.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn account of the Quantity of Foreign Salt imported into Scotland, and of\r\nScotch Salt delivered Duty-free from the Works there, for the Fishery, from the\r\n5th. of April 1771 to the 5th. of April 1782 with the Medium of both for one\r\nYear.\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n Foreign Salt Scotch Salt delivered\r\n PERIOD imported from the Works\r\n Bushels Bushels\r\n\r\n From 5th. April 1771 to\r\n 5th. April 1782 936,974 168,226\r\n Medium for one year 85,159½ 15,293¼\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nIt is to be observed, that the bushel of foreign salt weighs 48lbs., that of\r\nBritish weighs 56lbs. only.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap35\"\u003e\u003c/a\u003eBOOK V.\u003cbr\u003e\r\nOF THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH\u003c/h2\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap36\"\u003e\u003c/a\u003eCHAPTER I.\u003cbr\u003e\r\nOF THE EXPENSES OF THE SOVEREIGN OR COMMONWEALTH.\u003c/h2\u003e\r\n\r\n\u003ch3\u003ePART I. Of the Expense of Defence.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe first duty of the sovereign, that of protecting the society from the\r\nviolence and invasion of other independent societies, can be performed only by\r\nmeans of a military force. But the expense both of preparing this military\r\nforce in time of peace, and of employing it in time of war, is very different\r\nin the different states of society, in the different periods of improvement.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong nations of hunters, the lowest and rudest state of society, such as we\r\nfind it among the native tribes of North America, every man is a warrior, as\r\nwell as a hunter. When he goes to war, either to defend his society, or to\r\nrevenge the injuries which have been done to it by other societies, he\r\nmaintains himself by his own labour, in the same manner as when he lives at\r\nhome. His society (for in this state of things there is properly neither\r\nsovereign nor commonwealth) is at no sort of expense, either to prepare him for\r\nthe field, or to maintain him while he is in it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong nations of shepherds, a more advanced state of society, such as we find\r\nit among the Tartars and Arabs, every man is, in the same manner, a warrior.\r\nSuch nations have commonly no fixed habitation, but live either in tents, or in\r\na sort of covered waggons, which are easily transported from place to place.\r\nThe whole tribe, or nation, changes its situation according to the different\r\nseasons of the year, as well as according to other accidents. When its herds\r\nand flocks have consumed the forage of one part of the country, it removes to\r\nanother, and from that to a third. In the dry season, it comes down to the\r\nbanks of the rivers; in the wet season, it retires to the upper country. When\r\nsuch a nation goes to war, the warriors will not trust their herds and flocks\r\nto the feeble defence of their old men, their women and children; and their old\r\nmen, their women and children, will not be left behind without defence, and\r\nwithout subsistence. The whole nation, besides, being accustomed to a wandering\r\nlife, even in time of peace, easily takes the field in time of war. Whether it\r\nmarches as an army, or moves about as a company of herdsmen, the way of life is\r\nnearly the same, though the object proposed by it be very different. They all\r\ngo to war together, therefore, and everyone does as well as he can. Among the\r\nTartars, even the women have been frequently known to engage in battle. If they\r\nconquer, whatever belongs to the hostile tribe is the recompence of the\r\nvictory; but if they are vanquished, all is lost; and not only their herds and\r\nflocks, but their women and children become the booty of the conqueror. Even\r\nthe greater part of those who survive the action are obliged to submit to him\r\nfor the sake of immediate subsistence. The rest are commonly dissipated and\r\ndispersed in the desert.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ordinary life, the ordinary exercise of a Tartar or Arab, prepares him\r\nsufficiently for war. Running, wrestling, cudgel-playing, throwing the javelin,\r\ndrawing the bow, etc. are the common pastimes of those who live in the open\r\nair, and are all of them the images of war. When a Tartar or Arab actually goes\r\nto war, he is maintained by his own herds and flocks, which he carries with\r\nhim, in the same manner as in peace. His chief or sovereign (for those nations\r\nhave all chiefs or sovereigns) is at no sort of expense in preparing him for\r\nthe field; and when he is in it, the chance of plunder is the only pay which he\r\neither expects or requires.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn army of hunters can seldom exceed two or three hundred men. The precarious\r\nsubsistence which the chace affords, could seldom allow a greater number to\r\nkeep together for any considerable time. An army of shepherds, on the contrary,\r\nmay sometimes amount to two or three hundred thousand. As long as nothing stops\r\ntheir progress, as long as they can go on from one district, of which they have\r\nconsumed the forage, to another, which is yet entire; there seems to be scarce\r\nany limit to the number who can march on together. A nation of hunters can\r\nnever be formidable to the civilized nations in their neighbourhood; a nation\r\nof shepherds may. Nothing can be more contemptible than an Indian war in North\r\nAmerica; nothing, on the contrary, can be more dreadful than a Tartar invasion\r\nhas frequently been in Asia. The judgment of Thucydides, that both Europe and\r\nAsia could not resist the Scythians united, has been verified by the experience\r\nof all ages. The inhabitants of the extensive, but defenceless plains of\r\nScythia or Tartary, have been frequently united under the dominion of the chief\r\nof some conquering horde or clan; and the havock and devastation of Asia have\r\nalways signalized their union. The inhabitants of the inhospitable deserts of\r\nArabia, the other great nation of shepherds, have never been united but once,\r\nunder Mahomet and his immediate successors. Their union, which was more the\r\neffect of religious enthusiasm than of conquest, was signalized in the same\r\nmanner. If the hunting nations of America should ever become shepherds, their\r\nneighbourhood would be much more dangerous to the European colonies than it is\r\nat present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a yet more advanced state of society, among those nations of husbandmen who\r\nhave little foreign commerce, and no other manufactures but those coarse and\r\nhousehold ones, which almost every private family prepares for its own use,\r\nevery man, in the same manner, either is a warrior, or easily becomes such.\r\nThose who live by agriculture generally pass the whole day in the open air,\r\nexposed to all the inclemencies of the seasons. The hardiness of their ordinary\r\nlife prepares them for the fatigues of war, to some of which their necessary\r\noccupations bear a great analogy. The necessary occupation of a ditcher\r\nprepares him to work in the trenches, and to fortify a camp, as well as to\r\ninclose a field. The ordinary pastimes of such husbandmen are the same as those\r\nof shepherds, and are in the same manner the images of war. But as husbandmen\r\nhave less leisure than shepherds, they are not so frequently employed in those\r\npastimes. They are soldiers but soldiers not quite so much masters of their\r\nexercise. Such as they are, however, it seldom costs the sovereign or\r\ncommonwealth any expense to prepare them for the field.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAgriculture, even in its rudest and lowest state, supposes a settlement, some\r\nsort of fixed habitation, which cannot be abandoned without great loss. When a\r\nnation of mere husbandmen, therefore, goes to war, the whole people cannot take\r\nthe field together. The old men, the women and children, at least, must remain\r\nat home, to take care of the habitation. All the men of the military age,\r\nhowever, may take the field, and in small nations of this kind, have frequently\r\ndone so. In every nation, the men of the military age are supposed to amount to\r\nabout a fourth or a fifth part of the whole body of the people. If the\r\ncampaign, too, should begin after seedtime, and end before harvest, both the\r\nhusbandman and his principal labourers can be spared from the farm without much\r\nloss. He trusts that the work which must be done in the mean time, can be well\r\nenough executed by the old men, the women, and the children. He is not\r\nunwilling, therefore, to serve without pay during a short campaign; and it\r\nfrequently costs the sovereign or commonwealth as little to maintain him in the\r\nfield as to prepare him for it. The citizens of all the different states of\r\nancient Greece seem to have served in this manner till after the second Persian\r\nwar; and the people of Peloponnesus till after the Peloponnesian war. The\r\nPeloponnesians, Thucydides observes, generally left the field in the summer,\r\nand returned home to reap the harvest. The Roman people, under their kings, and\r\nduring the first ages of the republic, served in the same manner. It was not\r\ntill the seige of Veii, that they who staid at home began to contribute\r\nsomething towards maintaining those who went to war. In the European\r\nmonarchies, which were founded upon the ruins of the Roman empire, both before,\r\nand for some time after, the establishment of what is properly called the\r\nfeudal law, the great lords, with all their immediate dependents, used to serve\r\nthe crown at their own expense. In the field, in the same manner as at home,\r\nthey maintained themselves by their own revenue, and not by any stipend or pay\r\nwhich they received from the king upon that particular occasion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a more advanced state of society, two different causes contribute to render\r\nit altogether impossible that they who take the field should maintain\r\nthemselves at their own expense. Those two causes are, the progress of\r\nmanufactures, and the improvement in the art of war.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough a husbandman should be employed in an expedition, provided it begins\r\nafter seedtime, and ends before harvest, the interruption of his business will\r\nnot always occasion any considerable diminution of his revenue. Without the\r\nintervention of his labour, Nature does herself the greater part of the work\r\nwhich remains to be done. But the moment that an artificer, a smith, a\r\ncarpenter, or a weaver, for example, quits his workhouse, the sole source of\r\nhis revenue is completely dried up. Nature does nothing for him; he does all\r\nfor himself. When he takes the field, therefore, in defence of the public, as\r\nhe has no revenue to maintain himself, he must necessarily be maintained by the\r\npublic. But in a country, of which a great part of the inhabitants are\r\nartificers and manufacturers, a great part of the people who go to war must be\r\ndrawn from those classes, and must, therefore, be maintained by the public as\r\nlong as they are employed in its service.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the art of war, too, has gradually grown up to be a very intricate and\r\ncomplicated science; when the event of war ceases to be determined, as in the\r\nfirst ages of society, by a single irregular skirmish or battle; but when the\r\ncontest is generally spun out through several different campaigns, each of\r\nwhich lasts during the greater part of the year; it becomes universally\r\nnecessary that the public should maintain those who serve the public in war, at\r\nleast while they are employed in that service. Whatever, in time of peace,\r\nmight be the ordinary occupation of those who go to war, so very tedious and\r\nexpensive a service would otherwise be by far too heavy a burden upon them.\r\nAfter the second Persian war, accordingly, the armies of Athens seem to have\r\nbeen generally composed of mercenary troops, consisting, indeed, partly of\r\ncitizens, but partly, too, of foreigners; and all of them equally hired and\r\npaid at the expense of the state. From the time of the siege of Veii, the\r\narmies of Rome received pay for their service during the time which they\r\nremained in the field. Under the feudal governments, the military service, both\r\nof the great lords, and of their immediate dependents, was, after a certain\r\nperiod, universally exchanged for a payment in money, which was employed to\r\nmaintain those who served in their stead.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe number of those who can go to war, in proportion to the whole number of the\r\npeople, is necessarily much smaller in a civilized than in a rude state of\r\nsociety. In a civilized society, as the soldiers are maintained altogether by\r\nthe labour of those who are not soldiers, the number of the former can never\r\nexceed what the latter can maintain, over and above maintaining, in a manner\r\nsuitable to their respective stations, both themselves and the other officers\r\nof government and law, whom they are obliged to maintain. In the little\r\nagrarian states of ancient Greece, a fourth or a fifth part of the whole body\r\nof the people considered the themselves as soldiers, and would sometimes, it is\r\nsaid, take the field. Among the civilized nations of modern Europe, it is\r\ncommonly computed, that not more than the one hundredth part of the inhabitants\r\nof any country can be employed as soldiers, without ruin to the country which\r\npays the expense of their service.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of preparing the army for the field seems not to have become\r\nconsiderable in any nation, till long after that of maintaining it in the field\r\nhad devolved entirely upon the sovereign or commonwealth. In all the different\r\nrepublics of ancient Greece, to learn his military exercises, was a necessary\r\npart of education imposed by the state upon every free citizen. In every city\r\nthere seems to have been a public field, in which, under the protection of the\r\npublic magistrate, the young people were taught their different exercises by\r\ndifferent masters. In this very simple institution consisted the whole expense\r\nwhich any Grecian state seems ever to have been at, in preparing its citizens\r\nfor war. In ancient Rome, the exercises of the Campus Martius answered the same\r\npurpose with those of the Gymnasium in ancient Greece. Under the feudal\r\ngovernments, the many public ordinances, that the citizens of every district\r\nshould practise archery, as well as several other military exercises, were\r\nintended for promoting the same purpose, but do not seem to have promoted it so\r\nwell. Either from want of interest in the officers entrusted with the execution\r\nof those ordinances, or from some other cause, they appear to have been\r\nuniversally neglected; and in the progress of all those governments, military\r\nexercises seem to have gone gradually into disuse among the great body of the\r\npeople.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the republics of ancient Greece and Rome, during the whole period of their\r\nexistence, and under the feudal governments, for a considerable time after\r\ntheir first establishment, the trade of a soldier was not a separate, distinct\r\ntrade, which constituted the sole or principal occupation of a particular class\r\nof citizens; every subject of the state, whatever might be the ordinary trade\r\nor occupation by which he gained his livelihood, considered himself, upon all\r\nordinary occasions, as fit likewise to exercise the trade of a soldier, and,\r\nupon many extraordinary occasions, as bound to exercise it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe art of war, however, as it is certainly the noblest of all arts, so, in the\r\nprogress of improvement, it necessarily becomes one of the most complicated\r\namong them. The state of the mechanical, as well as some other arts, with which\r\nit is necessarily connected, determines the degree of perfection to which it is\r\ncapable of being carried at any particular time. But in order to carry it to\r\nthis degree of perfection, it is necessary that it should become the sole or\r\nprincipal occupation of a particular class of citizens; and the division of\r\nlabour is as necessary for the improvement of this, as of every other art. Into\r\nother arts, the division of labour is naturally introduced by the prudence of\r\nindividuals, who find that they promote their private interest better by\r\nconfining themselves to a particular trade, than by exercising a great number.\r\nBut it is the wisdom of the state only, which can render the trade of a soldier\r\na particular trade, separate and distinct from all others. A private citizen,\r\nwho, in time of profound peace, and without any particular encouragement from\r\nthe public, should spend the greater part of his time in military exercises,\r\nmight, no doubt, both improve himself very much in them, and amuse himself very\r\nwell; but he certainly would not promote his own interest. It is the wisdom of\r\nthe state only, which can render it for his interest to give up the greater\r\npart of his time to this peculiar occupation; and states have not always had\r\nthis wisdom, even when their circumstances had become such, that the\r\npreservation of their existence required that they should have it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA shepherd has a great deal of leisure; a husbandman, in the rude state of\r\nhusbandry, has some; an artificer or manufacturer has none at all. The first\r\nmay, without any loss, employ a great deal of his time in martial exercises;\r\nthe second may employ some part of it; but the last cannot employ a single hour\r\nin them without some loss, and his attention to his own interest naturally\r\nleads him to neglect them altogether. Those improvements in husbandry, too,\r\nwhich the progress of arts and manufactures necessarily introduces, leave the\r\nhusbandman as little leisure as the artificer. Military exercises come to be as\r\nmuch neglected by the inhabitants of the country as by those of the town, and\r\nthe great body of the people becomes altogether unwarlike. That wealth, at the\r\nsame time, which always follows the improvements of agriculture and\r\nmanufactures, and which, in reality, is no more than the accumulated produce of\r\nthose improvements, provokes the invasion of all their neighbours. An\r\nindustrious, and, upon that account, a wealthy nation, is of all nations the\r\nmost likely to be attacked; and unless the state takes some new measure for the\r\npublic defence, the natural habits of the people render them altogether\r\nincapable of defending themselves.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn these circumstances, there seem to be but two methods by which the state can\r\nmake any tolerable provision for the public defence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt may either, first, by means of a very rigorous police, and in spite of the\r\nwhole bent of the interest, genius, and inclinations of the people, enforce the\r\npractice of military exercises, and oblige either all the citizens of the\r\nmilitary age, or a certain number of them, to join in some measure the trade of\r\na soldier to whatever other trade or profession they may happen to carry on.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOr, secondly, by maintaining and employing a certain number of citizens in the\r\nconstant practice of military exercises, it may render the trade of a soldier a\r\nparticular trade, separate and distinct from all others.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the state has recourse to the first of those two expedients, its military\r\nforce is said to consist in a militia; if to the second, it is said to consist\r\nin a standing army. The practice of military exercises is the sole or principal\r\noccupation of the soldiers of a standing army, and the maintenance or pay which\r\nthe state affords them is the principal and ordinary fund of their subsistence.\r\nThe practice of military exercises is only the occasional occupation of the\r\nsoldiers of a militia, and they derive the principal and ordinary fund of their\r\nsubsistence from some other occupation. In a militia, the character of the\r\nlabourer, artificer, or tradesman, predominates over that of the soldier; in a\r\nstanding army, that of the soldier predominates over every other character; and\r\nin this distinction seems to consist the essential difference between those two\r\ndifferent species of military force.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMilitias have been of several different kinds. In some countries, the citizens\r\ndestined for defending the state seem to have been exercised only, without\r\nbeing, if I may say so, regimented; that is, without being divided into\r\nseparate and distinct bodies of troops, each of which performed its exercises\r\nunder its own proper and permanent officers. In the republics of ancient Greece\r\nand Rome, each citizen, as long as he remained at home, seems to have practised\r\nhis exercises, either separately and independently, or with such of his equals\r\nas he liked best; and not to have been attached to any particular body of\r\ntroops, till he was actually called upon to take the field. In other countries,\r\nthe militia has not only been exercised, but regimented. In England, in\r\nSwitzerland, and, I believe, in every other country of modern Europe, where any\r\nimperfect military force of this kind has been established, every militiaman\r\nis, even in time of peace, attached to a particular body of troops, which\r\nperforms its exercises under its own proper and permanent officers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore the invention of fire-arms, that army was superior in which the soldiers\r\nhad, each individually, the greatest skill and dexterity in the use of their\r\narms. Strength and agility of body were of the highest consequence, and\r\ncommonly determined the fate of battles. But this skill and dexterity in the\r\nuse of their arms could be acquired only, in the same manner as fencing is at\r\npresent, by practising, not in great bodies, but each man separately, in a\r\nparticular school, under a particular master, or with his own particular equals\r\nand companions. Since the invention of fire-arms, strength and agility of body,\r\nor even extraordinary dexterity and skill in the use of arms, though they are\r\nfar from being of no consequence, are, however, of less consequence. The nature\r\nof the weapon, though it by no means puts the awkward upon a level with the\r\nskilful, puts him more nearly so than he ever was before. All the dexterity and\r\nskill, it is supposed, which are necessary for using it, can be well enough\r\nacquired by practising in great bodies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRegularity, order, and prompt obedience to command, are qualities which, in\r\nmodern armies, are of more importance towards determining the fate of battles,\r\nthan the dexterity and skill of the soldiers in the use of their arms. But the\r\nnoise of fire-arms, the smoke, and the invisible death to which every man feels\r\nhimself every moment exposed, as soon as he comes within cannon-shot, and\r\nfrequently a long time before the battle can be well said to be engaged, must\r\nrender it very difficult to maintain any considerable degree of this\r\nregularity, order, and prompt obedience, even in the beginning of a modern\r\nbattle. In an ancient battle, there was no noise but what arose from the human\r\nvoice; there was no smoke, there was no invisible cause of wounds or death.\r\nEvery man, till some mortal weapon actually did approach him, saw clearly that\r\nno such weapon was near him. In these circumstances, and among troops who had\r\nsome confidence in their own skill and dexterity in the use of their arms, it\r\nmust have been a good deal less difficult to preserve some degree of regularity\r\nand order, not only in the beginning, but through the whole progress of an\r\nancient battle, and till one of the two armies was fairly defeated. But the\r\nhabits of regularity, order, and prompt obedience to command, can be acquired\r\nonly by troops which are exercised in great bodies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA militia, however, in whatever manner it may be either disciplined or\r\nexercised, must always be much inferior to a well disciplined and well\r\nexercised standing army.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe soldiers who are exercised only once a week, or once a-month, can never be\r\nso expert in the use of their arms, as those who are exercised every day, or\r\nevery other day; and though this circumstance may not be of so much consequence\r\nin modern, as it was in ancient times, yet the acknowledged superiority of the\r\nPrussian troops, owing, it is said, very much to their superior expertness in\r\ntheir exercise, may satisfy us that it is, even at this day, of very\r\nconsiderable consequence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe soldiers, who are bound to obey their officer only once a-week, or once\r\na-month, and who are at all other times at liberty to manage their own affairs\r\ntheir own way, without being, in any respect, accountable to him, can never be\r\nunder the same awe in his presence, can never have the same disposition to\r\nready obedience, with those whose whole life and conduct are every day directed\r\nby him, and who every day even rise and go to bed, or at least retire to their\r\nquarters, according to his orders. In what is called discipline, or in the\r\nhabit of ready obedience, a militia must always be still more inferior to a\r\nstanding army, than it may sometimes be in what is called the manual exercise,\r\nor in the management and use of its arms. But, in modern war, the habit of\r\nready and instant obedience is of much greater consequence than a considerable\r\nsuperiority in the management of arms.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose militias which, like the Tartar or Arab militia, go to war under the same\r\nchieftains whom they are accustomed to obey in peace, are by far the best. In\r\nrespect for their officers, in the habit of ready obedience, they approach\r\nnearest to standing armies. The Highland militia, when it served under its own\r\nchieftains, had some advantage of the same kind. As the Highlanders, however,\r\nwere not wandering, but stationary shepherds, as they had all a fixed\r\nhabitation, and were not, in peaceable times, accustomed to follow their\r\nchieftain from place to place; so, in time of war, they were less willing to\r\nfollow him to any considerable distance, or to continue for any long time in\r\nthe field. When they had acquired any booty, they were eager to return home,\r\nand his authority was seldom sufficient to detain them. In point of obedience,\r\nthey were always much inferior to what is reported of the Tartars and Arabs. As\r\nthe Highlanders, too, from their stationary life, spend less of their time in\r\nthe open air, they were always less accustomed to military exercises, and were\r\nless expert in the use of their arms than the Tartars and Arabs are said to be.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA militia of any kind, it must be observed, however, which has served for\r\nseveral successive campaigns in the field, becomes in every respect a standing\r\narmy. The soldiers are every day exercised in the use of their arms, and, being\r\nconstantly under the command of their officers, are habituated to the same\r\nprompt obedience which takes place in standing armies. What they were before\r\nthey took the field, is of little importance. They necessarily become in every\r\nrespect a standing army, after they have passed a few campaigns in it. Should\r\nthe war in America drag out through another campaign, the American militia may\r\nbecome, in every respect, a match for that standing army, of which the valour\r\nappeared, in the last war at least, not inferior to that of the hardiest\r\nveterans of France and Spain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis distinction being well understood, the history of all ages, it will be\r\nfound, hears testimony to the irresistible superiority which a well regulated\r\nstanding army has over a militia.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOne of the first standing armies, of which we have any distinct account in any\r\nwell authenticated history, is that of Philip of Macedon. His frequent wars\r\nwith the Thracians, Illyrians, Thessalians, and some of the Greek cities in the\r\nneighbourhood of Macedon, gradually formed his troops, which in the beginning\r\nwere probably militia, to the exact discipline of a standing army. When he was\r\nat peace, which he was very seldom, and never for any long time together, he\r\nwas careful not to disband that army. It vanquished and subdued, after a long\r\nand violent struggle, indeed, the gallant and well exercised militias of the\r\nprincipal republics of ancient Greece; and afterwards, with very little\r\nstruggle, the effeminate and ill exercised militia of the great Persian empire.\r\nThe fall of the Greek republics, and of the Persian empire was the effect of\r\nthe irresistible superiority which a standing arm has over every other sort of\r\nmilitia. It is the first great revolution in the affairs of mankind of which\r\nhistory has preserved any distinct and circumstantial account.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fall of Carthage, and the consequent elevation of Rome, is the second. All\r\nthe varieties in the fortune of those two famous republics may very well be\r\naccounted for from the same cause.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom the end of the first to the beginning of the second Carthaginian war, the\r\narmies of Carthage were continually in the field, and employed under three\r\ngreat generals, who succeeded one another in the command; Amilcar, his\r\nson-in-law Asdrubal, and his son Annibal: first in chastising their own\r\nrebellious slaves, afterwards in subduing the revolted nations of Africa; and\r\nlastly, in conquering the great kingdom of Spain. The army which Annibal led\r\nfrom Spain into Italy must necessarily, in those different wars, have been\r\ngradually formed to the exact discipline of a standing army. The Romans, in the\r\nmeantime, though they had not been altogether at peace, yet they had not,\r\nduring this period, been engaged in any war of very great consequence; and\r\ntheir military discipline, it is generally said, was a good deal relaxed. The\r\nRoman armies which Annibal encountered at Trebi, Thrasymenus, and Cannae, were\r\nmilitia opposed to a standing army. This circumstance, it is probable,\r\ncontributed more than any other to determine the fate of those battles.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe standing army which Annibal left behind him in Spain had the like\r\nsuperiority over the militia which the Romans sent to oppose it; and, in a few\r\nyears, under the command of his brother, the younger Asdrubal, expelled them\r\nalmost entirely from that country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAnnibal was ill supplied from home. The Roman militia, being continually in the\r\nfield, became, in the progress of the war, a well disciplined and well\r\nexercised standing army; and the superiority of Annibal grew every day less and\r\nless. Asdrubal judged it necessary to lead the whole, or almost the whole, of\r\nthe standing army which he commanded in Spain, to the assistance of his brother\r\nin Italy. In this march, he is said to have been misled by his guides; and in a\r\ncountry which he did not know, was surprised and attacked, by another standing\r\narmy, in every respect equal or superior to his own, and was entirely defeated.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen Asdrubal had left Spain, the great Scipio found nothing to oppose him but\r\na militia inferior to his own. He conquered and subdued that militia, and, in\r\nthe course of the war, his own militia necessarily became a well disciplined\r\nand well exercised standing army. That standing army was afterwards carried to\r\nAfrica, where it found nothing but a militia to oppose it. In order to defend\r\nCarthage, it became necessary to recal the standing army of Annibal. The\r\ndisheartened and frequently defeated African militia joined it, and, at the\r\nbattle of Zama, composed the greater part of the troops of Annibal. The event\r\nof that day determined the fate of the two rival republics.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFrom the end of the second Carthaginian war till the fall of the Roman\r\nrepublic, the armies of Rome were in every respect standing armies. The\r\nstanding army of Macedon made some resistance to their arms. In the height of\r\ntheir grandeur, it cost them two great wars, and three great battles, to subdue\r\nthat little kingdom, of which the conquest would probably have been still more\r\ndifficult, had it not been for the cowardice of its last king. The militias of\r\nall the civilized nations of the ancient world, of Greece, of Syria, and of\r\nEgypt, made but a feeble resistance to the standing armies of Rome. The\r\nmilitias of some barbarous nations defended themselves much better. The\r\nScythian or Tartar militia, which Mithridates drew from the countries north of\r\nthe Euxine and Caspian seas, were the most formidable enemies whom the Romans\r\nhad to encounter after the second Carthaginian war. The Parthian and German\r\nmilitias, too, were always respectable, and upon several occasions, gained very\r\nconsiderable advantages over the Roman armies. In general, however, and when\r\nthe Roman armies were well commanded, they appear to have been very much\r\nsuperior; and if the Romans did not pursue the final conquest either of Parthia\r\nor Germany, it was probably because they judged that it was not worth while to\r\nadd those two barbarous countries to an empire which was already too large. The\r\nancient Parthians appear to have been a nation of Scythian or Tartar\r\nextraction, and to have always retained a good deal of the manners of their\r\nancestors. The ancient Germans were, like the Scythians or Tartars, a nation of\r\nwandering shepherds, who went to war under the same chiefs whom they were\r\naccustomed to follow in peace. ‘Their militia was exactly of the same\r\nkind with that of the Scythians or Tartars, from whom, too, they were probably\r\ndescended.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMany different causes contributed to relax the discipline of the Roman armies.\r\nIts extreme severity was, perhaps, one of those causes. In the days of their\r\ngrandeur, when no enemy appeared capable of opposing them, their heavy armour\r\nwas laid aside as unnecessarily burdensome, their laborious exercises were\r\nneglected, as unnecessarily toilsome. Under the Roman emperors, besides, the\r\nstanding armies of Rome, those particularly which guarded the German and\r\nPannonian frontiers, became dangerous to their masters, against whom they used\r\nfrequently to set up their own generals. In order to render them less\r\nformidable, according to some authors, Dioclesian, according to others,\r\nConstantine, first withdrew them from the frontier, where they had always\r\nbefore been encamped in great bodies, generally of two or three legions each,\r\nand dispersed them in small bodies through the different provincial towns, from\r\nwhence they were scarce ever removed, but when it became necessary to repel an\r\ninvasion. Small bodies of soldiers, quartered in trading and manufacturing\r\ntowns, and seldom removed from those quarters, became themselves trades men,\r\nartificers, and manufacturers. The civil came to predominate over the military\r\ncharacter; and the standing armies of Rome gradually degenerated into a\r\ncorrupt, neglected, and undisciplined militia, incapable of resisting the\r\nattack of the German and Scythian militias, which soon afterwards invaded the\r\nwestern empire. It was only by hiring the militia of some of those nations to\r\noppose to that of others, that the emperors were for some time able to defend\r\nthemselves. The fall of the western empire is the third great revolution in the\r\naffairs of mankind, of which ancient history has preserved any distinct or\r\ncircumstantial account. It was brought about by the irresistible superiority\r\nwhich the militia of a barbarous has over that of a civilized nation; which the\r\nmilitia of a nation of shepherds has over that of a nation of husbandmen,\r\nartificers, and manufacturers. The victories which have been gained by militias\r\nhave generally been, not over standing armies, but over other militias, in\r\nexercise and discipline inferior to themselves. Such were the victories which\r\nthe Greek militia gained over that of the Persian empire; and such, too, were\r\nthose which, in later times, the Swiss militia gained over that of the\r\nAustrians and Burgundians.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe military force of the German and Scythian nations, who established\r\nthemselves upon ruins of the western empire, continued for some time to be of\r\nthe same kind in their new settlements, as it had been in their original\r\ncountry. It was a militia of shepherds and husbandmen, which, in time of war,\r\ntook the field under the command of the same chieftains whom it was accustomed\r\nto obey in peace. It was, therefore, tolerably well exercised, and tolerably\r\nwell disciplined. As arts and industry advanced, however, the authority of the\r\nchieftains gradually decayed, and the great body of the people had less time to\r\nspare for military exercises. Both the discipline and the exercise of the\r\nfeudal militia, therefore, went gradually to ruin, and standing armies were\r\ngradually introduced to supply the place of it. When the expedient of a\r\nstanding army, besides, had once been adopted by one civilized nation, it\r\nbecame necessary that all its neighbours should follow the example. They soon\r\nfound that their safety depended upon their doing so, and that their own\r\nmilitia was altogether incapable of resisting the attack of such an army.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe soldiers of a standing army, though they may never have seen an enemy, yet\r\nhave frequently appeared to possess all the courage of veteran troops, and, the\r\nvery moment that they took the field, to have been fit to face the hardiest and\r\nmost experienced veterans. In 1756, when the Russian army marched into Poland,\r\nthe valour of the Russian soldiers did not appear inferior to that of the\r\nPrussians, at that time supposed to be the hardiest and most experienced\r\nveterans in Europe. The Russian empire, however, had enjoyed a profound peace\r\nfor near twenty years before, and could at that time have very few soldiers who\r\nhad ever seen an enemy. When the Spanish war broke out in 1739, England had\r\nenjoyed a profound peace for about eight-and-twenty years. The valour of her\r\nsoldiers, however, far from being corrupted by that long peace, was never more\r\ndistinguished than in the attempt upon Carthagena, the first unfortunate\r\nexploit of that unfortunate war. In a long peace, the generals, perhaps, may\r\nsometimes forget their skill; but where a well regulated standing army has been\r\nkept up, the soldiers seem never to forget their valour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a civilized nation depends for its defence upon a militia, it is at all\r\ntimes exposed to be conquered by any barbarous nation which happens to be in\r\nits neighbourhood. The frequent conquests of all the civilized countries in\r\nAsia by the Tartars, sufficiently demonstrates the natural superiority which\r\nthe militia of a barbarous has over that of a civilized nation. A well\r\nregulated standing army is superior to every militia. Such an army, as it can\r\nbest be maintained by an opulent and civilized nation, so it can alone defend\r\nsuch a nation against the invasion of a poor and barbarous neighbour. It is\r\nonly by means of a standing army, therefore, that the civilization of any\r\ncountry can be perpetuated, or even preserved, for any considerable time.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs it is only by means of a well regulated standing army, that a civilized\r\ncountry can be defended, so it is only by means of it that a barbarous country\r\ncan be suddenly and tolerably civilized. A standing army establishes, with an\r\nirresistible force, the law of the sovereign through the remotest provinces of\r\nthe empire, and maintains some degree of regular government in countries which\r\ncould not otherwise admit of any. Whoever examines with attention, the\r\nimprovements which Peter the Great introduced into the Russian empire, will\r\nfind that they almost all resolve themselves into the establishment of a well\r\nregulated standing army. It is the instrument which executes and maintains all\r\nhis other regulations. That degree of order and internal peace, which that\r\nempire has ever since enjoyed, is altogether owing to the influence of that\r\narmy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMen of republican principles have been jealous of a standing army, as dangerous\r\nto liberty. It certainly is so, wherever the interest of the general, and that\r\nof the principal officers, are not necessarily connected with the support of\r\nthe constitution of the state. The standing army of Caesar destroyed the Roman\r\nrepublic. The standing army of Cromwell turned the long parliament out of\r\ndoors. But where the sovereign is himself the general, and the principal\r\nnobility and gentry of the country the chief officers of the army; where the\r\nmilitary force is placed under the command of those who have the greatest\r\ninterest in the support of the civil authority, because they have themselves\r\nthe greatest share of that authority, a standing army can never be dangerous to\r\nliberty. On the contrary, it may, in some cases, be favourable to liberty. The\r\nsecurity which it gives to the sovereign renders unnecessary that troublesome\r\njealousy, which, in some modern republics, seems to watch over the minutest\r\nactions, and to be at all times ready to disturb the peace of every citizen.\r\nWhere the security of the magistrate, though supported by the principal people\r\nof the country, is endangered by every popular discontent; where a small tumult\r\nis capable of bringing about in a few hours a great revolution, the whole\r\nauthority of government must be employed to suppress and punish every murmur\r\nand complaint against it. To a sovereign, on the contrary, who feels himself\r\nsupported, not only by the natural aristocracy of the country, but by a well\r\nregulated standing army, the rudest, the most groundless, and the most\r\nlicentious remonstrances, can give little disturbance. He can safely pardon or\r\nneglect them, and his consciousness of his own superiority naturally disposes\r\nhim to do so. That degree of liberty which approaches to licentiousness, can be\r\ntolerated only in countries where the sovereign is secured by a well regulated\r\nstanding army. It is in such countries only, that the public safety does not\r\nrequire that the sovereign should be trusted with any discretionary power, for\r\nsuppressing even the impertinent wantonness of this licentious liberty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first duty of the sovereign, therefore, that of defending the society from\r\nthe violence and injustice of other independent societies, grows gradually more\r\nand more expensive, as the society advances in civilization. The military force\r\nof the society, which originally cost the sovereign no expense, either in time\r\nof peace, or in time of war, must, in the progress of improvement, first be\r\nmaintained by him in time of war, and afterwards even in time of peace.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great change introduced into the art of war by the invention of fire-arms,\r\nhas enhanced still further both the expense of exercising and disciplining any\r\nparticular number of soldiers in time of peace, and that of employing them in\r\ntime of war. Both their arms and their ammunition are become more expensive. A\r\nmusket is a more expensive machine than a javelin or a bow and arrows; a cannon\r\nor a mortar, than a balista or a catapulta. The powder which is spent in a\r\nmodern review is lost irrecoverably, and occasions a very considerable expense.\r\nThe javelins and arrows which were thrown or shot in an ancient one, could\r\neasily be picked up again, and were, besides, of very little value. The cannon\r\nand the mortar are not only much dearer, but much heavier machines than the\r\nbalista or catapulta; and require a greater expense, not only to prepare them\r\nfor the field, but to carry them to it. As the superiority of the modern\r\nartillery, too, over that of the ancients, is very great; it has become much\r\nmore difficult, and consequently much more expensive, to fortify a town, so as\r\nto resist, even for a few weeks, the attack of that superior artillery. In\r\nmodern times, many different causes contribute to render the defence of the\r\nsociety more expensive. The unavoidable effects of the natural progress of\r\nimprovement have, in this respect, been a good deal enhanced by a great\r\nrevolution in the art of war, to which a mere accident, the invention of\r\ngunpowder, seems to have given occasion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn modern war, the great expense of firearms gives an evident advantage to the\r\nnation which can best afford that expense; and, consequently, to an opulent and\r\ncivilized, over a poor and barbarous nation. In ancient times, the opulent and\r\ncivilized found it difficult to defend themselves against the poor and\r\nbarbarous nations. In modern times, the poor and barbarous find it difficult to\r\ndefend themselves against the opulent and civilized. The invention of\r\nfire-arms, an invention which at first sight appears to be so pernicious, is\r\ncertainly favourable, both to the permanency and to the extension of\r\ncivilization.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II. Of the Expense of Justice\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe second duty of the sovereign, that of protecting, as far as possible, every\r\nmember of the society from the injustice or oppression of every other member of\r\nit, or the duty of establishing an exact administration of justice, requires\r\ntwo very different degrees of expense in the different periods of society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong nations of hunters, as there is scarce any property, or at least none\r\nthat exceeds the value of two or three days labour; so there is seldom any\r\nestablished magistrate, or any regular administration of justice. Men who have\r\nno property, can injure one another only in their persons or reputations. But\r\nwhen one man kills, wounds, beats, or defames another, though he to whom the\r\ninjury is done suffers, he who does it receives no benefit. It is otherwise\r\nwith the injuries to property. The benefit of the person who does the injury is\r\noften equal to the loss of him who suffers it. Envy, malice, or resentment, are\r\nthe only passions which can prompt one man to injure another in his person or\r\nreputation. But the greater part of men are not very frequently under the\r\ninfluence of those passions; and the very worst men are so only occasionally.\r\nAs their gratification, too, how agreeable soever it may be to certain\r\ncharacters, is not attended with any real or permanent advantage, it is, in the\r\ngreater part of men, commonly restrained by prudential considerations. Men may\r\nlive together in society with some tolerable degree of security, though there\r\nis no civil magistrate to protect them from the injustice of those passions.\r\nBut avarice and ambition in the rich, in the poor the hatred of labour and the\r\nlove of present ease and enjoyment, are the passions which prompt to invade\r\nproperty; passions much more steady in their operation, and much more universal\r\nin their influence. Wherever there is a great property, there is great\r\ninequality. For one very rich man, there must be at least five hundred poor,\r\nand the affluence of the few supposes the indigence of the many. The affluence\r\nof the rich excites the indignation of the poor, who are often both driven by\r\nwant, and prompted by envy to invade his possessions. It is only under the\r\nshelter of the civil magistrate, that the owner of that valuable property,\r\nwhich is acquired by the labour of many years, or perhaps of many successive\r\ngenerations, can sleep a single night in security. He is at all times\r\nsurrounded by unknown enemies, whom, though he never provoked, he can never\r\nappease, and from whose injustice he can be protected only by the powerful arm\r\nof the civil magistrate, continually held up to chastise it. The acquisition of\r\nvaluable and extensive property, therefore, necessarily requires the\r\nestablishment of civil government. Where there is no property, or at least none\r\nthat exceeds the value of two or three days labour, civil government is not so\r\nnecessary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCivil government supposes a certain subordination. But as the necessity of\r\ncivil government gradually grows up with the acquisition of valuable property;\r\nso the principal causes, which naturally introduce subordination, gradually\r\ngrow up with the growth of that valuable property.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe causes or circumstances which naturally introduce subordination, or which\r\nnaturally and antecedent to any civil institution, give some men some\r\nsuperiority over the greater part of their brethren, seem to be four in number.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first of those causes or circumstances, is the superiority of personal\r\nqualifications, of strength, beauty, and agility of body; of wisdom and virtue;\r\nof prudence, justice, fortitude, and moderation of mind. The qualifications of\r\nthe body, unless supported by those of the mind, can give little authority in\r\nany period of society. He is a very strong man, who, by mere strength of body,\r\ncan force two weak ones to obey him. The qualifications of the mind can alone\r\ngive very great authority. They are however, invisible qualities; always\r\ndisputable, and generally disputed. No society, whether barbarous or civilized,\r\nhas ever found it convenient to settle the rules of precedency of rank and\r\nsubordination, according to those invisible qualities; but according to\r\nsomething that is more plain and palpable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second of those causes or circumstances, is the superiority of age. An old\r\nman, provided his age is not so far advanced as to give suspicion of dotage, is\r\neverywhere more respected than a young man of equal rank, fortune, and\r\nabilities. Among nations of hunters, such as the native tribes of North\r\nAmerica, age is the sole foundation of rank and precedency. Among them, father\r\nis the appellation of a superior; brother, of an equal; and son, of an\r\ninferior. In the most opulent and civilized nations, age regulates rank among\r\nthose who are in every other respect equal; and among whom, therefore, there is\r\nnothing else to regulate it. Among brothers and among sisters, the eldest\r\nalways takes place; and in the succession of the paternal estate, every thing\r\nwhich cannot be divided, but must go entire to one person, such as a title of\r\nhonour, is in most cases given to the eldest. Age is a plain and palpable\r\nquality, which admits of no dispute.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe third of those causes or circumstances, is the superiority of fortune. The\r\nauthority of riches, however, though great in every age of society, is,\r\nperhaps, greatest in the rudest ages of society, which admits of any\r\nconsiderable inequality of fortune. A Tartar chief, the increase of whose\r\nflocks and herds is sufficient to maintain a thousand men, cannot well employ\r\nthat increase in any other way than in maintaining a thousand men. The rude\r\nstate of his society does not afford him any manufactured produce any trinkets\r\nor baubles of any kind, for which he can exchange that part of his rude produce\r\nwhich is over and above his own consumption. The thousand men whom he thus\r\nmaintains, depending entirely upon him for their subsistence, must both obey\r\nhis orders in war, and submit to his jurisdiction in peace. He is necessarily\r\nboth their general and their judge, and his chieftainship is the necessary\r\neffect of the superiority of his fortune. In an opulent and civilized society,\r\na man may possess a much greater fortune, and yet not be able to command a\r\ndozen of people. Though the produce of his estate may be sufficient to\r\nmaintain, and may, perhaps, actually maintain, more than a thousand people,\r\nyet, as those people pay for every thing which they get from him, as he gives\r\nscarce any thing to any body but in exchange for an equivalent, there is scarce\r\nanybody who considers himself as entirely dependent upon him, and his authority\r\nextends only over a few menial servants. The authority of fortune, however, is\r\nvery great, even in an opulent and civilized society. That it is much greater\r\nthan that either of age or of personal qualities, has been the constant\r\ncomplaint of every period of society which admitted of any considerable\r\ninequality of fortune. The first period of society, that of hunters, admits of\r\nno such inequality. Universal poverty establishes their universal equality; and\r\nthe superiority, either of age or of personal qualities, are the feeble, but\r\nthe sole foundations of authority and subordination. There is, therefore,\r\nlittle or no authority or subordination in this period of society. The second\r\nperiod of society, that of shepherds, admits of very great inequalities of\r\nfortune, and there is no period in which the superiority of fortune gives so\r\ngreat authority to those who possess it. There is no period, accordingly, in\r\nwhich authority and subordination are more perfectly established. The authority\r\nof an Arabian scherif is very great; that of a Tartar khan altogether\r\ndespotical.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fourth of those causes or circumstances, is the superiority of birth.\r\nSuperiority of birth supposes an ancient superiority of fortune in the family\r\nof the person who claims it. All families are equally ancient; and the\r\nancestors of the prince, though they may be better known, cannot well be more\r\nnumerous than those of the beggar. Antiquity of family means everywhere the\r\nantiquity either of wealth, or of that greatness which is commonly either\r\nfounded upon wealth, or accompanied with it. Upstart greatness is everywhere\r\nless respected than ancient greatness. The hatred of usurpers, the love of the\r\nfamily of an ancient monarch, are in a great measure founded upon the contempt\r\nwhich men naturally have for the former, and upon their veneration for the\r\nlatter. As a military officer submits, without reluctance, to the authority of\r\na superior by whom he has always been commanded, but cannot bear that his\r\ninferior should be set over his head; so men easily submit to a family to whom\r\nthey and their ancestors have always submitted; but are fired with indignation\r\nwhen another family, in whom they had never acknowledged any such superiority,\r\nassumes a dominion over them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe distinction of birth, being subsequent to the inequality of fortune, can\r\nhave no place in nations of hunters, among whom all men, being equal in\r\nfortune, must likewise be very nearly equal in birth. The son of a wise and\r\nbrave man may, indeed, even among them, be somewhat more respected than a man\r\nof equal merit, who has the misfortune to be the son of a fool or a coward. The\r\ndifference, however will not be very great; and there never was, I believe, a\r\ngreat family in the world, whose illustration was entirely derived from the\r\ninheritance of wisdom and virtue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe distinction of birth not only may, but always does, take place among\r\nnations of shepherds. Such nations are always strangers to every sort of\r\nluxury, and great wealth can scarce ever be dissipated among them by\r\nimprovident profusion. There are no nations, accordingly, who abound more in\r\nfamilies revered and honoured on account of their descent from a long race of\r\ngreat and illustrious ancestors; because there are no nations among whom wealth\r\nis likely to continue longer in the same families.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBirth and fortune are evidently the two circumstances which principally set one\r\nman above another. They are the two great sources of personal distinction, and\r\nare, therefore, the principal causes which naturally establish authority and\r\nsubordination among men. Among nations of shepherds, both those causes operate\r\nwith their full force. The great shepherd or herdsman, respected on account of\r\nhis great wealth, and of the great number of those who depend upon him for\r\nsubsistence, and revered on account of the nobleness of his birth, and of the\r\nimmemorial antiquity or his illustrious family, has a natural authority over\r\nall the inferior shepherds or herdsmen of his horde or clan. He can command the\r\nunited force of a greater number of people than any of them. His military power\r\nis greater than that of any of them. In time of war, they are all of them\r\nnaturally disposed to muster themselves under his banner, rather than under\r\nthat of any other person; and his birth and fortune thus naturally procure to\r\nhim some sort of executive power. By commanding, too, the united force of a\r\ngreater number of people than any of them, he is best able to compel any one of\r\nthem, who may have injured another, to compensate the wrong. He is the person,\r\ntherefore, to whom all those who are too weak to defend themselves naturally\r\nlook up for protection. It is to him that they naturally complain of the\r\ninjuries which they imagine have been done to them; and his interposition, in\r\nsuch cases, is more easily submitted to, even by the person complained of, than\r\nthat of any other person would be. His birth and fortune thus naturally procure\r\nhim some sort of judicial authority.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is in the age of shepherds, in the second period of society, that the\r\ninequality of fortune first begins to take place, and introduces among men a\r\ndegree of authority and subordination, which could not possibly exist before.\r\nIt thereby introduces some degree of that civil government which is\r\nindispensably necessary for its own preservation; and it seems to do this\r\nnaturally, and even independent of the consideration of that necessity. The\r\nconsideration of that necessity comes, no doubt, afterwards, to contribute very\r\nmuch to maintain and secure that authority and subordination. The rich, in\r\nparticular, are necessarily interested to support that order of things, which\r\ncan alone secure them in the possession of their own advantages. Men of\r\ninferior wealth combine to defend those of superior wealth in the possession of\r\ntheir property, in order that men of superior wealth may combine to defend them\r\nin the possession of theirs. All the inferior shepherds and herdsmen feel, that\r\nthe security of their own herds and flocks depends upon the security of those\r\nof the great shepherd or herdsman; that the maintenance of their lesser\r\nauthority depends upon that of his greater authority; and that upon their\r\nsubordination to him depends his power of keeping their inferiors in\r\nsubordination to them. They constitute a sort of little nobility, who feel\r\nthemselves interested to defend the property, and to support the authority, of\r\ntheir own little sovereign, in order that he may be able to defend their\r\nproperty, and to support their authority. Civil government, so far as it is\r\ninstituted for the security of property, is, in reality, instituted for the\r\ndefence of the rich against the poor, or of those who have some property\r\nagainst those who have none at all.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe judicial authority of such a sovereign, however, far from being a cause of\r\nexpense, was, for a long time, a source of revenue to him. The persons who\r\napplied to him for justice were always willing to pay for it, and a present\r\nnever failed to accompany a petition. After the authority of the sovereign,\r\ntoo, was thoroughly established, the person found guilty, over and above the\r\nsatisfaction which he was obliged to make to the party, was like-wise forced to\r\npay an amercement to the sovereign. He had given trouble, he had disturbed, he\r\nhad broke the peace of his lord the king, and for those offences an amercement\r\nwas thought due. In the Tartar governments of Asia, in the governments of\r\nEurope which were founded by the German and Scythian nations who overturned the\r\nRoman empire, the administration of justice was a considerable source of\r\nrevenue, both to the sovereign, and to all the lesser chiefs or lords who\r\nexercised under him any particular jurisdiction, either over some particular\r\ntribe or clan, or over some particular territory or district. Originally, both\r\nthe sovereign and the inferior chiefs used to exercise this jurisdiction in\r\ntheir own persons. Afterwards, they universally found it convenient to delegate\r\nit to some substitute, bailiff, or judge. This substitute, however, was still\r\nobliged to account to his principal or constituent for the profits of the\r\njurisdiction. Whoever reads the instructions (They are to be found in\r\nTyrol’s History of England) which were given to the judges of the circuit\r\nin the time of Henry II will see clearly that those judges were a sort of\r\nitinerant factors, sent round the country for the purpose of levying certain\r\nbranches of the king’s revenue. In those days, the administration of\r\njustice not only afforded a certain revenue to the sovereign, but, to procure\r\nthis revenue, seems to have been one of the principal advantages which he\r\nproposed to obtain by the administration of justice.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis scheme of making the administration of justice subservient to the purposes\r\nof revenue, could scarce fail to be productive of several very gross abuses.\r\nThe person who applied for justice with a large present in his hand, was likely\r\nto get something more than justice; while he who applied for it with a small\r\none was likely to get something less. Justice, too, might frequently be\r\ndelayed, in order that this present might be repeated. The amercement, besides,\r\nof the person complained of, might frequently suggest a very strong reason for\r\nfinding him in the wrong, even when he had not really been so. That such abuses\r\nwere far from being uncommon, the ancient history of every country in Europe\r\nbears witness.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the sovereign or chief exercises his judicial authority in his own person,\r\nhow much soever he might abuse it, it must have been scarce possible to get any\r\nredress; because there could seldom be any body powerful enough to call him to\r\naccount. When he exercised it by a bailiff, indeed, redress might sometimes be\r\nhad. If it was for his own benefit only, that the bailiff had been guilty of an\r\nact of injustice, the sovereign himself might not always be unwilling to punish\r\nhim, or to oblige him to repair the wrong. But if it was for the benefit of his\r\nsovereign; if it was in order to make court to the person who appointed him,\r\nand who might prefer him, that he had committed any act of oppression; redress\r\nwould, upon most occasions, be as impossible as if the sovereign had committed\r\nit himself. In all barbarous governments, accordingly, in all those ancient\r\ngovernments of Europe in particular, which were founded upon the ruins of the\r\nRoman empire, the administration of justice appears for a long time to have\r\nbeen extremely corrupt; far from being quite equal and impartial, even under\r\nthe best monarchs, and altogether profligate under the worst.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong nations of shepherds, where the sovereign or chief is only the greatest\r\nshepherd or herdsman of the horde or clan, he is maintained in the same manner\r\nas any of his vassals or subjects, by the increase of his own herds or flocks.\r\nAmong those nations of husbandmen, who are but just come out of the shepherd\r\nstate, and who are not much advanced beyond that state, such as the Greek\r\ntribes appear to have been about the time of the Trojan war, and our German and\r\nScythian ancestors, when they first settled upon the ruins of the western\r\nempire; the sovereign or chief is, in the same manner, only the greatest\r\nlandlord of the country, and is maintained in the same manner as any other\r\nlandlord, by a revenue derived from his own private estate, or from what, in\r\nmodern Europe, was called the demesne of the crown. His subjects, upon ordinary\r\noccasions, contribute nothing to his support, except when, in order to protect\r\nthem from the oppression of some of their fellow-subjects, they stand in need\r\nof his authority. The presents which they make him upon such occasions\r\nconstitute the whole ordinary revenue, the whole of the emoluments which,\r\nexcept, perhaps, upon some very extraordinary emergencies, he derives from his\r\ndominion over them. When Agamemnon, in Homer, offers to Achilles, for his\r\nfriendship, the sovereignty of seven Greek cities, the sole advantage which he\r\nmentions as likely to be derived from it was, that the people would honour him\r\nwith presents. As long as such presents, as long as the emoluments of justice,\r\nor what may be called the fees of court, constituted, in this manner, the whole\r\nordinary revenue which the sovereign derived from his sovereignty, it could not\r\nwell be expected, it could not even decently be proposed, that he should give\r\nthem up altogether. It might, and it frequently was proposed, that he should\r\nregulate and ascertain them. But after they had been so regulated and\r\nascertained, how to hinder a person who was all-powerful from extending them\r\nbeyond those regulations, was still very difficult, not to say impossible.\r\nDuring the continuance of this state of things, therefore, the corruption of\r\njustice, naturally resulting from the arbitrary and uncertain nature of those\r\npresents, scarce admitted of any effectual remedy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut when, from different causes, chiefly from the continually increasing\r\nexpense of defending the nation against the invasion of other nations, the\r\nprivate estate of the sovereign had become altogether insufficient for\r\ndefraying the expense of the sovereignty; and when it had become necessary that\r\nthe people should, for their own security, contribute towards this expense by\r\ntaxes of different kinds; it seems to have been very commonly stipulated, that\r\nno present for the administration of justice should, under any pretence, be\r\naccepted either by the sovereign, or by his bailiffs and substitutes, the\r\njudges. Those presents, it seems to have been supposed, could more easily be\r\nabolished altogether, than effectually regulated and ascertained. Fixed\r\nsalaries were appointed to the judges, which were supposed to compensate to\r\nthem the loss of whatever might have been their share of the ancient emoluments\r\nof justice; as the taxes more than compensated to the sovereign the loss of\r\nhis. Justice was then said to be administered gratis.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nJustice, however, never was in reality administered gratis in any country.\r\nLawyers and attorneys, at least, must always be paid by the parties; and if\r\nthey were not, they would perform their duty still worse than they actually\r\nperform it. The fees annually paid to lawyers and attorneys, amount, in every\r\ncourt, to a much greater sum than the salaries of the judges. The circumstance\r\nof those salaries being paid by the crown, can nowhere much diminish the\r\nnecessary expense of a law-suit. But it was not so much to diminish the\r\nexpense, as to prevent the corruption of justice, that the judges were\r\nprohibited from receiving my present or fee from the parties.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe office of judge is in itself so very honourable, that men are willing to\r\naccept of it, though accompanied with very small emoluments. The inferior\r\noffice of justice of peace, though attended with a good deal of trouble, and in\r\nmost cases with no emoluments at all, is an object of ambition to the greater\r\npart of our country gentlemen. The salaries of all the different judges, high\r\nand low, together with the whole expense of the administration and execution of\r\njustice, even where it is not managed with very good economy, makes, in any\r\ncivilized country, but a very inconsiderable part of the whole expense of\r\ngovernment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole expense of justice, too, might easily be defrayed by the fees of\r\ncourt; and, without exposing the administration of justice to any real hazard\r\nof corruption, the public revenue might thus be entirely discharged from a\r\ncertain, though perhaps but a small incumbrance. It is difficult to regulate\r\nthe fees of court effectually, where a person so powerful as the sovereign is\r\nto share in them and to derive any considerable part of his revenue from them.\r\nIt is very easy, where the judge is the principal person who can reap any\r\nbenefit from them. The law can very easily oblige the judge to respect the\r\nregulation though it might not always be able to make the sovereign respect it.\r\nWhere the fees of court are precisely regulated and ascertained where they are\r\npaid all at once, at a certain period of every process, into the hands of a\r\ncashier or receiver, to be by him distributed in certain known proportions\r\namong the different judges after the process is decided and not till it is\r\ndecided; there seems to be no more danger of corruption than when such fees are\r\nprohibited altogether. Those fees, without occasioning any considerable\r\nincrease in the expense of a law-suit, might be rendered fully sufficient for\r\ndefraying the whole expense of justice. But not being paid to the judges till\r\nthe process was determined, they might be some incitement to the diligence of\r\nthe court in examining and deciding it. In courts which consisted of a\r\nconsiderable number of judges, by proportioning the share of each judge to the\r\nnumber of hours and days which he had employed in examining the process, either\r\nin the court, or in a committee, by order of the court, those fees might give\r\nsome encouragement to the diligence of each particular judge. Public services\r\nare never better performed, than when their reward comes only in consequence of\r\ntheir being performed, and is proportioned to the diligence employed in\r\nperforming them. In the different parliaments of France, the fees of court\r\n(called epices and vacations) constitute the far greater part of the emoluments\r\nof the judges. After all deductions are made, the neat salary paid by the crown\r\nto a counsellor or judge in the parliament of Thoulouse, in rank and dignity\r\nthe second parliament of the kingdom, amounts only to 150 livres, about £6:11s.\r\nsterling a-year. About seven years ago, that sum was in the same place the\r\nordinary yearly wages of a common footman. The distribution of these epices,\r\ntoo, is according to the diligence of the judges. A diligent judge gains a\r\ncomfortable, though moderate revenue, by his office; an idle one gets little\r\nmore than his salary. Those parliaments are, perhaps, in many respects, not\r\nvery convenient courts of justice; but they have never been accused; they seem\r\nnever even to have been suspected of corruption.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fees of court seem originally to have been the principal support of the\r\ndifferent courts of justice in England. Each court endeavoured to draw to\r\nitself as much business as it could, and was, upon that account, willing to\r\ntake cognizance of many suits which were not originally intended to fall under\r\nits jurisdiction. The court of king’s bench, instituted for the trial of\r\ncriminal causes only, took cognizance of civil suits; the plaintiff pretending\r\nthat the defendant, in not doing him justice, had been guilty of some trespass\r\nor misdemeanour. The court of exchequer, instituted for the levying of the\r\nking’s revenue, and for enforcing the payment of such debts only as were\r\ndue to the king, took cognizance of all other contract debts; the planitiff\r\nalleging that he could not pay the king, because the defendant would not pay\r\nhim. In consequence of such fictions, it came, in many cases, to depend\r\naltogether upon the parties, before what court they would choose to have their\r\ncause tried, and each court endeavoured, by superior dispatch and impartiality,\r\nto draw to itself as many causes as it could. The present admirable\r\nconstitution of the courts of justice in England was, perhaps, originally, in a\r\ngreat measure, formed by this emulation, which anciently took place between\r\ntheir respective judges: each judge endeavouring to give, in his own court, the\r\nspeediest and most effectual remedy which the law would admit, for every sort\r\nof injustice. Originally, the courts of law gave damages only for breach of\r\ncontract. The court of chancery, as a court of conscience, first took upon it\r\nto enforce the specific performance of agreements. When the breach of contract\r\nconsisted in the non-payment of money, the damage sustained could be\r\ncompensated in no other way than by ordering payment, which was equivalent to a\r\nspecific performance of the agreement. In such cases, therefore, the remedy of\r\nthe courts of law was sufficient. It was not so in others. When the tenant sued\r\nhis lord for having unjustly outed him of his lease, the damages which he\r\nrecovered were by no means equivalent to the possession of the land. Such\r\ncauses, therefore, for some time, went all to the court of chancery, to the no\r\nsmall loss of the courts of law. It was to draw back such causes to themselves,\r\nthat the courts of law are said to have invented the artificial and fictitious\r\nwrit of ejectment, the most effectual remedy for an unjust outer or\r\ndispossession of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA stamp-duty upon the law proceedings of each particular court, to be levied by\r\nthat court, and applied towards the maintenance of the judges, and other\r\nofficers belonging to it, might in the same manner, afford a revenue sufficient\r\nfor defraying the expense of the administration of justice, without bringing\r\nany burden upon the general revenue of the society. The judges, indeed, might\r\nin this case, be under the temptation of multiplying unnecessarily the\r\nproceedings upon every cause, in order to increase, as much as possible, the\r\nproduce of such a stamp-duty. It has been the custom in modern Europe to\r\nregulate, upon most occasions, the payment of the attorneys and clerks of court\r\naccording to the number of pages which they had occasion to write; the court,\r\nhowever, requiring that each page should contain so many lines, and each line\r\nso many words. In order to increase their payment, the attorneys and clerks\r\nhave contrived to multiply words beyond all necessity, to the corruption of the\r\nlaw language of, I believe, every court of justice in Europe. A like temptation\r\nmight, perhaps, occasion a like corruption in the form of law proceedings.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut whether the administration of justice be so contrived as to defray its own\r\nexpense, or whether the judges be maintained by fixed salaries paid to them\r\nfrom some other fund, it does not seen necessary that the person or persons\r\nentrusted with the executive power should be charged with the management of\r\nthat fund, or with the payment of those salaries. That fund might arise from\r\nthe rent of landed estates, the management of each estate being entrusted to\r\nthe particular court which was to be maintained by it. That fund might arise\r\neven from the interest of a sum of money, the lending out of which might, in\r\nthe same manner, be entrusted to the court which was to be maintained by it. A\r\npart, though indeed but a small part of the salary of the judges of the court\r\nof session in Scotland, arises from the interest of a sum of money. The\r\nnecessary instability of such a fund seems, however, to render it an improper\r\none for the maintenance of an institution which ought to last for ever.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe separation of the judicial from the executive power, seems originally to\r\nhave arisen from the increasing business of the society, in consequence of its\r\nincreasing improvement. The administration of justice became so laborious and\r\nso complicated a duty, as to require the undivided attention of the person to\r\nwhom it was entrusted. The person entrusted with the executive power, not\r\nhaving leisure to attend to the decision of private causes himself, a deputy\r\nwas appointed to decide them in his stead. In the progress of the Roman\r\ngreatness, the consul was too much occupied with the political affairs of the\r\nstate, to attend to the administration of justice. A praetor, therefore, was\r\nappointed to administer it in his stead. In the progress of the European\r\nmonarchies, which were founded upon the ruins of the Roman empire, the\r\nsovereigns and the great lords came universally to consider the administration\r\nof justice as an office both too laborious and too ignoble for them to execute\r\nin their own persons. They universally, therefore, discharged themselves of it,\r\nby appointing a deputy, bailiff or judge.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the judicial is united to the executive power, it is scarce possible that\r\njustice should not frequently be sacrificed to what is vulgarly called\r\npolitics. The persons entrusted with the great interests of the state may even\r\nwithout any corrupt views, sometimes imagine it necessary to sacrifice to those\r\ninterests the rights of a private man. But upon the impartial administration of\r\njustice depends the liberty of every individual, the sense which he has of his\r\nown security. In order to make every individual feel himself perfectly secure\r\nin the possession of every right which belongs to him, it is not only necessary\r\nthat the judicial should be separated from the executive power, but that it\r\nshould be rendered as much as possible independent of that power. The judge\r\nshould not be liable to be removed from his office according to the caprice of\r\nthat power. The regular payment of his salary should not depend upon the good\r\nwill, or even upon the good economy of that power.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART III. Of the Expense of public Works and public Institutions.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe third and last duty of the sovereign or commonwealth, is that of erecting\r\nand maintaining those public institutions and those public works, which though\r\nthey may be in the highest degree advantageous to a great society, are,\r\nhowever, of such a nature, that the profit could never repay the expense to any\r\nindividual, or small number of individuals; and which it, therefore, cannot be\r\nexpected that any individual, or small number of individuals, should erect or\r\nmaintain. The performance of this duty requires, too, very different degrees of\r\nexpense in the different periods of society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter the public institutions and public works necessary for the defence of the\r\nsociety, and for the administration of justice, both of which have already been\r\nmentioned, the other works and institutions of this kind are chiefly for\r\nfacilitating the commerce of the society, and those for promoting the\r\ninstruction of the people. The institutions for instruction are of two kinds:\r\nthose for the education of the youth, and those for the instruction of people\r\nof all ages. The consideration of the manner in which the expense of those\r\ndifferent sorts of public works and institutions may be most properly defrayed\r\nwill divide this third part of the present chapter into three different\r\narticles.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nARTICLE I.—Of the public Works and Institutions for facilitating the\r\nCommerce of the Society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAnd, first, of those which are necessary for facilitating Commerce in general.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the erection and maintenance of the public works which facilitate the\r\ncommerce of any country, such as good roads, bridges, navigable canals,\r\nharbours, etc. must require very different degrees of expense in the different\r\nperiods of society, is evident without any proof. The expense of making and\r\nmaintaining the public roads of any country must evidently increase with the\r\nannual produce of the land and labour of that country, or with the quantity and\r\nweight of the goods which it becomes necessary to fetch and carry upon those\r\nroads. The strength of a bridge must be suited to the number and weight of the\r\ncarriages which are likely to pass over it. The depth and the supply of water\r\nfor a navigable canal must be proportioned to the number and tonnage of the\r\nlighters which are likely to carry goods upon it; the extent of a harbour, to\r\nthe number of the shipping which are likely to take shelter in it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt does not seem necessary that the expense of those public works should be\r\ndefrayed from that public revenue, as it is commonly called, of which the\r\ncollection and application are in most countries, assigned to the executive\r\npower. The greater part of such public works may easily be so managed, as to\r\nafford a particular revenue, sufficient for defraying their own expense without\r\nbringing any burden upon the general revenue of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA highway, a bridge, a navigable canal, for example, may, in most cases, be\r\nboth made add maintained by a small toll upon the carriages which make use of\r\nthem; a harbour, by a moderate port-duty upon the tonnage of the shipping which\r\nload or unload in it. The coinage, another institution for facilitating\r\ncommerce, in many countries, not only defrays its own expense, but affords a\r\nsmall revenue or a seignorage to the sovereign. The post-office, another\r\ninstitution for the same purpose, over and above defraying its own expense,\r\naffords, in almost all countries, a very considerable revenue to the sovereign.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the carriages which pass over a highway or a bridge, and the lighters\r\nwhich sail upon a navigable canal, pay toll in proportion to their weight or\r\ntheir tonnage, they pay for the maintenance of those public works exactly in\r\nproportion to the wear and tear which they occasion of them. It seems scarce\r\npossible to invent a more equitable way of maintaining such works. This tax or\r\ntoll, too, though it is advanced by the carrier, is finally paid by the\r\nconsumer, to whom it must always be charged in the price of the goods. As the\r\nexpense of carriage, however, is very much reduced by means of such public\r\nworks, the goods, notwithstanding the toll, come cheaper to the consumer than\r\nthey could otherwise have done, their price not being so much raised by the\r\ntoll, as it is lowered by the cheapness of the carriage. The person who finally\r\npays this tax, therefore, gains by the application more than he loses by the\r\npayment of it. His payment is exactly in proportion to his gain. It is, in\r\nreality, no more than a part of that gain which he is obliged to give up, in\r\norder to get the rest. It seems impossible to imagine a more equitable method\r\nof raising a tax. When the toll upon carriages of luxury, upon coaches,\r\npost-chaises, etc. is made somewhat higher in proportion to their weight, than\r\nupon carriages of necessary use, such as carts, waggons, etc. the indolence and\r\nvanity of the rich is made to contribute, in a very easy manner, to the relief\r\nof the poor, by rendering cheaper the transportation of heavy goods to all the\r\ndifferent parts of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen high-roads, bridges, canals, etc. are in this manner made and supported by\r\nthe commerce which is carried on by means of them, they can be made only where\r\nthat commerce requires them, and, consequently, where it is proper to make\r\nthem. Their expense, too, their grandeur and magnificence, must be suited to\r\nwhat that commerce can afford to pay. They must be made, consequently, as it is\r\nproper to make them. A magnificent high-road cannot be made through a desert\r\ncountry, where there is little or no commerce, or merely because it happens to\r\nlead to the country villa of the intendant of the province, or to that of some\r\ngreat lord, to whom the intendant finds it convenient to make his court. A\r\ngreat bridge cannot be thrown over a river at a place where nobody passes, or\r\nmerely to embellish the view from the windows of a neighbouring palace; things\r\nwhich sometimes happen in countries, where works of this kind are carried on by\r\nany other revenue than that which they themselves are capable of affording.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn several different parts of Europe, the toll or lock-duty upon a canal is the\r\nproperty of private persons, whose private interest obliges them to keep up the\r\ncanal. If it is not kept in tolerable order, the navigation necessarily ceases\r\naltogether, and, along with it, the whole profit which they can make by the\r\ntolls. If those tolls were put under the management of commissioners, who had\r\nthemselves no interest in them, they might be less attentive to the maintenance\r\nof the works which produced them. The canal of Languedoc cost the king of\r\nFrance and the province upwards of thirteen millions of livres, which (at\r\ntwenty-eight livres the mark of silver, the value of French money in the end of\r\nthe last century) amounted to upwards of nine hundred thousand pounds sterling.\r\nWhen that great work was finished, the most likely method, it was found, of\r\nkeeping it in constant repair, was to make a present of the tolls to Riquet,\r\nthe engineer who planned and conducted the work. Those tolls constitute, at\r\npresent, a very large estate to the different branches of the family of that\r\ngentleman, who have, therefore, a great interest to keep the work in constant\r\nrepair. But had those tolls been put under the management of commissioners, who\r\nhad no such interest, they might perhaps, have been dissipated in ornamental\r\nand unnecessary expenses, while the most essential parts of the works were\r\nallowed to go to ruin.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tolls for the maintenance of a highroad cannot, with any safety, be made\r\nthe property of private persons. A high-road, though entirely neglected, does\r\nnot become altogether impassable, though a canal does. The proprietors of the\r\ntolls upon a high-road, therefore, might neglect altogether the repair of the\r\nroad, and yet continue to levy very nearly the same tolls. It is proper,\r\ntherefore, that the tolls for the maintenance of such a work should be put\r\nunder the management of commissioners or trustees.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the abuses which the trustees have committed in the\r\nmanagement of those tolls, have, in many cases, been very justly complained of.\r\nAt many turnpikes, it has been said, the money levied is more than double of\r\nwhat is necessary for executing, in the completest manner, the work, which is\r\noften executed in a very slovenly manner, and sometimes not executed at all.\r\nThe system of repairing the high-roads by tolls of this kind, it must be\r\nobserved, is not of very long standing. We should not wonder, therefore, if it\r\nhas not yet been brought to that degree of perfection of which it seems\r\ncapable. If mean and improper persons are frequently appointed trustees; and if\r\nproper courts of inspection and account have not yet been established for\r\ncontrolling their conduct, and for reducing the tolls to what is barely\r\nsufficient for executing the work to be done by them; the recency of the\r\ninstitution both accounts and apologizes for those defects, of which, by the\r\nwisdom of parliament, the greater part may, in due time, be gradually remedied.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe money levied at the different turnpikes in Great Britain, is supposed to\r\nexceed so much what is necessary for repairing the roads, that the savings\r\nwhich, with proper economy, might be made from it, have been considered, even\r\nby some ministers, as a very great resource, which might, at some time or\r\nanother, be applied to the exigencies of the state. Government, it has been\r\nsaid, by taking the management of the turnpikes into its own hands, and by\r\nemploying the soldiers, who would work for a very small addition to their pay,\r\ncould keep the roads in good order, at a much less expense than it can be done\r\nby trustees, who have no other workmen to employ, but such as derive their\r\nwhole subsistence from their wages. A great revenue, half a million, perhaps\r\n{Since publishing the two first editions of this book, I have got good reasons\r\nto believe that all the turnpike tolls levied in Great Britain do not produce a\r\nneat revenue that amounts to half a million; a sum which, under the management\r\nof government, would not be sufficient to keep in repair five of the principal\r\nroads in the kingdom}, it has been pretended, might in this manner be gained,\r\nwithout laying any new burden upon the people; and the turnpike roads might be\r\nmade to contribute to the general expense of the state, in the same manner as\r\nthe post-office does at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat a considerable revenue might be gained in this manner, I have no doubt,\r\nthough probably not near so much as the projectors of this plan have supposed.\r\nThe plan itself, however, seems liable to several very important objections.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, If the tolls which are levied at the turnpikes should ever be considered\r\nas one of the resources for supplying the exigencies of the state, they would\r\ncertainly be augmented as those exigencies were supposed to require. According\r\nto the policy of Great Britain, therefore, they would probably he augmented\r\nvery fast. The facility with which a great revenue could be drawn from them,\r\nwould probably encourage administration to recur very frequently te this\r\nresource. Though it may, perhaps, be more than doubtful whether half a million\r\ncould by any economy be saved out of the present tolls, it can scarcely be\r\ndoubted, but that a million might be saved out of them, if they were doubled;\r\nand perhaps two millions, if they were tripled {I have now good reason to\r\nbelieve that all these conjectural sums are by much too large.}. This great\r\nrevenue, too, might be levied without the appointment of a single new officer\r\nto collect and receive it. But the turnpike tolls, being continually augmented\r\nin this manner, instead of facilitating the inland commerce of the country, as\r\nat present, would soon become a very great incumbrance upon it. The expense of\r\ntransporting all heavy goods from one part of the country to another, would\r\nsoon be so much increased, the market for all such goods, consequently, would\r\nsoon be so much narrowed, that their production would be in a great measure\r\ndiscouraged, and the most important branches of the domestic industry of the\r\ncountry annihilated altogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, A tax upon carriages, in proportion to their weight, though a very\r\nequal tax when applied to the sole purpose of repairing the roads, is a very\r\nunequal one when applied to any other purpose, or to supply the common\r\nexigencies of the state. When it is applied to the sole purpose above\r\nmentioned, each carriage is supposed to pay exactly for the wear and tear which\r\nthat carriage occasions of the roads. But when it is applied to any other\r\npurpose, each carriage is supposed to pay for more than that wear and tear, and\r\ncontributes to the supply of some other exigency of the state. But as the\r\nturnpike toll raises the price of goods in proportion to their weight and not\r\nto their value, it is chiefly paid by the consumers of coarse and bulky, not by\r\nthose of precious and light commodities. Whatever exigency of the state,\r\ntherefore, this tax might be intended to supply, that exigency would be chiefly\r\nsupplied at the expense of the poor, not of the rich; at the expense of those\r\nwho are least able to supply it, not of those who are most able.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, If government should at any time neglect the reparation of the\r\nhigh-roads, it would be still more difficult, than it is at present, to compel\r\nthe proper application of any part of the turnpike tolls. A large revenue might\r\nthus be levied upon the people, without any part of it being applied to the\r\nonly purpose to which a revenue levied in this manner ought ever to be applied.\r\nIf the meanness and poverty of the trustees of turnpike roads render it\r\nsometimes difficult, at present, to oblige them to repair their wrong; their\r\nwealth and greatness would render it ten times more so in the case which is\r\nhere supposed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the funds destined for the reparation of the high-roads are under\r\nthe immediate direction of the executive power. Those funds consist, partly in\r\na certain number of days labour, which the country people are in most parts of\r\nEurope obliged to give to the reparation of the highways; and partly in such a\r\nportion of the general revenue of the state as the king chooses to spare from\r\nhis other expenses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy the ancient law of France, as well as by that of most other parts of Europe,\r\nthe labour of the country people was under the direction of a local or\r\nprovincial magistracy, which had no immediate dependency upon the king’s\r\ncouncil. But, by the present practice, both the labour of the country people,\r\nand whatever other fund the king may choose to assign for the reparation of the\r\nhigh-roads in any particular province or generality, are entirely under the\r\nmanagement of the intendant; an officer who is appointed and removed by the\r\nking’s council who receives his orders from it, and is in constant\r\ncorrespondence with it. In the progress of despotism, the authority of the\r\nexecutive power gradually absorbs that of every other power in the state, and\r\nassumes to itself the management of every branch of revenue which is destined\r\nfor any public purpose. In France, however, the great post-roads, the roads\r\nwhich make the communication between the principal towns of the kingdom, are in\r\ngeneral kept in good order; and, in some provinces, are even a good deal\r\nsuperior to the greater part of the turnpike roads of England. But what we call\r\nthe cross roads, that is, the far greater part of the roads in the country, are\r\nentirely neglected, and are in many places absolutely impassable for any heavy\r\ncarriage. In some places it is even dangerous to travel on horseback, and mules\r\nare the only conveyance which can safely be trusted. The proud minister of an\r\nostentatious court, may frequently take pleasure in executing a work of\r\nsplendour and magnificence, such as a great highway, which is frequently seen\r\nby the principal nobility, whose applauses not only flatter his vanity, but\r\neven contribute to support his interest at court. But to execute a great number\r\nof little works, in which nothing that can be done can make any great\r\nappearance, or excite the smallest degree of admiration in any traveller, and\r\nwhich, in short, have nothing to recommend them but their extreme utility, is a\r\nbusiness which appears, in every respect, too mean and paltry to merit the\r\nattention of so great a magistrate. Under such an administration therefore,\r\nsuch works are almost always entirely neglected.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn China, and in several other governments of Asia, the executive power charges\r\nitself both with the reparation of the high-roads, and with the maintenance of\r\nthe navigable canals. In the instructions which are given to the governor of\r\neach province, those objects, it is said, are constantly recommended to him,\r\nand the judgment which the court forms of his conduct is very much regulated by\r\nthe attention which he appears to have paid to this part of his instructions.\r\nThis branch of public police, accordingly, is said to be very much attended to\r\nin all those countries, but particularly in China, where the high-roads, and\r\nstill more the navigable canals, it is pretended, exceed very much every thing\r\nof the same kind which is known in Europe. The accounts of those works,\r\nhowever, which have been transmitted to Europe, have generally been drawn up by\r\nweak and wondering travellers; frequently by stupid and lying missionaries. If\r\nthey had been examined by more intelligent eyes, and if the accounts of them\r\nhad been reported by more faithful witnesses, they would not, perhaps, appear\r\nto be so wonderful. The account which Bernier gives of some works of this kind\r\nin Indostan, falls very short of what had been reported of them by other\r\ntravellers, more disposed to the marvellous than he was. It may too, perhaps,\r\nbe in those countries, as it is in France, where the great roads, the great\r\ncommunications, which are likely to be the subjects of conversation at the\r\ncourt and in the capital, are attended to, and all the rest neglected. In\r\nChina, besides, in Indostan, and in several other governments of Asia, the\r\nrevenue of the sovereign arises almost altogether from a land tax or land rent,\r\nwhich rises or falls with the rise and fall of the annual produce of the land.\r\nThe great interest of the sovereign, therefore, his revenue, is in such\r\ncountries necessarily and immediately connected with the cultivation of the\r\nland, with the greatness of its produce, and with the value of its produce. But\r\nin order to render that produce both as great and as valuable as possible, it\r\nis necessary to procure to it as extensive a market as possible, and\r\nconsequently to establish the freest, the easiest, and the least expensive\r\ncommunication between all the different parts of the country; which can be done\r\nonly by means of the best roads and the best navigable canals. But the revenue\r\nof the sovereign does not, in any part of Europe, arise chiefly from a land tax\r\nor land rent. In all the great kingdoms of Europe, perhaps, the greater part of\r\nit may ultimately depend upon the produce of the land: but that dependency is\r\nneither so immediate nor so evident. In Europe, therefore, the sovereign does\r\nnot feel himself so directly called upon to promote the increase, both in\r\nquantity and value of the produce of the land, or, by maintaining good roads\r\nand canals, to provide the most extensive market for that produce. Though it\r\nshould be true, therefore, what I apprehend is not a little doubtful, that in\r\nsome parts of Asia this department of the public police is very properly\r\nmanaged by the executive power, there is not the least probability that, during\r\nthe present state of things, it could be tolerably managed by that power in any\r\npart of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven those public works, which are of such a nature that they cannot afford any\r\nrevenue for maintaining themselves, but of which the conveniency is nearly\r\nconfined to some particular place or district, are always better maintained by\r\na local or provincial revenue, under the management of a local and provincial\r\nadministration, than by the general revenue of the state, of which the\r\nexecutive power must always have the management. Were the streets of London to\r\nbe lighted and paved at the expense of the treasury, is there any probability\r\nthat they would be so well lighted and paved as they are at present, or even at\r\nso small an expense? The expense, besides, instead of being raised by a local\r\ntax upon the inhabitants of each particular street, parish, or district in\r\nLondon, would, in this case, be defrayed out of the general revenue of the\r\nstate, and would consequently be raised by a tax upon all the inhabitants of\r\nthe kingdom, of whom the greater part derive no sort of benefit from the\r\nlighting and paving of the streets of London.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe abuses which sometimes creep into the local and provincial administration\r\nof a local and provincial revenue, how enormous soever they may appear, are in\r\nreality, however, almost always very trifling in comparison of those which\r\ncommonly take place in the administration and expenditure of the revenue of a\r\ngreat empire. They are, besides, much more easily corrected. Under the local or\r\nprovincial administration of the justices of the peace in Great Britain, the\r\nsix days labour which the country people are obliged to give to the reparation\r\nof the highways, is not always, perhaps, very judiciously applied, but it is\r\nscarce ever exacted with any circumstance of cruelty or oppression. In France,\r\nunder the administration of the intendants, the application is not always more\r\njudicious, and the exaction is frequently the most cruel and oppressive. Such\r\ncorvees, as they are called, make one of the principal instruments of tyranny\r\nby which those officers chastise any parish or communeaute, which has had the\r\nmisfortune to fall under their displeasure.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf the public Works and Institution which are necessary for facilitating\r\nparticular Branches of Commerce.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe object of the public works and institutions above mentioned, is to\r\nfacilitate commerce in general. But in order to facilitate some particular\r\nbranches of it, particular institutions are necessary, which again require a\r\nparticular and extraordinary expense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome particular branches of commerce which are carried on with barbarous and\r\nuncivilized nations, require extraordinary protection. An ordinary store or\r\ncounting-house could give little security to the goods of the merchants who\r\ntrade to the western coast of Africa. To defend them from the barbarous\r\nnatives, it is necessary that the place where they are deposited should be in\r\nsome measure fortified. The disorders in the government of Indostan have been\r\nsupposed to render a like precaution necessary, even among that mild and gentle\r\npeople; and it was under pretence of securing their persons and property from\r\nviolence, that both the English and French East India companies were allowed to\r\nerect the first forts which they possessed in that country. Among other\r\nnations, whose vigorous government will suffer no strangers to possess any\r\nfortified place within their territory, it may be necessary to maintain some\r\nambassador, minister, or consul, who may both decide, according to their own\r\ncustoms, the differences arising among his own countrymen, and, in their\r\ndisputes with the natives, may by means of his public character, interfere with\r\nmore authority and afford them a more powerful protection than they could\r\nexpect from any private man. The interests of commerce have frequently made it\r\nnecessary to maintain ministers in foreign countries, where the purposes either\r\nof war or alliance would not have required any. The commerce of the Turkey\r\ncompany first occasioned the establishment of an ordinary ambassador at\r\nConstantinople. The first English embassies to Russia arose altogether from\r\ncommercial interests. The constant interference with those interests,\r\nnecessarily occasioned between the subjects of the different states of Europe,\r\nhas probably introduced the custom of keeping, in all neighbouring countries,\r\nambassadors or ministers constantly resident, even in the time of peace. This\r\ncustom, unknown to ancient times, seems not to be older than the end of the\r\nfifteenth, or beginning of the sixteenth century; that is, than the time when\r\ncommerce first began to extend itself to the greater part of the nations of\r\nEurope, and when they first began to attend to its interests.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt seems not unreasonable, that the extraordinary expense which the protection\r\nof any particular branch of commerce may occasion, should be defrayed by a\r\nmoderate tax upon that particular branch; by a moderate fine, for example, to\r\nbe paid by the traders when they first enter into it; or, what is more equal,\r\nby a particular duty of so much per cent. upon the goods which they either\r\nimport into, or export out of, the particular countries with which it is\r\ncarried on. The protection of trade, in general, from pirates and freebooters,\r\nis said to have given occasion to the first institution of the duties of\r\ncustoms. But, if it was thought reasonable to lay a general tax upon trade, in\r\norder to defray the expense of protecting trade in general, it should seem\r\nequally reasonable to lay a particular tax upon a particular branch of trade,\r\nin order to defray the extraordinary expense of protecting that branch.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe protection of trade, in general, has always been considered as essential to\r\nthe defence of the commonwealth, and, upon that account, a necessary part of\r\nthe duty of the executive power. The collection and application of the general\r\nduties of customs, therefore, have always been left to that power. But the\r\nprotection of any particular branch of trade is a part of the general\r\nprotection of trade; a part, therefore, of the duty of that power; and if\r\nnations always acted consistently, the particular duties levied for the\r\npurposes of such particular protection, should always have been left equally to\r\nits disposal. But in this respect, as well as in many others, nations have not\r\nalways acted consistently; and in the greater part of the commercial states of\r\nEurope, particular companies of merchants have had the address to persuade the\r\nlegislature to entrust to them the performance of this part of the duty of the\r\nsovereign, together with all the powers which are necessarily connected with\r\nit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThese companies, though they may, perhaps, have been useful for the first\r\nintroduction of some branches of commerce, by making, at their own expense, an\r\nexperiment which the state might not think it prudent to make, have in the\r\nlong-run proved, universally, either burdensome or useless, and have either\r\nmismanaged or confined the trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen those companies do not trade upon a joint stock, but are obliged to admit\r\nany person, properly qualified, upon paying a certain fine, and agreeing to\r\nsubmit to the regulations of the company, each member trading upon his own\r\nstock, and at his own risk, they are called regulated companies. When they\r\ntrade upon a joint stock, each member sharing in the common profit or loss, in\r\nproportion to his share in this stock, they are called joint-stock companies.\r\nSuch companies, whether regulated or joint-stock, sometimes have, and sometimes\r\nhave not, exclusive privileges.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRegulated companies resemble, in every respect, the corporation of trades, so\r\ncommon in the cities and towns of all the different countries of Europe; and\r\nare a sort of enlarged monopolies of the same kind. As no inhabitant of a town\r\ncan exercise an incorporated trade, without first obtaining his freedom in the\r\nincorporation, so, in most cases, no subject of the state can lawfully carry on\r\nany branch of foreign trade, for which a regulated company is established,\r\nwithout first becoming a member of that company. The monopoly is more or less\r\nstrict, according as the terms of admission are more or less difficult, and\r\naccording as the directors of the company have more or less authority, or have\r\nit more or less in their power to manage in such a manner as to confine the\r\ngreater part of the trade to themselves and their particular friends. In the\r\nmost ancient regulated companies, the privileges of apprenticeship were the\r\nsame as in other corporations, and entitled the person who had served his time\r\nto a member of the company, to become himself a member, either without paying\r\nany fine, or upon paying a much smaller one than what was exacted of other\r\npeople. The usual corporation spirit, wherever the law does not restrain it,\r\nprevails in all regulated companies. When they have been allowed to act\r\naccording to their natural genius, they have always, in order to confine the\r\ncompetition to as small a number of persons as possible, endeavoured to subject\r\nthe trade to many burdensome regulations. When the law has restrained them from\r\ndoing this, they have become altogether useless and insignificant.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe regulated companies for foreign commerce which at present subsist in Great\r\nBritain, are the ancient merchant-adventurers company, now commonly called the\r\nHamburgh company, the Russia company, the Eastland company, the Turkey company,\r\nand the African company.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe terms of admission into the Hamburgh company are now said to be quite easy;\r\nand the directors either have it not in their power to subject the trade to any\r\ntroublesome restraint or regulations, or, at least, have not of late exercised\r\nthat power. It has not always been so. About the middle of the last century,\r\nthe fine for admission was fifty, and at one time one hundred pounds, and the\r\nconduct of the company was said to be extremely oppressive. In 1643, in 1645,\r\nand in 1661, the clothiers and free traders of the west of England complained\r\nof them to parliament, as of monopolists, who confined the trade, and oppressed\r\nthe manufactures of the country. Though those complaints produced no act of\r\nparliament, they had probably intimidated the company so far, as to oblige them\r\nto reform their conduct. Since that time, at least, there have been no\r\ncomplaints against them. By the 10th and 11th of William III. c.6, the fine for\r\nadmission into the Russia company was reduced to five pounds; and by the 25th\r\nof Charles II. c.7, that for admission into the Eastland company to forty\r\nshillings; while, at the same time, Sweden, Denmark, and Norway, all the\r\ncountries on the north side of the Baltic, were exempted from their exclusive\r\ncharter. The conduct of those companies had probably given occasion to those\r\ntwo acts of parliament. Before that time, Sir Josiah Child had represented both\r\nthese and the Hamburgh company as extremely oppressive, and imputed to their\r\nbad management the low state of the trade, which we at that time carried on to\r\nthe countries comprehended within their respective charters. But though such\r\ncompanies may not, in the present times, be very oppressive, they are certainly\r\naltogether useless. To be merely useless, indeed, is perhaps, the highest\r\neulogy which can ever justly be bestowed upon a regulated company; and all the\r\nthree companies above mentioned seem, in their present state, to deserve this\r\neulogy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe fine for admission into the Turkey company was formerly twenty-five pounds\r\nfor all persons under twenty-six years of age, and fifty pounds for all persons\r\nabove that age. Nobody but mere merchants could be admitted; a restriction\r\nwhich excluded all shop-keepers and retailers. By a bye-law, no British\r\nmanufactures could be exported to Turkey but in the general ships of the\r\ncompany; and as those ships sailed always from the port of London, this\r\nrestriction confined the trade to that expensive port, and the traders to those\r\nwho lived in London and in its neighbourhood. By another bye-law, no person\r\nliving within twenty miles of London, and not free of the city, could be\r\nadmitted a member; another restriction which, joined to the foregoing,\r\nnecessarily excluded all but the freemen of London. As the time for the loading\r\nand sailing of those general ships depended altogether upon the directors, they\r\ncould easily fill them with their own goods, and those of their particular\r\nfriends, to the exclusion of others, who, they might pretend, had made their\r\nproposals too late. In this state of things, therefore, this company was, in\r\nevery respect, a strict and oppressive monopoly. Those abuses gave occasion to\r\nthe act of the 26th of George II. c. 18, reducing the fine for admission to\r\ntwenty pounds for all persons, without any distinction of ages, or any\r\nrestriction, either to mere merchants, or to the freemen of London; and\r\ngranting to all such persons the liberty of exporting, from all the ports of\r\nGreat Britain, to any port in Turkey, all British goods, of which the\r\nexportation was not prohibited, upon paying both the general duties of customs,\r\nand the particular duties assessed for defraying the necessary expenses of the\r\ncompany; and submitting, at the same time, to the lawful authority of the\r\nBritish ambassador and consuls resident in Turkey, and to the bye-laws of the\r\ncompany duly enacted. To prevent any oppression by those bye-laws, it was by\r\nthe same act ordained, that if any seven members of the company conceived\r\nthemselves aggrieved by any bye-law which should be enacted after the passing\r\nof this act, they might appeal to the board of trade and plantations (to the\r\nauthority of which a committee of the privy council has now succeeded),\r\nprovided such appeal was brought within twelve months after the bye-law was\r\nenacted; and that, if any seven members conceived themselves aggrieved by any\r\nbye-law which had been enacted before the passing of this act, they might bring\r\na like appeal, provided it was within twelve months after the day on which this\r\nact was to take place. The experience of one year, however, may not always be\r\nsufficient to discover to all the members of a great company the pernicious\r\ntendency of a particular bye-law; and if several of them should afterwards\r\ndiscover it, neither the board of trade, nor the committee of council, can\r\nafford them any redress. The object, besides, of the greater part of the\r\nbye-laws of all regulated companies, as well as of all other corporations, is\r\nnot so much to oppress those who are already members, as to discourage others\r\nfrom becoming so; which may be done, not only by a high fine, but by many other\r\ncontrivances. The constant view of such companies is always to raise the rate\r\nof their own profit as high as they can; to keep the market, both for the goods\r\nwhich they export, and for those which they import, as much understocked as\r\nthey can; which can be done only by restraining the competition, or by\r\ndiscouraging new adventurers from entering into the trade. A fine, even of\r\ntwenty pounds, besides, though it may not, perhaps, be sufficient to discourage\r\nany man from entering into the Turkey trade, with an intention to continue in\r\nit, may be enough to discourage a speculative merchant from hazarding a single\r\nadventure in it. In all trades, the regular established traders, even though\r\nnot incorporated, naturally combine to raise profits, which are noway so likely\r\nto be kept, at all times, down to their proper level, as by the occasional\r\ncompetition of speculative adventurers. The Turkey trade, though in some\r\nmeasure laid open by this act of parliament, is still considered by many people\r\nas very far from being altogether free. The Turkey company contribute to\r\nmaintain an ambassador and two or three consuls, who, like other public\r\nministers, ought to be maintained altogether by the state, and the trade laid\r\nopen to all his majesty’s subjects. The different taxes levied by the\r\ncompany, for this and other corporation purposes, might afford a revenue much\r\nmore than sufficient to enable a state to maintain such ministers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nRegulated companies, it was observed by Sir Josiah Child, though they had\r\nfrequently supported public ministers, had never maintained any forts or\r\ngarrisons in the countries to which they traded; whereas joint-stock companies\r\nfrequently had. And, in reality, the former seem to be much more unfit for this\r\nsort of service than the latter. First, the directors of a regulated company\r\nhave no particular interest in the prosperity of the general trade of the\r\ncompany, for the sake of which such forts and garrisons are maintained. The\r\ndecay of that general trade may even frequently contribute to the advantage of\r\ntheir own private trade; as, by diminishing the number of their competitors, it\r\nmay enable them both to buy cheaper, and to sell dearer. The directors of a\r\njoint-stock company, on the contrary, having only their share in the profits\r\nwhich are made upon the common stock committed to their management, have no\r\nprivate trade of their own, of which the interest can be separated from that of\r\nthe general trade of the company. Their private interest is connected with the\r\nprosperity of the general trade of the company, and with the maintenance of the\r\nforts and garrisons which are necessary for its defence. They are more likely,\r\ntherefore, to have that continual and careful attention which that maintenance\r\nnecessarily requires. Secondly, The directors of a joint-stock company have\r\nalways the management of a large capital, the joint stock of the company, a\r\npart of which they may frequently employ, with propriety, in building,\r\nrepairing, and maintaining such necessary forts and garrisons. But the\r\ndirectors of a regulated company, having the management of no common capital,\r\nhave no other fund to employ in this way, but the casual revenue arising from\r\nthe admission fines, and from the corporation duties imposed upon the trade of\r\nthe company. Though they had the same interest, therefore, to attend to the\r\nmaintenance of such forts and garrisons, they can seldom have the same ability\r\nto render that attention effectual. The maintenance of a public minister,\r\nrequiring scarce any attention, and but a moderate and limited expense, is a\r\nbusiness much more suitable both to the temper and abilities of a regulated\r\ncompany.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLong after the time of Sir Josiah Child, however, in 1750, a regulated company\r\nwas established, the present company of merchants trading to Africa; which was\r\nexpressly charged at first with the maintenance of all the British forts and\r\ngarrisons that lie between Cape Blanc and the Cape of Good Hope, and afterwards\r\nwith that of those only which lie between Cape Rouge and the Cape of Good Hope.\r\nThe act which establishes this company (the 23rd of George II. c.51 ), seems to\r\nhave had two distinct objects in view; first, to restrain effectually the\r\noppressive and monopolizing spirit which is natural to the directors of a\r\nregulated company; and, secondly, to force them, as much as possible, to give\r\nan attention, which is not natural to them, towards the maintenance of forts\r\nand garrisons.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFor the first of these purposes, the fine for admission is limited to forty\r\nshillings. The company is prohibited from trading in their corporate capacity,\r\nor upon a joint stock; from borrowing money upon common seal, or from laying\r\nany restraints upon the trade, which may be carried on freely from all places,\r\nand by all persons being British subjects, and paying the fine. The government\r\nis in a committee of nine persons, who meet at London, but who are chosen\r\nannually by the freemen of the company at London, Bristol, and Liverpool; three\r\nfrom each place. No committeeman can be continued in office for more than three\r\nyears together. Any committee-man might be removed by the board of trade and\r\nplantations, now by a committee of council, after being heard in his own\r\ndefence. The committee are forbid to export negroes from Africa, or to import\r\nany African goods into Great Britain. But as they are charged with the\r\nmaintenance of forts and garrisons, they may, for that purpose export from\r\nGreat Britain to Africa goods and stores of different kinds. Out of the moneys\r\nwhich they shall receive from the company, they are allowed a sum, not\r\nexceeding eight hundred pounds, for the salaries of their clerks and agents at\r\nLondon, Bristol, and Liverpool, the house-rent of their offices at London, and\r\nall other expenses of management, commission, and agency, in England. What\r\nremains of this sum, after defraying these different expenses, they may divide\r\namong themselves, as compensation for their trouble, in what manner they think\r\nproper. By this constitution, it might have been expected, that the spirit of\r\nmonopoly would have been effectually restrained, and the first of these\r\npurposes sufficiently answered. It would seem, however, that it had not. Though\r\nby the 4th of George III. c.20, the fort of Senegal, with all its dependencies,\r\nhad been invested in the company of merchants trading to Africa, yet, in the\r\nyear following (by the 5th of George III. c.44), not only Senegal and its\r\ndependencies, but the whole coast, from the port of Sallee, in South Barbary,\r\nto Cape Rouge, was exempted from the jurisdiction of that company, was vested\r\nin the crown, and the trade to it declared free to all his majesty’s\r\nsubjects. The company had been suspected of restraining the trade and of\r\nestablishing some sort of improper monopoly. It is not, however, very easy to\r\nconceive how, under the regulations of the 23d George II. they could do so. In\r\nthe printed debates of the house of commons, not always the most authentic\r\nrecords of truth, I observe, however, that they have been accused of this. The\r\nmembers of the committee of nine being all merchants, and the governors and\r\nfactors in their different forts and settlements being all dependent upon them,\r\nit is not unlikely that the latter might have given peculiar attention to the\r\nconsignments and commissions of the former, which would establish a real\r\nmonopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFor the second of these purposes, the maintenance of the forts and garrisons,\r\nan annual sum has been allotted to them by parliament, generally about £13,000.\r\nFor the proper application of this sum, the committee is obliged to account\r\nannually to the cursitor baron of exchequer; which account is afterwards to be\r\nlaid before parliament. But parliament, which gives so little attention to the\r\napplication of millions, is not likely to give much to that of £13,000 a-year;\r\nand the cursitor baron of exchequer, from his profession and education, is not\r\nlikely to be profoundly skilled in the proper expense of forts and garrisons.\r\nThe captains of his majesty’s navy, indeed, or any other commissioned\r\nofficers, appointed by the board of admiralty, may inquire into the condition\r\nof the forts and garrisons, and report their observations to that board. But\r\nthat board seems to have no direct jurisdiction over the committee, nor any\r\nauthority to correct those whose conduct it may thus inquire into; and the\r\ncaptains of his majesty’s navy, besides, are not supposed to be always\r\ndeeply learned in the science of fortification. Removal from an office, which\r\ncan be enjoyed only for the term of three years, and of which the lawful\r\nemoluments, even during that term, are so very small, seems to be the utmost\r\npunishment to which any committee-man is liable, for any fault, except direct\r\nmalversation, or embezzlement, either of the public money, or of that of the\r\ncompany; and the fear of the punishment can never be a motive of sufficient\r\nweight to force a continual and careful attention to a business to which he has\r\nno other interest to attend. The committee are accused of having sent out\r\nbricks and stones from England for the reparation of Cape Coast Castle, on the\r\ncoast of Guinea; a business for which parliament had several times granted an\r\nextraordinary sum of money. These bricks and stones, too, which had thus been\r\nsent upon so long a voyage, were said to have been of so bad a quality, that it\r\nwas necessary to rebuild, from the foundation, the walls which had been\r\nrepaired with them. The forts and garrisons which lie north of Cape Rouge, are\r\nnot only maintained at the expense of the state, but are under the immediate\r\ngovernment of the executive power; and why those which lie south of that cape,\r\nand which, too, are, in part at least, maintained at the expense of the state,\r\nshould be under a different government, it seems not very easy even to imagine\r\na good reason. The protection of the Mediterranean trade was the original\r\npurpose or pretence of the garrisons of Gibraltar and Minorca; and the\r\nmaintenance and government of those garrisons have always been, very properly,\r\ncommitted, not to the Turkey company, but to the executive power. In the extent\r\nof its dominion consists, in a great measure, the pride and dignity of that\r\npower; and it is not very likely to fail in attention to what is necessary for\r\nthe defence of that dominion. The garrisons at Gibraltar and Minorca,\r\naccordingly, have never been neglected. Though Minorca has been twice taken,\r\nand is now probably lost for ever, that disaster has never been imputed to any\r\nneglect in the executive power. I would not, however, be understood to\r\ninsinuate, that either of those expensive garrisons was ever, even in the\r\nsmallest degree, necessary for the purpose for which they were originally\r\ndismembered from the Spanish monarchy. That dismemberment, perhaps, never\r\nserved any other real purpose than to alienate from England her natural ally\r\nthe king of Spain, and to unite the two principal branches of the house of\r\nBourbon in a much stricter and more permanent alliance than the ties of blood\r\ncould ever have united them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nJoint-stock companies, established either by royal charter, or by act of\r\nparliament, are different in several respects, not only from regulated\r\ncompanies, but from private copartneries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, In a private copartnery, no partner without the consent of the company,\r\ncan transfer his share to another person, or introduce a new member into the\r\ncompany. Each member, however, may, upon proper warning, withdraw from the\r\ncopartnery, and demand payment from them of his share of the common stock. In a\r\njoint-stock company, on the contrary, no member can demand payment of his share\r\nfrom the company; but each member can, without their consent, transfer his\r\nshare to another person, and thereby introduce a new member. The value of a\r\nshare in a joint stock is always the price which it will bring in the market;\r\nand this may be either greater or less in any proportion, than the sum which\r\nits owner stands credited for in the stock of the company.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, In a private copartnery, each partner is bound for the debts\r\ncontracted by the company, to the whole extent of his fortune. In a joint-stock\r\ncompany, on the contrary, each partner is bound only to the extent of his\r\nshare.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trade of a joint-stock company is always managed by a court of directors.\r\nThis court, indeed, is frequently subject, in many respects, to the control of\r\na general court of proprietors. But the greater part of these proprietors\r\nseldom pretend to understand any thing of the business of the company; and when\r\nthe spirit of faction happens not to prevail among them, give themselves no\r\ntrouble about it, but receive contentedly such halfyearly or yearly dividend as\r\nthe directors think proper to make to them. This total exemption front trouble\r\nand front risk, beyond a limited sum, encourages many people to become\r\nadventurers in joint-stock companies, who would, upon no account, hazard their\r\nfortunes in any private copartnery. Such companies, therefore, commonly draw to\r\nthemselves much greater stocks, than any private copartnery can boast of. The\r\ntrading stock of the South Sea company at one time amounted to upwards of\r\nthirty-three millions eight hundred thousand pounds. The divided capital of the\r\nBank of England amounts, at present, to ten millions seven hundred and eighty\r\nthousand pounds. The directors of such companies, however, being the managers\r\nrather of other people’s money than of their own, it cannot well be\r\nexpected that they should watch over it with the same anxious vigilance with\r\nwhich the partners in a private copartnery frequently watch over their own.\r\nLike the stewards of a rich man, they are apt to consider attention to small\r\nmatters as not for their master’s honour, and very easily give themselves\r\na dispensation from having it. Negligence and profusion, therefore, must always\r\nprevail, more or less, in the management of the affairs of such a company. It\r\nis upon this account, that joint-stock companies for foreign trade have seldom\r\nbeen able to maintain the competition against private adventurers. They have,\r\naccordingly, very seldom succeeded without an exclusive privilege; and\r\nfrequently have not succeeded with one. Without an exclusive privilege, they\r\nhave commonly mismanaged the trade. With an exclusive privilege, they have both\r\nmismanaged and confined it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Royal African company, the predecessors of the present African company, had\r\nan exclusive privilege by charter; but as that charter had not been confirmed\r\nby act of parliament, the trade, in consequence of the declaration of rights,\r\nwas, soon after the Revolution, laid open to all his majesty’s subjects.\r\nThe Hudson’s Bay company are, as to their legal rights, in the same\r\nsituation as the Royal African company. Their exclusive charter has not been\r\nconfirmed by act of parliament. The South Sea company, as long as they\r\ncontinued to be a trading company, had an exclusive privilege confirmed by act\r\nof parliament; as have likewise the present united company of merchants trading\r\nto the East Indies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Royal African company soon found that they could not maintain the\r\ncompetition against private adventurers, whom, notwithstanding the declaration\r\nof rights, they continued for some time to call interlopers, and to persecute\r\nas such. In 1698, however, the private adventurers were subjected to a duty of\r\nten per cent. upon almost all the different branches of their trade, to be\r\nemployed by the company in the maintenance of their forts and garrisons. But,\r\nnotwithstanding this heavy tax, the company were still unable to maintain the\r\ncompetition. Their stock and credit gradually declined. In 1712, their debts\r\nhad become so great, that a particular act of parliament was thought necessary,\r\nboth for their security and for that of their creditors. It was enacted, that\r\nthe resolution of two-thirds of these creditors in number and value should bind\r\nthe rust, both with regard to the time which should be allowed to the company\r\nfor the payment of their debts, and with regard to any other agreement which it\r\nmight be thought proper to make with them concerning those debts. In 1730,\r\ntheir affairs were in so great disorder, that they were altogether incapable of\r\nmaintaining their forts and garrisons, the sole purpose and pretext of their\r\ninstitution. From that year till their final dissolution, the parliament judged\r\nit necessary to allow the annual sum of £10,000 for that purpose. In 1732,\r\nafter having been for many years losers by the trade of carrying negroes to the\r\nWest Indies, they at last resolved to give it up altogether; to sell to the\r\nprivate traders to America the negroes which they purchased upon the coast; and\r\nto employ their servants in a trade to the inland parts of Africa for gold\r\ndust, elephants teeth, dyeing drugs, etc. But their success in this more\r\nconfined trade was not greater than in their former extensive one. Their\r\naffairs continued to go gradually to decline, till at last, being in every\r\nrespect a bankrupt company, they were dissolved by act of parliament, and their\r\nforts and garrisons vested in the present regulated company of merchants\r\ntrading to Africa. Before the erection of the Royal African company, there had\r\nbeen three other joint-stock companies successively established, one after\r\nanother, for the African trade. They were all equally unsuccessful. They all,\r\nhowever, had exclusive charters, which, though not confirmed by act of\r\nparliament, were in those days supposed to convey a real exclusive privilege.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Hudson’s Bay company, before their misfortunes in the late war, had\r\nbeen much more fortunate than the Royal African company. Their necessary\r\nexpense is much smaller. The whole number of people whom they maintain in their\r\ndifferent settlements and habitations, which they have honoured with the name\r\nof forts, is said not to exceed a hundred and twenty persons. This number,\r\nhowever, is sufficient to prepare beforehand the cargo of furs and other goods\r\nnecessary for loading their ships, which, on account of the ice, can seldom\r\nremain above six or eight weeks in those seas. This advantage of having a cargo\r\nready prepared, could not, for several years, be acquired by private\r\nadventurers; and without it there seems to be no possibility of trading to\r\nHudson’s Bay. The moderate capital of the company, which, it is said,\r\ndoes not exceed one hundred and ten thousand pounds, may, besides, be\r\nsufficient to enable them to engross the whole, or almost the whole trade and\r\nsurplus produce, of the miserable though extensive country comprehended within\r\ntheir charter. No private adventurers, accordingly, have ever attempted to\r\ntrade to that country in competition with them. This company, therefore, have\r\nalways enjoyed an exclusive trade, in fact, though they may have no right to it\r\nin law. Over and above all this, the moderate capital of this company is said\r\nto be divided among a very small number of proprietors. But a joint-stock\r\ncompany, consisting of a small number of proprietors, with a moderate capital,\r\napproaches very nearly to the nature of a private copartnery, and may be\r\ncapable of nearly the same degree of vigilance and attention. It is not to be\r\nwondered at, therefore, if, in consequence of these different advantages, the\r\nHudson’s Bay company had, before the late war, been able to carry on\r\ntheir trade with a considerable degree of success. It does not seem probable,\r\nhowever, that their profits ever approached to what the late Mr Dobbs imagined\r\nthem. A much more sober and judicious writer, Mr Anderson, author of the\r\nHistorical and Chronological Deduction of Commerce, very justly observes, that\r\nupon examining the accounts which Mr Dobbs himself has given for several years\r\ntogether, of their exports and imports, and upon making proper allowances for\r\ntheir extraordinary risk and expense, it does not appear that their profits\r\ndeserve to be envied, or that they can much, if at all, exceed the ordinary\r\nprofits of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe South Sea company never had any forts or garrisons to maintain, and\r\ntherefore were entirely exempted from one great expense, to which other\r\njoint-stock companies for foreign trade are subject; but they had an immense\r\ncapital divided among an immense number of proprietors. It was naturally to be\r\nexpected, therefore, that folly, negligence, and profusion, should prevail in\r\nthe whole management of their affairs. The knavery and extravagance of their\r\nstock-jobbing projects are sufficiently known, and the explication of them\r\nwould be foreign to the present subject. Their mercantile projects were not\r\nmuch better conducted. The first trade which they engaged in, was that of\r\nsupplying the Spanish West Indies with negroes, of which (in consequence of\r\nwhat was called the Assiento Contract granted them by the treaty of Utrecht)\r\nthey had the exclusive privilege. But as it was not expected that much profit\r\ncould be made by this trade, both the Portuguese and French companies, who had\r\nenjoyed it upon the same terms before them, having been ruined by it, they were\r\nallowed, as compensation, to send annually a ship of a certain burden, to trade\r\ndirectly to the Spanish West Indies. Of the ten voyages which this annual ship\r\nwas allowed to make, they are said to have gained considerably by one, that of\r\nthe Royal Caroline, in 1731; and to have been losers, more or less, by almost\r\nall the rest. Their ill success was imputed, by their factors and agents, to\r\nthe extortion and oppression of the Spanish government; but was, perhaps,\r\nprincipally owing to the profusion and depredations of those very factors and\r\nagents; some of whom are said to have acquired great fortunes, even in one\r\nyear. In 1734, the company petitioned the king, that they might be allowed to\r\ndispose of the trade and tonnage of their annual ship, on account of the little\r\nprofit which they made by it, and to accept of such equivalent as they could\r\nobtain from the king of Spain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1724, this company had undertaken the whale fishery. Of this, indeed, they\r\nhad no monopoly; but as long as they carried it on, no other British subjects\r\nappear to have engaged in it. Of the eight voyages which their ships made to\r\nGreenland, they were gainers by one, and losers by all the rest. After their\r\neighth and last voyage, when they had sold their ships, stores, and utensils,\r\nthey found that their whole loss upon this branch, capital and interest\r\nincluded, amounted to upwards of £237,000.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1722, this company petitioned the parliament to be allowed to divide their\r\nimmense capital of more than thirty-three millions eight hundred thousand\r\npounds, the whole of which had been lent to government, into two equal parts;\r\nthe one half, or upwards of £16,900,000, to be put upon the same footing with\r\nother government annuities, and not to be subject to the debts contracted, or\r\nlosses incurred, by the directors of the company, in the prosecution of their\r\nmercantile projects; the other half to remain as before, a trading stock, and\r\nto be subject to those debts and losses. The petition was too reasonable not to\r\nbe granted. In 1733, they again petitioned the parliament, that three-fourths\r\nof their trading stock might be turned into annuity stock, and only one-fourth\r\nremain as trading stock, or exposed to the hazards arising from the bad\r\nmanagement of their directors. Both their annuity and trading stocks had, by\r\nthis time, been reduced more than two millions each, by several different\r\npayments from government; so that this fourth amounted only to £3,662,784:8:6.\r\nIn 1748, all the demands of the company upon the king of Spain, in consequence\r\nof the assiento contract, were, by the treaty of Aix-la-Chapelle, given up for\r\nwhat was supposed an equivalent. An end was put to their trade with the Spanish\r\nWest Indies; the remainder of their trading stock was turned into an annuity\r\nstock; and the company ceased, in every respect, to be a trading company.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt ought to be observed, that in the trade which the South Sea company carried\r\non by means of their annual ship, the only trade by which it ever was expected\r\nthat they could make any considerable profit, they were not without\r\ncompetitors, either in the foreign or in the home market. At Carthagena, Porto\r\nBello, and La Vera Cruz, they had to encounter the competition of the Spanish\r\nmerchants, who brought from Cadiz to those markets European goods, of the same\r\nkind with the outward cargo of their ship; and in England they had to encounter\r\nthat of the English merchants, who imported from Cadiz goods of the Spanish\r\nWest Indies, of the same kind with the inward cargo. The goods, both of the\r\nSpanish and English merchants, indeed, were, perhaps, subject to higher duties.\r\nBut the loss occasioned by the negligence, profusion, and malversation of the\r\nservants of the company, had probably been a tax much heavier than all those\r\nduties. That a joint-stock company should be able to carry on successfully any\r\nbranch of foreign trade, when private adventurers can come into any sort of\r\nopen and fair competition with them, seems contrary to all experience.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe old English East India company was established in 1600, by a charter from\r\nQueen Elizabeth. In the first twelve voyages which they fitted out for India,\r\nthey appear to have traded as a regulated company, with separate stocks, though\r\nonly in the general ships of the company. In 1612, they united into a joint\r\nstock. Their charter was exclusive, and, though not confirmed by act of\r\nparliament, was in those days supposed to convey a real exclusive privilege.\r\nFor many years, therefore, they were not much disturbed by interlopers. Their\r\ncapital, which never exceeded £744,000, and of which £50 was a share, was not\r\nso exorbitant, nor their dealings so extensive, as to afford either a pretext\r\nfor gross negligence and profusion, or a cover to gross malversation.\r\nNotwithstanding some extraordinary losses, occasioned partly by the malice of\r\nthe Dutch East India company, and partly by other accidents, they carried on\r\nfor many years a successful trade. But in process of time, when the principles\r\nof liberty were better understood, it became every day more and more doubtful,\r\nhow far a royal charter, not confirmed by act of parliament, could convey an\r\nexclusive privilege. Upon this question the decisions of the courts of justice\r\nwere not uniform, but varied with the authority of government, and the humours\r\nof the times. Interlopers multiplied upon them; and towards the end of the\r\nreign of Charles II., through the whole of that of James II., and during a part\r\nof that of William III., reduced them to great distress. In 1698, a proposal\r\nwas made to parliament, of advancing two millions to government, at eight per\r\ncent. provided the subscribers were erected into a new East India company, with\r\nexclusive privileges. The old East India company offered seven hundred thousand\r\npounds, nearly the amount of their capital, at four per cent. upon the same\r\nconditions. But such was at that time the state of public credit, that it was\r\nmore convenient for government to borrow two millions at eight per cent. than\r\nseven hundred thousand pounds at four. The proposal of the new subscribers was\r\naccepted, and a new East India company established in consequence. The old East\r\nIndia company, however, had a right to continue their trade till 1701. They\r\nhad, at the same time, in the name of their treasurer, subscribed very artfully\r\nthree hundred and fifteen thousand pounds into the stock of the new. By a\r\nnegligence in the expression of the act of parliament, which vested the East\r\nIndia trade in the subscribers to this loan of two millions, it did not appear\r\nevident that they were all obliged to unite into a joint stock. A few private\r\ntraders, whose subscriptions amounted only to seven thousand two hundred\r\npounds, insisted upon the privilege of trading separately upon their own\r\nstocks, and at their own risks. The old East India company had a right to a\r\nseparate trade upon their own stock till 1701; and they had likewise, both\r\nbefore and after that period, a right, like that or other private traders, to a\r\nseparate trade upon the £315,000, which they had subscribed into the stock of\r\nthe new company. The competition of the two companies with the private traders,\r\nand with one another, is said to have well nigh ruined both. Upon a subsequent\r\noccasion, in 1750, when a proposal was made to parliament for putting the trade\r\nunder the management of a regulated company, and thereby laying it in some\r\nmeasure open, the East India company, in opposition to this proposal,\r\nrepresented, in very strong terms, what had been, at this time, the miserable\r\neffects, as they thought them, of this competition. In India, they said, it\r\nraised the price of goods so high, that they were not worth the buying; and in\r\nEngland, by overstocking the market, it sunk their price so low, that no profit\r\ncould be made by them. That by a more plentiful supply, to the great advantage\r\nand conveniency of the public, it must have reduced very much the price of\r\nIndia goods in the English market, cannot well be doubted; but that it should\r\nhave raised very much their price in the Indian market, seems not very\r\nprobable, as all the extraordinary demand which that competition could occasion\r\nmust have been but as a drop of water in the immense ocean of Indian commerce.\r\nThe increase of demand, besides, though in the beginning it may sometimes raise\r\nthe price of goods, never fails to lower it in the long-run. It encourages\r\nproduction, and thereby increases the competition of the producers, who, in\r\norder to undersell one another, have recourse to new divisions or labour and\r\nnew improvements of art, which might never otherwise have been thought of. The\r\nmiserable effects of which the company complained, were the cheapness of\r\nconsumption, and the encouragement given to production; precisely the two\r\neffects which it is the great business of political economy to promote. The\r\ncompetition, however, of which they gave this doleful account, had not been\r\nallowed to be of long continuance. In 1702, the two companies were, in some\r\nmeasure, united by an indenture tripartite, to which the queen was the third\r\nparty; and in 1708, they were by act of parliament, perfectly consolidated into\r\none company, by their present name of the United Company of Merchants trading\r\nto the East Indies. Into this act it was thought worth while to insert a\r\nclause, allowing the separate traders to continue their trade till Michaelmas\r\n1711; but at the same time empowering the directors, upon three years notice,\r\nto redeem their little capital of seven thousand two hundred pounds, and\r\nthereby to convert the whole stock of the company into a joint stock. By the\r\nsame act, the capital of the company, in consequence of a new loan to\r\ngovernment, was augmented from two millions to three millions two hundred\r\nthousand pounds. In 1743, the company advanced another million to government.\r\nBut this million being raised, not by a call upon the proprietors, but by\r\nselling annuities and contracting bond-debts, it did not augment the stock upon\r\nwhich the proprietors could claim a dividend. It augmented, however, their\r\ntrading stock, it being equally liable with the other three millions two\r\nhundred thousand pounds, to the losses sustained, and debts contracted by the\r\ncompany in prosecution of their mercantile projects. From 1708, or at least\r\nfrom 1711, this company, being delivered from all competitors, and fully\r\nestablished in the monopoly of the English commerce to the East Indies, carried\r\non a successful trade, and from their profits, made annually a moderate\r\ndividend to their proprietors. During the French war, which began in 1741, the\r\nambition of Mr. Dupleix, the French governor of Pondicherry, involved them in\r\nthe wars of the Carnatic, and in the politics of the Indian princes. After many\r\nsignal successes, and equally signal losses, they at last lost Madras, at that\r\ntime their principal settlement in India. It was restored to them by the treaty\r\nof Aix-la-Chapelle; and, about this time the spirit of war and conquest seems\r\nto have taken possession of their servants in India, and never since to have\r\nleft them. During the French war, which began in 1755, their arms partook of\r\nthe general good fortune of those of Great Britain. They defended Madras, took\r\nPondicherry, recovered Calcutta, and acquired the revenues of a rich and\r\nextensive territory, amounting, it was then said, to upwards of three millions\r\na-year. They remained for several years in quiet possession of this revenue;\r\nbut in 1767, administration laid claim to their territorial acquisitions, and\r\nthe revenue arising from them, as of right belonging to the crown; and the\r\ncompany, in compensation for this claim, agreed to pay to government £400,000\r\na-year. They had, before this, gradually augmented their dividend from about\r\nsix to ten per cent.; that is, upon their capital of three millions two hundred\r\nthousand pounds, they had increased it by £128,000, or had raised it from one\r\nhundred and ninety-two thousand to three hundred and twenty thousand pounds\r\na-year. They were attempting about this time to raise it still further, to\r\ntwelve and a-half per cent., which would have made their annual payments to\r\ntheir proprietors equal to what they had agreed to pay annually to government,\r\nor to £400,000 a-year. But during the two years in which their agreement with\r\ngovernment was to take place, they were restrained from any further increase of\r\ndividend by two successive acts of parliament, of which the object was to\r\nenable them to make a speedier progress in the payment of their debts, which\r\nwere at this time estimated at upwards of six or seven millions sterling. In\r\n1769, they renewed their agreement with government for five years more, and\r\nstipulated, that during the course of that period, they should be allowed\r\ngradually to increase their dividend to twelve and a-half per cent; never\r\nincreasing it, however, more than one per cent. in one year. This increase of\r\ndividend, therefore, when it had risen to its utmost height, could augment\r\ntheir annual payments, to their proprietors and government together, but by\r\n£680,000, beyond what they had been before their late territorial acquisitions.\r\nWhat the gross revenue of those territorial acquisitions was supposed to amount\r\nto, has already been mentioned; and by an account brought by the Cruttenden\r\nEast Indiaman in 1769, the neat revenue, clear of all deductions and military\r\ncharges, was stated at two millions forty-eight thousand seven hundred and\r\nforty-seven pounds. They were said, at the same time, to possess another\r\nrevenue, arising partly from lands, but chiefly from the customs established at\r\ntheir different settlements, amounting to £439,000. The profits of their trade,\r\ntoo, according to the evidence of their chairman before the house of commons,\r\namounted, at this time, to at least £400,000 a-year; according to that of their\r\naccountant, to at least £500,000; according to the lowest account, at least\r\nequal to the highest dividend that was to be paid to their proprietors. So\r\ngreat a revenue might certainly have afforded an augmentation of £680,000 in\r\ntheir annual payments; and, at the same time, have left a large sinking fund,\r\nsufficient for the speedy reduction of their debt. In 1773, however, their\r\ndebts, instead of being reduced, were augmented by an arrear to the treasury in\r\nthe payment of the four hundred thousand pounds; by another to the custom-house\r\nfor duties unpaid; by a large debt to the bank, for money borrowed; and by a\r\nfourth, for bills drawn upon them from India, and wantonly accepted, to the\r\namount of upwards of twelve hundred thousand pounds. The distress which these\r\naccumulated claims brought upon them, obliged them not only to reduce all at\r\nonce their dividend to six per cent. but to throw themselves upon the mercy of\r\ngovermnent, and to supplicate, first, a release from the further payment of the\r\nstipulated £400,000 a-year; and, secondly, a loan of fourteen hundred thousand,\r\nto save them from immediate bankruptcy. The great increase of their fortune\r\nhad, it seems, only served to furnish their servants with a pretext for greater\r\nprofusion, and a cover for greater malversation, than in proportion even to\r\nthat increase of fortune. The conduct of their servants in India, and the\r\ngeneral state of their affairs both in India and in Europe, became the subject\r\nof a parliamentary inquiry: in consequence of which, several very important\r\nalterations were made in the constitution of their government, both at home and\r\nabroad. In India, their principal settlements or Madras, Bombay, and Calcutta,\r\nwhich had before been altogether independent of one another, were subjected to\r\na governor-general, assisted by a council of four assessors, parliament\r\nassuming to itself the first nomination of this governor and council, who were\r\nto reside at Calcutta; that city having now become, what Madras was before, the\r\nmost important of the English settlements in India. The court of the Mayor of\r\nCalcutta, originally instituted for the trial of mercantile causes, which arose\r\nin the city and neighbourhood, had gradually extended its jurisdiction with the\r\nextension of the empire. It was now reduced and confined to the original\r\npurpose of its institution. Instead of it, a new supreme court of judicature\r\nwas established, consisting of a chief justice and three judges, to be\r\nappointed by the crown. In Europe, the qualification necessary to entitle a\r\nproprietor to vote at their general courts was raised, from five hundred\r\npounds, the original price of a share in the stock of the company, to a\r\nthousand pounds. In order to vote upon this qualification, too, it was declared\r\nnecessary, that he should have possessed it, if acquired by his own purchase,\r\nand not by inheritance, for at least one year, instead of six months, the term\r\nrequisite before. The court of twenty-four directors had before been chosen\r\nannually; but it was now enacted, that each director should, for the future, be\r\nchosen for four years; six of them, however, to go out of office by rotation\r\nevery year, and not be capable of being re-chosen at the election of the six\r\nnew directors for the ensuing year. In consequence of these alterations, the\r\ncourts, both of the proprietors and directors, it was expected, would be likely\r\nto act with more dignity and steadiness than they had usually done before. But\r\nit seems impossible, by any alterations, to render those courts, in any\r\nrespect, fit to govern, or even to share in the government of a great empire;\r\nbecause the greater part of their members must always have too little interest\r\nin the prosperity of that empire, to give any serious attention to what may\r\npromote it. Frequently a man of great, sometimes even a man of small fortune,\r\nis willing to purchase a thousand pounds share in India stock, merely for the\r\ninfluence which he expects to aquire by a vote in the court of proprietors. It\r\ngives him a share, though not in the plunder, yet in the appointment of the\r\nplunderers of India; the court of directors, though they make that appointment,\r\nbeing necessarily more or less under the influence of the proprietors, who not\r\nonly elect those directors, but sometimes over-rule the appointments of their\r\nservants in India. Provided he can enjoy this influence for a few years, and\r\nthereby provide for a certain number of his friends, he frequently cares little\r\nabout the dividend, or even about the value of the stock upon which his vote is\r\nfounded. About the prosperity of the great empire, in the government of which\r\nthat vote gives him a share, he seldom cares at all. No other sovereigns ever\r\nwere, or, from the nature of things, ever could be, so perfectly indifferent\r\nabout the happiness or misery of their subjects, the improvement or waste of\r\ntheir dominions, the glory or disgrace of their administration, as, from\r\nirresistible moral causes, the greater part of the proprietors of such a\r\nmercantile company are, and necessarily must be. This indifference, too, was\r\nmore likely to be increased than diminished by some of the new regulations\r\nwhich were made in consequence of the parliamentary inquiry. By a resolution of\r\nthe house of commons, for example, it was declared, that when the £1,400,000\r\nlent to the company by government, should be paid, and their bond-debts be\r\nreduced to £1,500,000, they might then, and not till then, divide eight per\r\ncent. upon their capital; and that whatever remained of their revenues and neat\r\nprofits at home should be divided into four parts; three of them to be paid\r\ninto the exchequer for the use of the public, and the fourth to be reserved as\r\na fund, either for the further reduction of their bond-debts, or for the\r\ndischarge of other contingent exigencies which the company might labour under.\r\nBut if the company were bad stewards and bad sovereigns, when the whole of\r\ntheir neat revenue and profits belonged to themselves, and were at their own\r\ndisposal, they were surely not likely to be better when three-fourths of them\r\nwere to belong to other people, and the other fourth, though to be laid out for\r\nthe benefit of the company, yet to be so under the inspection and with the\r\napprobation of other people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt might be more agreeable to the company, that their own servants and\r\ndependants should have either the pleasure of wasting, or the profit of\r\nembezzling, whatever surplus might remain, after paying the proposed dividend\r\nof eight per cent. than that it should come into the hands of a set of people\r\nwith whom those resolutions could scarce fail to set them in some measure at\r\nvariance. The interest of those servants and dependants might so far\r\npredominate in the court of proprietors, as sometimes to dispose it to support\r\nthe authors of depredations which had been committed in direct violation of its\r\nown authority. With the majority of proprietors, the support even of the\r\nauthority of their own court might sometimes be a matter of less consequence\r\nthan the support of those who had set that authority at defiance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe regulations of 1773, accordingly, did not put an end to the disorder of the\r\ncompany’s government in India. Notwithstanding that, during a momentary\r\nfit of good conduct, they had at one time collected into the treasury of\r\nCalcutta more than £3,000,000 sterling; notwithstanding that they had\r\nafterwards extended either their dominion or their depredations over a vast\r\naccession of some of the richest and most fertile countries in India, all was\r\nwasted and destroyed. They found themselves altogether unprepared to stop or\r\nresist the incursion of Hyder Ali; and in consequence of those disorders, the\r\ncompany is now (1784) in greater distress than ever; and, in order to prevent\r\nimmediate bankruptcy, is once more reduced to supplicate the assistance of\r\ngovernment. Different plans have been proposed by the different parties in\r\nparliament for the better management of its affairs; and all those plans seem\r\nto agree in supposing, what was indeed always abundantly evident, that it is\r\naltogether unfit to govern its territorial possessions. Even the company itself\r\nseems to be convinced of its own incapacity so far, and seems, upon that\r\naccount willing to give them up to government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWith the right of possessing forts and garrisons in distant and barbarous\r\ncountries is necessarily connected the right of making peace and war in those\r\ncountries. The joint-stock companies, which have had the one right, have\r\nconstantly exercised the other, and have frequently had it expressly conferred\r\nupon them. How unjustly, how capriciously, how cruelly, they have commonly\r\nexercised it, is too well known from recent experience.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a company of merchants undertake, at their own risk and expense, to\r\nestablish a new trade with some remote and barbarous nation, it may not be\r\nunreasonable to incorporate them into a joint-stock company, and to grant them,\r\nin case of their success, a monopoly of the trade for a certain number of\r\nyears. It is the easiest and most natural way in which the state can recompense\r\nthem for hazarding a dangerous and expensive experiment, of which the public is\r\nafterwards to reap the benefit. A temporary monopoly of this kind may be\r\nvindicated, upon the same principles upon which a like monopoly of a new\r\nmachine is granted to its inventor, and that of a new book to its author. But\r\nupon the expiration of the term, the monopoly ought certainly to determine; the\r\nforts and garrisons, if it was found necessary to establish any, to be taken\r\ninto the hands of government, their value to be paid to the company, and the\r\ntrade to be laid open to all the subjects of the state. By a perpetual\r\nmonopoly, all the other subjects of the state are taxed very absurdly in two\r\ndifferent ways: first, by the high price of goods, which, in the case of a free\r\ntrade, they could buy much cheaper; and, secondly, by their total exclusion\r\nfrom a branch of business which it might be both convenient and profitable for\r\nmany of them to carry on. It is for the most worthless of all purposes, too,\r\nthat they are taxed in this manner. It is merely to enable the company to\r\nsupport the negligence, profusion, and malversation of their own servants,\r\nwhose disorderly conduct seldom allows the dividend of the company to exceed\r\nthe ordinary rate of profit in trades which are altogether free, and very\r\nfrequently makes a fall even a good deal short of that rate. Without a\r\nmonopoly, however, a joint-stock company, it would appear from experience,\r\ncannot long carry on any branch of foreign trade. To buy in one market, in\r\norder to sell with profit in another, when there are many competitors in both;\r\nto watch over, not only the occasional variations in the demand, but the much\r\ngreater and more frequent variations in the competition, or in the supply which\r\nthat demand is likely to get from other people; and to suit with dexterity and\r\njudgment both the quantity and quality of each assortment of goods to all these\r\ncircumstances, is a species of warfare, of which the operations are continually\r\nchanging, and which can scarce ever be conducted successfully, without such an\r\nunremitting exertion of vigilance and attention as cannot long be expected from\r\nthe directors of a joint-stock company. The East India company, upon the\r\nredemption of their funds, and the expiration of their exclusive privilege,\r\nhave a right, by act of parliament, to continue a corporation with a joint\r\nstock, and to trade in their corporate capacity to the East Indies, in common\r\nwith the rest of their fellow subjects. But in this situation, the superior\r\nvigilance and attention of a private adventurer would, in all probability, soon\r\nmake them weary of the trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn eminent French author, of great knowledge in matters of political economy,\r\nthe Abbe Morellet, gives a list of fifty-five joint-stock companies for foreign\r\ntrade, which have been established in different parts of Europe since the year\r\n1600, and which, according to him, have all failed from mismanagement,\r\nnotwithstanding they had exclusive privileges. He has been misinformed with\r\nregard to the history of two or three of them, which were not joint-stock\r\ncompanies and have not failed. But, in compensation, there have been several\r\njoint-stock companies which have failed, and which he has omitted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe only trades which it seems possible for a joint-stock company to carry on\r\nsuccessfully, without an exclusive privilege, are those, of which all the\r\noperations are capable of being reduced to what is called a routine, or to such\r\na uniformity of method as admits of little or no variation. Of this kind is,\r\nfirst, the banking trade; secondly, the trade of insurance from fire and from\r\nsea risk, and capture in time of war; thirdly, the trade of making and\r\nmaintaining a navigable cut or canal; and, fourthly, the similar trade of\r\nbringing water for the supply of a great city.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough the principles of the banking trade may appear somewhat abstruse, the\r\npractice is capable of being reduced to strict rules. To depart upon any\r\noccasion from those rules, in consequence of some flattering speculation of\r\nextraordinary gain, is almost always extremely dangerous and frequently fatal\r\nto the banking company which attempts it. But the constitution of joint-stock\r\ncompanies renders them in general, more tenacious of established rules than any\r\nprivate copartnery. Such companies, therefore, seem extremely well fitted for\r\nthis trade. The principal banking companies in Europe, accordingly, are\r\njoint-stock companies, many of which manage their trade very successfully\r\nwithout any exclusive privilege. The bank of England has no other exclusive\r\nprivilege, except that no other banking company in England shall consist of\r\nmore than six persons. The two banks of Edinburgh are joint-stock companies,\r\nwithout any exclusive privilege.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe value of the risk, either from fire, or from loss by sea, or by capture,\r\nthough it cannot, perhaps, be calculated very exactly, admits, however, of such\r\na gross estimation, as renders it, in some degree, reducible to strict rule and\r\nmethod. The trade of insurance, therefore, may be carried on successfully by a\r\njoint-stock company, without any exclusive privilege. Neither the London\r\nAssurance, nor the Royal Exchange Assurance companies have any such privilege.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a navigable cut or canal has been once made, the management of it becomes\r\nquite simple and easy, and it is reducible to strict rule and method. Even the\r\nmaking of it is so, as it may be contracted for with undertakers, at so much a\r\nmile, and so much a lock. The same thing may be said of a canal, an aqueduct,\r\nor a great pipe for bringing water to supply a great city. Such under-takings,\r\ntherefore, may be, and accordingly frequently are, very successfully managed by\r\njoint-stock companies, without any exclusive privilege.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo establish a joint-stock company, however, for any undertaking, merely\r\nbecause such a company might be capable of managing it successfully; or, to\r\nexempt a particular set of dealers from some of the general laws which take\r\nplace with regard to all their neighbours, merely because they might be capable\r\nof thriving, if they had such an exemption, would certainly not be reasonable.\r\nTo render such an establishment perfectly reasonable, with the circumstance of\r\nbeing reducible to strict rule and method, two other circumstances ought to\r\nconcur. First, it ought to appear with the clearest evidence, that the\r\nundertaking is of greater and more general utility than the greater part of\r\ncommon trades; and, secondly, that it requires a greater capital than can\r\neasily be collected into a private copartnery. If a moderate capital were\r\nsufficient, the great utility of the undertaking would not be a sufficient\r\nreason for establishing a joint-stock company; because, in this case, the\r\ndemand for what it was to produce, would readily and easily be supplied by\r\nprivate adventurers. In the four trades above mentioned, both those\r\ncircumstances concur.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great and general utility of the banking trade, when prudently managed, has\r\nbeen fully explained in the second book of this Inquiry. But a public bank,\r\nwhich is to support public credit, and, upon particular emergencies, to advance\r\nto government the whole produce of a tax, to the amount, perhaps, of several\r\nmillions, a year or two before it comes in, requires a greater capital than can\r\neasily be collected into any private copartnery.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe trade of insurance gives great security to the fortunes of private people,\r\nand, by dividing among a great many that loss which would ruin an individual,\r\nmakes it fall light and easy upon the whole society. In order to give this\r\nsecurity, however, it is necessary that the insurers should have a very large\r\ncapital. Before the establishment of the two joint-stock companies for\r\ninsurance in London, a list, it is said, was laid before the attorney-general,\r\nof one hundred and fifty private usurers, who had failed in the course of a few\r\nyears.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat navigable cuts and canals, and the works which are sometimes necessary for\r\nsupplying a great city with water, are of great and general utility, while, at\r\nthe same time, they frequently require a greater expense than suits the\r\nfortunes of private people, is sufficiently obvious.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nExcept the four trades above mentioned, I have not been able to recollect any\r\nother, in which all the three circumstances requisite for rendering reasonable\r\nthe establishment of a joint-stock company concur. The English copper company\r\nof London, the lead-smelting company, the glass-grinding company, have not even\r\nthe pretext of any great or singular utility in the object which they pursue;\r\nnor does the pursuit of that object seem to require any expense unsuitable to\r\nthe fortunes of many private men. Whether the trade which those companies carry\r\non, is reducible to such strict rule and method as to render it fit for the\r\nmanagement of a joint-stock company, or whether they have any reason to boast\r\nof their extraordinary profits, I do not pretend to know. The mine-adventurers\r\ncompany has been long ago bankrupt. A share in the stock of the British Linen\r\ncompany of Edinburgh sells, at present, very much below par, though less so\r\nthan it did some years ago. The joint-stock companies, which are established\r\nfor the public-spirited purpose of promoting some particular manufacture, over\r\nand above managing their own affairs ill, to the diminution of the general\r\nstock of the society, can, in other respects, scarce ever fail to do more harm\r\nthan good. Notwithstanding the most upright intentions, the unavoidable\r\npartiality of their directors to particular branches of the manufacture, of\r\nwhich the undertakers mislead and impose upon them, is a real discouragement to\r\nthe rest, and necessarily breaks, more or less, that natural proportion which\r\nwould otherwise establish itself between judicious industry and profit, and\r\nwhich, to the general industry of the country, is of all encouragements the\r\ngreatest and the most effectual.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nART. II.—Of the Expense of the Institution for the Education of Youth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe institutions for the education of the youth may, in the same manner,\r\nfurnish a revenue sufficient for defraying their own expense. The fee or\r\nhonorary, which the scholar pays to the master, naturally constitutes a revenue\r\nof this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nEven where the reward of the master does not arise altogether from this natural\r\nrevenue, it still is not necessary that it should be derived from that general\r\nrevenue of the society, of which the collection and application are, in most\r\ncountries, assigned to the executive power. Through the greater part of Europe,\r\naccordingly, the endowment of schools and colleges makes either no charge upon\r\nthat general revenue, or but a very small one. It everywhere arises chiefly\r\nfrom some local or provincial revenue, from the rent of some landed estate, or\r\nfrom the interest of some sum of money, allotted and put under the management\r\nof trustees for this particular purpose, sometimes by the sovereign himself,\r\nand sometimes by some private donor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHave those public endowments contributed in general, to promote the end of\r\ntheir institution? Have they contributed to encourage the diligence, and to\r\nimprove the abilities, of the teachers? Have they directed the course of\r\neducation towards objects more useful, both to the individual and to the\r\npublic, than those to which it would naturally have gone of its own accord? It\r\nshould not seem very difficult to give at least a probable answer to each of\r\nthose questions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every profession, the exertion of the greater part of those who exercise it,\r\nis always in proportion to the necessity they are under of making that\r\nexertion. This necessity is greatest with those to whom the emoluments of their\r\nprofession are the only source from which they expect their fortune, or even\r\ntheir ordinary revenue and subsistence. In order to acquire this fortune, or\r\neven to get this subsistence, they must, in the course of a year, execute a\r\ncertain quantity of work of a known value; and, where the competition is free,\r\nthe rivalship of competitors, who are all endeavouring to justle one another\r\nout of employment, obliges every man to endeavour to execute his work with a\r\ncertain degree of exactness. The greatness of the objects which are to be\r\nacquired by success in some particular professions may, no doubt, sometimes\r\nanimate the exertions of a few men of extraordinary spirit and ambition. Great\r\nobjects, however, are evidently not necessary, in order to occasion the\r\ngreatest exertions. Rivalship and emulation render excellency, even in mean\r\nprofessions, an object of ambition, and frequently occasion the very greatest\r\nexertions. Great objects, on the contrary, alone and unsupported by the\r\nnecessity of application, have seldom been sufficient to occasion any\r\nconsiderable exertion. In England, success in the profession of the law leads\r\nto some very great objects of ambition; and yet how few men, born to easy\r\nfortunes, have ever in this country been eminent in that profession?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe endowments of schools and colleges have necessarily diminished, more or\r\nless, the necessity of application in the teachers. Their subsistence, so far\r\nas it arises from their salaries, is evidently derived from a fund, altogether\r\nindependent of their success and reputation in their particular professions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some universities, the salary makes but a part, and frequently but a small\r\npart, of the emoluments of the teacher, of which the greater part arises from\r\nthe honoraries or fees of his pupils. The necessity of application, though\r\nalways more or less diminished, is not, in this case, entirely taken away.\r\nReputation in his profession is still of some importance to him, and he still\r\nhas some dependency upon the affection, gratitude, and favourable report of\r\nthose who have attended upon his instructions; and these favourable sentiments\r\nhe is likely to gain in no way so well as by deserving them, that is, by the\r\nabilities and diligence with which he discharges every part of his duty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn other universities, the teacher is prohibited from receiving any honorary or\r\nfee from his pupils, and his salary constitutes the whole of the revenue which\r\nhe derives from his office. His interest is, in this case, set as directly in\r\nopposition to his duty as it is possible to set it. It is the interest of every\r\nman to live as much at his ease as he can; and if his emoluments are to be\r\nprecisely the same, whether he does or does not perform some very laborious\r\nduty, it is certainly his interest, at least as interest is vulgarly\r\nunderstood, either to neglect it altogether, or, if he is subject to some\r\nauthority which will not suffer him to do this, to perform it in as careless\r\nand slovenly a manner as that authority will permit. If he is naturally active\r\nand a lover of labour, it is his interest to employ that activity in any way\r\nfrom which he can derive some advantage, rather than in the performance of his\r\nduty, from which he can derive none.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the authority to which he is subject resides in the body corporate, the\r\ncollege, or university, of which he himself is a member, and in which the\r\ngreater part of the other members are, like himself, persons who either are, or\r\nought to be teachers, they are likely to make a common cause, to be all very\r\nindulgent to one another, and every man to consent that his neighbour may\r\nneglect his duty, provided he himself is allowed to neglect his own. In the\r\nuniversity of Oxford, the greater part of the public professors have, for these\r\nmany years, given up altogether even the pretence of teaching.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the authority to which he is subject resides, not so much in the body\r\ncorporate, of which he is a member, as in some other extraneous persons, in the\r\nbishop of the diocese, for example, in the governor of the province, or,\r\nperhaps, in some minister of state, it is not, indeed, in this case, very\r\nlikely that he will be suffered to neglect his duty altogether. All that such\r\nsuperiors, however, can force him to do, is to attend upon his pupils a certain\r\nnumber of hours, that is, to give a certain number of lectures in the week, or\r\nin the year. What those lectures shall be, must still depend upon the diligence\r\nof the teacher; and that diligence is likely to be proportioned to the motives\r\nwhich he has for exerting it. An extraneous jurisdiction of this kind, besides,\r\nis liable to be exercised both ignorantly and capriciously. In its nature, it\r\nis arbitrary and discretionary; and the persons who exercise it, neither\r\nattending upon the lectures of the teacher themselves, nor perhaps\r\nunderstanding the sciences which it is his business to teach, are seldom\r\ncapable of exercising it with judgment. From the insolence of office, too, they\r\nare frequently indifferent how they exercise it, and are very apt to censure or\r\ndeprive him of his office wantonly and without any just cause. The person\r\nsubject to such jurisdiction is necessarily degraded by it, and, instead of\r\nbeing one of the most respectable, is rendered one of the meanest and most\r\ncontemptible persons in the society. It is by powerful protection only, that he\r\ncan effectually guard himself against the bad usage to which he is at all times\r\nexposed; and this protection he is most likely to gain, not by ability or\r\ndiligence in his profession, but by obsequiousness to the will of his\r\nsuperiors, and by being ready, at all times, to sacrifice to that will the\r\nrights, the interest, and the honour of the body corporate, of which he is a\r\nmember. Whoever has attended for any considerable time to the administration of\r\na French university, must have had occasion to remark the effects which\r\nnaturally result from an arbitrary and extraneous jurisdiction of this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever forces a certain number of students to any college or university,\r\nindependent of the merit or reputation of the teachers, tends more or less to\r\ndiminish the necessity of that merit or reputation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe privileges of graduates in arts, in law, physic, and divinity, when they\r\ncan be obtained only by residing a certain number of years in certain\r\nuniversities, necessarily force a certain number of students to such\r\nuniversities, independent of the merit or reputation of the teachers. The\r\nprivileges of graduates are a sort of statutes of apprenticeship, which have\r\ncontributed to the improvement of education just as the other statutes of\r\napprenticeship have to that of arts and manufactures.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe charitable foundations of scholarships, exhibitions, bursaries, etc.\r\nnecessarily attach a certain number of students to certain colleges,\r\nindependent altogether of the merit of those particular colleges. Were the\r\nstudents upon such charitable foundations left free to choose what college they\r\nliked best, such liberty might perhaps contribute to excite some emulation\r\namong different colleges. A regulation, on the contrary, which prohibited even\r\nthe independent members of every particular college from leaving it, and going\r\nto any other, without leave first asked and obtained of that which they meant\r\nto abandon, would tend very much to extinguish that emulation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf in each college, the tutor or teacher, who was to instruct each student in\r\nall arts and sciences, should not be voluntarily chosen by the student, but\r\nappointed by the head of the college; and if, in case of neglect, inability, or\r\nbad usage, the student should not be allowed to change him for another, without\r\nleave first asked and obtained; such a regulation would not only tend very much\r\nto extinguish all emulation among the different tutors of the same college, but\r\nto diminish very much, in all of them, the necessity of diligence and of\r\nattention to their respective pupils. Such teachers, though very well paid by\r\ntheir students, might be as much disposed to neglect them, as those who are not\r\npaid by them at all or who have no other recompense but their salary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf the teacher happens to be a man of sense, it must be an unpleasant thing to\r\nhim to be conscious, while he is lecturing to his students, that he is either\r\nspeaking or reading nonsense, or what is very little better than nonsense. It\r\nmust, too, be unpleasant to him to observe, that the greater part of his\r\nstudents desert his lectures; or perhaps, attend upon them with plain enough\r\nmarks of neglect, contempt, and derision. If he is obliged, therefore, to give\r\na certain number of lectures, these motives alone, without any other interest,\r\nmight dispose him to take some pains to give tolerably good ones. Several\r\ndifferent expedients, however, may be fallen upon, which will effectually blunt\r\nthe edge of all those incitements to diligence. The teacher, instead of\r\nexplaining to his pupils himself the science in which he proposes to instruct\r\nthem, may read some book upon it; and if this book is written in a foreign and\r\ndead language, by interpreting it to them into their own, or, what would give\r\nhim still less trouble, by making them interpret it to him, and by now and then\r\nmaking an occasional remark upon it, he may flatter himself that he is giving a\r\nlecture. The slightest degree of knowledge and application will enable him to\r\ndo this, without exposing himself to contempt or derision, by saying any thing\r\nthat is really foolish, absurd, or ridiculous. The discipline of the college,\r\nat the same time, may enable him to force all his pupils to the most regular\r\nattendance upon his sham lecture, and to maintain the most decent and\r\nrespectful behaviour during the whole time of the performance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discipline of colleges and universities is in general contrived, not for\r\nthe benefit of the students, but for the interest, or, more properly speaking,\r\nfor the ease of the masters. Its object is, in all cases, to maintain the\r\nauthority of the master, and, whether he neglects or performs his duty, to\r\noblige the students in all cases to behave to him as if he performed it with\r\nthe greatest diligence and ability. It seems to presume perfect wisdom and\r\nvirtue in the one order, and the greatest weakness and folly in the other.\r\nWhere the masters, however, really perform their duty, there are no examples, I\r\nbelieve, that the greater part of the students ever neglect theirs. No\r\ndiscipline is ever requisite to force attendance upon lectures which are really\r\nworth the attending, as is well known wherever any such lectures are given.\r\nForce and restraint may, no doubt, be in some degree requisite, in order to\r\noblige children, or very young boys, to attend to those parts of education,\r\nwhich it is thought necessary for them to acquire during that early period of\r\nlife; but after twelve or thirteen years of age, provided the master does his\r\nduty, force or restraint can scarce ever be necessary to carry on any part of\r\neducation. Such is the generosity of the greater part of young men, that so far\r\nfrom being disposed to neglect or despise the instructions of their master,\r\nprovided he shews some serious intention of being of use to them, they are\r\ngenerally inclined to pardon a great deal of incorrectness in the performance\r\nof his duty, and sometimes even to conceal from the public a good deal of gross\r\nnegligence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose parts of education, it is to be observed, for the teaching of which there\r\nare no public institutions, are generally the best taught. When a young man\r\ngoes to a fencing or a dancing school, he does not, indeed, always learn to\r\nfence or to dance very well; but he seldom fails of learning to fence or to\r\ndance. The good effects of the riding school are not commonly so evident. The\r\nexpense of a riding school is so great, that in most places it is a public\r\ninstitution. The three most essential parts of literary education, to read,\r\nwrite, and account, it still continues to be more common to acquire in private\r\nthan in public schools; and it very seldom happens, that anybody fails of\r\nacquiring them to the degree in which it is necessary to acquire them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, the public schools are much less corrupted than the universities.\r\nIn the schools, the youth are taught, or at least may be taught, Greek and\r\nLatin; that is, everything which the masters pretend to teach, or which it is\r\nexpected they should teach. In the universities, the youth neither are taught,\r\nnor always can find any proper means of being taught the sciences, which it is\r\nthe business of those incorporated bodies to teach. The reward of the\r\nschoolmaster, in most cases, depends principally, in some cases almost\r\nentirely, upon the fees or honoraries of his scholars. Schools have no\r\nexclusive privileges. In order to obtain the honours of graduation, it is not\r\nnecessary that a person should bring a certificate of his having studied a\r\ncertain number of years at a public school. If, upon examination, he appears to\r\nunderstand what is taught there, no questions are asked about the place where\r\nhe learnt it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe parts of education which are commonly taught in universities, it may\r\nperhaps be said, are not very well taught. But had it not been for those\r\ninstitutions, they would not have been commonly taught at all; and both the\r\nindividual and the public would have suffered a good deal from the want of\r\nthose important parts of education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe present universities of Europe were originally, the greater part of them,\r\necclesiastical corporations, instituted for the education of churchmen. They\r\nwere founded by the authority of the pope; and were so entirely under his\r\nimmediate protection, that their members, whether masters or students, had all\r\nof them what was then called the benefit of clergy, that is, were exempted from\r\nthe civil jurisdiction of the countries in which their respective universities\r\nwere situated, and were amenable only to the ecclesiastical tribunals. What was\r\ntaught in the greater part of those universities was suitable to the end of\r\ntheir institution, either theology, or something that was merely preparatory to\r\ntheology.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen Christianity was first established by law, a corrupted Latin had become\r\nthe common language of all the western parts of Europe. The service of the\r\nchurch, accordingly, and the translation of the Bible which were read in\r\nchurches, were both in that corrupted Latin; that is, in the common language of\r\nthe country, After the irruption of the barbarous nations who overturned the\r\nRoman empire, Latin gradually ceased to be the language of any part of Europe.\r\nBut the reverence of the people naturally preserves the established forms and\r\nceremonies of religion long after the circumstances which first introduced and\r\nrendered them reasonable, are no more. Though Latin, therefore, was no longer\r\nunderstood anywhere by the great body of the people, the whole service of the\r\nchurch still continued to be performed in that language. Two different\r\nlanguages were thus established in Europe, in the same manner as in ancient\r\nEgypt: a language of the priests, and a language of the people; a sacred and a\r\nprofane, a learned and an unlearned language. But it was necessary that the\r\npriests should understand something of that sacred and learned language in\r\nwhich they were to officiate; and the study of the Latin language therefore\r\nmade, from the beginning, an essential part of university education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was not so with that either of the Greek or of the Hebrew language. The\r\ninfallible decrees of the church had pronounced the Latin translation of the\r\nBible, commonly called the Latin Vulgate, to have been equally dictated by\r\ndivine inspiration, and therefore of equal authority with the Greek and Hebrew\r\noriginals. The knowledge of those two languages, therefore, not being\r\nindispensably requisite to a churchman, the study of them did not for a long\r\ntime make a necessary part of the common course of university education. There\r\nare some Spanish universities, I am assured, in which the study of the Greek\r\nlanguage has never yet made any part of that course. The first reformers found\r\nthe Greek text of the New Testament, and even the Hebrew text of the Old, more\r\nfavourable to their opinions than the vulgate translation, which, as might\r\nnaturally be supposed, had been gradually accommodated to support the doctrines\r\nof the Catholic Church. They set themselves, therefore, to expose the many\r\nerrors of that translation, which the Roman catholic clergy were thus put under\r\nthe necessity of defending or explaining. But this could not well be done\r\nwithout some knowledge of the original languages, of which the study was\r\ntherefore gradually introduced into the greater part of universities; both of\r\nthose which embraced, and of those which rejected, the doctrines of the\r\nreformation. The Greek language was connected with every part of that classical\r\nlearning, which, though at first principally cultivated by catholics and\r\nItalians, happened to come into fashion much about the same time that the\r\ndoctrines of the reformation were set on foot. In the greater part of\r\nuniversities, therefore, that language was taught previous to the study of\r\nphilosophy, and as soon as the student had made some progress in the Latin. The\r\nHebrew language having no connection with classical learning, and, except the\r\nHoly Scriptures, being the language of not a single book in any esteem the\r\nstudy of it did not commonly commence till after that of philosophy, and when\r\nthe student had entered upon the study of theology.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOriginally, the first rudiments, both of the Greek and Latin languages, were\r\ntaught in universities; and in some universities they still continue to be so.\r\nIn others, it is expected that the student should have previously acquired, at\r\nleast, the rudiments of one or both of those languages, of which the study\r\ncontinues to make everywhere a very considerable part of university education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient Greek philosophy was divided into three great branches; physics, or\r\nnatural philosophy; ethics, or moral philosophy; and logic. This general\r\ndivision seems perfectly agreeable to the nature of things.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe great phenomena of nature, the revolutions of the heavenly bodies,\r\neclipses, comets; thunder and lightning, and other extraordinary meteors; the\r\ngeneration, the life, growth, and dissolution of plants and animals; are\r\nobjects which, as they necessarily excite the wonder, so they naturally call\r\nforth the curiosity of mankind to inquire into their causes. Superstition first\r\nattempted to satisfy this curiosity, by referring all those wonderful\r\nappearances to the immediate agency of the gods. Philosophy afterwards\r\nendeavoured to account for them from more familiar causes, or from such as\r\nmankind were better acquainted with, than the agency of the gods. As those\r\ngreat phenomena are the first objects of human curiosity, so the science which\r\npretends to explain them must naturally have been the first branch of\r\nphilosophy that was cultivated. The first philosophers, accordingly, of whom\r\nhistory has preserved any account, appear to have been natural philosophers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every age and country of the world, men must have attended to the\r\ncharacters, designs, and actions of one another; and many reputable rules and\r\nmaxims for the conduct of human life must have been laid down and approved of\r\nby common consent. As soon as writing came into fashion, wise men, or those who\r\nfancied themselves such, would naturally endeavour to increase the number of\r\nthose established and respected maxims, and to express their own sense of what\r\nwas either proper or improper conduct, sometimes in the more artificial form of\r\napologues, like what are called the fables of Aesop; and sometimes in the more\r\nsimple one of apophthegms or wise sayings, like the proverbs of Solomon, the\r\nverses of Theognis and Phocyllides, and some part of the works of Hesiod. They\r\nmight continue in this manner, for a long time, merely to multiply the number\r\nof those maxims of prudence and morality, without even attempting to arrange\r\nthem in any very distinct or methodical order, much less to connect them\r\ntogether by one or more general principles, from which they were all deducible,\r\nlike effects from their natural causes. The beauty of a systematical\r\narrangement of different observations, connected by a few common principles,\r\nwas first seen in the rude essays of those ancient times towards a system of\r\nnatural philosophy. Something of the same kind was afterwards attempted in\r\nmorals. The maxims of common life were arranged in some methodical order, and\r\nconnected together by a few common principles, in the same manner as they had\r\nattempted to arrange and connect the phenomena of nature. The science which\r\npretends to investigate and explain those connecting principles, is what is\r\nproperly called Moral Philosophy.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDifferent authors gave different systems, both of natural and moral philosophy.\r\nBut the arguments by which they supported those different systems, far from\r\nbeing always demonstrations, were frequently at best but very slender\r\nprobabilities, and sometimes mere sophisms, which had no other foundation but\r\nthe inaccuracy and ambiguity of common language. Speculative systems, have, in\r\nall ages of the world, been adopted for reasons too frivolous to have\r\ndetermined the judgment of any man of common sense, in a matter of the smallest\r\npecuniary interest. Gross sophistry has scarce ever had any influence upon the\r\nopinions of mankind, except in matters of philosophy and speculation; and in\r\nthese it has frequently had the greatest. The patrons of each system of natural\r\nand moral philosophy, naturally endeavoured to expose the weakness of the\r\narguments adduced to support the systems which were opposite to their own. In\r\nexamining those arguments, they were necessarily led to consider the difference\r\nbetween a probable and a demonstrative argument, between a fallacious and a\r\nconclusive one; and logic, or the science of the general principles of good and\r\nbad reasoning, necessarily arose out of the observations which a scrutiny of\r\nthis kind gave occasion to; though, in its origin, posterior both to physics\r\nand to ethics, it was commonly taught, not indeed in all, but in the greater\r\npart of the ancient schools of philosophy, previously to either of those\r\nsciences. The student, it seems to have been thought, ought to understand well\r\nthe difference between good and bad reasoning, before he was led to reason upon\r\nsubjects of so great importance.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis ancient division of philosophy into three parts was, in the greater part\r\nof the universities of Europe, changed for another into five.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the ancient philosophy, whatever was taught concerning the nature either of\r\nthe human mind or of the Deity, made a part of the system of physics. Those\r\nbeings, in whatever their essence might be supposed to consist, were parts of\r\nthe great system of the universe, and parts, too, productive of the most\r\nimportant effects. Whatever human reason could either conclude or conjecture\r\nconcerning them, made, as it were, two chapters, though no doubt two very\r\nimportant ones, of the science which pretended to give an account of the origin\r\nand revolutions of the great system of the universe. But in the universities of\r\nEurope, where philosophy was taught only as subservient to theology, it was\r\nnatural to dwell longer upon these two chapters than upon any other of the\r\nscience. They were gradually more and more extended, and were divided into many\r\ninferior chapters; till at last the doctrine of spirits, of which so little can\r\nbe known, came to take up as much room in the system of philosophy as the\r\ndoctrine of bodies, of which so much can be known. The doctrines concerning\r\nthose two subjects were considered as making two distinct sciences. What are\r\ncalled metaphysics, or pneumatics, were set in opposition to physics, and were\r\ncultivated not only as the more sublime, but, for the purposes of a particular\r\nprofession, as the more useful science of the two. The proper subject of\r\nexperiment and observation, a subject in which a careful attention is capable\r\nof making so many useful discoveries, was almost entirely neglected. The\r\nsubject in which, after a very few simple and almost obvious truths, the most\r\ncareful attention can discover nothing but obscurity and uncertainty, and can\r\nconsequently produce nothing but subtleties and sophisms, was greatly\r\ncultivated.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen those two sciences had thus been set in opposition to one another, the\r\ncomparison between them naturally gave birth to a third, to what was called\r\nontology, or the science which treated of the qualities and attributes which\r\nwere common to both the subjects of the other two sciences. But if subtleties\r\nand sophisms composed the greater part of the metaphysics or pneumatics of the\r\nschools, they composed the whole of this cobweb science of ontology, which was\r\nlikewise sometimes called metaphysics.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWherein consisted the happiness and perfection of a man, considered not only as\r\nan individual, but as the member of a family, of a state, and of the great\r\nsociety of mankind, was the object which the ancient moral philosophy proposed\r\nto investigate. In that philosophy, the duties of human life were treated of as\r\nsubservient to the happiness and perfection of human life, But when moral, as\r\nwell as natural philosophy, came to be taught only as subservient to theology,\r\nthe duties of human life were treated of as chiefly subservient to the\r\nhappiness of a life to come. In the ancient philosophy, the perfection of\r\nvirtue was represented as necessarily productive, to the person who possessed\r\nit, of the most perfect happiness in this life. In the modern philosophy, it\r\nwas frequently represented as generally, or rather as almost always,\r\ninconsistent with any degree of happiness in this life; and heaven was to be\r\nearned only by penance and mortification, by the austerities and abasement of a\r\nmonk, not by the liberal, generous, and spirited conduct of a man. Casuistry,\r\nand an ascetic morality, made up, in most cases, the greater part of the moral\r\nphilosophy of the schools. By far the most important of all the different\r\nbranches of philosophy became in this manner by far the most corrupted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch, therefore, was the common course of philosophical education in the\r\ngreater part of the universities in Europe. Logic was taught first; ontology\r\ncame in the second place; pneumatology, comprehending the doctrine concerning\r\nthe nature of the human soul and of the Deity, in the third; in the fourth\r\nfollowed a debased system of moral philosophy, which was considered as\r\nimmediately connected with the doctrines of pneumatology, with the immortality\r\nof the human soul, and with the rewards and punishments which, from the justice\r\nof the Deity, were to be expected in a life to come: a short and superficial\r\nsystem of physics usually concluded the course.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe alterations which the universities of Europe thus introduced into the\r\nancient course of philosophy were all meant for the education of ecclesiastics,\r\nand to render it a more proper introduction to the study of theology. But the\r\nadditional quantity of subtlety and sophistry, the casuistry and ascetic\r\nmorality which those alterations introduced into it, certainly did not render\r\nit more for the education of gentlemen or men of the world, or more likely\r\neither to improve the understanding or to mend the heart.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis course of philosophy is what still continues to be taught in the greater\r\npart of the universities of Europe, with more or less diligence, according as\r\nthe constitution of each particular university happens to render diligence more\r\nor less necessary to the teachers. In some of the richest and best endowed\r\nuniversities, the tutors content themselves with teaching a few unconnected\r\nshreds and parcels of this corrupted course; and even these they commonly teach\r\nvery negligently and superficially.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe improvements which, in modern times have been made in several different\r\nbranches of philosophy, have not, the greater part of them, been made in\r\nuniversities, though some, no doubt, have. The greater part of universities\r\nhave not even been very forward to adopt those improvements after they were\r\nmade; and several of those learned societies have chosen to remain, for a long\r\ntime, the sanctuaries in which exploded systems and obsolete prejudices found\r\nshelter and protection, after they had been hunted out of every other corner of\r\nthe world. In general, the richest and best endowed universities have been\r\nslowest in adopting those improvements, and the most averse to permit any\r\nconsiderable change in the established plan of education. Those improvements\r\nwere more easily introduced into some of the poorer universities, in which the\r\nteachers, depending upon their reputation for the greater part of their\r\nsubsistence, were obliged to pay more attention to the current opinions of the\r\nworld.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the public schools and universities of Europe were originally\r\nintended only for the education of a particular profession, that of churchmen;\r\nand though they were not always very diligent in instructing their pupils, even\r\nin the sciences which were supposed necessary for that profession; yet they\r\ngradually drew to themselves the education of almost all other people,\r\nparticularly of almost all gentlemen and men of fortune. No better method, it\r\nseems, could be fallen upon, of spending, with any advantage, the long interval\r\nbetween infancy and that period of life at which men begin to apply in good\r\nearnest to the real business of the world, the business which is to employ them\r\nduring the remainder of their days. The greater part of what is taught in\r\nschools and universities, however, does not seem to be the most proper\r\npreparation for that business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, it becomes every day more and more the custom to send young people\r\nto travel in foreign countries immediately upon their leaving school, and\r\nwithout sending them to any university. Our young people, it is said, generally\r\nreturn home much improved by their travels. A young man, who goes abroad at\r\nseventeen or eighteen, and returns home at one-and-twenty, returns three or\r\nfour years older than he was when he went abroad; and at that age it is very\r\ndifficult not to improve a good deal in three or four years. In the course of\r\nhis travels, he generally acquires some knowledge of one or two foreign\r\nlanguages; a knowledge, however, which is seldom sufficient to enable him\r\neither to speak or write them with propriety. In other respects, he commonly\r\nreturns home more conceited, more unprincipled, more dissipated, and more\r\nincapable of any serious application, either to study or to business, than he\r\ncould well have become in so short a time had he lived at home. By travelling\r\nso very young, by spending in the most frivolous dissipation the most precious\r\nyears of his life, at a distance from the inspection and control of his parents\r\nand relations, every useful habit, which the earlier parts of his education\r\nmight have had some tendency to form in him, instead of being riveted and\r\nconfirmed, is almost necessarily either weakened or effaced. Nothing but the\r\ndiscredit into which the universities are allowing themselves to fall, could\r\never have brought into repute so very absurd a practice as that of travelling\r\nat this early period of life. By sending his son abroad, a father delivers\r\nhimself, at least for some time, from so disagreeable an object as that of a\r\nson unemployed, neglected, and going to ruin before his eyes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch have been the effects of some of the modern institutions for education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDifferent plans and different institutions for education seem to have taken\r\nplace in other ages and nations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the republics of ancient Greece, every free citizen was instructed, under\r\nthe direction of the public magistrate, in gymnastic exercises and in music. By\r\ngymnastic exercises, it was intended to harden his body, to sharpen his\r\ncourage, and to prepare him for the fatigues and dangers of war; and as the\r\nGreek militia was, by all accounts, one of the best that ever was in the world,\r\nthis part of their public education must have answered completely the purpose\r\nfor which it was intended. By the other part, music, it was proposed, at least\r\nby the philosophers and historians, who have given us an account of those\r\ninstitutions, to humanize the mind, to soften the temper, and to dispose it for\r\nperforming all the social and moral duties of public and private life.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn ancient Rome, the exercises of the Campus Martius answered the same purpose\r\nas those of the Gymnasium in ancient Greece, and they seem to have answered it\r\nequally well. But among the Romans there was nothing which corresponded to the\r\nmusical education of the Greeks. The morals of the Romans, however, both in\r\nprivate and public life, seem to have been, not only equal, but, upon the\r\nwhole, a good deal superior to those of the Greeks. That they were superior in\r\nprivate life, we have the express testimony of Polybius, and of Dionysius of\r\nHalicarnassus, two authors well acquainted with both nations; and the whole\r\ntenor of the Greek and Roman history bears witness to the superiority of the\r\npublic morals of the Romans. The good temper and moderation of contending\r\nfactions seem to be the most essential circumstances in the public morals of a\r\nfree people. But the factions of the Greeks were almost always violent and\r\nsanguinary; whereas, till the time of the Gracchi, no blood had ever been shed\r\nin any Roman faction; and from the time of the Gracchi, the Roman republic may\r\nbe considered as in reality dissolved. Notwithstanding, therefore, the very\r\nrespectable authority of Plato, Aristotle, and Polybius, and notwithstanding\r\nthe very ingenious reasons by which Mr. Montesquieu endeavours to support that\r\nauthority, it seems probable that the musical education of the Greeks had no\r\ngreat effect in mending their morals, since, without any such education, those\r\nof the Romans were, upon the whole, superior. The respect of those ancient\r\nsages for the institutions of their ancestors had probably disposed them to\r\nfind much political wisdom in what was, perhaps, merely an ancient custom,\r\ncontinued, without interruption, from the earliest period of those societies,\r\nto the times in which they had arrived at a considerable degree of refinement.\r\nMusic and dancing are the great amusements of almost all barbarous nations, and\r\nthe great accomplishments which are supposed to fit any man for entertaining\r\nhis society. It is so at this day among the negroes on the coast of Africa. It\r\nwas so among the ancient Celtes, among the ancient Scandinavians, and, as we\r\nmay learn from Homer, among the ancient Greeks, in the times preceding the\r\nTrojan war. When the Greek tribes had formed themselves into little republics,\r\nit was natural that the study of those accomplishments should for a long time\r\nmake a part of the public and common education of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe masters who instructed the young people, either in music or in military\r\nexercises, do not seem to have been paid, or even appointed by the state,\r\neither in Rome or even at Athens, the Greek republic of whose laws and customs\r\nwe are the best informed. The state required that every free citizen should fit\r\nhimself for defending it in war, and should upon that account, learn his\r\nmilitary exercises. But it left him to learn them of such masters as he could\r\nfind; and it seems to have advanced nothing for this purpose, but a public\r\nfield or place of exercise, in which he should practise and perform them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the early ages, both of the Greek and Roman republics, the other parts of\r\neducation seem to have consisted in learning to read, write, and account,\r\naccording to the arithmetic of the times. These accomplishments the richer\r\ncitizens seem frequently to have acquired at home, by the assistance of some\r\ndomestic pedagogue, who was, generally, either a slave or a freedman; and the\r\npoorer citizens in the schools of such masters as made a trade of teaching for\r\nhire. Such parts of education, however, were abandoned altogether to the care\r\nof the parents or guardians of each individual. It does not appear that the\r\nstate ever assumed any inspection or direction of them. By a law of Solon,\r\nindeed, the children were acquitted from maintaining those parents who had\r\nneglected to instruct them in some profitable trade or business.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the progress of refinement, when philosophy and rhetoric came into fashion,\r\nthe better sort of people used to send their children to the schools of\r\nphilosophers and rhetoricians, in order to be instructed in these fashionable\r\nsciences. But those schools were not supported by the public. They were, for a\r\nlong time, barely tolerated by it. The demand for philosophy and rhetoric was,\r\nfor a long time, so small, that the first professed teachers of either could\r\nnot find constant employment in any one city, but were obliged to travel about\r\nfrom place to place. In this manner lived Zeno of Elea, Protagoras, Gorgias,\r\nHippias, and many others. As the demand increased, the school, both of\r\nphilosophy and rhetoric, became stationary, first in Athens, and afterwards in\r\nseveral other cities. The state, however, seems never to have encouraged them\r\nfurther, than by assigning to some of them a particular place to teach in,\r\nwhich was sometimes done, too, by private donors. The state seems to have\r\nassigned the Academy to Plato, the Lyceum to Aristotle, and the Portico to Zeno\r\nof Citta, the founder of the Stoics. But Epicurus bequeathed his gardens to his\r\nown school. Till about the time of Marcus Antoninus, however, no teacher\r\nappears to have had any salary from the public, or to have had any other\r\nemoluments, but what arose from the honoraries or fees of his scholars. The\r\nbounty which that philosophical emperor, as we learn from Lucian, bestowed upon\r\none of the teachers of philosophy, probably lasted no longer than his own life.\r\nThere was nothing equivalent to the privileges of graduation; and to have\r\nattended any of those schools was not necessary, in order to be permitted to\r\npractise any particular trade or profession. If the opinion of their own\r\nutility could not draw scholars to them, the law neither forced anybody to go\r\nto them, nor rewarded anybody for having gone to them. The teachers had no\r\njurisdiction over their pupils, nor any other authority besides that natural\r\nauthority which superior virtue and abilities never fail to procure from young\r\npeople towards those who are entrusted with any part of their education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt Rome, the study of the civil law made a part of the education, not of the\r\ngreater part of the citizens, but of some particular families. The young\r\npeople, however, who wished to acquire knowledge in the law, had no public\r\nschool to go to, and had no other method of studying it, than by frequenting\r\nthe company of such of their relations and friends as were supposed to\r\nunderstand it. It is, perhaps, worth while to remark, that though the laws of\r\nthe twelve tables were many of them copied from those of some ancient Greek\r\nrepublics, yet law never seems to have grown up to be a science in any republic\r\nof ancient Greece. In Rome it became a science very early, and gave a\r\nconsiderable degree of illustration to those citizens who had the reputation of\r\nunderstanding it. In the republics of ancient Greece, particularly in Athens,\r\nthe ordinary courts of justice consisted of numerous, and therefore disorderly,\r\nbodies of people, who frequently decided almost at random, or as clamour,\r\nfaction, and party-spirit, happened to determine. The ignominy of an unjust\r\ndecision, when it was to be divided among five hundred, a thousand, or fifteen\r\nhundred people (for some of their courts were so very numerous), could not fall\r\nvery heavy upon any individual. At Rome, on the contrary, the principal courts\r\nof justice consisted either of a single judge, or of a small number of judges,\r\nwhose characters, especially as they deliberated always in public, could not\r\nfail to be very much affected by any rash or unjust decision. In doubtful cases\r\nsuch courts, from their anxiety to avoid blame, would naturally endeavour to\r\nshelter themselves under the example or precedent of the judges who had sat\r\nbefore them, either in the same or in some other court. This attention to\r\npractice and precedent, necessarily formed the Roman law into that regular and\r\norderly system in which it has been delivered down to us; and the like\r\nattention has had the like effects upon the laws of every other country where\r\nsuch attention has taken place. The superiority of character in the Romans over\r\nthat of the Greeks, so much remarked by Polybius and Dionysius of\r\nHalicarnassus, was probably more owing to the better constitution of their\r\ncourts of justice, than to any of the circumstances to which those authors\r\nascribe it. The Romans are said to have been particularly distinguished for\r\ntheir superior respect to an oath. But the people who were accustomed to make\r\noath only before some diligent and well informed court of justice, would\r\nnaturally be much more attentive to what they swore, than they who were\r\naccustomed to do the same thing before mobbish and disorderly assemblies.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe abilities, both civil and military, of the Greeks and Romans, will readily\r\nbe allowed to have been at least equal to those of any modern nation. Our\r\nprejudice is perhaps rather to overrate them. But except in what related to\r\nmilitary exercises, the state seems to have been at no pains to form those\r\ngreat abilities; for I cannot be induced to believe that the musical education\r\nof the Greeks could be of much consequence in forming them. Masters, however,\r\nhad been found, it seems, for instructing the better sort of people among those\r\nnations, in every art and science in which the circumstances of their society\r\nrendered it necessary or convenient for them to be instructed. The demand for\r\nsuch instruction produced, what it always produces, the talent for giving it;\r\nand the emulation which an unrestrained competition never fails to excite,\r\nappears to have brought that talent to a very high degree of perfection. In the\r\nattention which the ancient philosophers excited, in the empire which they\r\nacquired over the opinions and principles of their auditors, in the faculty\r\nwhich they possessed of giving a certain tone and character to the conduct and\r\nconversation of those auditors, they appear to have been much superior to any\r\nmodern teachers. In modern times, the diligence of public teachers is more or\r\nless corrupted by the circumstances which render them more or less independent\r\nof their success and reputation in their particular professions. Their\r\nsalaries, too, put the private teacher, who would pretend to come into\r\ncompetition with them, in the same state with a merchant who attempts to trade\r\nwithout a bounty, in competition with those who trade with a considerable one.\r\nIf he sells his goods at nearly the same price, he cannot have the same profit;\r\nand poverty and beggary at least, if not bankruptcy and ruin, will infallibly\r\nbe his lot. If he attempts to sell them much dearer, he is likely to have so\r\nfew customers, that his circumstances will not be much mended. The privileges\r\nof graduation, besides, are in many countries necessary, or at least extremely\r\nconvenient, to most men of learned professions, that is, to the far greater\r\npart of those who have occasion for a learned education. But those privileges\r\ncan be obtained only by attending the lectures of the public teachers. The most\r\ncareful attendance upon the ablest instructions of any private teacher cannot\r\nalways give any title to demand them. It is from these different causes that\r\nthe private teacher of any of the sciences, which are commonly taught in\r\nuniversities, is, in modern times, generally considered as in the very lowest\r\norder of men of letters. A man of real abilities can scarce find out a more\r\nhumiliating or a more unprofitable employment to turn them to. The endowments\r\nof schools and colleges have in this manner not only corrupted the diligence of\r\npublic teachers, but have rendered it almost impossible to have any good\r\nprivate ones.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWere there no public institutions for education, no system, no science, would\r\nbe taught, for which there was not some demand, or which the circumstances of\r\nthe times did not render it either necessary or convenient, or at least\r\nfashionable to learn. A private teacher could never find his account in\r\nteaching either an exploded and antiquated system of a science acknowledged to\r\nbe useful, or a science universally believed to be a mere useless and pedantic\r\nheap of sophistry and nonsense. Such systems, such sciences, can subsist\r\nnowhere but in those incorporated societies for education, whose prosperity and\r\nrevenue are in a great measure independent of their industry. Were there no\r\npublic institutions for education, a gentleman, after going through, with\r\napplication and abilities, the most complete course of education which the\r\ncircumstances of the times were supposed to afford, could not come into the\r\nworld completely ignorant of everything which is the common subject of\r\nconversation among gentlemen and men of the world.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are no public institutions for the education of women, and there is\r\naccordingly nothing useless, absurd, or fantastical, in the common course of\r\ntheir education. They are taught what their parents or guardians judge it\r\nnecessary or useful for them to learn, and they are taught nothing else. Every\r\npart of their education tends evidently to some useful purpose; either to\r\nimprove the natural attractions of their person, or to form their mind to\r\nreserve, to modesty, to chastity, and to economy; to render them both likely to\r\nbecame the mistresses of a family, and to behave properly when they have become\r\nsuch. In every part of her life, a woman feels some conveniency or advantage\r\nfrom every part of her education. It seldom happens that a man, in any part of\r\nhis life, derives any conveniency or advantage from some of the most laborious\r\nand troublesome parts of his education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOught the public, therefore, to give no attention, it may be asked, to the\r\neducation of the people? Or, if it ought to give any, what are the different\r\nparts of education which it ought to attend to in the different orders of the\r\npeople? and in what manner ought it to attend to them?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some cases, the state of society necessarily places the greater part of\r\nindividuals in such situations as naturally form in them, without any attention\r\nof government, almost all the abilities and virtues which that state requires,\r\nor perhaps can admit of. In other cases, the state of the society does not\r\nplace the greater part of individuals in such situations; and some attention of\r\ngovernment is necessary, in order to prevent the almost entire corruption and\r\ndegeneracy of the great body of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the progress of the division of labour, the employment of the far greater\r\npart of those who live by labour, that is, of the great body of the people,\r\ncomes to be confined to a few very simple operations; frequently to one or two.\r\nBut the understandings of the greater part of men are necessarily formed by\r\ntheir ordinary employments. The man whose whole life is spent in performing a\r\nfew simple operations, of which the effects, too, are perhaps always the same,\r\nor very nearly the same, has no occasion to exert his understanding, or to\r\nexercise his invention, in finding out expedients for removing difficulties\r\nwhich never occur. He naturally loses, therefore, the habit of such exertion,\r\nand generally becomes as stupid and ignorant as it is possible for a human\r\ncreature to become. The torpor of his mind renders him not only incapable of\r\nrelishing or bearing a part in any rational conversation, but of conceiving any\r\ngenerous, noble, or tender sentiment, and consequently of forming any just\r\njudgment concerning many even of the ordinary duties of private life. Of the\r\ngreat and extensive interests of his country he is altogether incapable of\r\njudging; and unless very particular pains have been taken to render him\r\notherwise, he is equally incapable of defending his country in war. The\r\nuniformity of his stationary life naturally corrupts the courage of his mind,\r\nand makes him regard, with abhorrence, the irregular, uncertain, and\r\nadventurous life of a soldier. It corrupts even the activity of his body, and\r\nrenders him incapable of exerting his strength with vigour and perseverance in\r\nany other employment, than that to which he has been bred. His dexterity at his\r\nown particular trade seems, in this manner, to be acquired at the expense of\r\nhis intellectual, social, and martial virtues. But in every improved and\r\ncivilized society, this is the state into which the labouring poor, that is,\r\nthe great body of the people, must necessarily fall, unless government takes\r\nsome pains to prevent it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is otherwise in the barbarous societies, as they are commonly called, of\r\nhunters, of shepherds, and even of husbandmen in that rude state of husbandry\r\nwhich precedes the improvement of manufactures, and the extension of foreign\r\ncommerce. In such societies, the varied occupations of every man oblige every\r\nman to exert his capacity, and to invent expedients for removing difficulties\r\nwhich are continually occurring. Invention is kept alive, and the mind is not\r\nsuffered to fall into that drowsy stupidity, which, in a civilized society,\r\nseems to benumb the understanding of almost all the inferior ranks of people.\r\nIn those barbarous societies, as they are called, every man, it has already\r\nbeen observed, is a warrior. Every man, too, is in some measure a statesman,\r\nand can form a tolerable judgment concerning the interest of the society, and\r\nthe conduct of those who govern it. How far their chiefs are good judges in\r\npeace, or good leaders in war, is obvious to the observation of almost every\r\nsingle man among them. In such a society, indeed, no man can well acquire that\r\nimproved and refined understanding which a few men sometimes possess in a more\r\ncivilized state. Though in a rude society there is a good deal of variety in\r\nthe occupations of every individual, there is not a great deal in those of the\r\nwhole society. Every man does, or is capable of doing, almost every thing which\r\nany other man does, or is capable of being. Every man has a considerable degree\r\nof knowledge, ingenuity, and invention but scarce any man has a great degree.\r\nThe degree, however, which is commonly possessed, is generally sufficient for\r\nconducting the whole simple business of the society. In a civilized state, on\r\nthe contrary, though there is little variety in the occupations of the greater\r\npart of individuals, there is an almost infinite variety in those of the whole\r\nsociety. These varied occupations present an almost infinite variety of objects\r\nto the contemplation of those few, who, being attached to no particular\r\noccupation themselves, have leisure and inclination to examine the occupations\r\nof other people. The contemplation of so great a variety of objects necessarily\r\nexercises their minds in endless comparisons and combinations, and renders\r\ntheir understandings, in an extraordinary degree, both acute and\r\ncomprehensive. Unless those few, however, happen to be placed in some very\r\nparticular situations, their great abilities, though honourable to themselves,\r\nmay contribute very little to the good government or happiness of their\r\nsociety. Notwithstanding the great abilities of those few, all the nobler parts\r\nof the human character may be, in a great measure, obliterated and extinguished\r\nin the great body of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe education of the common people requires, perhaps, in a civilized and\r\ncommercial society, the attention of the public, more than that of people of\r\nsome rank and fortune. People of some rank and fortune are generally eighteen\r\nor nineteen years of age before they enter upon that particular business,\r\nprofession, or trade, by which they propose to distinguish themselves in the\r\nworld. They have, before that, full time to acquire, or at least to fit\r\nthemselves for afterwards acquiring, every accomplishment which can recommend\r\nthem to the public esteem, or render them worthy of it. Their parents or\r\nguardians are generally sufficiently anxious that they should be so\r\naccomplished, and are in most cases, willing enough to lay out the expense\r\nwhich is necessary for that purpose. If they are not always properly educated,\r\nit is seldom from the want of expense laid out upon their education, but from\r\nthe improper application of that expense. It is seldom from the want of\r\nmasters, but from the negligence and incapacity of the masters who are to be\r\nhad, and from the difficulty, or rather from the impossibility, which there is,\r\nin the present state of things, of finding any better. The employments, too, in\r\nwhich people of some rank or fortune spend the greater part of their lives, are\r\nnot, like those of the common people, simple and uniform. They are almost all\r\nof them extremely complicated, and such as exercise the head more than the\r\nhands. The understandings of those who are engaged in such employments, can\r\nseldom grow torpid for want of exercise. The employments of people of some rank\r\nand fortune, besides, are seldom such as harass them from morning to night.\r\nThey generally have a good deal of leisure, during which they may perfect\r\nthemselves in every branch, either of useful or ornamental knowledge, of which\r\nthey may have laid the foundation, or for which they may have acquired some\r\ntaste in the earlier part of life.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is otherwise with the common people. They have little time to spare for\r\neducation. Their parents can scarce afford to maintain them, even in infancy.\r\nAs soon as they are able to work, they must apply to some trade, by which they\r\ncan earn their subsistence. That trade, too, is generally so simple and\r\nuniform, as to give little exercise to the understanding; while, at the same\r\ntime, their labour is both so constant and so severe, that it leaves them\r\nlittle leisure and less inclination to apply to, or even to think of any thing\r\nelse.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though the common people cannot, in any civilized society, be so well\r\ninstructed as people of some rank and fortune; the most essential parts of\r\neducation, however, to read, write, and account, can be acquired at so early a\r\nperiod of life, that the greater part, even of those who are to be bred to the\r\nlowest occupations, have time to acquire them before they can be employed in\r\nthose occupations. For a very small expense, the public can facilitate, can\r\nencourage and can even impose upon almost the whole body of the people, the\r\nnecessity of acquiring those most essential parts of education.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public can facilitate this acquisition, by establishing in every parish or\r\ndistrict a little school, where children maybe taught for a reward so moderate,\r\nthat even a common labourer may afford it; the master being partly, but not\r\nwholly, paid by the public; because, if he was wholly, or even principally,\r\npaid by it, he would soon learn to neglect his business. In Scotland, the\r\nestablishment of such parish schools has taught almost the whole common people\r\nto read, and a very great proportion of them to write and account. In England,\r\nthe establishment of charity schools has had an effect of the same kind, though\r\nnot so universally, because the establishment is not so universal. If, in those\r\nlittle schools, the books by which the children are taught to read, were a\r\nlittle more instructive than they commonly are; and if, instead of a little\r\nsmattering in Latin, which the children of the common people are sometimes\r\ntaught there, and which can scarce ever be of any use to them, they were\r\ninstructed in the elementary parts of geometry and mechanics; the literary\r\neducation of this rank of people would, perhaps, be as complete as can be.\r\nThere is scarce a common trade, which does not afford some opportunities of\r\napplying to it the principles of geometry and mechanics, and which would not,\r\ntherefore, gradually exercise and improve the common people in those\r\nprinciples, the necessary introduction to the most sublime, as well as to the\r\nmost useful sciences.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public can encourage the acquisition of those most essential parts of\r\neducation, by giving small premiums, and little badges of distinction, to the\r\nchildren of the common people who excel in them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public can impose upon almost the whole body of the people the necessity of\r\nacquiring the most essential parts of education, by obliging every man to\r\nundergo an examination or probation in them, before he can obtain the freedom\r\nin any corporation, or be allowed to set up any trade, either in a village or\r\ntown corporate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was in this manner, by facilitating the acquisition of their military and\r\ngymnastic exercises, by encouraging it, and even by imposing upon the whole\r\nbody of the people the necessity of learning those exercises, that the Greek\r\nand Roman republics maintained the martial spirit of their respective citizens.\r\nThey facilitated the acquisition of those exercises, by appointing a certain\r\nplace for learning and practising them, and by granting to certain masters the\r\nprivilege of teaching in that place. Those masters do not appear to have had\r\neither salaries or exclusive privileges of any kind. Their reward consisted\r\naltogether in what they got from their scholars; and a citizen, who had learnt\r\nhis exercises in the public gymnasia, had no sort of legal advantage over one\r\nwho had learnt them privately, provided the latter had learned them equally\r\nwell. Those republics encouraged the acquisition of those exercises, by\r\nbestowing little premiums and badges of distinction upon those who excelled in\r\nthem. To have gained a prize in the Olympic, Isthmian, or Nemaean games, gave\r\nillustration, not only to the person who gained it, but to his whole family and\r\nkindred. The obligation which every citizen was under, to serve a certain\r\nnumber of years, if called upon, in the armies of the republic, sufficiently\r\nimposed the necessity of learning those exercises, without which he could not\r\nbe fit for that service.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat in the progress of improvement, the practice of military exercises, unless\r\ngovernment takes proper pains to support it, goes gradually to decay, and,\r\ntogether with it, the martial spirit of the great body of the people, the\r\nexample of modern Europe sufficiently demonstrates. But the security of every\r\nsociety must always depend, more or less, upon the martial spirit of the great\r\nbody of the people. In the present times, indeed, that martial spirit alone,\r\nand unsupported by a well-disciplined standing army, would not, perhaps, be\r\nsufficient for the defence and security of any society. But where every citizen\r\nhad the spirit of a soldier, a smaller standing army would surely be requisite.\r\nThat spirit, besides, would necessarily diminish very much the dangers to\r\nliberty, whether real or imaginary, which are commonly apprehended from a\r\nstanding army. As it would very much facilitate the operations of that army\r\nagainst a foreign invader; so it would obstruct them as much, if unfortunately\r\nthey should ever be directed against the constitution of the state.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient institutions of Greece and Rome seem to have been much more\r\neffectual for maintaining the martial spirit of the great body of the people,\r\nthan the establishment of what are called the militias of modern times. They\r\nwere much more simple. When they were once established, they executed\r\nthemselves, and it required little or no attention from government to maintain\r\nthem in the most perfect vigour. Whereas to maintain, even in tolerable\r\nexecution, the complex regulations of any modern militia, requires the\r\ncontinual and painful attention of government, without which they are\r\nconstantly falling into total neglect and disuse. The influence, besides, of\r\nthe ancient institutions, was much more universal. By means of them, the whole\r\nbody of the people was completely instructed in the use of arms; whereas it is\r\nbut a very small part of them who can ever be so instructed by the regulations\r\nof any modern militia, except, perhaps, that of Switzerland. But a coward, a\r\nman incapable either of defending or of revenging himself, evidently wants one\r\nof the most essential parts of the character of a man. He is as much mutilated\r\nand deformed in his mind as another is in his body, who is either deprived of\r\nsome of its most essential members, or has lost the use of them. He is\r\nevidently the more wretched and miserable of the two; because happiness and\r\nmisery, which reside altogether in the mind, must necessarily depend more upon\r\nthe healthful or unhealthful, the mutilated or entire state of the mind, than\r\nupon that of the body. Even though the martial spirit of the people were of no\r\nuse towards the defence of the society, yet, to prevent that sort of mental\r\nmutilation, deformity, and wretchedness, which cowardice necessarily involves\r\nin it, from spreading themselves through the great body of the people, would\r\nstill deserve the most serious attention of government; in the same manner as\r\nit would deserve its most serious attention to prevent a leprosy, or any other\r\nloathsome and offensive disease, though neither mortal nor dangerous, from\r\nspreading itself among them; though, perhaps, no other public good might result\r\nfrom such attention, besides the prevention of so great a public evil.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same thing may be said of the gross ignorance and stupidity which, in a\r\ncivilized society, seem so frequently to benumb the understandings of all the\r\ninferior ranks of people. A man without the proper use of the intellectual\r\nfaculties of a man, is, if possible, more contemptible than even a coward, and\r\nseems to be mutilated and deformed in a still more essential part of the\r\ncharacter of human nature. Though the state was to derive no advantage from the\r\ninstruction of the inferior ranks of people, it would still deserve its\r\nattention that they should not be altogether uninstructed. The state, however,\r\nderives no inconsiderable advantage from their instruction. The more they are\r\ninstructed, the less liable they are to the delusions of enthusiasm and\r\nsuperstition, which, among ignorant nations frequently occasion the most\r\ndreadful disorders. An instructed and intelligent people, besides, are always\r\nmore decent and orderly than an ignorant and stupid one. They feel themselves,\r\neach individually, more respectable, and more likely to obtain the respect of\r\ntheir lawful superiors, and they are, therefore, more disposed to respect those\r\nsuperiors. They are more disposed to examine, and more capable of seeing\r\nthrough, the interested complaints of faction and sedition; and they are, upon\r\nthat account, less apt to be misled into any wanton or unnecessary opposition\r\nto the measures of government. In free countries, where the safety of\r\ngovernment depends very much upon the favourable judgment which the people may\r\nform of its conduct, it must surely be of the highest importance, that they\r\nshould not be disposed to judge rashly or capriciously concerning it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nArt. III.—Of the Expense of the Institutions for the Instruction of\r\nPeople of all Ages.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe institutions for the instruction of people of all ages, are chiefly those\r\nfor religious instruction. This is a species of instruction, of which the\r\nobject is not so much to render the people good citizens in this world, as to\r\nprepare them for another and a better world in the life to come. The teachers\r\nof the doctrine which contains this instruction, in the same manner as other\r\nteachers, may either depend altogether for their subsistence upon the voluntary\r\ncontributions of their hearers; or they may derive it from some other fund, to\r\nwhich the law of their country may entitle them; such as a landed estate, a\r\ntythe or land tax, an established salary or stipend. Their exertion, their zeal\r\nand industry, are likely to be much greater in the former situation than in the\r\nlatter. In this respect, the teachers of a new religion have always had a\r\nconsiderable advantage in attacking those ancient and established systems, of\r\nwhich the clergy, reposing themselves upon their benefices, had neglected to\r\nkeep up the fervour of faith and devotion in the great body of the people; and\r\nhaving given themselves up to indolence, were become altogether incapable of\r\nmaking any vigorous exertion in defence even of their own establishment. The\r\nclergy of an established and well endowed religion frequently become men of\r\nlearning and elegance, who possess all the virtues of gentlemen, or which can\r\nrecommend them to the esteem of gentlemen; but they are apt gradually to lose\r\nthe qualities, both good and bad, which gave them authority and influence with\r\nthe inferior ranks of people, and which had perhaps been the original causes of\r\nthe success and establishment of their religion. Such a clergy, when attacked\r\nby a set of popular and bold, though perhaps stupid and ignorant enthusiasts,\r\nfeel themselves as perfectly defenceless as the indolent, effeminate, and full\r\nfed nations of the southern parts of Asia, when they were invaded by the\r\nactive, hardy, and hungry Tartars of the north. Such a clergy, upon such an\r\nemergency, have commonly no other resource than to call upon the civil\r\nmagistrate to persecute, destroy, or drive out their adversaries, as disturbers\r\nof the public peace. It was thus that the Roman catholic clergy called upon the\r\ncivil magistrate to persecute the protestants, and the church of England to\r\npersecute the dissenters; and that in general every religious sect, when it has\r\nonce enjoyed, for a century or two, the security of a legal establishment, has\r\nfound itself incapable of making any vigorous defence against any new sect\r\nwhich chose to attack its doctrine or discipline. Upon such occasions, the\r\nadvantage, in point of learning and good writing, may sometimes be on the side\r\nof the established church. But the arts of popularity, all the arts of gaining\r\nproselytes, are constantly on the side of its adversaries. In England, those\r\narts have been long neglected by the well endowed clergy of the established\r\nchurch, and are at present chiefly cultivated by the dissenters and by the\r\nmethodists. The independent provisions, however, which in many places have been\r\nmade for dissenting teachers, by means of voluntary subscriptions, of trust\r\nrights, and other evasions of the law, seem very much to have abated the zeal\r\nand activity of those teachers. They have many of them become very learned,\r\ningenious, and respectable men; but they have in general ceased to be very\r\npopular preachers. The methodists, without half the learning of the dissenters,\r\nare much more in vogue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the church of Rome the industry and zeal of the inferior clergy are kept\r\nmore alive by the powerful motive of self-interest, than perhaps in any\r\nestablished protestant church. The parochial clergy derive many of them, a very\r\nconsiderable part of their subsistence from the voluntary oblations of the\r\npeople; a source of revenue, which confession gives them many opportunities of\r\nimproving. The mendicant orders derive their whole subsistence from such\r\noblations. It is with them as with the hussars and light infantry of some\r\narmies; no plunder, no pay. The parochial clergy are like those teachers whose\r\nreward depends partly upon their salary, and partly upon the fees or honoraries\r\nwhich they get from their pupils; and these must always depend, more or less,\r\nupon their industry and reputation. The mendicant orders are like those\r\nteachers whose subsistence depends altogether upon their industry. They are\r\nobliged, therefore, to use every art which can animate the devotion of the\r\ncommon people. The establishment of the two great mendicant orders of St\r\nDominic and St. Francis, it is observed by Machiavel, revived, in the\r\nthirteenth and fourteenth centuries, the languishing faith and devotion of the\r\ncatholic church. In Roman catholic countries, the spirit of devotion is\r\nsupported altogether by the monks, and by the poorer parochial clergy. The\r\ngreat dignitaries of the church, with all the accomplishments of gentlemen and\r\nmen of the world, and sometimes with those of men of learning, are careful to\r\nmaintain the necessary discipline over their inferiors, but seldom give\r\nthemselves any trouble about the instruction of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n“Most of the arts and professions in a state,” says by far the most\r\nillustrious philosopher and historian of the present age, “are of such a\r\nnature, that, while they promote the interests of the society, they are also\r\nuseful or agreeable to some individuals; and, in that case, the constant rule\r\nof the magistrate, except, perhaps, on the first introduction of any art, is,\r\nto leave the profession to itself, and trust its encouragement to the\r\nindividuals who reap the benefit of it. The artizans, finding their profits to\r\nrise by the favour of their customers, increase, as much as possible, their\r\nskill and industry; and as matters are not disturbed by any injudicious\r\ntampering, the commodity is always sure to be at all times nearly proportioned\r\nto the demand.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n“But there are also some callings which, though useful and even necessary\r\nin a state, bring no advantage or pleasure to any individual; and the supreme\r\npower is obliged to alter its conduct with regard to the retainers of those\r\nprofessions. It must give them public encouragement in order to their\r\nsubsistence; and it must provide against that negligence to which they will\r\nnaturally be subject, either by annexing particular honours to profession, by\r\nestablishing a long subordination of ranks, and a strict dependence, or by some\r\nother expedient. The persons employed in the finances, fleets, and magistracy,\r\nare instances of this order of men.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n“It may naturally be thought, at first sight, that the ecclesiastics\r\nbelong to the first class, and that their encouragement, as well as that of\r\nlawyers and physicians, may safely be entrusted to the liberality of\r\nindividuals, who are attached to their doctrines, and who find benefit or\r\nconsolation from their spiritual ministry and assistance. Their industry and\r\nvigilance will, no doubt, be whetted by such an additional motive; and their\r\nskill in the profession, as well as their address in governing the minds of the\r\npeople, must receive daily increase, from their increasing practice, study, and\r\nattention.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n“But if we consider the matter more closely, we shall find that this\r\ninterested diligence of the clergy is what every wise legislator will study to\r\nprevent; because, in every religion except the true, it is highly pernicious,\r\nand it has even a natural tendency to pervert the truth, by infusing into it a\r\nstrong mixture of superstition, folly, and delusion. Each ghostly practitioner,\r\nin order to render himself more precious and sacred in the eyes of his\r\nretainers, will inspire them with the most violent abhorrence of all other\r\nsects, and continually endeavour, by some novelty, to excite the languid\r\ndevotion of his audience. No regard will be paid to truth, morals, or decency,\r\nin the doctrines inculcated. Every tenet will be adopted that best suits the\r\ndisorderly affections of the human frame. Customers will be drawn to each\r\nconventicle by new industry and address, in practising on the passions and\r\ncredulity of the populace. And, in the end, the civil magistrate will find that\r\nhe has dearly paid for his intended frugality, in saving a fixed establishment\r\nfor the priests; and that, in reality, the most decent and advantageous\r\ncomposition, which he can make with the spiritual guides, is to bribe their\r\nindolence, by assigning stated salaries to their profession, and rendering it\r\nsuperfluous for them to be farther active, than merely to prevent their flock\r\nfrom straying in quest of new pastors. And in this manner ecclesiastical\r\nestablishments, though commonly they arose at first from religious views, prove\r\nin the end advantageous to the political interests of society.”\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut whatever may have been the good or bad effects of the independent provision\r\nof the clergy, it has, perhaps, been very seldom bestowed upon them from any\r\nview to those effects. Times of violent religious controversy have generally\r\nbeen times of equally violent political faction. Upon such occasions, each\r\npolitical party has either found it, or imagined it, for his interest, to\r\nleague itself with some one or other of the contending religious sects. But\r\nthis could be done only by adopting, or, at least, by favouring the tenets of\r\nthat particular sect. The sect which had the good fortune to be leagued with\r\nthe conquering party necessarily shared in the victory of its ally, by whose\r\nfavour and protection it was soon enabled, in some degree, to silence and\r\nsubdue all its adversaries. Those adversaries had generally leagued themselves\r\nwith the enemies of the conquering party, and were, therefore the enemies of\r\nthat party. The clergy of this particular sect having thus become complete\r\nmasters of the field, and their influence and authority with the great body of\r\nthe people being in its highest vigour, they were powerful enough to overawe\r\nthe chiefs and leaders of their own party, and to oblige the civil magistrate\r\nto respect their opinions and inclinations. Their first demand was generally\r\nthat he should silence and subdue all their adversaries; and their second, that\r\nhe should bestow an independent provision on themselves. As they had generally\r\ncontributed a good deal to the victory, it seemed not unreasonable that they\r\nshould have some share in the spoil. They were weary, besides, of humouring the\r\npeople, and of depending upon their caprice for a subsistence. In making this\r\ndemand, therefore, they consulted their own ease and comfort, without troubling\r\nthemselves about the effect which it might have, in future times, upon the\r\ninfluence and authority of their order. The civil magistrate, who could comply\r\nwith their demand only by giving them something which he would have chosen much\r\nrather to take, or to keep to himself, was seldom very forward to grant it.\r\nNecessity, however, always forced him to submit at last, though frequently not\r\ntill after many delays, evasions, and affected excuses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut if politics had never called in the aid of religion, had the conquering\r\nparty never adopted the tenets of one sect more than those of another, when it\r\nhad gained the victory, it would probably have dealt equally and impartially\r\nwith all the different sects, and have allowed every man to choose his own\r\npriest, and his own religion, as he thought proper. There would, and, in this\r\ncase, no doubt, have been, a great multitude of religious sects. Almost every\r\ndifferent congregation might probably have had a little sect by itself, or have\r\nentertained some peculiar tenets of its own. Each teacher, would, no doubt,\r\nhave felt himself under the necessity of making the utmost exertion, and of\r\nusing every art, both to preserve and to increase the number of his disciples.\r\nBut as every other teacher would have felt himself under the same necessity,\r\nthe success of no one teacher, or sect of teachers, could have been very great.\r\nThe interested and active zeal of religious teachers can be dangerous and\r\ntroublesome only where there is either but one sect tolerated in the society,\r\nor where the whole of a large society is divided into two or three great sects;\r\nthe teachers of each acting by concert, and under a regular discipline and\r\nsubordination. But that zeal must be altogether innocent, where the society is\r\ndivided into two or three hundred, or, perhaps, into as many thousand small\r\nsects, of which no one could be considerable enough to disturb the public\r\ntranquillity. The teachers of each sect, seeing themselves surrounded on all\r\nsides with more adversaries than friends, would be obliged to learn that\r\ncandour and moderation which are so seldom to be found among the teachers of\r\nthose great sects, whose tenets, being supported by the civil magistrate, are\r\nheld in veneration by almost all the inhabitants of extensive kingdoms and\r\nempires, and who, therefore, see nothing round them but followers, disciples,\r\nand humble admirers. The teachers of each little sect, finding themselves\r\nalmost alone, would be obliged to respect those of almost every other sect; and\r\nthe concessions which they would mutually find it both convenient and agreeable\r\nto make one to another, might in time, probably reduce the doctrine of the\r\ngreater part of them to that pure and rational religion, free from every\r\nmixture of absurdity, imposture, or fanaticism, such as wise men have, in all\r\nages of the world, wished to see established; but such as positive law has,\r\nperhaps, never yet established, and probably never will establish in any\r\ncountry; because, with regard to religion, positive law always has been, and\r\nprobably always will be, more or less influenced by popular superstition and\r\nenthusiasm. This plan of ecclesiastical government, or, more properly, of no\r\necclesiastical government, was what the sect called Independents (a sect, no\r\ndoubt, of very wild enthusiasts), proposed to establish in England towards the\r\nend of the civil war. If it had been established, though of a very\r\nunphilosophical origin, it would probably, by this time, have been productive\r\nof the most philosophical good temper and moderation with regard to every sort\r\nof religious principle. It has been established in Pennsylvania, where, though\r\nthe quakers happen to be the most numerous, the law, in reality, favours no one\r\nsect more than another; and it is there said to have been productive of this\r\nphilosophical good temper and moderation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBut though this equality of treatment should not be productive of this good\r\ntemper and moderation in all, or even in the greater part of the religious\r\nsects of a particular country; yet, provided those sects were sufficiently\r\nnumerous, and each of them consequently too small to disturb the public\r\ntranquillity, the excessive zeal of each for its particular tenets could not\r\nwell be productive of any very hurtful effects, but, on the contrary, of\r\nseveral good ones; and if the government was perfectly decided, both to let\r\nthem all alone, and to oblige them all to let alone one another, there is\r\nlittle danger that they would not of their own accord, subdivide themselves\r\nfast enough, so as soon to become sufficiently numerous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn every civilized society, in every society where the distinction of ranks has\r\nonce been completely established, there have been always two different schemes\r\nor systems of morality current at the same time; of which the one may be called\r\nthe strict or austere; the other the liberal, or, if you will, the loose\r\nsystem. The former is generally admired and revered by the common people; the\r\nlatter is commonly more esteemed and adopted by what are called the people of\r\nfashion. The degree of disapprobation with which we ought to mark the vices of\r\nlevity, the vices which are apt to arise from great prosperity, and from the\r\nexcess of gaiety and good humour, seems to constitute the principal distinction\r\nbetween those two opposite schemes or systems. In the liberal or loose system,\r\nluxury, wanton, and even disorderly mirth, the pursuit of pleasure to some\r\ndegree of intemperance, the breach of chastity, at least in one of the two\r\nsexes, etc. provided they are not accompanied with gross indecency, and do not\r\nlead to falsehood and injustice, are generally treated with a good deal of\r\nindulgence, and are easily either excused or pardoned altogether. In the\r\naustere system, on the contrary, those excesses are regarded with the utmost\r\nabhorrence and detestation. The vices of levity are always ruinous to the\r\ncommon people, and a single week’s thoughtlessness and dissipation is\r\noften sufficient to undo a poor workman for ever, and to drive him, through\r\ndespair, upon committing the most enormous crimes. The wiser and better sort of\r\nthe common people, therefore, have always the utmost abhorrence and detestation\r\nof such excesses, which their experience tells them are so immediately fatal to\r\npeople of their condition. The disorder and extravagance of several years, on\r\nthe contrary, will not always ruin a man of fashion; and people of that rank\r\nare very apt to consider the power of indulging in some degree of excess, as\r\none of the advantages of their fortune; and the liberty of doing so without\r\ncensure or reproach, as one of the privileges which belong to their station. In\r\npeople of their own station, therefore, they regard such excesses with but a\r\nsmall degree of disapprobation, and censure them either very slightly or not at\r\nall.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAlmost all religious sects have begun among the common people, from whom they\r\nhave generally drawn their earliest, as well as their most numerous proselytes.\r\nThe austere system of morality has, accordingly, been adopted by those sects\r\nalmost constantly, or with very few exceptions; for there have been some. It\r\nwas the system by which they could best recommend themselves to that order of\r\npeople, to whom they first proposed their plan of reformation upon what had\r\nbeen before established. Many of them, perhaps the greater part of them, have\r\neven endeavoured to gain credit by refining upon this austere system, and by\r\ncarrying it to some degree of folly and extravagance; and this excessive rigour\r\nhas frequently recommended them, more than any thing else, to the respect and\r\nveneration of the common people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA man of rank and fortune is, by his station, the distinguished member of a\r\ngreat society, who attend to every part of his conduct, and who thereby oblige\r\nhim to attend to every part of it himself. His authority and consideration\r\ndepend very much upon the respect which this society bears to him. He dares not\r\ndo anything which would disgrace or discredit him in it; and he is obliged to a\r\nvery strict observation of that species of morals, whether liberal or austere,\r\nwhich the general consent of this society prescribes to persons of his rank and\r\nfortune. A man of low condition, on the contrary, is far from being a\r\ndistinguished member of any great society. While he remains in a country\r\nvillage, his conduct may be attended to, and he may be obliged to attend to it\r\nhimself. In this situation, and in this situation only, he may have what is\r\ncalled a character to lose. But as soon as he comes into a great city, he is\r\nsunk in obscurity and darkness. His conduct is observed and attended to by\r\nnobody; and he is, therefore, very likely to neglect it himself, and to abandon\r\nhimself to every sort of low profligacy and vice. He never emerges so\r\neffectually from this obscurity, his conduct never excites so much the\r\nattention of any respectable society, as by his becoming the member of a small\r\nreligious sect. He from that moment acquires a degree of consideration which he\r\nnever had before. All his brother sectaries are, for the credit of the sect,\r\ninterested to observe his conduct; and, if he gives occasion to any scandal, if\r\nhe deviates very much from those austere morals which they almost always\r\nrequire of one another, to punish him by what is always a very severe\r\npunishment, even where no evil effects attend it, expulsion or excommunication\r\nfrom the sect. In little religious sects, accordingly, the morals of the common\r\npeople have been almost always remarkably regular and orderly; generally much\r\nmore so than in the established church. The morals of those little sects,\r\nindeed, have frequently been rather disagreeably rigorous and unsocial.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are two very easy and effectual remedies, however, by whose joint\r\noperation the state might, without violence, correct whatever was unsocial or\r\ndisagreeably rigorous in the morals of all the little sects into which the\r\ncountry was divided.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first of those remedies is the study of science and philosophy, which the\r\nstate might render almost universal among all people of middling or more than\r\nmiddling rank and fortune; not by giving salaries to teachers in order to make\r\nthem negligent and idle, but by instituting some sort of probation, even in the\r\nhigher and more difficult sciences, to be undergone by every person before he\r\nwas permitted to exercise any liberal profession, or before he could be\r\nreceived as a candidate for any honourable office, of trust or profit. If the\r\nstate imposed upon this order of men the necessity of learning, it would have\r\nno occasion to give itself any trouble about providing them with proper\r\nteachers. They would soon find better teachers for themselves, than any whom\r\nthe state could provide for them. Science is the great antidote to the poison\r\nof enthusiasm and superstition; and where all the superior ranks of people were\r\nsecured from it, the inferior ranks could not be much exposed to it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe second of those remedies is the frequency and gaiety of public diversions.\r\nThe state, by encouraging, that is, by giving entire liberty to all those who,\r\nfrom their own interest, would attempt, without scandal or indecency, to amuse\r\nand divert the people by painting, poetry, music, dancing; by all sorts of\r\ndramatic representations and exhibitions; would easily dissipate, in the\r\ngreater part of them, that melancholy and gloomy humour which is almost always\r\nthe nurse of popular superstition and enthusiasm. Public diversions have always\r\nbeen the objects of dread and hatred to all the fanatical promoters of those\r\npopular frenzies. The gaiety and good humour which those diversions inspire,\r\nwere altogether inconsistent with that temper of mind which was fittest for\r\ntheir purpose, or which they could best work upon. Dramatic representations,\r\nbesides, frequently exposing their artifices to public ridicule, and sometimes\r\neven to public execration, were, upon that account, more than all other\r\ndiversions, the objects of their peculiar abhorrence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country where the law favoured the teachers of no one religion more than\r\nthose of another, it would not be necessary that any of them should have any\r\nparticular or immediate dependency upon the sovereign or executive power; or\r\nthat he should have anything to do either in appointing or in dismissing them\r\nfrom their offices. In such a situation, he would have no occasion to give\r\nhimself any concern about them, further than to keep the peace among them, in\r\nthe same manner as among the rest of his subjects, that is, to hinder them from\r\npersecuting, abusing, or oppressing one another. But it is quite otherwise in\r\ncountries where there is an established or governing religion. The sovereign\r\ncan in this case never be secure, unless he has the means of influencing in a\r\nconsiderable degree the greater part of the teachers of that religion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe clergy of every established church constitute a great incorporation. They\r\ncan act in concert, and pursue their interest upon one plan, and with one\r\nspirit as much as if they were under the direction of one man; and they are\r\nfrequently, too, under such direction. Their interest as an incorporated body\r\nis never the same with that of the sovereign, and is sometimes directly\r\nopposite to it. Their great interest is to maintain their authority with the\r\npeople, and this authority depends upon the supposed certainty and importance\r\nof the whole doctrine which they inculcate, and upon the supposed necessity of\r\nadopting every part of it with the most implicit faith, in order to avoid\r\neternal misery. Should the sovereign have the imprudence to appear either to\r\nderide, or doubt himself of the most trifling part of their doctrine, or from\r\nhumanity, attempt to protect those who did either the one or the other, the\r\npunctilious honour of a clergy, who have no sort of dependency upon him, is\r\nimmediately provoked to proscribe him as a profane person, and to employ all\r\nthe terrors of religion, in order to oblige the people to transfer their\r\nallegiance to some more orthodox and obedient prince. Should he oppose any of\r\ntheir pretensions or usurpations, the danger is equally great. The princes who\r\nhave dared in this manner to rebel against the church, over and above this\r\ncrime of rebellion, have generally been charged, too, with the additional crime\r\nof heresy, notwithstanding their solemn protestations of their faith, and\r\nhumble submission to every tenet which she thought proper to prescribe to them.\r\nBut the authority of religion is superior to every other authority. The fears\r\nwhich it suggests conquer all other fears. When the authorized teachers of\r\nreligion propagate through the great body of the people, doctrines subversive\r\nof the authority of the sovereign, it is by violence only, or by the force of a\r\nstanding army, that he can maintain his authority. Even a standing army cannot\r\nin this case give him any lasting security; because if the soldiers are not\r\nforeigners, which can seldom be the case, but drawn from the great body of the\r\npeople, which must almost always be the case, they are likely to be soon\r\ncorrupted by those very doctrines. The revolutions which the turbulence of the\r\nGreek clergy was continually occasioning at Constantinople, as long as the\r\neastern empire subsisted; the convulsions which, during the course of several\r\ncenturies, the turbulence of the Roman clergy was continually occasioning in\r\nevery part of Europe, sufficiently demonstrate how precarious and insecure must\r\nalways be the situation of the sovereign, who has no proper means of\r\ninfluencing the clergy of the established and governing religion of his\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nArticles of faith, as well as all other spiritual matters, it is evident\r\nenough, are not within the proper department of a temporal sovereign, who,\r\nthough he may be very well qualified for protecting, is seldom supposed to be\r\nso for instructing the people. With regard to such matters, therefore, his\r\nauthority can seldom be sufficient to counterbalance the united authority of\r\nthe clergy of the established church. The public tranquillity, however, and his\r\nown security, may frequently depend upon the doctrines which they may think\r\nproper to propagate concerning such matters. As he can seldom directly oppose\r\ntheir decision, therefore, with proper weight and authority, it is necessary\r\nthat he should be able to influence it; and he can influence it only by the\r\nfears and expectations which he may excite in the greater part of the\r\nindividuals of the order. Those fears and expectations may consist in the fear\r\nof deprivation or other punishment, and in the expectation of further\r\npreferment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all Christian churches, the benefices of the clergy are a sort of freeholds,\r\nwhich they enjoy, not during pleasure, but during life or good behaviour. If\r\nthey held them by a more precarious tenure, and were liable to be turned out\r\nupon every slight disobligation either of the sovereign or of his ministers, it\r\nwould perhaps be impossible for them to maintain their authority with the\r\npeople, who would then consider them as mercenary dependents upon the court, in\r\nthe sincerity of whose instructions they could no longer have any confidence.\r\nBut should the sovereign attempt irregularly, and by violence, to deprive any\r\nnumber of clergymen of their freeholds, on account, perhaps, of their having\r\npropagated, with more than ordinary zeal, some factious or seditious doctrine,\r\nhe would only render, by such persecution, both them and their doctrine ten\r\ntimes more popular, and therefore ten times more troublesome and dangerous,\r\nthan they had been before. Fear is in almost all cases a wretched instrument of\r\ngovermnent, and ought in particular never to be employed against any order of\r\nmen who have the smallest pretensions to independency. To attempt to terrify\r\nthem, serves only to irritate their bad humour, and to confirm them in an\r\nopposition, which more gentle usage, perhaps, might easily induce them either\r\nto soften, or to lay aside altogether. The violence which the French government\r\nusually employed in order to oblige all their parliaments, or sovereign courts\r\nof justice, to enregister any unpopular edict, very seldom succeeded. The means\r\ncommonly employed, however, the imprisonment of all the refractory members, one\r\nwould think, were forcible enough. The princes of the house of Stuart sometimes\r\nemployed the like means in order to influence some of the members of the\r\nparliament of England, and they generally found them equally intractable. The\r\nparliament of England is now managed in another manner; and a very small\r\nexperiment, which the duke of Choiseul made, about twelve years ago, upon the\r\nparliament of Paris, demonstrated sufficiently that all the parliaments of\r\nFrance might have been managed still more easily in the same manner. That\r\nexperiment was not pursued. For though management and persuasion are always the\r\neasiest and safest instruments of government as force and violence are the\r\nworst and the most dangerous; yet such, it seems, is the natural insolence of\r\nman, that he almost always disdains to use the good instrument, except when he\r\ncannot or dare not use the bad one. The French government could and durst use\r\nforce, and therefore disdained to use management and persuasion. But there is\r\nno order of men, it appears I believe, from the experience of all ages, upon\r\nwhom it is so dangerous or rather so perfectly ruinous, to employ force and\r\nviolence, as upon the respected clergy of an established church. The rights,\r\nthe privileges, the personal liberty of every individual ecclesiastic, who is\r\nupon good terms with his own order, are, even in the most despotic governments,\r\nmore respected than those of any other person of nearly equal rank and fortune.\r\nIt is so in every gradation of despotism, from that of the gentle and mild\r\ngovernment of Paris, to that of the violent and furious government of\r\nConstantinople. But though this order of men can scarce ever be forced, they\r\nmay be managed as easily as any other; and the security of the sovereign, as\r\nwell as the public tranquillity, seems to depend very much upon the means which\r\nhe has of managing them; and those means seem to consist altogether in the\r\npreferment which he has to bestow upon them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the ancient constitution of the Christian church, the bishop of each diocese\r\nwas elected by the joint votes of the clergy and of the people of the episcopal\r\ncity. The people did not long retain their right of election; and while they\r\ndid retain it, they almost always acted under the influence of the clergy, who,\r\nin such spiritual matters, appeared to be their natural guides. The clergy,\r\nhowever, soon grew weary of the trouble of managing them, and found it easier\r\nto elect their own bishops themselves. The abbot, in the same manner, was\r\nelected by the monks of the monastery, at least in the greater part of\r\nabbacies. All the inferior ecclesiastical benefices comprehended within the\r\ndiocese were collated by the bishop, who bestowed them upon such ecclesiastics\r\nas he thought proper. All church preferments were in this manner in the\r\ndisposal of the church. The sovereign, though he might have some indirect\r\ninfluence in those elections, and though it was sometimes usual to ask both his\r\nconsent to elect, and his approbation of the election, yet had no direct or\r\nsufficient means of managing the clergy. The ambition of every clergyman\r\nnaturally led him to pay court, not so much to his sovereign as to his own\r\norder, from which only he could expect preferment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThrough the greater part of Europe, the pope gradually drew to himself, first\r\nthe collation of almost all bishoprics and abbacies, or of what were called\r\nconsistorial benefices, and afterwards, by various machinations and pretences,\r\nof the greater part of inferior benefices comprehended within each diocese,\r\nlittle more being left to the bishop than what was barely necessary to give him\r\na decent authority with his own clergy. By this arrangement the condition of\r\nthe sovereign was still worse than it had been before. The clergy of all the\r\ndifferent countries of Europe were thus formed into a sort of spiritual army,\r\ndispersed in different quarters indeed, but of which all the movements and\r\noperations could now be directed by one head, and conducted upon one uniform\r\nplan. The clergy of each particular country might be considered as a particular\r\ndetachment of that army, of which the operations could easily be supported and\r\nseconded by all the other detachments quartered in the different countries\r\nround about. Each detachment was not only independent of the sovereign of the\r\ncountry in which it was quartered, and by which it was maintained, but\r\ndependent upon a foreign sovereign, who could at any time turn its arms against\r\nthe sovereign of that particular country, and support them by the arms of all\r\nthe other detachments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose arms were the most formidable that can well be imagined. In the ancient\r\nstate of Europe, before the establishment of arts and manufactures, the wealth\r\nof the clergy gave them the same sort of influence over the common people which\r\nthat of the great barons gave them over their respective vassals, tenants, and\r\nretainers. In the great landed estates, which the mistaken piety both of\r\nprinces and private persons had bestowed upon the church, jurisdictions were\r\nestablished, of the same kind with those of the great barons, and for the same\r\nreason. In those great landed estates, the clergy, or their bailiffs, could\r\neasily keep the peace, without the support or assistance either of the king or\r\nof any other person; and neither the king nor any other person could keep the\r\npeace there without the support and assistance of the clergy. The jurisdictions\r\nof the clergy, therefore, in their particular baronies or manors, were equally\r\nindependent, and equally exclusive of the authority of the king’s courts,\r\nas those of the great temporal lords. The tenants of the clergy were, like\r\nthose of the great barons, almost all tenants at will, entirely dependent upon\r\ntheir immediate lords, and, therefore, liable to be called out at pleasure, in\r\norder to fight in any quarrel in which the clergy might think proper to engage\r\nthem. Over and above the rents of those estates, the clergy possessed in the\r\ntithes a very large portion of the rents of all the other estates in every\r\nkingdom of Europe. The revenues arising from both those species of rents were,\r\nthe greater part of them, paid in kind, in corn, wine, cattle, poultry, etc.\r\nThe quantity exceeded greatly what the clergy could themselves consume; and\r\nthere were neither arts nor manufactures, for the produce of which they could\r\nexchange the surplus. The clergy could derive advantage from this immense\r\nsurplus in no other way than by employing it, as the great barons employed the\r\nlike surplus of their revenues, in the most profuse hospitality, and in the\r\nmost extensive charity. Both the hospitality and the charity of the ancient\r\nclergy, accordingly, are said to have been very great. They not only maintained\r\nalmost the whole poor of every kingdom, but many knights and gentlemen had\r\nfrequently no other means of subsistence than by travelling about from\r\nmonastery to monastery, under pretence of devotion, but in reality to enjoy the\r\nhospitality of the clergy. The retainers of some particular prelates were often\r\nas numerous as those of the greatest lay-lords; and the retainers of all the\r\nclergy taken together were, perhaps, more numerous than those of all the\r\nlay-lords. There was always much more union among the clergy than among the\r\nlay-lords. The former were under a regular discipline and subordination to the\r\npapal authority. The latter were under no regular discipline or subordination,\r\nbut almost always equally jealous of one another, and of the king. Though the\r\ntenants and retainers of the clergy, therefore, had both together been less\r\nnumerous than those of the great lay-lords, and their tenants were probably\r\nmuch less numerous, yet their union would have rendered them more formidable.\r\nThe hospitality and charity of the clergy, too, not only gave them the command\r\nof a great temporal force, but increased very much the weight of their\r\nspiritual weapons. Those virtues procured them the highest respect and\r\nveneration among all the inferior ranks of people, of whom many were\r\nconstantly, and almost all occasionally, fed by them. Everything belonging or\r\nrelated to so popular an order, its possessions, its privileges, its doctrines,\r\nnecessarily appeared sacred in the eyes of the common people; and every\r\nviolation of them, whether real or pretended, the highest act of sacrilegious\r\nwickedness and profaneness. In this state of things, if the sovereign\r\nfrequently found it difficult to resist the confederacy of a few of the great\r\nnobility, we cannot wonder that he should find it still more so to resist the\r\nunited force of the clergy of his own dominions, supported by that of the\r\nclergy of all the neighbouring dominions. In such circumstances, the wonder is,\r\nnot that he was sometimes obliged to yield, but that he ever was able to\r\nresist.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe privileges of the clergy in those ancient times (which to us, who live in\r\nthe present times, appear the most absurd), their total exemption from the\r\nsecular jurisdiction, for example, or what in England was called the benefit of\r\nclergy, were the natural, or rather the necessary, consequences of this state\r\nof things. How dangerous must it have been for the sovereign to attempt to\r\npunish a clergyman for any crime whatever, if his order were disposed to\r\nprotect him, and to represent either the proof as insufficient for convicting\r\nso holy a man, or the punishment as too severe to be inflicted upon one whose\r\nperson had been rendered sacred by religion? The sovereign could, in such\r\ncircumstances, do no better than leave him to be tried by the ecclesiastical\r\ncourts, who, for the honour of their own order, were interested to restrain, as\r\nmuch as possible, every member of it from committing enormous crimes, or even\r\nfrom giving occasion to such gross scandal as might disgust the minds of the\r\npeople.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the state in which things were, through the greater part of Europe, during\r\nthe tenth, eleventh, twelfth, and thirteenth centuries, and for some time both\r\nbefore and after that period, the constitution of the church of Rome may be\r\nconsidered as the most formidable combination that ever was formed against the\r\nauthority and security of civil government, as well as against the liberty,\r\nreason, and happiness of mankind, which can flourish only where civil\r\ngovernment is able to protect them. In that constitution, the grossest\r\ndelusions of superstition were supported in such a manner by the private\r\ninterests of so great a number of people, as put them out of all danger from\r\nany assault of human reason; because, though human reason might, perhaps, have\r\nbeen able to unveil, even to the eyes of the common people, some of the\r\ndelusions of superstition, it could never have dissolved the ties of private\r\ninterest. Had this constitution been attacked by no other enemies but the\r\nfeeble efforts of human reason, it must have endured for ever. But that immense\r\nand well-built fabric, which all the wisdom and virtue of man could never have\r\nshaken, much less have overturned, was, by the natural course of things, first\r\nweakened, and afterwards in part destroyed; and is now likely, in the course of\r\na few centuries more, perhaps, to crumble into ruins altogether.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gradual improvements of arts, manufactures, and commerce, the same causes\r\nwhich destroyed the power of the great barons, destroyed, in the same manner,\r\nthrough the greater part of Europe, the whole temporal power of the clergy. In the produce of arts, manufactures, and\r\ncommerce, the clergy, like the great barons, found something for which they\r\ncould exchange their rude produce, and thereby discovered the means of spending\r\ntheir whole revenues upon their own persons, without giving any considerable\r\nshare of them to other people. Their charity became gradually less extensive,\r\ntheir hospitality less liberal, or less profuse. Their retainers became\r\nconsequently less numerous, and, by degrees, dwindled away altogether. The\r\nclergy, too, like the great barons, wished to get a better rent from their\r\nlanded estates, in order to spend it, in the same manner, upon the\r\ngratification of their own private vanity and folly. But this increase of rent\r\ncould be got only by granting leases to their tenants, who thereby became, in a\r\ngreat measure, independent of them. The ties of interest, which bound the\r\ninferior ranks of people to the clergy, were in this manner gradually broken\r\nand dissolved. They were even broken and dissolved sooner than those which\r\nbound the same ranks of people to the great barons; because the benefices of\r\nthe church being, the greater part of them, much smaller than the estates of\r\nthe great barons, the possessor of each benefice was much sooner able to spend\r\nthe whole of its revenue upon his own person. During the greater part of the\r\nfourteenth and fifteenth centuries, the power of the great barons was, through\r\nthe greater part of Europe, in full vigour. But the temporal power of the\r\nclergy, the absolute command which they had once had over the great body of the\r\npeople was very much decayed. The power of the church was, by that time, very\r\nnearly reduced, through the greater part of Europe, to what arose from their\r\nspiritual authority; and even that spiritual authority was much weakened, when\r\nit ceased to be supported by the charity and hospitality of the clergy. The\r\ninferior ranks of people no longer looked upon that order as they had done\r\nbefore; as the comforters of their distress, and the relievers of their\r\nindigence. On the contrary, they were provoked and disgusted by the vanity,\r\nluxury, and expense of the richer clergy, who appeared to spend upon their own\r\npleasures what had always before been regarded as the patrimony of the poor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this situation of things, the sovereigns in the different states of Europe\r\nendeavoured to recover the influence which they had once had in the disposal of\r\nthe great benefices of the church; by procuring to the deans and chapters of\r\neach diocese the restoration of their ancient right of electing the bishop; and\r\nto the monks of each abbacy that of electing the abbot. The re-establishing\r\nthis ancient order was the object of several statutes enacted in England during\r\nthe course of the fourteenth century, particularly of what is called the\r\nstatute of provisors; and of the pragmatic sanction, established in France in\r\nthe fifteenth century. In order to render the election valid, it was necessary\r\nthat the sovereign should both consent to it before hand, and afterwards\r\napprove of the person elected; and though the election was still supposed to be\r\nfree, he had, however all the indirect means which his situation necessarily\r\nafforded him, of influencing the clergy in his own dominions. Other\r\nregulations, of a similar tendency, were established in other parts of Europe.\r\nBut the power of the pope, in the collation of the great benefices of the\r\nchurch, seems, before the reformation, to have been nowhere so effectually and\r\nso universally restrained as in France and England. The concordat afterwards,\r\nin the sixteenth century, gave to the kings of France the absolute right of\r\npresenting to all the great, or what are called the consistorial, benefices of\r\nthe Gallican church.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSince the establishment of the pragmatic sanction and of the concordat, the\r\nclergy of France have in general shewn less respect to the decrees of the papal\r\ncourt, than the clergy of any other catholic country. In all the disputes which\r\ntheir sovereign has had with the pope, they have almost constantly taken part\r\nwith the former. This independency of the clergy of France upon the court of\r\nRome seems to be principally founded upon the pragmatic sanction and the\r\nconcordat. In the earlier periods of the monarchy, the clergy of France appear\r\nto have been as much devoted to the pope as those of any other country. When\r\nRobert, the second prince of the Capetian race, was most unjustly\r\nexcommunicated by the court of Rome, his own servants, it is said, threw the\r\nvictuals which came from his table to the dogs, and refused to taste any thing\r\nthemselves which had been polluted by the contact of a person in his situation.\r\nThey were taught to do so, it may very safely be presumed, by the clergy of his\r\nown dominions.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe claim of collating to the great benefices of the church, a claim in defence\r\nof which the court of Rome had frequently shaken, and sometimes overturned, the\r\nthrones of some of the greatest sovereigns in Christendom, was in this manner\r\neither restrained or modified, or given up altogether, in many different parts\r\nof Europe, even before the time of the reformation. As the clergy had now less\r\ninfluence over the people, so the state had more influence over the clergy. The\r\nclergy, therefore, had both less power, and less inclination, to disturb the\r\nstate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe authority of the church of Rome was in this state of declension, when the\r\ndisputes which gave birth to the reformation began in Germany, and soon spread\r\nthemselves through every part of Europe. The new doctrines were everywhere\r\nreceived with a high degree of popular favour. They were propagated with all\r\nthat enthusiastic zeal which commonly animates the spirit of party, when it\r\nattacks established authority. The teachers of those doctrines, though perhaps,\r\nin other respects, not more learned than many of the divines who defended the\r\nestablished church, seem in general to have been better acquainted with\r\necclesiastical history, and with the origin and progress of that system of\r\nopinions upon which the authority of the church was established; and they had\r\nthereby the advantage in almost every dispute. The austerity of their manners\r\ngave them authority with the common people, who contrasted the strict\r\nregularity of their conduct with the disorderly lives of the greater part of\r\ntheir own clergy. They possessed, too, in a much higher degree than their\r\nadversaries, all the arts of popularity and of gaining proselytes; arts which\r\nthe lofty and dignified sons of the church had long neglected, as being to them\r\nin a great measure useless. The reason of the new doctrines recommended them to\r\nsome, their novelty to many; the hatred and contempt of the established clergy\r\nto a still greater number: but the zealous, passionate, and fanatical, though\r\nfrequently coarse and rustic eloquence, with which they were almost everywhere\r\ninculcated, recommended them to by far the greatest number.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe success of the new doctrines was almost everywhere so great, that the\r\nprinces, who at that time happened to be on bad terms with the court of Rome,\r\nwere, by means of them, easily enabled, in their own dominions, to overturn the\r\nchurch, which having lost the respect and veneration of the inferior ranks of\r\npeople, could make scarce any resistance. The court of Rome had disobliged some\r\nof the smaller princes in the northern parts of Germany, whom it had probably\r\nconsidered as too insignificant to be worth the managing. They universally,\r\ntherefore, established the reformation in their own dominions. The tyranny of\r\nChristiern II., and of Troll archbishop of Upsal, enabled Gustavus Vasa to\r\nexpel them both from Sweden. The pope favoured the tyrant and the archbishop,\r\nand Gustavus Vasa found no difficulty in establishing the reformation in\r\nSweden. Christiern II. was afterwards deposed from the throne of Denmark, where\r\nhis conduct had rendered him as odious as in Sweden. The pope, however, was\r\nstill disposed to favour him; and Frederic of Holstein, who had mounted the\r\nthrone in his stead, revenged himself, by following the example of Gustavus\r\nVasa. The magistrates of Berne and Zurich, who had no particular quarrel with\r\nthe pope, established with great ease the reformation in their respective\r\ncantons, where just before some of the clergy had, by an imposture somewhat\r\ngrosser than ordinary, rendered the whole order both odious and contemptible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn this critical situation of its affairs the papal court was at sufficient\r\npains to cultivate the friendship of the powerful sovereigns of France and\r\nSpain, of whom the latter was at that time emperor of Germany. With their\r\nassistance, it was enabled, though not without great difficulty, and much\r\nbloodshed, either to suppress altogether, or to obstruct very much, the\r\nprogress of the reformation in their dominions. It was well enough inclined,\r\ntoo, to be complaisant to the king of England. But from the circumstances of\r\nthe times, it could not be so without giving offence to a still greater\r\nsovereign, Charles V., king of Spain and emperor of Germany. Henry VIII.,\r\naccordingly, though he did not embrace himself the greater part of the\r\ndoctrines of the reformation, was yet enabled, by their general prevalence, to\r\nsuppress all the monasteries, and to abolish the authority of the church of\r\nRome in his dominions. That he should go so far, though he went no further,\r\ngave some satisfaction to the patrons of the reformation, who, having got\r\npossession of the government in the reign of his son and successor completed,\r\nwithout any difficulty, the work which Henry VIII. had begun.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some countries, as in Scotland, where the government was weak, unpopular,\r\nand not very firmly established, the reformation was strong enough to overturn,\r\nnot only the church, but the state likewise, for attempting to support the\r\nchurch.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAmong the followers of the reformation, dispersed in all the different\r\ncountries of Europe, there was no general tribunal, which, like that of the\r\ncourt of Rome, or an oecumenical council, could settle all disputes among them,\r\nand, with irresistible authority, prescribe to all of them the precise limits\r\nof orthodoxy. When the followers of the reformation in one country, therefore,\r\nhappened to differ from their brethren in another, as they had no common judge\r\nto appeal to, the dispute could never be decided; and many such disputes arose\r\namong them. Those concerning the government of the church, and the right of\r\nconferring ecclesiastical benefices, were perhaps the most interesting to the\r\npeace and welfare of civil society. They gave birth, accordingly, to the two\r\nprincipal parties or sects among the followers of the reformation, the Lutheran\r\nand Calvinistic sects, the only sects among them, of which the doctrine and\r\ndiscipline have ever yet been established by law in any part of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe followers of Luther, together with what is called the church of England,\r\npreserved more or less of the episcopal government, established subordination\r\namong the clergy, gave the sovereign the disposal of all the bishoprics, and\r\nother consistorial benefices within his dominions, and thereby rendered him the\r\nreal head of the church; and without depriving the bishop of the right of\r\ncollating to the smaller benefices within his diocese, they, even to those\r\nbenefices, not only admitted, but favoured the right of presentation, both in\r\nthe sovereign and in all other lay patrons. This system of church government\r\nwas, from the beginning, favourable to peace and good order, and to submission\r\nto the civil sovereign. It has never, accordingly, been the occasion of any\r\ntumult or civil commotion in any country in which it has once been established.\r\nThe church of England, in particular, has always valued herself, with great\r\nreason, upon the unexceptionable loyalty of her principles. Under such a\r\ngovernment, the clergy naturally endeavour to recommend themselves to the\r\nsovereign, to the court, and to the nobility and gentry of the country, by\r\nwhose influence they chiefly expect to obtain preferment. They pay court to\r\nthose patrons, sometimes, no doubt, by the vilest flattery and assentation; but\r\nfrequently, too, by cultivating all those arts which best deserve, and which\r\nare therefore most likely to gain them, the esteem of people of rank and\r\nfortune; by their knowledge in all the different branches of useful and\r\nornamental learning, by the decent liberality of their manners, by the social\r\ngood humour of their conversation, and by their avowed contempt of those absurd\r\nand hypocritical austerities which fanatics inculcate and pretend to practise,\r\nin order to draw upon themselves the veneration, and upon the greater part of\r\nmen of rank and fortune, who avow that they do not practise them, the\r\nabhorrence of the common people. Such a clergy, however, while they pay their\r\ncourt in this manner to the higher ranks of life, are very apt to neglect\r\naltogether the means of maintaining their influence and authority with the\r\nlower. They are listened to, esteemed, and respected by their superiors; but\r\nbefore their inferiors they are frequently incapable of defending, effectually,\r\nand to the conviction of such hearers, their own sober and moderate doctrines,\r\nagainst the most ignorant enthusiast who chooses to attack them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe followers of Zuinglius, or more properly those of Calvin, on the contrary,\r\nbestowed upon the people of each parish, whenever the church became vacant, the\r\nright of electing their own pastor; and established, at the same time, the most\r\nperfect equality among the clergy. The former part of this institution, as long\r\nas it remained in vigour, seems to have been productive of nothing but disorder\r\nand confusion, and to have tended equally to corrupt the morals both of the\r\nclergy and of the people. The latter part seems never to have had any effects\r\nbut what were perfectly agreeable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs long as the people of each parish preserved the right of electing their own\r\npastors, they acted almost always under the influence of the clergy, and\r\ngenerally of the most factious and fanatical of the order. The clergy, in order\r\nto preserve their influence in those popular elections, became, or affected to\r\nbecome, many of them, fanatics themselves, encouraged fanaticism among the\r\npeople, and gave the preference almost always to the most fanatical candidate.\r\nSo small a matter as the appointment of a parish priest, occasioned almost\r\nalways a violent contest, not only in one parish, but in all the neighbouring\r\nparishes who seldom failed to take part in the quarrel. When the parish\r\nhappened to be situated in a great city, it divided all the inhabitants into\r\ntwo parties; and when that city happened, either to constitute itself a little\r\nrepublic, or to be the head and capital of a little republic, as in the case\r\nwith many of the considerable cities in Switzerland and Holland, every paltry\r\ndispute of this kind, over and above exasperating the animosity of all their\r\nother factions, threatened to leave behind it, both a new schism in the church,\r\nand a new faction in the state. In those small republics, therefore, the\r\nmagistrate very soon found it necessary, for the sake of preserving the public\r\npeace, to assume to himself the right of presenting to all vacant benefices. In\r\nScotland, the most extensive country in which this presbyterian form of church\r\ngovernment has ever been established, the rights of patronage were in effect\r\nabolished by the act which established presbytery in the beginning of the reign\r\nof William III. That act, at least, put in the power of certain classes of\r\npeople in each parish to purchase, for a very small price, the right of\r\nelecting their own pastor. The constitution which this act established, was\r\nallowed to subsist for about two-and-twenty years, but was abolished by the\r\n10th of queen Anne, ch.12, on account of the confusions and disorders which\r\nthis more popular mode of election had almost everywhere occasioned. In so\r\nextensive a country as Scotland, however, a tumult in a remote parish was not\r\nso likely to give disturbance to government as in a smaller state. The 10th of\r\nqueen Anne restored the rights of patronage. But though, in Scotland, the law\r\ngives the benefice, without any exception to the person presented by the\r\npatron; yet the church requires sometimes (for she has not in this respect been\r\nvery uniform in her decisions) a certain concurrence of the people, before she\r\nwill confer upon the presentee what is called the cure of souls, or the\r\necclesiastical jurisdiction in the parish. She sometimes, at least, from an\r\naffected concern for the peace of the parish, delays the settlement till this\r\nconcurrence can be procured. The private tampering of some of the neighbouring\r\nclergy, sometimes to procure, but more frequently to prevent this concurrence,\r\nand the popular arts which they cultivate, in order to enable them upon such\r\noccasions to tamper more effectually, are perhaps the causes which principally\r\nkeep up whatever remains of the old fanatical spirit, either in the clergy or\r\nin the people of Scotland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe equality which the presbyterian form of church government establishes among\r\nthe clergy, consists, first, in the equality of authority or ecclesiastical\r\njurisdiction; and, secondly, in the equality of benefice. In all presbyterian\r\nchurches, the equality of authority is perfect; that of benefice is not so. The\r\ndifference, however, between one benefice and another, is seldom so\r\nconsiderable, as commonly to tempt the possessor even of the small one to pay\r\ncourt to his patron, by the vile arts of flattery and assentation, in order to\r\nget a better. In all the presbyterian churches, where the rights of patronage\r\nare thoroughly established, it is by nobler and better arts, that the\r\nestablished clergy in general endeavour to gain the favour of their superiors;\r\nby their learning, by the irreproachable regularity of their life, and by the\r\nfaithful and diligent discharge of their duty. Their patrons even frequently\r\ncomplain of the independency of their spirit, which they are apt to construe\r\ninto ingratitude for past favours, but which, at worse, perhaps, is seldom\r\nanymore than that indifference which naturally arises from the consciousness\r\nthat no further favours of the kind are ever to be expected. There is scarce,\r\nperhaps, to be found anywhere in Europe, a more learned, decent, independent,\r\nand respectable set of men, than the greater part of the presbyterian clergy of\r\nHolland, Geneva, Switzerland, and Scotland.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhere the church benefices are all nearly equal, none of them can be very\r\ngreat; and this mediocrity of benefice, though it may be, no doubt, carried too\r\nfar, has, however, some very agreeable effects. Nothing but exemplary morals\r\ncan give dignity to a man of small fortune. The vices of levity and vanity\r\nnecessarily render him ridiculous, and are, besides, almost as ruinous to him\r\nas they are to the common people. In his own conduct, therefore, he is obliged\r\nto follow that system of morals which the common people respect the most. He\r\ngains their esteem and affection, by that plan of life which his own interest\r\nand situation would lead him to follow. The common people look upon him with\r\nthat kindness with which we naturally regard one who approaches somewhat to our\r\nown condition, but who, we think, ought to be in a higher. Their kindness\r\nnaturally provokes his kindness. He becomes careful to instruct them, and\r\nattentive to assist and relieve them. He does not even despise the prejudices\r\nof people who are disposed to be so favourable to him, and never treats them\r\nwith those contemptuous and arrogant airs, which we so often meet with in the\r\nproud dignitaries of opulent and well endowed churches. The presbyterian\r\nclergy, accordingly, have more influence over the minds of the common people,\r\nthan perhaps the clergy of any other established church. It is, accordingly, in\r\npresbyterian countries only, that we ever find the common people converted,\r\nwithout persecution completely, and almost to a man, to the established church.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn countries where church benefices are, the greater part of them, very\r\nmoderate, a chair in a university is generally a better establishment than a\r\nchurch benefice. The universities have, in this case, the picking and chusing\r\nof their members from all the churchmen of the country, who, in every country,\r\nconstitute by far the most numerous class of men of letters. Where church\r\nbenefices, on the contrary, are many of them very considerable, the church\r\nnaturally draws from the universities the greater part of their eminent men of\r\nletters; who generally find some patron, who does himself honour by procuring\r\nthem church preferment. In the former situation, we are likely to find the\r\nuniversities filled with the most eminent men of letters that are to be found\r\nin the country. In the latter, we are likely to find few eminent men among\r\nthem, and those few among the youngest members of the society, who are likely,\r\ntoo, to be drained away from it, before they can have acquired experience and\r\nknowledge enough to be of much use to it. It is observed by Mr. de Voltaire,\r\nthat father Porée, a jesuit of no great eminence in the republic of letters,\r\nwas the only professor they had ever had in France, whose works were worth the\r\nreading. In a country which has produced so many eminent men of letters, it\r\nmust appear somewhat singular, that scarce one of them should have been a\r\nprofessor in a university. The famous Cassendi was, in the beginning of his\r\nlife, a professor in the university of Aix. Upon the first dawning of his\r\ngenius, it was represented to him, that by going into the church he could\r\neasily find a much more quiet and comfortable subsistence, as well as a better\r\nsituation for pursuing his studies; and he immediately followed the advice. The\r\nobservation of Mr. de Voltaire may be applied, I believe, not only to France,\r\nbut to all other Roman Catholic countries. We very rarely find in any of them\r\nan eminent man of letters, who is a professor in a university, except, perhaps,\r\nin the professions of law and physic; professions from which the church is not\r\nso likely to draw them. After the church of Rome, that of England is by far the\r\nrichest and best endowed church in Christendom. In England, accordingly, the\r\nchurch is continually draining the universities of all their best and ablest\r\nmembers; and an old college tutor who is known and distinguished in Europe as\r\nan eminent man of letters, is as rarely to be found there as in any Roman\r\ncatholic country. In Geneva, on the contrary, in the protestant cantons of\r\nSwitzerland, in the protestant countries of Germany, in Holland, in Scotland,\r\nin Sweden, and Denmark, the most eminent men of letters whom those countries\r\nhave produced, have, not all indeed, but the far greater part of them, been\r\nprofessors in universities. In those countries, the universities are\r\ncontinually draining the church of all its most eminent men of letters.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt may, perhaps, be worth while to remark, that, if we except the poets, a few\r\norators, and a few historians, the far greater part of the other eminent men of\r\nletters, both of Greece and Rome, appear to have been either public or private\r\nteachers; generally either of philosophy or of rhetoric. This remark will be\r\nfound to hold true, from the days of Lysias and Isocrates, of Plato and\r\nAristotle, down to those of Plutarch and Epictetus, Suetonius, and Quintilian.\r\nTo impose upon any man the necessity of teaching, year after year, in any\r\nparticular branch of science seems in reality to be the most effectual method\r\nfor rendering him completely master of it himself. By being obliged to go every\r\nyear over the same ground, if he is good for any thing, he necessarily becomes,\r\nin a few years, well acquainted with every part of it, and if, upon any\r\nparticular point, he should form too hasty an opinion one year, when he comes,\r\nin the course of his lectures to reconsider the same subject the year\r\nthereafter, he is very likely to correct it. As to be a teacher of science is\r\ncertainly the natural employment of a mere man of letters; so is it likewise,\r\nperhaps, the education which is most likely to render him a man of solid\r\nlearning and knowledge. The mediocrity of church benefices naturally tends to\r\ndraw the greater part of men of letters in the country where it takes place, to\r\nthe employment in which they can be the most useful to the public, and at the\r\nsame time to give them the best education, perhaps, they are capable of\r\nreceiving. It tends to render their learning both as solid as possible, and as\r\nuseful as possible.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue of every established church, such parts of it excepted as may arise\r\nfrom particular lands or manors, is a branch, it ought to be observed, of the\r\ngeneral revenue of the state, which is thus diverted to a purpose very\r\ndifferent from the defence of the state. The tithe, for example, is a real land\r\ntax, which puts it out of the power of the proprietors of land to contribute so\r\nlargely towards the defence of the state as they otherwise might be able to do.\r\nThe rent of land, however, is, according to some, the sole fund; and, according\r\nto others, the principal fund, from which, in all great monarchies, the\r\nexigencies of the state must be ultimately supplied. The more of this fund that\r\nis given to the church, the less, it is evident, can be spared to the state. It\r\nmay be laid down as a certain maxim, that all other things being supposed\r\nequal, the richer the church, the poorer must necessarily be, either the\r\nsovereign on the one hand, or the people on the other; and, in all cases, the\r\nless able must the state be to defend itself. In several protestant countries,\r\nparticularly in all the protestant cantons of Switzerland, the revenue which\r\nanciently belonged to the Roman catholic church, the tithes and church lands,\r\nhas been found a fund sufficient, not only to afford competent salaries to the\r\nestablished clergy, but to defray, with little or no addition, all the other\r\nexpenses of the state. The magistrates of the powerful canton of Berne, in\r\nparticular, have accumulated, out of the savings from this fund, a very large\r\nsum, supposed to amount to several millions; part of which is deposited in a\r\npublic treasure, and part is placed at interest in what are called the public\r\nfunds of the different indebted nations of Europe; chiefly in those of France\r\nand Great Britain. What may be the amount of the whole expense which the\r\nchurch, either of Berne, or of any other protestant canton, costs the state, I\r\ndo not pretend to know. By a very exact account it appears, that, in 1755, the\r\nwhole revenue of the clergy of the church of Scotland, including their glebe or\r\nchurch lands, and the rent of their manses or dwelling-houses, estimated\r\naccording to a reasonable valuation, amounted only to £68,514:1:5 1/12d. This\r\nvery moderate revenue affords a decent subsistence to nine hundred and\r\nforty-four ministers. The whole expense of the church, including what is\r\noccasionally laid out for the building and reparation of churches, and of the\r\nmanses of ministers, cannot well be supposed to exceed eighty or eighty-five\r\nthousand pounds a-year. The most opulent church in Christendom does not\r\nmaintain better the uniformity of faith, the fervour of devotion, the spirit of\r\norder, regularity, and austere morals, in the great body of the people, than\r\nthis very poorly endowed church of Scotland. All the good effects, both civil\r\nand religious, which an established church can be supposed to produce, are\r\nproduced by it as completely as by any other. The greater part of the\r\nprotestant churches of Switzerland, which, in general, are not better endowed\r\nthan the church of Scotland, produce those effects in a still higher degree. In\r\nthe greater part of the protestant cantons, there is not a single person to be\r\nfound, who does not profess himself to be of the established church. If he\r\nprofesses himself to be of any other, indeed, the law obliges him to leave the\r\ncanton. But so severe, or, rather, indeed, so oppressive a law, could never\r\nhave been executed in such free countries, had not the diligence of the clergy\r\nbeforehand converted to the established church the whole body of the people,\r\nwith the exception of, perhaps, a few individuals only. In some parts of\r\nSwitzerland, accordingly, where, from the accidental union of a protestant and\r\nRoman catholic country, the conversion has not been so complete, both religions\r\nare not only tolerated, but established by law.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proper performance of every service seems to require, that its pay or\r\nrecompence should be, as exactly as possible, proportioned to the nature of the\r\nservice. If any service is very much underpaid, it is very apt to suffer by the\r\nmeanness and incapacity of the greater part of those who are employed in it. If\r\nit is very much overpaid, it is apt to suffer, perhaps still more, by their\r\nnegligence and idleness. A man of a large revenue, whatever may be his\r\nprofession, thinks he ought to live like other men of large revenues; and to\r\nspend a great part of his time in festivity, in vanity, and in dissipation. But\r\nin a clergyman, this train of life not only consumes the time which ought to be\r\nemployed in the duties of his function, but in the eyes of the common people,\r\ndestroys almost entirely that sanctity of character, which can alone enable him\r\nto perform those duties with proper weight and authority.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART IV. Of the Expense of supporting the Dignity of the Sovereign.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nOver and above the expenses necessary for enabling the sovereign to perform his\r\nseveral duties, a certain expense is requisite for the support of his dignity.\r\nThis expense varies, both with the different periods of improvement, and with\r\nthe different forms of government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn an opulent and improved society, where all the different orders of people\r\nare growing every day more expensive in their houses, in their furniture, in\r\ntheir tables, in their dress, and in their equipage; it cannot well be expected\r\nthat the sovereign should alone hold out against the fashion. He naturally,\r\ntherefore, or rather necessarily, becomes more expensive in all those different\r\narticles too. His dignity even seems to require that he should become so.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs, in point of dignity, a monarch is more raised above his subjects than the\r\nchief magistrate of any republic is ever supposed to be above his\r\nfellow-citizens; so a greater expense is necessary for supporting that higher\r\ndignity. We naturally expect more splendour in the court of a king, than in the\r\nmansion-house of a doge or burgo-master.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003eCONCLUSION.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of defending the society, and that of supporting the dignity of the\r\nchief magistrate, are both laid out for the general benefit of the whole\r\nsociety. It is reasonable, therefore, that they should be defrayed by the\r\ngeneral contribution of the whole society; all the different members\r\ncontributing, as nearly as possible, in proportion to their respective\r\nabilities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of the administration of justice, too, may no doubt be considered\r\nas laid out for the benefit of the whole society. There is no impropriety,\r\ntherefore, in its being defrayed by the general contribution of the whole\r\nsociety. The persons, however, who give occasion to this expense, are those\r\nwho, by their injustice in one way or another, make it necessary to seek\r\nredress or protection from the courts of justice. The persons, again, most\r\nimmediately benefited by this expense, are those whom the courts of justice\r\neither restore to their rights, or maintain in their rights. The expense of the\r\nadministration of justice, therefore, may very properly be defrayed by the\r\nparticular contribution of one or other, or both, of those two different sets\r\nof persons, according as different occasions may require, that is, by the fees\r\nof court. It cannot be necessary to have recourse to the general contribution\r\nof the whole society, except for the conviction of those criminals who have not\r\nthemselves any estate or fund sufficient for paying those fees.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose local or provincial expenses, of which the benefit is local or provincial\r\n(what is laid out, for example, upon the police of a particular town or\r\ndistrict), ought to be defrayed by a local or provincial revenue, and ought to\r\nbe no burden upon the general revenue of the society. It is unjust that the\r\nwhole society should contribute towards an expense, of which the benefit is\r\nconfined to a part of the society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of maintaining good roads and communications is, no doubt,\r\nbeneficial to the whole society, and may, therefore, without any injustice, be\r\ndefrayed by the general contributions of the whole society. This expense,\r\nhowever, is most immediately and directly beneficial to those who travel or\r\ncarry goods from one place to another, and to those who consume such goods. The\r\nturnpike tolls in England, and the duties called peages in other countries, lay\r\nit altogether upon those two different sets of people, and thereby discharge\r\nthe general revenue of the society from a very considerable burden.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of the institutions for education and religious instruction, is\r\nlikewise, no doubt, beneficial to the whole society, and may, therefore,\r\nwithout injustice, be defrayed by the general contribution of the whole\r\nsociety. This expense, however, might, perhaps, with equal propriety, and even\r\nwith some advantage, be defrayed altogether by those who receive the immediate\r\nbenefit of such education and instruction, or by the voluntary contribution of\r\nthose who think they have occasion for either the one or the other.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the institutions, or public works, which are beneficial to the whole\r\nsociety, either cannot be maintained altogether, or are not maintained\r\naltogether, by the contribution of such particular members of the society as\r\nare most immediately benefited by them; the deficiency must, in most cases, be\r\nmade up by the general contribution of the whole society. The general revenue\r\nof the society, over and above defraying the expense of defending the society,\r\nand of supporting the dignity of the chief magistrate, must make up for the\r\ndeficiency of many particular branches of revenue. The sources of this general\r\nor public revenue, I shall endeavour to explain in the following chapter.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap37\"\u003e\u003c/a\u003eCHAPTER II.\u003cbr\u003e\r\nOF THE SOURCES OF THE GENERAL OR PUBLIC REVENUE OF THE SOCIETY.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue which must defray, not only the expense of defending the society\r\nand of supporting the dignity of the chief magistrate, but all the other\r\nnecessary expenses of government, for which the constitution of the state has\r\nnot provided any particular revenue may be drawn, either, first, from some fund\r\nwhich peculiarly belongs to the sovereign or commonwealth, and which is\r\nindependent of the revenue of the people; or, secondly, from the revenue of the\r\npeople.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART I. Of the Funds, or Sources, of Revenue, which may peculiarly belong\r\nto the Sovereign or Commonwealth.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe funds, or sources, of revenue, which may peculiarly belong to the sovereign\r\nor commonwealth, must consist, either in stock, or in land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe sovereign, like, any other owner of stock, may derive a revenue from it,\r\neither by employing it himself, or by lending it. His revenue is, in the one\r\ncase, profit, in the other interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue of a Tartar or Arabian chief consists in profit. It arises\r\nprincipally from the milk and increase of his own herds and flocks, of which he\r\nhimself superintends the management, and is the principal shepherd or herdsman\r\nof his own horde or tribe. It is, however, in this earliest and rudest state of\r\ncivil government only, that profit has ever made the principal part of the\r\npublic revenue of a monarchical state.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSmall republics have sometimes derived a considerable revenue from the profit\r\nof mercantile projects. The republic of Hamburgh is said to do so from the\r\nprofits of a public wine-cellar and apothecary’s shop. {See Memoires\r\nconcernant les Droits et Impositions en Europe, tome i. page 73. This work was\r\ncompiled by the order of the court, for the use of a commission employed for\r\nsome years past in considering the proper means for reforming the finances of\r\nFrance. The account of the French taxes, which takes up three volumes in\r\nquarto, may be regarded as perfectly authentic. That of those of other European\r\nnations was compiled from such information as the French ministers at the\r\ndifferent courts could procure. It is much shorter, and probably not quite so\r\nexact as that of the French taxes.} That state cannot be very great, of which\r\nthe sovereign has leisure to carry on the trade of a wine-merchant or an\r\napothecary. The profit of a public bank has been a source of revenue to more\r\nconsiderable states. It has been so, not only to Hamburgh, but to Venice and\r\nAmsterdam. A revenue of this kind has even by some people been thought not\r\nbelow the attention of so great an empire as that of Great Britain. Reckoning\r\nthe ordinary dividend of the bank of England at five and a-half per cent., and\r\nits capital at ten millions seven hundred and eighty thousand pounds, the neat\r\nannual profit, after paying the expense of management, must amount, it is said,\r\nto five hundred and ninety-two thousand nine hundred pounds. Government, it is\r\npretended, could borrow this capital at three per cent. interest, and, by\r\ntaking the management of the bank into its own hands, might make a clear profit\r\nof two hundred and sixty-nine thousand five hundred pounds a-year. The orderly,\r\nvigilant, and parsimonious administration of such aristocracies as those of\r\nVenice and Amsterdam, is extremely proper, it appears from experience, for the\r\nmanagement of a mercantile project of this kind. But whether such a government\r\nas that of England, which, whatever may be its virtues, has never been famous\r\nfor good economy; which, in time of peace, has generally conducted itself with\r\nthe slothful and negligent profusion that is, perhaps, natural to monarchies;\r\nand, in time of war, has constantly acted with all the thoughtless extravagance\r\nthat democracies are apt to fall into, could be safely trusted with the\r\nmanagement of such a project, must at least be a good deal more doubtful.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe post-office is properly a mercantile project. The government advances the\r\nexpense of establishing the different offices, and of buying or hiring the\r\nnecessary horses or carriages, and is repaid, with a large profit, by the\r\nduties upon what is carried. It is, perhaps, the only mercantile project which\r\nhas been successfully managed by, I believe, every sort of government. The\r\ncapital to be advanced is not very considerable. There is no mystery in the\r\nbusiness. The returns are not only certain but immediate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPrinces, however, have frequently engaged in many other mercantile projects,\r\nand have been willing, like private persons, to mend their fortunes, by\r\nbecoming adventurers in the common branches of trade. They have scarce ever\r\nsucceeded. The profusion with which the affairs of princes are always managed,\r\nrenders it almost impossible that they should. The agents of a prince regard\r\nthe wealth of their master as inexhaustible; are careless at what price they\r\nbuy, are careless at what price they sell, are careless at what expense they\r\ntransport his goods from one place to another. Those agents frequently live\r\nwith the profusion of princes; and sometimes, too, in spite of that profusion,\r\nand by a proper method of making up their accounts, acquire the fortunes of\r\nprinces. It was thus, as we are told by Machiavel, that the agents of Lorenzo\r\nof Medicis, not a prince of mean abilities, carried on his trade. The republic\r\nof Florence was several times obliged to pay the debt into which their\r\nextravagance had involved him. He found it convenient, accordingly to give up\r\nthe business of merchant, the business to which his family had originally owed\r\ntheir fortune, and, in the latter part of his life, to employ both what\r\nremained of that fortune, and the revenue of the state, of which he had the\r\ndisposal, in projects and expenses more suitable to his station.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo two characters seem more inconsistent than those of trader and sovereign. If\r\nthe trading spirit of the English East India company renders them very bad\r\nsovereigns, the spirit of sovereignty seems to have rendered them equally bad\r\ntraders. While they were traders only, they managed their trade successfully,\r\nand were able to pay from their profits a moderate dividend to the proprietors\r\nof their stock. Since they became sovereigns, with a revenue which, it is said,\r\nwas originally more than three millions sterling, they have been obliged to beg\r\nthe ordinary assistance of government, in order to avoid immediate bankruptcy.\r\nIn their former situation, their servants in India considered themselves as the\r\nclerks of merchants; in their present situation, those servants consider\r\nthemselves as the ministers of sovereigns.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA state may sometimes derive some part of its public revenue from the interest\r\nof money, as well as from the profits of stock. If it has amassed a treasure,\r\nit may lend a part of that treasure, either to foreign states, or to its own\r\nsubjects.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe canton of Berne derives a considerable revenue by lending a part of its\r\ntreasure to foreign states, that is, by placing it in the public funds of the\r\ndifferent indebted nations of Europe, chiefly in those of France and England.\r\nThe security of this revenue must depend, first, upon the security of the funds\r\nin which it is placed, or upon the good faith of the government which has the\r\nmanagement of them; and, secondly, upon the certainty or probability of the\r\ncontinuance of peace with the debtor nation. In the case of a war, the very\r\nfirst act of hostility on the part of the debtor nation might be the forfeiture\r\nof the funds of its credit. This policy of lending money to foreign states is,\r\nso far as I know peculiar to the canton of Berne.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe city of Hamburgh {See Memoire concernant les Droites et Impositions en\r\nEurope tome i p. 73.}has established a sort of public pawn-shop, which lends\r\nmoney to the subjects of the state, upon pledges, at six per cent. interest.\r\nThis pawn-shop, or lombard, as it is called, affords a revenue, it is\r\npretended, to the state, of a hundred and fifty thousand crowns, which, at four\r\nand sixpence the crown, amounts to £33,750 sterling.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe government of Pennsylvania, without amassing any treasure, invented a\r\nmethod of lending, not money, indeed, but what is equivalent to money, to its\r\nsubjects. By advancing to private people, at interest, and upon land security\r\nto double the value, paper bills of credit, to be redeemed fifteen years after\r\ntheir date; and, in the mean time, made transferable from hand to hand, like\r\nbanknotes, and declared by act of assembly to be a legal tender in all payments\r\nfrom one inhabitant of the province to another, it raised a moderate revenue,\r\nwhich went a considerable way towards defraying an annual expense of about\r\n£4,500, the whole ordinary expense of that frugal and orderly government. The\r\nsuccess of an expedient of this kind must have depended upon three different\r\ncircumstances: first, upon the demand for some other instrument of commerce,\r\nbesides gold and silver money, or upon the demand for such a quantity of\r\nconsumable stock as could not be had without sending abroad the greater part of\r\ntheir gold and silver money, in order to purchase it; secondly, upon the good\r\ncredit of the government which made use of this expedient; and, thirdly, upon\r\nthe moderation with which it was used, the whole value of the paper bills of\r\ncredit never exceeding that of the gold and silver money which would have been\r\nnecessary for carrying on their circulation, had there been no paper bills of\r\ncredit. The same expedient was, upon different occasions, adopted by several\r\nother American colonies; but, from want of this moderation, it produced, in the\r\ngreater part of them, much more disorder than conveniency.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe unstable and perishable nature of stock and credit, however, renders them\r\nunfit to be trusted to as the principal funds of that sure, steady, and\r\npermanent revenue, which can alone give security and dignity to government. The\r\ngovernment of no great nation, that was advanced beyond the shepherd state,\r\nseems ever to have derived the greater part of its public revenue from such\r\nsources.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLand is a fund of more stable and permanent nature; and the rent of public\r\nlands, accordingly, has been the principal source of the public revenue of many\r\na great nation that was much advanced beyond the shepherd state. From the\r\nproduce or rent of the public lands, the ancient republics of Greece and Italy\r\nderived for a long time the greater part of that revenue which defrayed the\r\nnecessary expenses of the commonwealth. The rent of the crown lands constituted\r\nfor a long time the greater part of the revenue of the ancient sovereigns of\r\nEurope.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWar, and the preparation for war, are the two circumstances which, in modern\r\ntimes, occasion the greater part of the necessary expense or all great states.\r\nBut in the ancient republics of Greece and Italy, every citizen was a soldier,\r\nand both served, and prepared himself for service, at his own expense. Neither\r\nof those two circumstances, therefore, could occasion any very considerable\r\nexpense to the state. The rent of a very moderate landed estate might be fully\r\nsufficient for defraying all the other necessary expenses of government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the ancient monarchies of Europe, the manners and customs of the time\r\nsufficiently prepared the great body of the people for war; and when they took\r\nthe field, they were, by the condition of their feudal tenures, to be\r\nmaintained either at their own expense, or at that of their immediate lords,\r\nwithout bringing any new charge upon the sovereign. The other expenses of\r\ngovernment were, the greater part of them, very moderate. The administration of\r\njustice, it has been shewn, instead of being a cause of expense was a source of\r\nrevenue. The labour of the country people, for three days before, and for three\r\ndays after, harvest, was thought a fund sufficient for making and maintaining\r\nall the bridges, highways, and other public works, which the commerce of the\r\ncountry was supposed to require. In those days the principal expense of the\r\nsovereign seems to have consisted in the maintenance of his own family and\r\nhousehold. The officers of his household, accordingly, were then the great\r\nofficers of state. The lord treasurer received his rents. The lord steward and\r\nlord chamberlain looked after the expense of his family. The care of his\r\nstables was committed to the lord constable and the lord marshal. His houses\r\nwere all built in the form of castles, and seem to have been the principal\r\nfortresses which he possessed. The keepers of those houses or castles might be\r\nconsidered as a sort of military governors. They seem to have been the only\r\nmilitary officers whom it was necessary to maintain in time of peace. In these\r\ncircumstances, the rent of a great landed estate might, upon ordinary\r\noccasions, very well defray all the necessary expenses of government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the present state of the greater part of the civilized monarchies of Europe,\r\nthe rent of all the lands in the country, managed as they probably would be, if\r\nthey all belonged to one proprietor, would scarce, perhaps, amount to the\r\nordinary revenue which they levy upon the people even in peaceable times. The\r\nordinary revenue of Great Britain, for example, including not only what is\r\nnecessary for defraying the current expense of the year, but for paying the\r\ninterest of the public debts, and for sinking a part of the capital of those\r\ndebts, amounts to upwards of ten millions a-year. But the land tax, at four\r\nshillings in the pound, falls short of two millions a-year. This land tax, as\r\nit is called however, is supposed to be one-fifth, not only of the rent of all\r\nthe land, but of that of all the houses, and of the interest of all the capital\r\nstock of Great Britain, that part of it only excepted which is either lent to\r\nthe public, or employed as farming stock in the cultivation of land. A very\r\nconsiderable part of the produce of this tax arises from the rent of houses and\r\nthe interest of capital stock. The land tax of the city of London, for example,\r\nat four shillings in the pound, amounts to £123,399: 6: 7; that of the city of\r\nWestminster to £63,092: 1: 5; that of the palaces of Whitehall and St.\r\nJames’s, to £30,754: 6: 3. A certain proportion of the land tax is, in\r\nthe same manner, assessed upon all the other cities and towns corporate in the\r\nkingdom; and arises almost altogether, either from the rent of houses, or from\r\nwhat is supposed to be the interest of trading and capital stock. According to\r\nthe estimation, therefore, by which Great Britain is rated to the land tax, the\r\nwhole mass of revenue arising from the rent of all the lands, from that of all\r\nthe houses, and from the interest of all the capital stock, that part of it\r\nonly excepted which is either lent to the public, or employed in the\r\ncultivation of land, does not exceed ten millions sterling a-year, the ordinary\r\nrevenue which government levies upon the people, even in peaceable times. The\r\nestimation by which Great Britain is rated to the land tax is, no doubt, taking\r\nthe whole kingdom at an average, very much below the real value; though in\r\nseveral particular counties and districts it is said to be nearly equal to that\r\nvalue. The rent of the lands alone, exclusive of that of houses and of the\r\ninterest of stock, has by many people been estimated at twenty millions; an\r\nestimation made in a great measure at random, and which, I apprehend, is as\r\nlikely to be above as below the truth. But if the lands of Great Britain, in\r\nthe present state of their cultivation, do not afford a rent of more than\r\ntwenty millions a-year, they could not well afford the half, most probably not\r\nthe fourth part of that rent, if they all belonged to a single proprietor, and\r\nwere put under the negligent, expensive, and oppressive management of his\r\nfactors and agents. The crown lands of Great Britain do not at present afford\r\nthe fourth part of the rent which could probably be drawn from them if they\r\nwere the property of private persons. If the crown lands were more extensive,\r\nit is probable, they would be still worse managed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue which the great body of the people derives from land is, in\r\nproportion, not to the rent, but to the produce of the land. The whole annual\r\nproduce of the land of every country, if we except what is reserved for seed,\r\nis either annually consumed by the great body of the people, or exchanged for\r\nsomething else that is consumed by them. Whatever keeps down the produce of the\r\nland below what it would otherwise rise to, keeps down the revenue of the great\r\nbody of the people, still more than it does that of the proprietors of land.\r\nThe rent of land, that portion of the produce which belongs to the proprietors,\r\nis scarce anywhere in Great Britain supposed to be more than a third part of\r\nthe whole produce. If the land which, in one state of cultivation, affords a\r\nrevenue of ten millions sterling a-year, would in another afford a rent of\r\ntwenty millions; the rent being, in both cases, supposed a third part of the\r\nproduce, the revenue of the proprietors would be less than it otherwise might\r\nbe, by ten millions a-year only; but the revenue of the great body of the\r\npeople would be less than it otherwise might be, by thirty millions a-year,\r\ndeducting only what would be necessary for seed. The population of the country\r\nwould be less by the number of people which thirty millions a-year, deducting\r\nalways the seed, could maintain, according to the particular mode of living,\r\nand expense which might take place in the different ranks of men, among whom\r\nthe remainder was distributed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough there is not at present in Europe, any civilized state of any kind which\r\nderives the greater part of its public revenue from the rent of lands which are\r\nthe property of the state; yet, in all the great monarchies of Europe, there\r\nare still many large tracts of land which belong to the crown. They are\r\ngenerally forest, and sometimes forests where, after travelling several miles,\r\nyou will scarce find a single tree; a mere waste and loss of country, in\r\nrespect both of produce and population. In every great monarchy of Europe, the\r\nsale of the crown lands would produce a very large sum of money, which, if\r\napplied to the payment of the public debts, would deliver from mortgage a much\r\ngreater revenue than any which those lands have ever afforded to the crown. In\r\ncountries where lands, improved and cultivated very highly, and yielding, at\r\nthe time of sale, as great a rent as can easily be got from them, commonly sell\r\nat thirty years purchase; the unimproved, uncultivated, and low-rented crown\r\nlands, might well be expected to sell at forty, fifty, or sixty years purchase.\r\nThe crown might immediately enjoy the revenue which this great price would\r\nredeem from mortgage. In the course of a few years, it would probably enjoy\r\nanother revenue. When the crown lands had become private property, they would,\r\nin the course of a few years, become well improved and well cultivated. The\r\nincrease of their produce would increase the population of the country, by\r\naugmenting the revenue and consumption of the people. But the revenue which the\r\ncrown derives from the duties or custom and excise, would necessarily increase\r\nwith the revenue and consumption of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue which, in any civilized monarchy, the crown derives from the crown\r\nlands, though it appears to cost nothing to individuals, in reality costs more\r\nto the society than perhaps any other equal revenue which the crown enjoys. It\r\nwould, in all cases, be for the interest of the society, to replace this\r\nrevenue to the crown by some other equal revenue, and to divide the lands among\r\nthe people, which could not well be done better, perhaps, than by exposing them\r\nto public sale.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLands, for the purposes of pleasure and magnificence, parks, gardens, public\r\nwalks, etc. possessions which are everywhere considered as causes of expense,\r\nnot as sources of revenue, seem to be the only lands which, in a great and\r\ncivilized monarchy, ought to belong to the crown.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nPublic stock and public lands, therefore, the two sources of revenue which may\r\npeculiarly belong to the sovereign or commonwealth, being both improper and\r\ninsufficient funds for defraying the necessary expense of any great and\r\ncivilized state; it remains that this expense must, the greater part of it, be\r\ndefrayed by taxes of one kind or another; the people contributing a part of\r\ntheir own private revenue, in order to make up a public revenue to the\r\nsovereign or commonwealth.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003ePART II. Of Taxes.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nThe private revenue of individuals, it has been shown in the first book of this\r\nInquiry, arises, ultimately from three different sources; rent, profit, and\r\nwages. Every tax must finally be paid from some one or other of those three\r\ndifferent sources of revenue, or from all of them indifferently. I shall\r\nendeavour to give the best account I can, first, of those taxes which, it is\r\nintended should fall upon rent; secondly, of those which, it is intended should\r\nfall upon profit; thirdly, of those which, it is intended should fall upon\r\nwages; and fourthly, of those which, it is intended should fall indifferently\r\nupon all those three different sources of private revenue. The particular\r\nconsideration of each of these four different sorts of taxes will divide the\r\nsecond part of the present chapter into four articles, three of which will\r\nrequire several other subdivisions. Many of these taxes, it will appear from\r\nthe following review, are not finally paid from the fund, or source of revenue,\r\nupon which it is intended they should fall.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore I enter upon the examination of particular taxes, it is necessary to\r\npremise the four following maxims with regard to taxes in general.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n1. The subjects of every state ought to contribute towards the support of the\r\ngovernment, as nearly as possible, in proportion to their respective abilities;\r\nthat is, in proportion to the revenue which they respectively enjoy under the\r\nprotection of the state. The expense of government to the individuals of a\r\ngreat nation, is like the expense of management to the joint tenants of a great\r\nestate, who are all obliged to contribute in proportion to their respective\r\ninterests in the estate. In the observation or neglect of this maxim, consists\r\nwhat is called the equality or inequality of taxation. Every tax, it must be\r\nobserved once for all, which falls finally upon one only of the three sorts of\r\nrevenue above mentioned, is necessarily unequal, in so far as it does not\r\naffect the other two. In the following examination of different taxes, I shall\r\nseldom take much farther notice of this sort of inequality; but shall, in most\r\ncases, confine my observations to that inequality which is occasioned by a\r\nparticular tax falling unequally upon that particular sort of private revenue\r\nwhich is affected by it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n2. The tax which each individual is bound to pay, ought to be certain and not\r\narbitrary. The time of payment, the manner of payment, the quantity to be paid,\r\nought all to be clear and plain to the contributor, and to every other person.\r\nWhere it is otherwise, every person subject to the tax is put more or less in\r\nthe power of the tax-gatherer, who can either aggravate the tax upon any\r\nobnoxious contributor, or extort, by the terror of such aggravation, some\r\npresent or perquisite to himself. The uncertainty of taxation encourages the\r\ninsolence, and favours the corruption, of an order of men who are naturally\r\nunpopular, even where they are neither insolent nor corrupt. The certainty of\r\nwhat each individual ought to pay is, in taxation, a matter of so great\r\nimportance, that a very considerable degree of inequality, it appears, I\r\nbelieve, from the experience of all nations, is not near so great an evil as a\r\nvery small degree of uncertainty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n3. Every tax ought to be levied at the time, or in the manner, in which it is\r\nmost likely to be convenient for the contributor to pay it. A tax upon the rent\r\nof land or of houses, payable at the same term at which such rents are usually\r\npaid, is levied at the time when it is most likely to be convenient for the\r\ncontributor to pay; or when he is most likely to have wherewithall to pay.\r\nTaxes upon such consumable goods as are articles of luxury, are all finally\r\npaid by the consumer, and generally in a manner that is very convenient for\r\nhim. He pays them by little and little, as he has occasion to buy the goods. As\r\nhe is at liberty too, either to buy or not to buy, as he pleases, it must be\r\nhis own fault if he ever suffers any considerable inconveniency from such\r\ntaxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\n4. Every tax ought to be so contrived, as both to take out and to keep out of\r\nthe pockets of the people as little as possible, over and above what it brings\r\ninto the public treasury of the state. A tax may either take out or keep out of\r\nthe pockets of the people a great deal more than it brings into the public\r\ntreasury, in the four following ways. First, the levying of it may require a\r\ngreat number of officers, whose salaries may eat up the greater part of the\r\nproduce of the tax, and whose perquisites may impose another additional tax\r\nupon the people. Secondly, it may obstruct the industry of the people, and\r\ndiscourage them from applying to certain branches of business which might give\r\nmaintenance and employment to great multitudes. While it obliges the people to\r\npay, it may thus diminish, or perhaps destroy, some of the funds which might\r\nenable them more easily to do so. Thirdly, by the forfeitures and other\r\npenalties which those unfortunate individuals incur, who attempt unsuccessfully\r\nto evade the tax, it may frequently ruin them, and thereby put an end to the\r\nbenefit which the community might have received from the employment of their\r\ncapitals. An injudicious tax offers a great temptation to smuggling. But the\r\npenalties of smuggling must arise in proportion to the temptation. The law,\r\ncontrary to all the ordinary principles of justice, first creates the\r\ntemptation, and then punishes those who yield to it; and it commonly enhances\r\nthe punishment, too, in proportion to the very circumstance which ought\r\ncertainly to alleviate it, the temptation to commit the crime. {See Sketches of\r\nthe History of Man page 474, and Seq.} Fourthly, by subjecting the people to\r\nthe frequent visits and the odious examination of the tax-gatherers, it may\r\nexpose them to much unnecessary trouble, vexation, and oppression; and though\r\nvexation is not, strictly speaking, expense, it is certainly equivalent to the\r\nexpense at which every man would be willing to redeem himself from it. It is in\r\nsome one or other of these four different ways, that taxes are frequently so\r\nmuch more burdensome to the people than they are beneficial to the sovereign.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe evident justice and utility of the foregoing maxims have recommended them,\r\nmore or less, to the attention of all nations. All nations have endeavoured, to\r\nthe best of their judgment, to render their taxes as equal as they could\r\ncontrive; as certain, as convenient to the contributor, both the time and the\r\nmode of payment, and in proportion to the revenue which they brought to the\r\nprince, as little burdensome to the people. The following short review of some\r\nof the principal taxes which have taken place in different ages and countries,\r\nwill show, that the endeavours of all nations have not in this respect been\r\nequally successful.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nARTICLE I.—Taxes upon Rent—Taxes upon the Rent of Land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax upon the rent of land may either be imposed according to a certain canon,\r\nevery district being valued at a curtain rent, which valuation is not\r\nafterwards to be altered; or it may be imposed in such a manner, as to vary\r\nwith every variation in the real rent of the land, and to rise or fall with the\r\nimprovement or declension of its cultivation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA land tax which, like that of Great Britain, is assessed upon each district\r\naccording to a certain invariable canon, though it should be equal at the time\r\nof its first establishment, necessarily becomes unequal in process of time,\r\naccording to the unequal degrees of improvement or neglect in the cultivation\r\nof the different parts of the country. In England, the valuation, according to\r\nwhich the different counties and parishes were assessed to the land tax by the\r\n4th of William and Mary, was very unequal even at its first establishment. This\r\ntax, therefore, so far offends against the first of the four maxims above\r\nmentioned. It is perfectly agreeable to the other three. It is perfectly\r\ncertain. The time of payment for the tax, being the same as that for the rent,\r\nis as convenient as it can be to the contributor. Though the landlord is, in\r\nall cases, the real contributor, the tax is commonly advanced by the tenant, to\r\nwhom the landlord is obliged to allow it in the payment of the rent. This tax\r\nis levied by a much smaller number of officers than any other which affords\r\nnearly the same revenue. As the tax upon each district does not rise with the\r\nrise of the rent, the sovereign does not share in the profits of the\r\nlandlord’s improvements. Those improvements sometimes contribute, indeed,\r\nto the discharge of the other landlords of the district. But the aggravation of\r\nthe tax, which this may sometimes occasion upon a particular estate, is always\r\nso very small, that it never can discourage those improvements, nor keep down\r\nthe produce of the land below what it would otherwise rise to. As it has no\r\ntendency to diminish the quantity, it can have none to raise the price of that\r\nproduce. It does not obstruct the industry of the people; it subjects the\r\nlandlord to no other inconveniency besides the unavoidable one of paying the\r\ntax. The advantage, however, which the land-lord has derived from the\r\ninvariable constancy of the valuation, by which all the lands of Great Britain\r\nare rated to the land-tax, has been principally owing to some circumstances\r\naltogether extraneous to the nature of the tax.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has been owing in part, to the great prosperity of almost every part of the\r\ncountry, the rents of almost all the estates of Great Britain having, since the\r\ntime when this valuation was first established, been continually rising, and\r\nscarce any of them having fallen. The landlords, therefore, have almost all\r\ngained the difference between the tax which they would have paid, according to\r\nthe present rent of their estates, and that which they actually pay according\r\nto the ancient valuation. Had the state of the country been different, had\r\nrents been gradually falling in consequence of the declension of cultivation,\r\nthe landlords would almost all have lost this difference. In the state of\r\nthings which has happened to take place since the revolution, the constancy of\r\nthe valuation has been advantageous to the landlord and hurtful to the\r\nsovereign. In a different state of things it might have been advantageous to\r\nthe sovereign and hurtful to the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the tax is made payable in money, so the valuation of the land is expressed\r\nin money. Since the establishment of this valuation, the value of silver has\r\nbeen pretty uniform, and there has been no alteration in the standard of the\r\ncoin, either as to weight or fineness. Had silver risen considerably in its\r\nvalue, as it seems to have done in the course of the two centuries which\r\npreceded the discovery of the mines of America, the constancy of the valuation\r\nmight have proved very oppressive to the landlord. Had silver fallen\r\nconsiderably in its value, as it certainly did for about a century at least\r\nafter the discovery of those mines, the same constancy of valuation would have\r\nreduced very much this branch of the revenue of the sovereign. Had any\r\nconsiderable alteration been made in the standard of the money, either by\r\nsinking the same quantity of silver to a lower denomination, or by raising it\r\nto a higher; had an ounce of silver, for example, instead of being coined into\r\nfive shillings and two pence, been coined either into pieces which bore so low\r\na denomination as two shillings and seven pence, or into pieces which bore so\r\nhigh a one as ten shillings and four pence, it would, in the one case, have\r\nhurt the revenue of the proprietor, in the other that of the sovereign.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn circumstances, therefore, somewhat different from those which have actually\r\ntaken place, this constancy of valuation might have been a very great\r\ninconveniency, either to the contributors or to the commonwealth. In the course\r\nof ages, such circumstances, however, must at some time or other happen. But\r\nthough empires, like all the other works of men, have all hitherto proved\r\nmortal, yet every empire aims at immortality. Every constitution, therefore,\r\nwhich it is meant should be as permanent as the empire itself, ought to be\r\nconvenient, not in certain circumstances only, but in all circumstances; or\r\nought to be suited, not to those circumstances which are transitory,\r\noccasional, or accidental, but to those which are necessary, and therefore\r\nalways the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax upon the rent of land, which varies with every variation of the rent, or\r\nwhich rises and falls according to the improvement or neglect of cultivation,\r\nis recommended by that sect of men of letters in France, who call themselves\r\nthe economists, as the most equitable of all taxes. All taxes, they pretend,\r\nfall ultimately upon the rent of land, and ought, therefore, to be imposed\r\nequally upon the fund which must finally pay them. That all taxes ought to fall\r\nas equally as possible upon the fund which must finally pay them, is certainly\r\ntrue. But without entering into the disagreeable discussion of the metaphysical\r\narguments by which they support their very ingenious theory, it will\r\nsufficiently appear, from the following review, what are the taxes which fall\r\nfinally upon the rent of the land, and what are those which fall finally upon\r\nsome other fund.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the Venetian territory, all the arable lands which are given in lease to\r\nfarmers are taxed at a tenth of the rent. {Memoires concernant les Droits, p.\r\n240, 241.} The leases are recorded in a public register, which is kept by the\r\nofficers of revenue in each province or district. When the proprietor\r\ncultivates his own lands, they are valued according to an equitable estimation,\r\nand he is allowed a deduction of one-fifth of the tax; so that for such land he\r\npays only eight instead of ten per cent. of the supposed rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA land-tax of this kind is certainly more equal than the land-tax of England.\r\nIt might not, perhaps, be altogether so certain, and the assessment of the tax\r\nmight frequently occasion a good deal more trouble to the landlord. It might,\r\ntoo, be a good deal more expensive in the levying.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch a system of administration, however, might, perhaps, be contrived, as\r\nwould in a great measure both prevent this uncertainty, and moderate this\r\nexpense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe landlord and tenant, for example, might jointly be obliged to record their\r\nlease in a public register. Proper penalties might be enacted against\r\nconcealing or misrepresenting any of the conditions; and if part of those\r\npenalties were to be paid to either of the two parties who informed against and\r\nconvicted the other of such concealment or misrepresentation, it would\r\neffectually deter them from combining together in order to defraud the public\r\nrevenue. All the conditions of the lease might be sufficiently known from such\r\na record.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome landlords, instead of raising the rent, take a fine for the renewal of the\r\nlease. This practice is, in most cases, the expedient of a spendthrift, who,\r\nfor a sum of ready money sells a future revenue of much greater value. It is,\r\nin most cases, therefore, hurtful to the landlord; it is frequently hurtful to\r\nthe tenant; and it is always hurtful to the community. It frequently takes from\r\nthe tenant so great a part of his capital, and thereby diminishes so much his\r\nability to cultivate the land, that he finds it more difficult to pay a small\r\nrent than it would otherwise have been to pay a great one. Whatever diminishes\r\nhis ability to cultivate, necessarily keeps down, below what it would otherwise\r\nhave been, the most important part of the revenue of the community. By\r\nrendering the tax upon such fines a good deal heavier than upon the ordinary\r\nrent, this hurtful practice might be discouraged, to the no small advantage of\r\nall the different parties concerned, of the landlord, of the tenant, of the\r\nsovereign, and of the whole community.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome leases prescribe to the tenant a certain mode of cultivation, and a\r\ncertain succession of crops, during the whole continuance of the lease. This\r\ncondition, which is generally the effect of the landlord’s conceit of his\r\nown superior knowledge (a conceit in most cases very ill-founded), ought always\r\nto be considered as an additional rent, as a rent in service, instead of a rent\r\nin money. In order to discourage the practice, which is generally a foolish\r\none, this species of rent might be valued rather high, and consequently taxed\r\nsomewhat higher than common money-rents.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome landlords, instead of a rent in money, require a rent in kind, in corn,\r\ncattle, poultry, wine, oil, etc.; others, again, require a rent in service.\r\nSuch rents are always more hurtful to the tenant than beneficial to the\r\nlandlord. They either take more, or keep more out of the pocket of the former,\r\nthan they put into that of the latter. In every country where they take place,\r\nthe tenants are poor and beggarly, pretty much according to the degree in which\r\nthey take place. By valuing, in the same manner, such rents rather high, and\r\nconsequently taxing them somewhat higher than common money-rents, a practice\r\nwhich is hurtful to the whole community, might, perhaps, be sufficiently\r\ndiscouraged.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the landlord chose to occupy himself a part of his own lands, the rent\r\nmight be valued according to an equitable arbitration of the farmers and\r\nlandlords in the neighbourhood, and a moderate abatement of the tax might be\r\ngranted to him, in the same manner as in the Venetian territory, provided the\r\nrent of the lands which he occupied did not exceed a certain sum. It is of\r\nimportance that the landlord should be encouraged to cultivate a part of his\r\nown land. His capital is generally greater than that of the tenant, and, with\r\nless skill, he can frequently raise a greater produce. The landlord can afford\r\nto try experiments, and is generally disposed to do so. His unsuccessful\r\nexperiments occasion only a moderate loss to himself. His successful ones\r\ncontribute to the improvement and better cultivation of the whole country. It\r\nmight be of importance, however, that the abatement of the tax should encourage\r\nhim to cultivate to a certain extent only. If the landlords should, the greater\r\npart of them, be tempted to farm the whole of their own lands, the country\r\n(instead of sober and industrious tenants, who are bound by their own interest\r\nto cultivate as well as their capital and skill will allow them) would be\r\nfilled with idle and profligate bailiffs, whose abusive management would soon\r\ndegrade the cultivation, and reduce the annual produce of the land, to the\r\ndiminution, not only of the revenue of their masters, but of the most important\r\npart of that of the whole society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch a system of administration might, perhaps, free a tax of this kind from\r\nany degree of uncertainty, which could occasion either oppression or\r\ninconveniency to the contributor; and might, at the same time, serve to\r\nintroduce into the common management of land such a plan of policy as might\r\ncontribute a good deal to the general improvement and good cultivation of the\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe expense of levying a land-tax, which varied with every variation of the\r\nrent, would, no doubt, be somewhat greater than that of levying one which was\r\nalways rated according to a fixed valuation. Some additional expense would\r\nnecessarily be incurred, both by the different register-offices which it would\r\nbe proper to establish in the different districts of the country, and by the\r\ndifferent valuations which might occasionally be made of the lands which the\r\nproprietor chose to occupy himself. The expense of all this, however, might be\r\nvery moderate, and much below what is incurred in the levying of many other\r\ntaxes, which afford a very inconsiderable revenue in comparison of what might\r\neasily be drawn from a tax of this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe discouragement which a variable land-tax of this kind might give to the\r\nimprovement of land, seems to be the most important objection which can be made\r\nto it. The landlord would certainly be less disposed to improve, when the\r\nsovereign, who contributed nothing to the expense, was to share in the profit\r\nof the improvement. Even this objection might, perhaps, be obviated, by\r\nallowing the landlord, before he began his improvement, to ascertain, in\r\nconjunction with the officers of revenue, the actual value of his lands,\r\naccording to the equitable arbitration of a certain number of landlords and\r\nfarmers in the neighbourhood, equally chosen by both parties: and by rating\r\nhim, according to this valuation, for such a number of years as might be fully\r\nsufficient for his complete indemnification. To draw the attention of the\r\nsovereign towards the improvement of the land, from a regard to the increase of\r\nhis own revenue, is one or the principal advantages proposed by this species of\r\nland-tax. The term, therefore, allowed, for the indemnification of the\r\nlandlord, ought not to be a great deal longer than what was necessary for that\r\npurpose, lest the remoteness of the interest should discourage too much this\r\nattention. It had better, however, be somewhat too long, than in any respect\r\ntoo short. No incitement to the attention of the sovereign can ever\r\ncounterbalance the smallest discouragement to that of the landlord. The\r\nattention of the sovereign can be, at best, but a very general and vague\r\nconsideration of what is likely to contribute to the better cultivation of the\r\ngreater part of his dominions. The attention of the landlord is a particular\r\nand minute consideration of what is likely to be the most advantageous\r\napplication of every inch of ground upon his estate. The principal attention of\r\nthe sovereign ought to be, to encourage, by every means in his power, the\r\nattention both of the landlord and of the farmer, by allowing both to pursue\r\ntheir own interest in their own way, and according to their own judgment; by\r\ngiving to both the most perfect security that they shall enjoy the full\r\nrecompence of their own industry; and by procuring to both the most extensive\r\nmarket for every part of their produce, in consequence of establishing the\r\neasiest and safest communications, both by land and by water, through every\r\npart of his own dominions, as well as the most unbounded freedom of exportation\r\nto the dominions of all other princes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, by such a system of administration, a tax of this kind could be so managed\r\nas to give, not only no discouragement, but, on the contrary, some\r\nencouragement to the improvement or land, it does not appear likely to occasion\r\nany other inconveniency to the landlord, except always the unavoidable one of\r\nbeing obliged to pay the tax. In all the variations of the state of the\r\nsociety, in the improvement and in the declension of agriculture; in all the\r\nvariations in the value of silver, and in all those in the standard of the\r\ncoin, a tax of this kind would, of its own accord, and without any attention of\r\ngovernment, readily suit itself to the actual situation of things, and would be\r\nequally just and equitable in all those different changes. It would, therefore,\r\nbe much more proper to be established as a perpetual and unalterable\r\nregulation, or as what is called a fundamental law of the commonwealth, than\r\nany tax which was always to be levied according to a certain valuation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSome states, instead of the simple and obvious expedient of a register of\r\nleases, have had recourse to the laborious and expensive one of an actual\r\nsurvey and valuation of all the lands in the country. They have suspected,\r\nprobably, that the lessor and lessee, in order to defraud the public revenue,\r\nmight combine to conceal the real terms of the lease. Doomsday-book seems to\r\nhave been the result of a very accurate survey of this kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the ancient dominions of the king of Prussia, the land-tax is assessed\r\naccording to an actual survey and valuation, which is reviewed and altered from\r\ntime to time. {Memoires concernant les Droits, etc. tom, i. p. 114, 115, 116,\r\netc.} According to that valuation, the lay proprietors pay from twenty to\r\ntwenty-five per cent. of their revenue; ecclesiastics from forty to forty-five\r\nper cent. The survey and valuation of Silesia was made by order of the present\r\nking, it is said, with great accuracy. According to that valuation, the lands\r\nbelonging to the bishop of Breslaw are taxed at twenty-five per cent. of their\r\nrent. The other revenues of the ecclesiastics of both religions at fifty per\r\ncent. The commanderies of the Teutonic order, and of that of Malta, at forty\r\nper cent. Lands held by a noble tenure, at thirty-eight and one-third per cent.\r\nLands held by a base tenure, at thirty-five and one-third per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe survey and valuation of Bohemia is said to have been the work of more than\r\na hundred years. It was not perfected till after the peace of 1748, by the\r\norders of the present empress queen. {Id. tom i. p.85, 84.} The survey of the\r\nduchy of Milan, which was begun in the time of Charles VI., was not perfected\r\ntill after 1760. It is esteemed one of the most accurate that has ever been\r\nmade. The survey of Savoy and Piedmont was executed under the orders of the\r\nlate king of Sardinia. {Id. p. 280, etc.; also p, 287. etc. to 316.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the dominions of the king of Prussia, the revenue of the church is taxed\r\nmuch higher than that of lay proprietors. The revenue of the church is, the\r\ngreater part of it, a burden upon the rent of land. It seldom happens that any\r\npart of it is applied towards the improvement of land; or is so employed as to\r\ncontribute, in any respect, towards increasing the revenue of the great body of\r\nthe people. His Prussian majesty had probably, upon that account, thought it\r\nreasonable that it should contribute a good deal more towards relieving the\r\nexigencies of the state. In some countries, the lands of the church are\r\nexempted from all taxes. In others, they are taxed more lightly than other\r\nlands. In the duchy of Milan, the lands which the church possessed before 1575,\r\nare rated to the tax at a third only or their value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Silesia, lands held by a noble tenure are taxed three per cent. higher than\r\nthose held by a base tenure. The honours and privileges of different kinds\r\nannexed to the former, his Prussian majesty had probably imagined, would\r\nsufficiently compensate to the proprietor a small aggravation of the tax;\r\nwhile, at the same time, the humiliating inferiority of the latter would be in\r\nsome measure alleviated, by being taxed somewhat more lightly. In other\r\ncountries, the system of taxation, instead of alleviating, aggravates this\r\ninequality. In the dominions of the king of Sardinia, and in those provinces of\r\nFrance which are subject to what is called the real or predial taille, the tax\r\nfalls altogether upon the lands held by a base tenure. Those held by a noble\r\none are exempted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA land tax assessed according to a general survey and valuation, how equal\r\nsoever it may be at first, must, in the course of a very moderate period of\r\ntime, become unequal. To prevent its becoming so would require the continual\r\nand painful attention of government to all the variations in the state and\r\nproduce of every different farm in the country. The governments of Prussia, of\r\nBohemia, of Sardinia, and of the duchy of Milan, actually exert an attention of\r\nthis kind; an attention so unsuitable to the nature of government, that it is\r\nnot likely to be of long continuance, and which, if it is continued, will\r\nprobably, in the long-run, occasion much more trouble and vexation than it can\r\npossibly bring relief to the contributors.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1666, the generality of Montauban was assessed to the real or predial\r\ntaille, according, it is said, to a very exact survey and valuation. {Memoires\r\nconcernant les Droits, etc. tom. ii p. 139, etc.} By 1727, this assessment had\r\nbecome altogether unequal. In order to remedy this inconveniency, government\r\nhas found no better expedient, than to impose upon the whole generality an\r\nadditional tax of a hundred and twenty thousand livres. This additional tax is\r\nrated upon all the different districts subject to the taille according to the\r\nold assessment. But it is levied only upon those which, in the actual state of\r\nthings, are by that assessment under-taxed; and it is applied to the relief of\r\nthose which, by the same assessment, are over-taxed. Two districts, for\r\nexample, one of which ought, in the actual state of things, to be taxed at nine\r\nhundred, the other at eleven hundred livres, are, by the old assessment, both\r\ntaxed at a thousand livres. Both these districts are, by the additional tax,\r\nrated at eleven hundred livres each. But this additional tax is levied only\r\nupon the district under-charged, and it is applied altogether to the relief of\r\nthat overcharged, which consequently pays only nine hundred livres. The\r\ngovernment neither gains nor loses by the additional tax, which is applied\r\naltogether to remedy the inequalities arising from the old assessment. The\r\napplication is pretty much regulated according to the discretion of the\r\nintendant of the generality, and must, therefore, be in a great measure\r\narbitrary.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes which are proportioned, not in the Rent, but to the Produce of Land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the produce of land are, in reality, taxes upon the rent; and though\r\nthey may be originally advanced by the farmer, are finally paid by the\r\nlandlord. When a certain portion of the produce is to be paid away for a tax,\r\nthe farmer computes as well as he can, what the value of this portion is, one\r\nyear with another, likely to amount to, and he makes a proportionable abatement\r\nin the rent which he agrees to pay to the landlord. There is no farmer who does\r\nnot compute beforehand what the church tythe, which is a land tax of this kind,\r\nis, one year with another, likely to amount to.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tythe, and every other land tax of this kind, under the appearance of\r\nperfect equality, are very unequal taxes; a certain portion of the produce\r\nbeing in different situations, equivalent to a very different portion of the\r\nrent. In some very rich lands, the produce is so great, that the one half of it\r\nis fully sufficient to replace to the farmer his capital employed in\r\ncultivation, together with the ordinary profits of farming stock in the\r\nneighbourhood. The other half, or, what comes to the same thing, the value of\r\nthe other half, he could afford to pay as rent to the landlord, if there was no\r\ntythe. But if a tenth of the produce is taken from him in the way of tythe, he\r\nmust require an abatement of the fifth part of his rent, otherwise he cannot\r\nget back his capital with the ordinary profit. In this case, the rent of the\r\nlandlord, instead of amounting to a half, or five-tenths of the whole produce,\r\nwill amount only to four-tenths of it. In poorer lands, on the contrary, the\r\nproduce is sometimes so small, and the expense of cultivation so great, that it\r\nrequires four-fifths of the whole produce, to replace to the farmer his capital\r\nwith the ordinary profit. In this case, though there was no tythe, the rent of\r\nthe landlord could amount to no more than one-fifth or two-tenths of the whole\r\nproduce. But if the farmer pays one-tenth of the produce in the way of tythe,\r\nhe must require an equal abatement of the rent of the landlord, which will thus\r\nbe reduced to one-tenth only of the whole produce. Upon the rent of rich lands\r\nthe tythe may sometimes be a tax of no more than one-fifth part, or four\r\nshillings in the pound; whereas upon that of poorer lands, it may sometimes be\r\na tax of one half, or of ten shillings in the pound.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tythe, as it is frequently a very unequal tax upon the rent, so it is\r\nalways a great discouragement, both to the improvements of the landlord, and to\r\nthe cultivation of the farmer. The one cannot venture to make the most\r\nimportant, which are generally the most expensive improvements; nor the other\r\nto raise the most valuable, which are generally, too, the most expensive crops;\r\nwhen the church, which lays out no part of the expense, is to share so very\r\nlargely in the profit. The cultivation of madder was, for a long time, confined\r\nby the tythe to the United Provinces, which, being presbyterian countries, and\r\nupon that account exempted from this destructive tax, enjoyed a sort of\r\nmonopoly of that useful dyeing drug against the rest of Europe. The late\r\nattempts to introduce the culture of this plant into England, have been made\r\nonly in consequence of the statute, which enacted that five shillings an acre\r\nshould be received in lieu of all manner of tythe upon madder.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs through the greater part of Europe, the church, so in many different\r\ncountries of Asia, the state, is principally supported by a land tax,\r\nproportioned not to the rent, but to the produce of the land. In China, the\r\nprincipal revenue of the sovereign consists in a tenth part of the produce of\r\nall the lands of the empire. This tenth part, however, is estimated so very\r\nmoderately, that, in many provinces, it is said not to exceed a thirtieth part\r\nof the ordinary produce. The land tax or land rent which used to be paid to the\r\nMahometan government of Bengal, before that country fell into the hands of the\r\nEnglish East India company, is said to have amounted to about a fifth part of\r\nthe produce. The land tax of ancient Egypt is said likewise to have amounted to\r\na fifth part.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Asia, this sort of land tax is said to interest the sovereign in the\r\nimprovement and cultivation of land. The sovereigns of China, those of Bengal\r\nwhile under the Mahometan govermnent, and those of ancient Egypt, are said,\r\naccordingly, to have been extremely attentive to the making and maintaining of\r\ngood roads and navigable canals, in order to increase, as much as possible,\r\nboth the quantity and value of every part of the produce of the land, by\r\nprocuring to every part of it the most extensive market which their own\r\ndominions could afford. The tythe of the church is divided into such small\r\nportions that no one of its proprietors can have any interest of this kind. The\r\nparson of a parish could never find his account, in making a road or canal to a\r\ndistant part of the country, in order to extend the market for the produce of\r\nhis own particular parish. Such taxes, when destined for the maintenance of the\r\nstate, have some advantages, which may serve in some measure to balance their\r\ninconveniency. When destined for the maintenance of the church, they are\r\nattended with nothing but inconveniency.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the produce of land may be levied, either in kind, or, according to\r\na certain valuation in money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe parson of a parish, or a gentleman of small fortune who lives upon his\r\nestate, may sometimes, perhaps find some advantage in receiving, the one his\r\ntythe, and the other his rent, in kind. The quantity to be collected, and the\r\ndistrict within which it is to be collected, are so small, that they both can\r\noversee, with their own eyes, the collection and disposal of every part of what\r\nis due to them. A gentleman of great fortune, who lived in the capital, would\r\nbe in danger of suffering much by the neglect, and more by the fraud, of his\r\nfactors and agents, if the rents of an estate in a distant province were to be\r\npaid to him in this manner. The loss of the sovereign, from the abuse and\r\ndepredation of his tax-gatherers, would necessarily be much greater. The\r\nservants of the most careless private person are, perhaps, more under the eye\r\nof their master than those of the most careful prince; and a public revenue,\r\nwhich was paid in kind, would suffer so much from the mismanagement of the\r\ncollectors, that a very small part of what was levied upon the people would\r\never arrive at the treasury of the prince. Some part of the public revenue of\r\nChina, however, is said to be paid in this manner. The mandarins and other\r\ntax-gatherers will, no doubt, find their advantage in continuing the practice\r\nof a payment, which is so much more liable to abuse than any payment in money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax upon the produce of land, which is levied in money, may be levied, either\r\naccording to a valuation, which varies with all the variations of the market\r\nprice; or according to a fixed valuation, a bushel of wheat, for example, being\r\nalways valued at one and the same money price, whatever may be the state of the\r\nmarket. The produce of a tax levied in the former way will vary only according\r\nto the variations in the real produce of the land, according to the improvement\r\nor neglect of cultivation. The produce of a tax levied in the latter way will\r\nvary, not only according to the variations in the produce of the land, but\r\naccording both to those in the value of the precious metals, and those in the\r\nquantity of those metals which is at different times contained in coin of the\r\nsame denomination. The produce of the former will always bear the same\r\nproportion to the value of the real produce of the land. The produce of the\r\nlatter may, at different times, bear very different proportions to that value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, instead either of a certain portion of the produce of land, or of the\r\nprice of a certain portion, a certain sum of money is to be paid in full\r\ncompensation for all tax or tythe; the tax becomes, in this case, exactly of\r\nthe same nature with the land tax of England. It neither rises nor falls with\r\nthe rent of the land. It neither encourages nor discourages improvement. The\r\ntythe in the greater part of those parishes which pay what is called a modus,\r\nin lieu of all other tythe is a tax of this kind. During the Mahometan\r\ngovernment of Bengal, instead of the payment in kind of the fifth part of the\r\nproduce, a modus, and, it is said, a very moderate one, was established in the\r\ngreater part of the districts or zemindaries of the country. Some of the\r\nservants of the East India company, under pretence of restoring the public\r\nrevenue to its proper value, have, in some provinces, exchanged this modus for\r\na payment in kind. Under their management, this change is likely both to\r\ndiscourage cultivation, and to give new opportunities for abuse in the\r\ncollection of the public revenue, which has fallen very much below what it was\r\nsaid to have been when it first fell under the management of the company. The\r\nservants of the company may, perhaps, have profited by the change, but at the\r\nexpense, it is probable, both of their masters and of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the Rent of Houses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of a house may be distinguished into two parts, of which the one may\r\nvery properly be called the building-rent; the other is commonly called the\r\nground-rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe building-rent is the interest or profit of the capital expended in building\r\nthe house. In order to put the trade of a builder upon a level with other\r\ntrades, it is necessary that this rent should be sufficient, first, to pay him\r\nthe same interest which he would have got for his capital, if he had lent it\r\nupon good security; and, secondly, to keep the house in constant repair, or,\r\nwhat comes to the same thing, to replace, within a certain term of years, the\r\ncapital which had been employed in building it. The building-rent, or the\r\nordinary profit of building, is, therefore, everywhere regulated by the\r\nordinary interest of money. Where the market rate of interest is four per cent.\r\nthe rent of a house, which, over and above paying the ground-rent, affords six\r\nor six and a-half per cent. upon the whole expense of building, may, perhaps,\r\nafford a sufficient profit to the builder. Where the market rate of interest is\r\nfive per cent. it may perhaps require seven or seven and a half per cent. If,\r\nin proportion to the interest of money, the trade of the builders affords at\r\nany time much greater profit than this, it will soon draw so much capital from\r\nother trades as will reduce the profit to its proper level. If it affords at\r\nany time much less than this, other trades will soon draw so much capital from\r\nit as will again raise that profit.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhatever part of the whole rent of a house is over and above what is sufficient\r\nfor affording this reasonable profit, naturally goes to the ground-rent; and,\r\nwhere the owner of the ground and the owner of the building are two different\r\npersons, is, in most cases, completely paid to the former. This surplus rent is\r\nthe price which the inhabitant of the house pays for some real or supposed\r\nadvantage of the situation. In country houses, at a distance from any great\r\ntown, where there is plenty of ground to chuse upon, the ground-rent is scarce\r\nanything, or no more than what the ground which the house stands upon would\r\npay, if employed in agriculture. In country villas, in the neighbourhood of\r\nsome great town, it is sometimes a good deal higher; and the peculiar\r\nconveniency or beauty of situation is there frequently very well paid for.\r\nGround-rents are generally highest in the capital, and in those particular\r\nparts of it where there happens to be the greatest demand for houses, whatever\r\nbe the reason of that demand, whether for trade and business, for pleasure and\r\nsociety, or for mere vanity and fashion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax upon house-rent, payable by the tenant, and proportioned to the whole\r\nrent of each house, could not, for any considerable time at least, affect the\r\nbuilding-rent. If the builder did not get his reasonable profit, he would be\r\nobliged to quit the trade; which, by raising the demand for building, would, in\r\na short time, bring back his profit to its proper level with that of other\r\ntrades. Neither would such a tax fall altogether upon the ground-rent; but it\r\nwould divide itself in such a manner, as to fall partly upon the inhabitant of\r\nthe house, and partly upon the owner of the ground.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLet us suppose, for example, that a particular person judges that he can afford\r\nfor house-rent all expense of sixty pounds a-year; and let us suppose, too,\r\nthat a tax of four shillings in the pound, or of one-fifth, payable by the\r\ninhabitant, is laid upon house-rent. A house of sixty pounds rent will, in that\r\ncase, cost him seventy-two pounds a-year, which is twelve pounds more than he\r\nthinks he can afford. He will, therefore, content himself with a worse house,\r\nor a house of fifty pounds rent, which, with the additional ten pounds that he\r\nmust pay for the tax, will make up the sum of sixty pounds a-year, the expense\r\nwhich he judges he can afford, and, in order to pay the tax, he will give up a\r\npart of the additional conveniency which he might have had from a house of ten\r\npounds a-year more rent. He will give up, I say, a part of this additional\r\nconveniency; for he will seldom be obliged to give up the whole, but will, in\r\nconsequence of the tax, get a better house for fifty pounds a-year, than he\r\ncould have got if there had been no tax for as a tax of this kind, by taking\r\naway this particular competitor, must diminish the competition for houses of\r\nsixty pounds rent, so it must likewise diminish it for those of fifty pounds\r\nrent, and in the same manner for those of all other rents, except the lowest\r\nrent, for which it would for some time increase the competition. But the rents\r\nof every class of houses for which the competition was diminished, would\r\nnecessarily be more or less reduced. As no part of this reduction, however,\r\ncould for any considerable time at least, affect the building-rent, the whole\r\nof it must, in the long-run, necessarily fall upon the ground-rent. The final\r\npayment of this tax, therefore, would fall partly upon the inhabitant of the\r\nhouse, who, in order to pay his share, would be obliged to give up a part of\r\nhis conveniency; and partly upon the owner of the ground, who, in order to pay\r\nhis share, would be obliged to give up a part of his revenue. In what\r\nproportion this final payment would be divided between them, it is not,\r\nperhaps, very easy to ascertain. The division would probably be very different\r\nin different circumstances, and a tax of this kind might, according to those\r\ndifferent circumstances, affect very unequally, both the inhabitant of the\r\nhouse and the owner of the ground.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inequality with which a tax of this kind might fall upon the owners of\r\ndifferent ground-rents, would arise altogether from the accidental inequality\r\nof this division. But the inequality with which it might fall upon the\r\ninhabitants of different houses, would arise, not only from this, but from\r\nanother cause. The proportion of the expense of house-rent to the whole expense\r\nof living, is different in the different degrees of fortune. It is, perhaps,\r\nhighest in the highest degree, and it diminishes gradually through the inferior\r\ndegrees, so as in general to be lowest in the lowest degree. The necessaries of\r\nlife occasion the great expense of the poor. They find it difficult to get\r\nfood, and the greater part of their little revenue is spent in getting it. The\r\nluxuries and vanities of life occasion the principal expense of the rich; and a\r\nmagnificent house embellishes and sets off to the best advantage all the other\r\nluxuries and vanities which they possess. A tax upon house-rents, therefore,\r\nwould in general fall heaviest upon the rich; and in this sort of inequality\r\nthere would not, perhaps, be any thing very unreasonable. It is not very\r\nunreasonable that the rich should contribute to the public expense, not only in\r\nproportion to their revenue, but something more than in that proportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of houses, though it in some respects resembles the rent of land, is\r\nin one respect essentially different from it. The rent of land is paid for the\r\nuse of a productive subject. The land which pays it produces it. The rent of\r\nhouses is paid for the use of an unproductive subject. Neither the house, nor\r\nthe ground which it stands upon, produce anything. The person who pays the\r\nrent, therefore, must draw it from some other source of revenue, distinct from\r\nand independent of this subject. A tax upon the rent of houses, so far as it\r\nfalls upon the inhabitants, must be drawn from the same source as the rent\r\nitself, and must be paid from their revenue, whether derived from the wages of\r\nlabour, the profits of stock, or the rent of land. So far as it falls upon the\r\ninhabitants, it is one of those taxes which fall, not upon one only, but\r\nindifferently upon all the three different sources of revenue; and is, in every\r\nrespect, of the same nature as a tax upon any other sort of consumable\r\ncommodities. In general, there is not perhaps, any one article of expense or\r\nconsumption by which the liberality or narrowness of a man’s whole\r\nexpense can be better judged of than by his house-rent. A proportional tax upon\r\nthis particular article of expense might, perhaps, produce a more considerable\r\nrevenue than any which has hitherto been drawn from it in any part of Europe.\r\nIf the tax, indeed, was very high, the greater part of people would endeavour\r\nto evade it as much as they could, by contenting themselves with smaller\r\nhouses, and by turning the greater part of their expense into some other\r\nchannel.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe rent of houses might easily be ascertained with sufficient accuracy, by a\r\npolicy of the same kind with that which would be necessary for ascertaining the\r\nordinary rent of land. Houses not inhabited ought to pay no tax. A tax upon\r\nthem would fall altogether upon the proprietor, who would thus be taxed for a\r\nsubject which afforded him neither conveniency nor revenue. Houses inhabited by\r\nthe proprietor ought to be rated, not according to the expense which they might\r\nhave cost in building, but according to the rent which an equitable arbitration\r\nmight judge them likely to bring if leased to a tenant. If rated according to\r\nthe expense which they might have cost in building, a tax of three or four\r\nshillings in the pound, joined with other taxes, would ruin almost all the rich\r\nand great families of this, and, I believe, of every other civilized country.\r\nWhoever will examine with attention the different town and country houses of\r\nsome of the richest and greatest families in this country, will find that, at\r\nthe rate of only six and a-half, or seven per cent. upon the original expense\r\nof building, their house-rent is nearly equal to the whole neat rent of their\r\nestates. It is the accumulated expense of several successive generations, laid\r\nout upon objects of great beauty and magnificence, indeed, but, in proportion\r\nto what they cost, of very small exchangeable value. {Since the first\r\npublication of this book, a tax nearly upon the above-mentioned principles has\r\nbeen imposed.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGround-rents are a still more proper subject of taxation than the rent of\r\nhouses. A tax upon ground-rents would not raise the rent of houses; it would\r\nfall altogether upon the owner of the ground-rent, who acts always as a\r\nmonopolist, and exacts the greatest rent which can be got for the use of his\r\nground. More or less can be got for it, according as the competitors happen to\r\nbe richer or poorer, or can afford to gratify their fancy for a particular spot\r\nof ground at a greater or smaller expense. In every country, the greatest\r\nnumber of rich competitors is in the capital, and it is there accordingly that\r\nthe highest ground-rents are always to be found. As the wealth of those\r\ncompetitors would in no respect be increased by a tax upon ground-rents, they\r\nwould not probably be disposed to pay more for the use of the ground. Whether\r\nthe tax was to be advanced by the inhabitant or by the owner of the ground,\r\nwould be of little importance. The more the inhabitant was obliged to pay for\r\nthe tax, the less he would incline to pay for the ground; so that the final\r\npayment of the tax would fall altogether upon the owner of the ground-rent. The\r\nground-rents of uninhabited houses ought to pay no tax. Both ground-rents, and\r\nthe ordinary rent of land, are a species of revenue which the owner, in many\r\ncases, enjoys without any care or attention of his own. Though a part of this\r\nrevenue should be taken from him in order to defray the expenses of the state,\r\nno discouragement will thereby be given to any sort of industry. The annual\r\nproduce of the land and labour of the society, the real wealth and revenue of\r\nthe great body of the people, might be the same after such a tax as before.\r\nGround-rents, and the ordinary rent of land, are therefore, perhaps, the\r\nspecies of revenue which can best bear to have a peculiar tax imposed upon\r\nthem.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nGround-rents seem, in this respect, a more proper subject of peculiar taxation,\r\nthan even the ordinary rent of land. The ordinary rent of land is, in many\r\ncases, owing partly, at least, to the attention and good management of the\r\nlandlord. A very heavy tax might discourage, too much, this attention and good\r\nmanagement. Ground-rents, so far as they exceed the ordinary rent of land, are\r\naltogether owing to the good government of the sovereign, which, by protecting\r\nthe industry either of the whole people or of the inhabitants of some\r\nparticular place, enables them to pay so much more than its real value for the\r\nground which they build their houses upon; or to make to its owner so much more\r\nthan compensation for the loss which he might sustain by this use of it.\r\nNothing can be more reasonable, than that a fund, which owes its existence to\r\nthe good government of the state, should be taxed peculiarly, or should\r\ncontribute something more than the greater part of other funds, towards the\r\nsupport of that government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThough, in many different countries of Europe, taxes have been imposed upon the\r\nrent of houses, I do not know of any in which ground-rents have been considered\r\nas a separate subject of taxation. The contrivers of taxes have, probably,\r\nfound some difficulty in ascertaining what part of the rent ought to be\r\nconsidered as ground-rent, and what part ought to be considered as\r\nbuilding-rent. It should not, however, seem very difficult to distinguish those\r\ntwo parts of the rent from one another.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain the rent of houses is supposed to be taxed in the same\r\nproportion as the rent of land, by what is called the annual land tax. The\r\nvaluation, according to which each different parish and district is assessed to\r\nthis tax, is always the same. It was originally extremely unequal, and it still\r\ncontinues to be so. Through the greater part of the kingdom this tax falls\r\nstill more lightly upon the rent of houses than upon that of land. In some few\r\ndistricts only, which were originally rated high, and in which the rents of\r\nhouses have fallen considerably, the land tax of three or four shillings in the\r\npound is said to amount to an equal proportion of the real rent of houses.\r\nUntenanted houses, though by law subject to the tax, are, in most districts,\r\nexempted from it by the favour of the assessors; and this exemption sometimes\r\noccasions some little variation in the rate of particular houses, though that\r\nof the district is always the same. Improvements of rent, by new buildings,\r\nrepairs, etc. go to the discharge of the district, which occasions still\r\nfurther variations in the rate of particular houses.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the province of Holland, {Memoires concernant les Droits, etc. p. 223.}\r\nevery house is taxed at two and a-half per cent. of its value, without any\r\nregard, either to the rent which it actually pays, or to the circumstance of\r\nits being tenanted or untenanted. There seems to be a hardship in obliging the\r\nproprietor to pay a tax for an untenanted house, from which he can derive no\r\nrevenue, especially so very heavy a tax. In Holland, where the market rate of\r\ninterest does not exceed three per cent., two and a-half per cent. upon the\r\nwhole value of the house must, in most cases, amount to more than a third of\r\nthe building-rent, perhaps of the whole rent. The valuation, indeed, according\r\nto which the houses are rated, though very unequal, is said to be always below\r\nthe real value. When a house is rebuilt, improved, or enlarged, there is a new\r\nvaluation, and the tax is rated accordingly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe contrivers of the several taxes which in England have, at different times,\r\nbeen imposed upon houses, seem to have imagined that there was some great\r\ndifficulty in ascertaining, with tolerable exactness, what was the real rent of\r\nevery house. They have regulated their taxes, therefore, according to some more\r\nobvious circumstance, such as they had probably imagined would, in most cases,\r\nbear some proportion to the rent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe first tax of this kind was hearth-money; or a tax of two shillings upon\r\nevery hearth. In order to ascertain how many hearths were in the house, it was\r\nnecessary that the tax-gatherer should enter every room in it. This odious\r\nvisit rendered the tax odious. Soon after the Revolution, therefore, it was\r\nabolished as a badge of slavery.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe next tax of this kind was a tax of two shillings upon every dwelling-house\r\ninhabited. A house with ten windows to pay four shillings more. A house with\r\ntwenty windows and upwards to pay eight shillings. This tax was afterwards so\r\nfar altered, that houses with twenty windows, and with less than thirty, were\r\nordered to pay ten shillings, and those with thirty windows and upwards to pay\r\ntwenty shillings. The number of windows can, in most cases, be counted from the\r\noutside, and, in all cases, without entering every room in the house. The visit\r\nof the tax-gatherer, therefore, was less offensive in this tax than in the\r\nhearth-money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis tax was afterwards repealed, and in the room of it was established the\r\nwindow-tax, which has undergone two several alterations and augmentations. The\r\nwindow tax, as it stands at present (January 1775), over and above the duty of\r\nthree shillings upon every house in England, and of one shilling upon every\r\nhouse in Scotland, lays a duty upon every window, which in England augments\r\ngradually from twopence, the lowest rate upon houses with not more than seven\r\nwindows, to two shillings, the highest rate upon houses with twenty-five\r\nwindows and upwards.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe principal objection to all such taxes is their inequality; an inequality of\r\nthe worst kind, as they must frequently fall much heavier upon the poor than\r\nupon the rich. A house of ten pounds rent in a country town, may sometimes have\r\nmore windows than a house of five hundred pounds rent in London; and though the\r\ninhabitant of the former is likely to be a much poorer man than that of the\r\nlatter, yet, so far as his contribution is regulated by the window tax, he must\r\ncontribute more to the support of the state. Such taxes are, therefore,\r\ndirectly contrary to the first of the four maxims above mentioned. They do not\r\nseem to offend much against any of the other three.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe natural tendency of the window tax, and of all other taxes upon houses, is\r\nto lower rents. The more a man pays for the tax, the less, it is evident, he\r\ncan afford to pay for the rent. Since the imposition of the window tax,\r\nhowever, the rents of houses have, upon the whole, risen more or less, in\r\nalmost every town and village of Great Britain, with which I am acquainted.\r\nSuch has been, almost everywhere, the increase of the demand for houses, that\r\nit has raised the rents more than the window tax could sink them; one of the\r\nmany proofs of the great prosperity of the country, and of the increasing\r\nrevenue of its inhabitants. Had it not been for the tax, rents would probably\r\nhave risen still higher.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nARTICLE II.—Taxes upon Profit, or upon the Revenue arising from Stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue or profit arising from stock naturally divides itself into two\r\nparts; that which pays the interest, and which belongs to the owner of the\r\nstock; and that surplus part which is over and above what is necessary for\r\npaying the interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThis latter part of profit is evidently a subject not taxable directly. It is\r\nthe compensation, and, in most cases, it is no more than a very moderate\r\ncompensation for the risk and trouble of employing the stock. The employer must\r\nhave this compensation, otherwise he cannot, consistently with his own\r\ninterest, continue the employment. If he was taxed directly, therefore, in\r\nproportion to the whole profit, he would be obliged either to raise the rate of\r\nhis profit, or to charge the tax upon the interest of money; that is, to pay\r\nless interest. If he raised the rate of his profit in proportion to the tax,\r\nthe whole tax, though it might be advanced by him, would be finally paid by one\r\nor other of two different sets of people, according to the different ways in\r\nwhich he might employ the stock of which he had the management. If he employed\r\nit as a farming stock, in the cultivation of land, he could raise the rate of\r\nhis profit only by retaining a greater portion, or, what comes to the same\r\nthing, the price of a greater portion, of the produce of the land; and as this\r\ncould be done only by a reduction of rent, the final payment of the tax would\r\nfall upon the landlord. If he employed it as a mercantile or manufacturing\r\nstock, he could raise the rate of his profit only by raising the price of his\r\ngoods; in which case, the final payment of the tax would fall altogether upon\r\nthe consumers of those goods. If he did not raise the rate of his profit, he\r\nwould be obliged to charge the whole tax upon that part of it which was\r\nallotted for the interest of money. He could afford less interest for whatever\r\nstock he borrowed, and the whole weight of the tax would, in this case, fall\r\nultimately upon the interest of money. So far as he could not relieve himself\r\nfrom the tax in the one way, he would be obliged to relieve himself in the\r\nother.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe interest of money seems, at first sight, a subject equally capable of being\r\ntaxed directly as the rent of land. Like the rent of land, it is a neat\r\nproduce, which remains, after completely compensating the whole risk and\r\ntrouble of employing the stock. As a tax upon the rent of land cannot raise\r\nrents, because the neat produce which remains, after replacing the stock of the\r\nfarmer, together with his reasonable profit, cannot be greater after the tax\r\nthan before it, so, for the same reason, a tax upon the interest of money could\r\nnot raise the rate of interest; the quantity of stock or money in the country,\r\nlike the quantity of land, being supposed to remain the same after the tax as\r\nbefore it. The ordinary rate of profit, it has been shewn, in the first book,\r\nis everywhere regulated by the quantity of stock to be employed, in proportion\r\nto the quantity of the employment, or of the business which must be done by it.\r\nBut the quantity of the employment, or of the business to be done by stock,\r\ncould neither be increased nor diminished by any tax upon the interest of\r\nmoney. If the quantity of the stock to be employed, therefore, was neither\r\nincreased nor diminished by it, the ordinary rate of profit would necessarily\r\nremain the same. But the portion of this profit, necessary for compensating the\r\nrisk and trouble of the employer, would likewise remain the same; that risk and\r\ntrouble being in no respect altered. The residue, therefore, that portion which\r\nbelongs to the owner of the stock, and which pays the interest of money, would\r\nnecessarily remain the same too. At first sight, therefore, the interest of\r\nmoney seems to be a subject as fit to be taxed directly as the rent of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThere are, however, two different circumstances, which render the interest of\r\nmoney a much less proper subject of direct taxation than the rent of land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, the quantity and value of the land which any man possesses, can never be\r\na secret, and can always be ascertained with great exactness. But the whole\r\namount of the capital stock which he possesses is almost always a secret, and\r\ncan scarce ever be ascertained with tolerable exactness. It is liable, besides,\r\nto almost continual variations. A year seldom passes away, frequently not a\r\nmonth, sometimes scarce a single day, in which it does not rise or fall more or\r\nless. An inquisition into every man’s private circumstances, and an\r\ninquisition which, in order to accommodate the tax to them, watched over all\r\nthe fluctuations of his fortune, would be a source of such continual and\r\nendless vexation as no person could support.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, land is a subject which cannot be removed; whereas stock easily may.\r\nThe proprietor of land is necessarily a citizen of the particular country in\r\nwhich his estate lies. The proprietor of stock is properly a citizen of the\r\nworld, and is not necessarily attached to any particular country. He would be\r\napt to abandon the country in which he was exposed to a vexatious inquisition,\r\nin order to be assessed to a burdensome tax; and would remove his stock to some\r\nother country, where he could either carry on his business, or enjoy his\r\nfortune more at his ease. By removing his stock, he would put an end to all the\r\nindustry which it had maintained in the country which he left. Stock cultivates\r\nland; stock employs labour. A tax which tended to drive away stock from any\r\nparticular country, would so far tend to dry up every source of revenue, both\r\nto the sovereign and to the society. Not only the profits of stock, but the\r\nrent of land, and the wages of labour, would necessarily be more or less\r\ndiminished by its removal.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe nations, accordingly, who have attempted to tax the revenue arising from\r\nstock, instead of any severe inquisition of this kind, have been obliged to\r\ncontent themselves with some very loose, and, therefore, more or less arbitrary\r\nestimation. The extreme inequality and uncertainty of a tax assessed in this\r\nmanner, can be compensated only by its extreme moderation; in consequence of\r\nwhich, every man finds himself rated so very much below his real revenue, that\r\nhe gives himself little disturbance though his neighbour should be rated\r\nsomewhat lower.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy what is called the land tax in England, it was intended that the stock\r\nshould be taxed in the same proportion as land. When the tax upon land was at\r\nfour shillings in the pound, or at one-fifth of the supposed rent, it was\r\nintended that stock should be taxed at one-fifth of the supposed interest. When\r\nthe present annual land tax was first imposed, the legal rate of interest was\r\nsix per cent. Every hundred pounds stock, accordingly, was supposed to be taxed\r\nat twenty-four shillings, the fifth part of six pounds. Since the legal rate of\r\ninterest has been reduced to five per cent. every hundred pounds stock is\r\nsupposed to be taxed at twenty shillings only. The sum to be raised, by what is\r\ncalled the land tax, was divided between the country and the principal towns.\r\nThe greater part of it was laid upon the country; and of what was laid upon the\r\ntowns, the greater part was assessed upon the houses. What remained to be\r\nassessed upon the stock or trade of the towns (for the stock upon the land was\r\nnot meant to be taxed) was very much below the real value of that stock or\r\ntrade. Whatever inequalities, therefore, there might be in the original\r\nassessment, gave little disturbance. Every parish and district still continues\r\nto be rated for its land, its houses, and its stock, according to the original\r\nassessment; and the almost universal prosperity of the country, which, in most\r\nplaces, has raised very much the value of all these, has rendered those\r\ninequalities of still less importance now. The rate, too, upon each district,\r\ncontinuing always the same, the uncertainty of this tax, so far as it might he\r\nassessed upon the stock of any individual, has been very much diminished, as\r\nwell as rendered of much less consequence. If the greater part of the lands of\r\nEngland are not rated to the land tax at half their actual value, the greater\r\npart of the stock of England is, perhaps, scarce rated at the fiftieth part of\r\nits actual value. In some towns, the whole land tax is assessed upon houses; as\r\nin Westminster, where stock and trade are free. It is otherwise in London.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn all countries, a severe inquisition into the circumstances of private\r\npersons has been carefully avoided.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAt Hamburg, {Memoires concernant les Droits, tom. i, p.74} every inhabitant is\r\nobliged to pay to the state one fourth per cent. of all that he possesses; and\r\nas the wealth of the people of Hamburg consists principally in stock, this tax\r\nmaybe considered as a tax upon stock. Every man assesses himself, and, in the\r\npresence of the magistrate, puts annually into the public coffer a certain sum\r\nof money, which he declares upon oath, to be one fourth per cent. of all that\r\nhe possesses, but without declaring what it amounts to, or being liable to any\r\nexamination upon that subject. This tax is generally supposed to be paid with\r\ngreat fidelity. In a small republic, where the people have entire confidence in\r\ntheir magistrates, are convinced of the necessity of the tax for the support of\r\nthe state, and believe that it will be faithfully applied to that purpose, such\r\nconscientious and voluntary payment may sometimes be expected. It is not\r\npeculiar to the people of Hamburg.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe canton of Underwald, in Switzerland, is frequently ravaged by storms and\r\ninundations, and it is thereby exposed to extraordinary expenses. Upon such\r\noccasions the people assemble, and every one is said to declare with the\r\ngreatest frankness what he is worth, in order to be taxed accordingly. At\r\nZurich, the law orders, that in cases of necessity, every one should be taxed\r\nin proportion to his revenue; the amount of which he is obliged to declare upon\r\noath. They have no suspicion, it is said, that any of their fellow citizens\r\nwill deceive them. At Basil, the principal revenue of the state arises from a\r\nsmall custom upon goods exported. All the citizens make oath, that they will\r\npay every three months all the taxes imposed by law. All merchants, and even\r\nall inn-keepers, are trusted with keeping themselves the account of the goods\r\nwhich they sell, either within or without the territory. At the end of every\r\nthree months, they send this account to the treasurer, with the amount of the\r\ntax computed at the bottom of it. It is not suspected that the revenue suffers\r\nby this confidence. {Memoires concernant les Droits, tom. i p. 163, 167,171.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo oblige every citizen to declare publicly upon oath, the amount of his\r\nfortune, must not, it seems, in those Swiss cantons, be reckoned a hardship. At\r\nHamburg it would be reckoned the greatest. Merchants engaged in the hazardous\r\nprojects of trade, all tremble at the thoughts of being obliged, at all times,\r\nto expose the real state of their circumstances. The ruin of their credit, and\r\nthe miscarriage of their projects, they foresee, would too often be the\r\nconsequence. A sober and parsimonious people, who are strangers to all such\r\nprojects, do not feel that they have occasion for any such concealment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Holland, soon after the exaltation of the late prince of Orange to the\r\nstadtholdership, a tax of two per cent. or the fiftieth penny, as it was\r\ncalled, was imposed upon the whole substance of every citizen. Every citizen\r\nassesed himself, and paid his tax, in the same manner as at Hamburg, and it was\r\nin general supposed to have been paid with great fidelity. The people had at\r\nthat time the greatest affection for their new government, which they had just\r\nestablished by a general insurrection. The tax was to be paid but once, in\r\norder to relieve the state in a particular exigency. It was, indeed, too heavy\r\nto be permanent. In a country where the market rate of interest seldom exceeds\r\nthree per cent., a tax of two per cent. amounts to thirteen shillings and four\r\npence in the pound, upon the highest neat revenue which is commonly drawn from\r\nstock. It is a tax which very few people could pay, without encroaching more or\r\nless upon their capitals. In a particular exigency, the people may, from great\r\npublic zeal, make a great effort, and give up even a part of their capital, in\r\norder to relieve the state. But it is impossible that they should continue to\r\ndo so for any considerable time; and if they did, the tax would soon ruin them\r\nso completely, as to render them altogether incapable of supporting the state.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe tax upon stock, imposed by the land tax bill in England, though it is\r\nproportioned to the capital, is not intended to diminish or, take away any part\r\nof that capital. It is meant only to be a tax upon the interest of money,\r\nproportioned to that upon the rent of land; so that when the latter is at four\r\nshillings in the pound, the former may be at four shillings in the pound too.\r\nThe tax at Hamburg, and the still more moderate taxes of Underwald and Zurich,\r\nare meant, in the same manner, to be taxes, not upon the capital, but upon the\r\ninterest or neat revenue of stock. That of Holland was meant to be a tax upon\r\nthe capital.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the Profit of particular Employments.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some countries, extraordinary taxes are imposed upon the profits of stock;\r\nsometimes when employed in particular branches of trade, and sometimes when\r\nemployed in agriculture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf the former kind, are in England, the tax upon hawkers and pedlars, that upon\r\nhackney-coaches and chairs, and that which the keepers of ale-houses pay for a\r\nlicence to retail ale and spiritous liquors. During the late war, another tax\r\nof the same kind was proposed upon shops. The war having been undertaken, it\r\nwas said, in defence of the trade of the country, the merchants, who were to\r\nprofit by it, ought to contribute towards the support of it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax, however, upon the profits of stock employed in any particular branch of\r\ntrade, can never fall finally upon the dealers (who must in all ordinary cases\r\nhave their reasonable profit, and, where the competition is free, can seldom\r\nhave more than that profit), but always upon the consumers, who must be obliged\r\nto pay in the price of the goods the tax which the dealer advances; and\r\ngenerally with some overcharge.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax of this kind, when it is proportioned to the trade of the dealer, is\r\nfinally paid by the consumer, and occasions no oppression to the dealer. When\r\nit is not so proportioned, but is the same upon all dealers, though in this\r\ncase, too, it is finally paid by the consumer, yet it favours the great, and\r\noccasions some oppression to the small dealer. The tax of five shillings a-week\r\nupon every hackney coach, and that of ten shillings a-year upon every hackney\r\nchair, so far as it is advanced by the different keepers of such coaches and\r\nchairs, is exactly enough proportioned to the extent of their respective\r\ndealings. It neither favours the great, nor oppresses the smaller dealer. The\r\ntax of twenty shillings a-year for a licence to sell ale; of forty shillings\r\nfor a licence to sell spiritous liquors; and of forty shillings more for a\r\nlicence to sell wine, being the same upon all retailers, must necessarily give\r\nsome advantage to the great, and occasion some oppression to the small dealers.\r\nThe former must find it more easy to get back the tax in the price of their\r\ngoods than the latter. The moderation of the tax, however, renders this\r\ninequality of less importance; and it may to many people appear not improper to\r\ngive some discouragement to the multiplication of little ale-houses. The tax\r\nupon shops, it was intended, should be the same upon all shops. It could not\r\nwell have been otherwise. It would have been impossible to proportion, with\r\ntolerable exactness, the tax upon a shop to the extent of the trade carried on\r\nin it, without such an inquisition as would have been altogether insupportable\r\nin a free country. If the tax had been considerable, it would have oppressed\r\nthe small, and forced almost the whole retail trade into the hands of the great\r\ndealers. The competition of the former being taken away, the latter would have\r\nenjoyed a monopoly of the trade; and, like all other monopolists, would soon\r\nhave combined to raise their profits much beyond what was necessary for the\r\npayment of the tax. The final payment, instead of falling upon the shop-keeper,\r\nwould have fallen upon the consumer, with a considerable overcharge to the\r\nprofit of the shop-keeper. For these reasons, the project of a tax upon shops\r\nwas laid aside, and in the room of it was substituted the subsidy, 1759.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat in France is called the personal taille, is perhaps, the most important\r\ntax upon the profits of stock employed in agriculture, that is levied in any\r\npart of Europe.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the disorderly state of Europe, during the prevalence of the feudal\r\ngovernment, the sovereign was obliged to content himself with taxing those who\r\nwere too weak to refuse to pay taxes. The great lords, though willing to assist\r\nhim upon particular emergencies, refused to subject themselves to any constant\r\ntax, and he was not strong enough to force them. The occupiers of land all over\r\nEurope were, the greater part of them, originally bond-men. Through the greater\r\npart of Europe, they were gradually emancipated. Some of them acquired the\r\nproperty of landed estates, which they held by some base or ignoble tenure,\r\nsometimes under the king, and sometimes under some other great lord, like the\r\nancient copy-holders of England. Others, without acquiring the property,\r\nobtained leases for terms of years, of the lands which they occupied under\r\ntheir lord, and thus became less dependent upon him. The great lords seem to\r\nhave beheld the degree of prosperity and independency, which this inferior\r\norder of men had thus come to enjoy, with a malignant and contemptuous\r\nindignation, and willingly consented that the sovereign should tax them. In\r\nsome countries, this tax was confined to the lands which were held in property\r\nby an ignoble tenure; and, in this case, the taille was said to be real. The\r\nland tax established by the late king of Sardinia, and the taille in the\r\nprovinces of Languedoc, Provence, Dauphine, and Britanny; in the generality of\r\nMontauban, and in the elections of Agen and Condom, as well as in some other\r\ndistricts of France; are taxes upon lands held in property by an ignoble\r\ntenure. In other countries, the tax was laid upon the supposed profits of all\r\nthose who held, in farm or lease, lands belonging to other people, whatever\r\nmight be the tenure by which the proprietor held them; and in this case, the\r\ntaille was said to be personal. In the greater part of those provinces of\r\nFrance, which are called the countries of elections, the taille is of this\r\nkind. The real taille, as it is imposed only upon a part of the lands of the\r\ncountry, is necessarily an unequal, but it is not always an arbitrary tax,\r\nthough it is so upon some occasions. The personal taille, as it is intended to\r\nbe proportioned to the profits of a certain class of people, which can only be\r\nguessed at, is necessarily both arbitrary and unequal.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the personal taille at present (1775) annually imposed upon the\r\ntwenty generalities, called the countries of elections, amounts to 40,107,239\r\nlivres, 16 sous. {Memoires concernant les Droits, etc tom. ii, p.17.} the\r\nproportion in which this sum is assessed upon those different provinces, varies\r\nfrom year to year, according to the reports which are made to the king’s\r\ncouncil concerning the goodness or badness of the crops, as well as other\r\ncircumstances, which may either increase or diminish their respective abilities\r\nto pay. Each generality is divided into a certain number of elections; and the\r\nproportion in which the sum imposed upon the whole generality is divided among\r\nthose different elections, varies likewise from year to year, according to the\r\nreports made to the council concerning their respective abilities. It seems\r\nimpossible, that the council, with the best intentions, can ever proportion,\r\nwith tolerable exactness, either of these two assessments to the real abilities\r\nof the province or district upon which they are respectively laid. Ignorance\r\nand misinformation must always, more or less, mislead the most upright council.\r\nThe proportion which each parish ought to support of what is assessed upon the\r\nwhole election, and that which each individual ought to support of what is\r\nassessed upon his particular parish, are both in the same manner varied from\r\nyear to year, according as circumstances are supposed to require. These\r\ncircumstances are judged of, in the one case, by the officers of the election,\r\nin the other, by those of the parish; and both the one and the other are, more\r\nor less, under the direction and influence of the intendant. Not only ignorance\r\nand misinformation, but friendship, party animosity, and private resentment,\r\nare said frequently to mislead such assessors. No man subject to such a tax, it\r\nis evident, can ever be certain, before he is assessed, of what he is to pay.\r\nHe cannot even be certain after he is assessed. If any person has been taxed\r\nwho ought to have been exempted, or if any person has been taxed beyond his\r\nproportion, though both must pay in the mean time, yet if they complain, and\r\nmake good their complaints, the whole parish is reimposed next year, in order\r\nto reimburse them. If any of the contributors become bankrupt or insolvent, the\r\ncollector is obliged to advance his tax; and the whole parish is reimposed next\r\nyear, in order to reimburse the collector. If the collector himself should\r\nbecome bankrupt, the parish which elects him must answer for his conduct to the\r\nreceiver-general of the election. But, as it might be troublesome for the\r\nreceiver to prosecute the whole parish, he takes at his choice five or six of\r\nthe richest contributors, and obliges them to make good what had been lost by\r\nthe insolvency of the collector. The parish is afterwards reimposed, in order\r\nto reimburse those five or six. Such reimpositions are always over and above\r\nthe taille of the particular year in which they are laid on.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen a tax is imposed upon the profits of stock in a particular branch of\r\ntrade, the traders are all careful to bring no more goods to market than what\r\nthey can sell at a price sufficient to reimburse them from advancing the tax.\r\nSome of them withdraw a part of their stocks from the trade, and the market is\r\nmore sparingly supplied than before. The price of the goods rises, and the\r\nfinal payment of the tax falls upon the consumer. But when a tax is imposed\r\nupon the profits of stock employed in agriculture, it is not the interest of\r\nthe farmers to withdraw any part of their stock from that employment. Each\r\nfarmer occupies a certain quantity of land, for which he pays rent. For the\r\nproper cultivation of this land, a certain quantity of stock is necessary; and\r\nby withdrawing any part of this necessary quantity, the farmer is not likely to\r\nbe more able to pay either the rent or the tax. In order to pay the tax, it can\r\nnever be his interest to diminish the quantity of his produce, nor consequently\r\nto supply the market more sparingly than before. The tax, therefore, will never\r\nenable him to raise the price of his produce, so as to reimburse himself, by\r\nthrowing the final payment upon the consumer. The farmer, however, must have\r\nhis reasonable profit as well as every other dealer, otherwise he must give up\r\nthe trade. After the imposition of a tax of this kind, he can get this\r\nreasonable profit only by paying less rent to the landlord. The more he is\r\nobliged to pay in the way of tax, the less he can afford to pay in the way of\r\nrent. A tax of this kind, imposed during the currency of a lease, may, no\r\ndoubt, distress or ruin the farmer. Upon the renewal of the lease, it must\r\nalways fall upon the landlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the countries where the personal taille takes place, the farmer is commonly\r\nassessed in proportion to the stock which he appears to employ in cultivation.\r\nHe is, upon this account, frequently afraid to have a good team of horses or\r\noxen, but endeavours to cultivate with the meanest and most wretched\r\ninstruments of husbandry that he can. Such is his distrust in the justice of\r\nhis assessors, that he counterfeits poverty, and wishes to appear scarce able\r\nto pay anything, for fear of being obliged to pay too much. By this miserable\r\npolicy, he does not, perhaps, always consult his own interest in the most\r\neffectual manner; and he probably loses more by the diminution of his produce,\r\nthan he saves by that of his tax. Though, in consequence of this wretched\r\ncultivation, the market is, no doubt, somewhat worse supplied; yet the small\r\nrise of price which this may occasion, as it is not likely even to indemnify\r\nthe farmer for the diminution of his produce, it is still less likely to enable\r\nhim to pay more rent to the landlord. The public, the farmer, the landlord, all\r\nsuffer more or less by this degraded cultivation. That the personal taille\r\ntends, in many different ways, to discourage cultivation, and consequently to\r\ndry up the principal source of the wealth of every great country, I have\r\nalready had occasion to observe in the third book of this Inquiry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat are called poll-taxes in the southern provinces of North America, and the\r\nWest India islands, annual taxes of so much a-head upon every negro, are\r\nproperly taxes upon the profits of a certain species of stock employed in\r\nagriculture. As the planters, are the greater part of them, both farmers and\r\nlandlords, the final payment of the tax falls upon them in their quality of\r\nlandlords, without any retribution.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes of so much a head upon the bondmen employed in cultivation, seem\r\nanciently to have been common all over Europe. There subsists at present a tax\r\nof this kind in the empire of Russia. It is probably upon this account that\r\npoll-taxes of all kinds have often been represented as badges of slavery. Every\r\ntax, however, is, to the person who pays it, a badge, not of slavery, but of\r\nliberty. It denotes that he is subject to government, indeed; but that, as he\r\nhas some property, he cannot himself be the property of a master. A poll tax\r\nupon slaves is altogether different from a poll-tax upon freemen. The latter is\r\npaid by the persons upon whom it is imposed; the former, by a different set of\r\npersons. The latter is either altogether arbitrary, or altogether unequal, and,\r\nin most cases, is both the one and the other; the former, though in some\r\nrespects unequal, different slaves being of different values, is in no respect\r\narbitrary. Every master, who knows the number of his own slaves, knows exactly\r\nwhat he has to pay. Those different taxes, however, being called by the same\r\nname, have been considered as of the same nature.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe taxes which in Holland are imposed upon men and maid servants, are taxes,\r\nnot upon stock, but upon expense; and so far resemble the taxes upon consumable\r\ncommodities. The tax of a guinea a-head for every man-servant, which has lately\r\nbeen imposed in Great Britain, is of the same kind. It falls heaviest upon the\r\nmiddling rank. A man of two hundred a-year may keep a single man-servant. A man\r\nof ten thousand a-year will not keep fifty. It does not affect the poor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the profits of stock, in particular employments, can never affect\r\nthe interest of money. Nobody will lend his money for less interest to those\r\nwho exercise the taxed, than to those who exercise the untaxed employments.\r\nTaxes upon the revenue arising from stock in all employments, where the\r\ngovernment attempts to levy them with any degree of exactness, will, in many\r\ncases, fall upon the interest of money. The vingtieme, or twentieth penny, in\r\nFrance, is a tax of the same kind with what is called the land tax in England,\r\nand is assessed, in the same manner, upon the revenue arising upon land,\r\nhouses, and stock. So far as it affects stock, it is assessed, though not with\r\ngreat rigour, yet with much more exactness than that part of the land tax in\r\nEngland which is imposed upon the same fund. It, in many cases, falls\r\naltogether upon the interest of money. Money is frequently sunk in France, upon\r\nwhat are called contracts for the constitution of a rent; that is, perpetual\r\nannuities, redeemable at any time by the debtor, upon payment of the sum\r\noriginally advanced, but of which this redemption is not exigible by the\r\ncreditor except in particular cases. The vingtieme seems not to have raised the\r\nrate of those annuities, though it is exactly levied upon them all.\r\n\u003c/p\u003e\r\n\r\n\u003ch3\u003eAPPENDIX TO ARTICLES I. AND II.—Taxes upon the Capital Value of\r\nLands, Houses, and Stock.\u003c/h3\u003e\r\n\r\n\u003cp\u003e\r\nWhile property remains in the possession of the same person, whatever permanent\r\ntaxes may have been imposed upon it, they have never been intended to diminish\r\nor take away any part of its capital value, but only some part of the revenue\r\narising from it. But when property changes hands, when it is transmitted either\r\nfrom the dead to the living, or from the living to the living, such taxes have\r\nfrequently been imposed upon it as necessarily take away some part of its\r\ncapital value.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe transference of all sorts of property from the dead to the living, and that\r\nof immoveable property of land and houses from the living to the living, are\r\ntransactions which are in their nature either public and notorious, or such as\r\ncannot be long concealed. Such transactions, therefore, may be taxed directly.\r\nThe transference of stock or moveable property, from the living to the living,\r\nby the lending of money, is frequently a secret transaction, and may always be\r\nmade so. It cannot easily, therefore, be taxed directly. It has been taxed\r\nindirectly in two different ways; first, by requiring that the deed, containing\r\nthe obligation to repay, should be written upon paper or parchment which had\r\npaid a certain stamp duty, otherwise not to be valid; secondly, by requiring,\r\nunder the like penalty of invalidity, that it should be recorded either in a\r\npublic or secret register, and by imposing certain duties upon such\r\nregistration. Stamp duties, and duties of registration, have frequently been\r\nimposed likewise upon the deeds transferring property of all kinds from the\r\ndead to the living, and upon those transferring immoveable property from the\r\nliving to the living; transactions which might easily have been taxed directly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe vicesima hereditatum, or the twentieth penny of inheritances, imposed by\r\nAugustus upon the ancient Romans, was a tax upon the transference of property\r\nfrom the dead to the living. Dion Cassius, { Lib. 55. See also Burman. de\r\nVectigalibus Pop. Rom. cap. xi. and Bouchaud de l’impot du vingtieme sur\r\nles successions.} the author who writes concerning it the least indistinctly,\r\nsays, that it was imposed upon all successions, legacies and donations, in case\r\nof death, except upon those to the nearest relations, and to the poor.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOf the same kind is the Dutch tax upon successions. {See Memoires concernant\r\nles Droits, etc. tom i, p. 225.} Collateral successions are taxed according to\r\nthe degree of relation, from five to thirty per cent. upon the whole value of\r\nthe succession. Testamentary donations, or legacies to collaterals, are subject\r\nto the like duties. Those from husband to wife, or from wife to husband, to the\r\nfiftieth penny. The luctuosa hereditas, the mournful succession of ascendants\r\nto descendants, to the twentieth penny only. Direct successions, or those of\r\ndescendants to ascendants, pay no tax. The death of a father, to such of his\r\nchildren as live in the same house with him, is seldom attended with any\r\nincrease, and frequently with a considerable diminution of revenue; by the loss\r\nof his industry, of his office, or of some life-rent estate, of which he may\r\nhave been in possession. That tax would be cruel and oppressive, which\r\naggravated their loss, by taking from them any part of his succession. It may,\r\nhowever, sometimes be otherwise with those children, who, in the language of\r\nthe Roman law, are said to be emancipated; in that of the Scotch law, to be\r\nforis-familiated; that is, who have received their portion, have got families\r\nof their own, and are supported by funds separate and independent of those of\r\ntheir father. Whatever part of his succession might come to such children,\r\nwould be a real addition to their fortune, and might, therefore, perhaps,\r\nwithout more inconveniency than what attends all duties of this kind, be liable\r\nto some tax. The casualties of the feudal law were taxes upon the transference\r\nof land, both from the dead to the living, and from the living to the living.\r\nIn ancient times, they constituted, in every part of Europe, one of the\r\nprincipal branches of the revenue of the crown.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe heir of every immediate vassal of the crown paid a certain duty, generally\r\na year’s rent, upon receiving the investiture of the estate. If the heir\r\nwas a minor, the whole rents of the estate, during the continuance of the\r\nminority, devolved to the superior, without any other charge besides the\r\nmaintenance of the minor, and the payment of the widow’s dower, when\r\nthere happened to be a dowager upon the land. When the minor came to be of age,\r\nanother tax, called relief, was still due to the superior, which generally\r\namounted likewise to a year’s rent. A long minority, which, in the\r\npresent times, so frequently disburdens a great estate of all its incumbrances,\r\nand restores the family to their ancient splendour, could in those times have\r\nno such effect. The waste, and not the disincumbrance of the estate, was the\r\ncommon effect of a long minority.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy a feudal law, the vassal could not alienate without the consent of his\r\nsuperior, who generally extorted a fine or composition on granting it. This\r\nfine, which was at first arbitrary, came, in many countries, to be regulated at\r\na certain portion of the price of the land. In some countries, where the\r\ngreater part of the other feudal customs have gone into disuse, this tax upon\r\nthe alienation of land still continues to make a very considerable branch of\r\nthe revenue of the sovereign. In the canton of Berne it is so high as a sixth\r\npart of the price of all noble fiefs, and a tenth part of that of all ignoble\r\nones. {Memoires concernant les Droits, etc, tom.i p.154} In the canton of\r\nLucern, the tax upon the sale of land is not universal, and takes place only in\r\ncertain districts. But if any person sells his land in order to remove out of\r\nthe territory, he pays ten per cent. upon the whole price of the sale. {id.\r\np.157.} Taxes of the same kind, upon the sale either of all lands, or of lands\r\nheld by certain tenures, take place in many other countries, and make a more or\r\nless considerable branch of the revenue of the sovereign.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch transactions may be taxed indirectly, by means either of stamp duties, or\r\nof duties upon registration; and those duties either may, or may not, be\r\nproportioned to the value of the subject which is transferred.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the stamp duties are higher or lower, not so much according\r\nto the value of the property transferred (an eighteen-penny or half-crown stamp\r\nbeing sufficient upon a bond for the largest sum of money), as according to the\r\nnature of the deed. The highest do not exceed six pounds upon every sheet of\r\npaper, or skin of parchment; and these high duties fall chiefly upon grants\r\nfrom the crown, and upon certain law proceedings, without any regard to the\r\nvalue of the subject. There are, in Great Britain, no duties on the\r\nregistration of deeds or writings, except the fees of the officers who keep the\r\nregister; and these are seldom more than a reasonable recompence for their\r\nlabour. The crown derives no revenue from them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Holland {Memoires concernant les Droits, etc. tom. i. p 223, 224, 225.}\r\nthere are both stamp duties and duties upon registration; which in some cases\r\nare, and in some are not, proportioned to the value of the property\r\ntransferred. All testaments must be written upon stamped paper, of which the\r\nprice is proportioned to the property disposed of; so that there are stamps\r\nwhich cost from three pence or three stivers a-sheet, to three hundred florins,\r\nequal to about twenty-seven pounds ten shillings of our money. If the stamp is\r\nof an inferior price to what the testator ought to have made use of, his\r\nsuccession is confiscated. This is over and above all their other taxes on\r\nsuccession. Except bills of exchange, and some other mercantile bills, all\r\nother deeds, bonds, and contracts, are subject to a stamp duty. This duty,\r\nhowever, does not rise in proportion to the value of the subject. All sales of\r\nland and of houses, and all mortgages upon either, must be registered, and,\r\nupon registration, pay a duty to the state of two and a-half per cent. upon the\r\namount of the price or of the mortgage. This duty is extended to the sale of\r\nall ships and vessels of more than two tons burden, whether decked or undecked.\r\nThese, it seems, are considered as a sort of houses upon the water. The sale of\r\nmoveables, when it is ordered by a court of justice, is subject to the like\r\nduty of two and a-half per cent.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, there are both stamp duties and duties upon registration. The former\r\nare considered as a branch of the aids of excise, and, in the provinces where\r\nthose duties take place, are levied by the excise officers. The latter are\r\nconsidered as a branch of the domain of the crown and are levied by a different\r\nset of officers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThose modes of taxation by stamp duties and by duties upon registration, are of\r\nvery modern invention. In the course of little more than a century, however,\r\nstamp duties have, in Europe, become almost universal, and duties upon\r\nregistration extremely common. There is no art which one government sooner\r\nlearns of another, than that of draining money from the pockets of the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the transference of property from the dead to the living, fall\r\nfinally, as well as immediately, upon the persons to whom the property is\r\ntransferred. Taxes upon the sale of land fall altogether upon the seller. The\r\nseller is almost always under the necessity of selling, and must, therefore,\r\ntake such a price as he can get. The buyer is scarce ever under the necessity\r\nof buying, and will, therefore, only give such a price as he likes. He\r\nconsiders what the land will cost him, in tax and price together. The more he\r\nis obliged to pay in the way of tax, the less he will be disposed to give in\r\nthe way of price. Such taxes, therefore, fall almost always upon a necessitous\r\nperson, and must, therefore, be frequently very cruel and oppressive. Taxes\r\nupon the sale of new-built houses, where the building is sold without the\r\nground, fall generally upon the buyer, because the builder must generally have\r\nhis profit; otherwise he must give up the trade. If he advances the tax,\r\ntherefore, the buyer must generally repay it to him. Taxes upon the sale of old\r\nhouses, for the same reason as those upon the sale of land, fall generally upon\r\nthe seller; whom, in most cases, either conveniency or necessity obliges to\r\nsell. The number of new-built houses that are annually brought to market, is\r\nmore or less regulated by the demand. Unless the demand is such as to afford\r\nthe builder his profit, after paying all expenses, he will build no more\r\nhouses. The number of old houses which happen at any time to come to market, is\r\nregulated by accidents, of which the greater part have no relation to the\r\ndemand. Two or three great bankruptcies in a mercantile town, will bring many\r\nhouses to sale, which must be sold for what can be got for them. Taxes upon the\r\nsale of ground-rents fall altogether upon the seller, for the same reason as\r\nthose upon the sale of lands. Stamp duties, and duties upon the registration of\r\nbonds and contracts for borrowed money, fall altogether upon the borrower, and,\r\nin fact, are always paid by him. Duties of the same kind upon law proceedings\r\nfall upon the suitors. They reduce to both the capital value of the subject in\r\ndispute. The more it costs to acquire any property, the less must be the neat\r\nvalue of it when acquired.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll taxes upon the transference of property of every kind, so far as they\r\ndiminish the capital value of that property, tend to diminish the funds\r\ndestined for the maintenance of productive labour. They are all more or less\r\nunthrifty taxes that increase the revenue of the sovereign, which seldom\r\nmaintains any but unproductive labourers, at the expense of the capital of the\r\npeople, which maintains none but productive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes, even when they are proportioned to the value of the property\r\ntransferred, are still unequal; the frequency of transference not being always\r\nequal in property of equal value. When they are not proportioned to this value,\r\nwhich is the case with the greater part of the stamp duties and duties of\r\nregistration, they are still more so. They are in no respect arbitrary, but\r\nare, or may be, in all cases, perfectly clear and certain. Though they\r\nsometimes fall upon the person who is not very able to pay, the time of payment\r\nis, in most cases, sufficiently convenient for him. When the payment becomes\r\ndue, he must, in most cases, have the more to pay. They are levied at very\r\nlittle expense, and in general subject the contributors to no other\r\ninconveniency, besides always the unavoidable one of paying the tax. In France,\r\nthe stamp duties are not much complained of. Those of registration, which they\r\ncall the Controle, are. They give occasion, it is pretended, to much extortion\r\nin the officers of the farmers-general who collect the tax, which is in a great\r\nmeasure arbitrary and uncertain. In the greater part of the libels which have\r\nbeen written against the present system of finances in France, the abuses of\r\nthe controle make a principal article. Uncertainty, however, does not seem to\r\nbe necessarily inherent in the nature of such taxes. If the popular complaints\r\nare well founded, the abuse must arise, not so much from the nature of the tax\r\nas from the want of precision and distinctness in the words of the edicts or\r\nlaws which impose it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe registration of mortgages, and in general of all rights upon immoveable\r\nproperty, as it gives great security both to creditors and purchasers, is\r\nextremely advantageous to the public. That of the greater part of deeds of\r\nother kinds, is frequently inconvenient and even dangerous to individuals,\r\nwithout any advantage to the public. All registers which, it is acknowledged,\r\nought to be kept secret, ought certainly never to exist. The credit of\r\nindividuals ought certainly never to depend upon so very slender a security, as\r\nthe probity and religion of the inferior officers of revenue. But where the\r\nfees of registration have been made a source of revenue to the sovereign,\r\nregister-offices have commonly been multiplied without end, both for the deeds\r\nwhich ought to be registered, and for those which ought not. In France there\r\nare several different sorts of secret registers. This abuse, though not perhaps\r\na necessary, it must be acknowledged, is a very natural effect of such taxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch stamp duties as those in England upon cards and dice, upon newspapers and\r\nperiodical pamphlets, etc. are properly taxes upon consumption; the final\r\npayment falls upon the persons who use or consume such commodities. Such stamp\r\nduties as those upon licences to retail ale, wine, and spiritous liquors,\r\nthough intended, perhaps, to fall upon the profits of the retailers, are\r\nlikewise finally paid by the consumers of those liquors. Such taxes, though\r\ncalled by the same name, and levied by the same officers, and in the same\r\nmanner with the stamp duties above mentioned upon the transference of property,\r\nare, however, of a quite different nature, and fall upon quite different funds.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nARTICLE III.—Taxes upon the Wages of Labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe wages of the inferior classes of work men, I have endeavoured to show in\r\nthe first book are everywhere necessarily regulated by two different\r\ncircumstances; the demand for labour, and the ordinary or average price of\r\nprovisions. The demand for labour, according as it happens to be either\r\nincreasing, stationary, or declining; or to require an increasing, stationary, or\r\ndeclining population, regulates the subsistence of the labourer, and determines\r\nin what degree it shall be either liberal, moderate, or scanty. The ordinary\r\naverage price of provisions determines the quantity of money which must be paid\r\nto the workman, in order to enable him, one year with another, to purchase this\r\nliberal, moderate, or scanty subsistence. While the demand for the labour and\r\nthe price of provisions, therefore, remain the same, a direct tax upon the\r\nwages of labour can have no other effect, than to raise them somewhat higher\r\nthan the tax. Let us suppose, for example, that, in a particular place, the\r\ndemand for labour and the price of provisions were such as to render ten\r\nshillings a-week the ordinary wages of labour; and that a tax of one-fifth, or\r\nfour shillings in the pound, was imposed upon wages. If the demand for labour\r\nand the price of provisions remained the same, it would still be necessary that\r\nthe labourer should, in that place, earn such a subsistence as could be bought\r\nonly for ten shillings a-week; so that, after paying the tax, he should have\r\nten shillings a-week free wages. But, in order to leave him such free wages,\r\nafter paying such a tax, the price of labour must, in that place, soon rise,\r\nnot to twelve shillings a week only, but to twelve and sixpence; that is, in\r\norder to enable him to pay a tax of one-fifth, his wages must necessarily soon\r\nrise, not one-fifth part only, but one-fourth. Whatever was the proportion of\r\nthe tax, the wages of labour must, in all cases rise, not only in that\r\nproportion, but in a higher proportion. If the tax for example, was one-tenth,\r\nthe wages of labour must necessarily soon rise, not one-tenth part only, but\r\none-eighth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA direct tax upon the wages of labour, therefore, though the labourer might,\r\nperhaps, pay it out of his hand, could not properly be said to be even advanced\r\nby him; at least if the demand for labour and the average price of provisions\r\nremained the same after the tax as before it. In all such cases, not only the\r\ntax, but something more than the tax, would in reality be advanced by the\r\nperson who immediately employed him. The final payment would, in different\r\ncases, fall upon different persons. The rise which such a tax might occasion in\r\nthe wages of manufacturing labour would be advanced by the master manufacturer,\r\nwho would both be entitled and obliged to charge it, with a profit, upon the\r\nprice of his goods. The final payment of this rise of wages, therefore,\r\ntogether with the additional profit of the master manufacturer would fall upon\r\nthe consumer. The rise which such a tax might occasion in the wages of country\r\nlabour would be advanced by the farmer, who, in order to maintain the same\r\nnumber of labourers as before, would be obliged to employ a greater capital. In\r\norder to get back this greater capital, together with the ordinary profits of\r\nstock, it would be necessary that he should retain a larger portion, or, what\r\ncomes to the same thing, the price of a larger portion, of the produce of the\r\nland, and, consequently, that he should pay less rent to the landlord. The\r\nfinal payment of this rise of wages, therefore, would, in this case, fall upon\r\nthe landlord, together with the additional profit of the farmer who had\r\nadvanced it. In all cases, a direct tax upon the wages of labour must, in the\r\nlong-run, occasion both a greater reduction in the rent of land, and a greater\r\nrise in the price of manufactured goods than would have followed from the\r\nproper assessment of a sum equal to the produce of the tax, partly upon the\r\nrent of land, and partly upon consumable commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf direct taxes upon the wages of labour have not always occasioned a\r\nproportionable rise in those wages, it is because they have generally\r\noccasioned a considerable fall in the demand of labour. The declension of\r\nindustry, the decrease of employment for the poor, the diminution of the annual\r\nproduce of the land and labour of the country, have generally been the effects\r\nof such taxes. In consequence of them, however, the price of labour must always\r\nbe higher than it otherwise would have been in the actual state of the demand;\r\nand this enhancement of price, together with the profit of those who advance\r\nit, must always be finally paid by the landlords and consumers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax upon the wages of country labour does not raise the price of the rude\r\nproduce of land in proportion to the tax; for the same reason that a tax upon\r\nthe farmer’s profit does not raise that price in that proportion.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAbsurd and destructive as such taxes are, however, they take place in many\r\ncountries. In France, that part of the taille which is charged upon the\r\nindustry of workmen and day-labourers in country villages, is properly a tax of\r\nthis kind. Their wages are computed according to the common rate of the\r\ndistrict in which they reside; and, that they may be as little liable as\r\npossible to any overcharge, their yearly gains are estimated at no more than\r\ntwo hundred working days in the year. {Memoires concernant les Droits, etc.\r\ntom. ii. p. 108.} The tax of each individual is varied from year to year,\r\naccording to different circumstances, of which the collector or the commissary,\r\nwhom intendant appoints to assist him, are the judges. In Bohemia, in\r\nconsequence of the alteration in the system of finances which was begun in\r\n1748, a very heavy tax is imposed upon the industry of artificers. They are\r\ndivided into four classes. The highest class pay a hundred florins a year,\r\nwhich, at two-and-twenty pence half penny a-florin, amounts to £9:7:6. The\r\nsecond class are taxed at seventy; the third at fifty; and the fourth,\r\ncomprehending artificers in villages, and the lowest class of those in towns,\r\nat twenty-five florins. {Memoires concernant les Droits, etc. tom. iii. p. 87.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe recompence of ingenious artists, and of men of liberal professions, I have\r\nendeavoured to show in the first book, necessarily keeps a certain proportion\r\nto the emoluments of inferior trades. A tax upon this recompence, therefore,\r\ncould have no other effect than to raise it somewhat higher than in proportion\r\nto the tax. If it did not rise in this manner, the ingenious arts and the\r\nliberal professions, being no longer upon a level with other trades, would be\r\nso much deserted, that they would soon return to that level.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe emoluments of offices are not, like those of trades and professions,\r\nregulated by the free competition of the market, and do not, therefore, always\r\nbear a just proportion to what the nature of the employment requires. They are,\r\nperhaps, in most countries, higher than it requires; the persons who have the\r\nadministration of government being generally disposed to regard both themselves\r\nand their immediate dependents, rather more than enough. The emoluments of\r\noffices, therefore, can, in most cases, very well bear to be taxed. The\r\npersons, besides, who enjoy public offices, especially the more lucrative, are,\r\nin all countries, the objects of general envy; and a tax upon their emoluments,\r\neven though it should be somewhat higher than upon any other sort of revenue,\r\nis always a very popular tax. In England, for example, when, by the land-tax,\r\nevery other sort of revenue was supposed to be assessed at four shillings in\r\nthe pound, it was very popular to lay a real tax of five shillings and sixpence\r\nin the pound upon the salaries of offices which exceeded a hundred pounds\r\na-year; the pensions of the younger branches of the royal family, the pay of\r\nthe officers of the army and navy, and a few others less obnoxious to envy,\r\nexcepted. There are in England no other direct taxes upon the wages of labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nARTICLE IV.—Taxes which it is intended should fall indifferently upon\r\nevery different Species of Revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe taxes which it is intended should fall indifferently upon every different\r\nspecies of revenue, are capitation taxes, and taxes upon consumable\r\ncommodities. Those must be paid indifferently, from whatever revenue the\r\ncontributors may possess; from the rent of their land, from the profits of\r\ntheir stock, or from the wages of their labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCapitation Taxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCapitation taxes, if it is attempted to proportion them to the fortune or\r\nrevenue of each contributor, become altogether arbitrary. The state of a\r\nman’s fortune varies from day to day; and, without an inquisition, more\r\nintolerable than any tax, and renewed at least once every year, can only be\r\nguessed at. His assessment, therefore, must, in most cases, depend upon the\r\ngood or bad humour of his assessors, and must, therefore, be altogether\r\narbitrary and uncertain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCapitation taxes, if they are proportioned, not to the supposed fortune, but to\r\nthe rank of each contributor, become altogether unequal; the degrees of fortune\r\nbeing frequently unequal in the same degree of rank.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes, therefore, if it is attempted to render them equal, become\r\naltogether arbitrary and uncertain; and if it is attempted to render them\r\ncertain and not arbitrary, become altogether unequal. Let the tax be light or\r\nheavy, uncertainty is always a great grievance. In a light tax, a considerable\r\ndegree of inequality may be supported; in a heavy one, it is altogether\r\nintolerable.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the different poll-taxes which took place in England during the reign of\r\nWilliam III. the contributors were, the greater part of them, assessed\r\naccording to the degree of their rank; as dukes, marquises, earls, viscounts,\r\nbarons, esquires, gentlemen, the eldest and youngest sons of peers, etc. All\r\nshop-keepers and tradesmen worth more than three hundred pounds, that is, the\r\nbetter sort of them, were subject to the same assessment, how great soever\r\nmight be the difference in their fortunes. Their rank was more considered than\r\ntheir fortune. Several of those who, in the first poll-tax, were rated\r\naccording to their supposed fortune were afterwards rated according to their\r\nrank. Serjeants, attorneys, and proctors at law, who, in the first poll-tax,\r\nwere assessed at three shillings in the pound of their supposed income, were\r\nafterwards assessed as gentlemen. In the assessment of a tax which was not very\r\nheavy, a considerable degree of inequality had been found less insupportable\r\nthan any degree of uncertainty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the capitation which has been levied in France, without-any interruption,\r\nsince the beginning of the present century, the highest orders of people are\r\nrated according to their rank, by an invariable tariff; the lower orders of\r\npeople, according to what is supposed to be their fortune, by an assessment\r\nwhich varies from year to year. The officers of the king’s court, the\r\njudges, and other officers in the superior courts of justice, the officers of\r\nthe troops, etc are assessed in the first manner. The inferior ranks of people\r\nin the provinces are assessed in the second. In France, the great easily submit\r\nto a considerable degree of inequality in a tax which, so far as it affects\r\nthem, is not a very heavy one; but could not brook the arbitrary assessment of\r\nan intendant.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inferior ranks of people must, in that country, suffer patiently the usage\r\nwhich their superiors think proper to give them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, the different poll-taxes never produced the sum which had been\r\nexpected from them, or which it was supposed they might have produced, had they\r\nbeen exactly levied. In France, the capitation always produces the sum expected\r\nfrom it. The mild government of England, when it assessed the different ranks\r\nof people to the poll-tax, contented itself with what that assessment happened\r\nto produce, and required no compensation for the loss which the state might\r\nsustain, either by those who could not pay, or by those who would not pay (for\r\nthere were many such), and who, by the indulgent execution of the law, were not\r\nforced to pay. The more severe government of France assesses upon each\r\ngenerality a certain sum, which the intendant must find as he can. If any\r\nprovince complains of being assessed too high, it may, in the assessment of\r\nnext year, obtain an abatement proportioned to the overcharge of the year\r\nbefore; but it must pay in the mean time. The intendant, in order to be sure of\r\nfinding the sum assessed upon his generality, was empowered to assess it in a\r\nlarger sum, that the failure or inability of some of the contributors might be\r\ncompensated by the overcharge of the rest; and till 1765, the fixation of this\r\nsurplus assessment was left altogether to his discretion. In that year, indeed,\r\nthe council assumed this power to itself. In the capitation of the provinces,\r\nit is observed by the perfectly well informed author of the Memoirs upon the\r\nImpositions in France, the proportion which falls upon the nobility, and upon\r\nthose whose privileges exempt them from the taille, is the least considerable.\r\nThe largest falls upon those subject to the taille, who are assessed to the\r\ncapitation at so much a-pound of what they pay to that other tax. Capitation\r\ntaxes, so far as they are levied upon the lower ranks of people, are direct\r\ntaxes upon the wages of labour, and are attended with all the inconveniencies\r\nof such taxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCapitation taxes are levied at little expense; and, where they are rigorously\r\nexacted, afford a very sure revenue to the state. It is upon this account that,\r\nin countries where the case, comfort, and security of the inferior ranks of\r\npeople are little attended to, capitation taxes are very common. It is in\r\ngeneral, however, but a small part of the public revenue, which, in a great\r\nempire, has ever been drawn from such taxes; and the greatest sum which they\r\nhave ever afforded, might always have been found in some other way much more\r\nconvenient to the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon Consumable Commodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe impossibility of taxing the people, in proportion to their revenue, by any\r\ncapitation, seems to have given occasion to the invention of taxes upon\r\nconsumable commodities. The state not knowing how to tax, directly and\r\nproportionably, the revenue of its subjects, endeavours to tax it indirectly by\r\ntaxing their expense, which, it is supposed, will, in most cases, be nearly in\r\nproportion to their revenue. Their expense is taxed, by taxing the consumable\r\ncommodities upon which it is laid out.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nConsumable commodities are either necessaries or luxuries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy necessaries I understand, not only the commodities which are indispensibly\r\nnecessary for the support of life, but whatever the custom of the country\r\nrenders it indecent for creditable people, even of the lowest order, to be\r\nwithout. A linen shirt, for example, is, strictly speaking, not a necessary of\r\nlife. The Greeks and Romans lived, I suppose, very comfortably, though they had\r\nno linen. But in the present times, through the greater part of Europe, a\r\ncreditable day-labourer would be ashamed to appear in public without a linen\r\nshirt, the want of which would be supposed to denote that disgraceful degree of\r\npoverty, which, it is presumed, nobody can well fall into without extreme bad\r\nconduct. Custom, in the same manner, has rendered leather shoes a necessary of\r\nlife in England. The poorest creditable person, of either sex, would be ashamed\r\nto appear in public without them. In Scotland, custom has rendered them a\r\nnecessary of life to the lowest order of men; but not to the same order of\r\nwomen, who may, without any discredit, walk about barefooted. In France, they\r\nare necessaries neither to men nor to women; the lowest rank of both sexes\r\nappearing there publicly, without any discredit, sometimes in wooden shoes, and\r\nsometimes barefooted. Under necessaries, therefore, I comprehend, not only\r\nthose things which nature, but those things which the established rules of\r\ndecency have rendered necessary to the lowest rank of people. All other things\r\nI call luxuries, without meaning, by this appellation, to throw the smallest\r\ndegree of reproach upon the temperate use of them. Beer and ale, for example,\r\nin Great Britain, and wine, even in the wine countries, I call luxuries. A man\r\nof any rank may, without any reproach, abstain totally from tasting such\r\nliquors. Nature does not render them necessary for the support of life; and\r\ncustom nowhere renders it indecent to live without them.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAs the wages of labour are everywhere regulated, partly by the demand for it,\r\nand partly by the average price of the necessary articles of subsistence;\r\nwhatever raises this average price must necessarily raise those wages; so that\r\nthe labourer may still be able to purchase that quantity of those necessary\r\narticles which the state of the demand for labour, whether increasing,\r\nstationary, or declining, requires that he should have. {See book i.chap. 8} A\r\ntax upon those articles necessarily raises their price somewhat higher than the\r\namount of the tax, because the dealer, who advances the tax, must generally get\r\nit back, with a profit. Such a tax must, therefore, occasion a rise in the\r\nwages of labour, proportionable to this rise of price.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is thus that a tax upon the necessaries of life operates exactly in the same\r\nmanner as a direct tax upon the wages of labour. The labourer, though he may\r\npay it out of his hand, cannot, for any considerable time at least, be properly\r\nsaid even to advance it. It must always, in the long-run, be advanced to him by\r\nhis immediate employer, in the advanced state of wages. His employer, if he is\r\na manufacturer, will charge upon the price of his goods the rise of wages,\r\ntogether with a profit, so that the final payment of the tax, together with\r\nthis overcharge, will fall upon the consumer. If his employer is a farmer, the\r\nfinal payment, together with a like overcharge, will fall upon the rent of the\r\nlandlord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is otherwise with taxes upon what I call luxuries, even upon those of the\r\npoor. The rise in the price of the taxed commodities, will not necessarily\r\noccasion any rise in the wages of labour. A tax upon tobacco, for example,\r\nthough a luxury of the poor, as well as of the rich, will not raise wages.\r\nThough it is taxed in England at three times, and in France at fifteen times\r\nits original price, those high duties seem to have no effect upon the wages of\r\nlabour. The same thing maybe said of the taxes upon tea and sugar, which, in\r\nEngland and Holland, have become luxuries of the lowest ranks of people; and of\r\nthose upon chocolate, which, in Spain, is said to have become so.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe different taxes which, in Great Britain, have, in the course of the present\r\ncentury, been imposed upon spiritous liquors, are not supposed to have had any\r\neffect upon the wages of labour. The rise in the price of porter, occasioned by\r\nan additional tax of three shillings upon the barrel of strong beer, has not\r\nraised the wages of common labour in London. These were about eighteen pence or\r\ntwenty pence a-day before the tax, and they are not more now.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe high price of such commodities does not necessarily diminish the ability of\r\nthe inferior ranks of people to bring up families. Upon the sober and\r\nindustrious poor, taxes upon such commodities act as sumptuary laws, and\r\ndispose them either to moderate, or to refrain altogether from the use of\r\nsuperfluities which they can no longer easily afford. Their ability to bring up\r\nfamilies, in consequence of this forced frugality, instead of being diminished,\r\nis frequently, perhaps, increased by the tax. It is the sober and industrious\r\npoor who generally bring up the most numerous families, and who principally\r\nsupply the demand for useful labour. All the poor, indeed, are not sober and\r\nindustrious; and the dissolute and disorderly might continue to indulge\r\nthemselves in the use of such commodities, after this rise of price, in the\r\nsame manner as before, without regarding the distress which this indulgence\r\nmight bring upon their families. Such disorderly persons, however, seldom rear\r\nup numerous families, their children generally perishing from neglect,\r\nmismanagement, and the scantiness or unwholesomeness of their food. If by the\r\nstrength of their constitution, they survive the hardships to which the bad\r\nconduct of their parents exposes them, yet the example of that bad conduct\r\ncommonly corrupts their morals; so that, instead of being useful to society by\r\ntheir industry, they become public nuisances by their vices and disorders.\r\nThrough the advanced price of the luxuries of the poor, therefore, might\r\nincrease somewhat the distress of such disorderly families, and thereby\r\ndiminish somewhat their ability to bring up children, it would not probably\r\ndiminish much the useful population of the country.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAny rise in the average price of necessaries, unless it be compensated by a\r\nproportionable rise in the wages of labour, must necessarily diminish, more or\r\nless, the ability of the poor to bring up numerous families, and, consequently,\r\nto supply the demand for useful labour; whatever may be the state of that\r\ndemand, whether increasing, stationary, or declining; or such as requires an\r\nincreasing, stationary, or declining population.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon luxuries have no tendency to raise the price of any other\r\ncommodities, except that of the commodities taxed. Taxes upon necessaries, by\r\nraising the wages of labour, necessarily tend to raise the price of all\r\nmanufactures, and consequently to diminish the extent of their sale and\r\nconsumption. Taxes upon luxuries are finally paid by the consumers of the\r\ncommodities taxed, without any retribution. They fall indifferently upon every\r\nspecies of revenue, the wages of labour, the profits of stock, and the rent of\r\nland. Taxes upon necessaries, so far as they affect the labouring poor, are\r\nfinally paid, partly by landlords, in the diminished rent of their lands, and\r\npartly by rich consumers, whether landlords or others, in the advanced price of\r\nmanufactured goods; and always with a considerable overcharge. The advanced\r\nprice of such manufactures as are real necessaries of life, and are destined\r\nfor the consumption of the poor, of coarse woollens, for example, must be\r\ncompensated to the poor by a farther advancement of their wages. The middling\r\nand superior ranks of people, if they understood their own interest, ought\r\nalways to oppose all taxes upon the necessaries of life, as well as all taxes\r\nupon the wages of labour. The final payment of both the one and the other falls\r\naltogether upon themselves, and always with a considerable overcharge. They\r\nfall heaviest upon the landlords, who always pay in a double capacity; in that\r\nof landlords, by the reduction, of their rent; and in that of rich consumers,\r\nby the increase of their expense. The observation of Sir Matthew Decker, that\r\ncertain taxes are, in the price of certain goods, sometimes repeated and\r\naccumulated four or five times, is perfectly just with regard to taxes upon the\r\nnecessaries of life. In the price of leather, for example, you must pay not\r\nonly for the tax upon the leather of your own shoes, but for a part of that\r\nupon those of the shoemaker and the tanner. You must pay, too, for the tax upon\r\nthe salt, upon the soap, and upon the candles which those workmen consume while\r\nemployed in your service; and for the tax upon the leather, which the\r\nsaltmaker, the soap-maker, and the candle-maker consume, while employed in\r\ntheir service.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the principal taxes upon the necessaries of life, are those\r\nupon the four commodities just now mentioned, salt, leather, soap, and candles.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSalt is a very ancient and a very universal subject of taxation. It was taxed\r\namong the Romans, and it is so at present in, I believe, every part of Europe.\r\nThe quantity annually consumed by any individual is so small, and may be\r\npurchased so gradually, that nobody, it seems to have been thought, could feel\r\nvery sensibly even a pretty heavy tax upon it. It is in England taxed at three\r\nshillings and fourpence a bushel; about three times the original price of the\r\ncommodity. In some other countries, the tax is still higher. Leather is a real\r\nnecessary of life. The use of linen renders soap such. In countries where the\r\nwinter nights are long, candles are a necessary instrument of trade. Leather\r\nand soap are in Great Britain taxed at three halfpence a-pound; candles at a\r\npenny; taxes which, upon the original price of leather, may amount to about\r\neight or ten per cent.; upon that of soap, to about twenty or five-and-twenty\r\nper cent.; and upon that of candles to about fourteen or fifteen per cent.;\r\ntaxes which, though lighter than that upon salt, are still very heavy. As all\r\nthose four commodities are real necessaries of life, such heavy taxes upon them\r\nmust increase somewhat the expense of the sober and industrious poor, and must\r\nconsequently raise more or less the wages of their labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a country where the winters are so cold as in Great Britain, fuel is, during\r\nthat season, in the strictest sense of the word, a necessary of life, not only\r\nfor the purpose of dressing victuals, but for the comfortable subsistence of\r\nmany different sorts of workmen who work within doors; and coals are the\r\ncheapest of all fuel. The price of fuel has so important an influence upon that\r\nof labour, that all over Great Britain, manufactures have confined themselves\r\nprincipally to the coal counties; other parts of the country, on account of the\r\nhigh price of this necessary article, not being able to work so cheap. In some\r\nmanufactures, besides, coal is a necessary instrument of trade; as in those of\r\nglass, iron, and all other metals. If a bounty could in any case be reasonable,\r\nit might perhaps be so upon the transportation of coals from those parts of the\r\ncountry in which they abound, to those in which they are wanted. But the\r\nlegislature, instead of a bounty, has imposed a tax of three shillings and\r\nthreepence a-ton upon coals carried coastways; which, upon most sorts of coal,\r\nis more than sixty per cent. of the original price at the coal pit. Coals\r\ncarried, either by land or by inland navigation, pay no duty. Where they are\r\nnaturally cheap, they are consumed duty free; where they are naturally dear,\r\nthey are loaded with a heavy duty.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes, though they raise the price of subsistence, and consequently the\r\nwages of labour, yet they afford a considerable revenue to government, which it\r\nmight not be easy to find in any other way. There may, therefore, be good\r\nreasons for continuing them. The bounty upon the exportation of corn, so far as\r\nit tends, in the actual state of tillage, to raise the price of that necessary\r\narticle, produces all the like bad effects; and instead of affording any\r\nrevenue, frequently occasions a very great expense to government. The high\r\nduties upon the importation of foreign corn, which, in years of moderate\r\nplenty, amount to a prohibition; and the absolute prohibition of the\r\nimportation, either of live cattle, or of salt provisions, which takes place in\r\nthe ordinary state of the law, and which, on account of the scarcity, is at\r\npresent suspended for a limited time with regard to Ireland and the British\r\nplantations, have all had the bad effects of taxes upon the necessaries of\r\nlife, and produce no revenue to government. Nothing seems necessary for the\r\nrepeal of such regulations, but to convince the public of the futility of that\r\nsystem in consequence of which they have been established.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon the necessaries of life are much higher in many other countries than\r\nin Great Britain. Duties upon flour and meal when ground at the mill, and upon\r\nbread when baked at the oven, take place in many countries. In Holland the\r\nmoney-price of the bread consumed in towns is supposed to be doubled by means\r\nof such taxes. In lieu of a part of them, the people who live in the country,\r\npay every year so much a-head, according to the sort of bread they are supposed\r\nto consume. Those who consume wheaten bread pay three guilders fifteen stivers;\r\nabout six shillings and ninepence halfpenny. Those, and some other taxes of the\r\nsame kind, by raising the price of labour, are said to have ruined the greater\r\npart of the manufactures of Holland {Memoires concernant les Droits, etc. p.\r\n210, 211.}. Similar taxes, though not quite so heavy, take place in the\r\nMilanese, in the states of Genoa, in the duchy of Modena, in the duchies of\r\nParma, Placentia, and Guastalla, and the Ecclesiastical state. A French author\r\n{Le Reformateur} of some note, has proposed to reform the finances of his\r\ncountry, by substituting in the room of the greater part of other taxes, this\r\nmost ruinous of all taxes. There is nothing so absurd, says Cicero, which has\r\nnot sometimes been asserted by some philosophers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon butcher’s meat are still more common than those upon bread. It\r\nmay indeed be doubted, whether butcher’s meat is any where a necessary of\r\nlife. Grain and other vegetables, with the help of milk, cheese, and butter, or\r\noil, where butter is not to be had, it is known from experience, can, without\r\nany butcher’s meat, afford the most plentiful, the most wholesome, the\r\nmost nourishing, and the most invigorating diet. Decency nowhere requires that\r\nany man should eat butcher’s meat, as it in most places requires that he\r\nshould wear a linen shirt or a pair of leather shoes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nConsumable commodities, whether necessaries or luxuries, may be taxed in two\r\ndifferent ways. The consumer may either pay an annual sum on account of his\r\nusing or consuming goods of a certain kind; or the goods may be taxed while\r\nthey remain in the hands of the dealer, and before they are delivered to the\r\nconsumer. The consumable goods which last a considerable time before they are\r\nconsumed altogether, are most properly taxed in the one way; those of which the\r\nconsumption is either immediate or more speedy, in the other. The coach-tax and\r\nplate tax are examples of the former method of imposing; the greater part of\r\nthe other duties of excise and customs, of the latter.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA coach may, with good management, last ten or twelve years. It might be taxed,\r\nonce for all, before it comes out of the hands of the coach-maker. But it is\r\ncertainly more convenient for the buyer to pay four pounds a-year for the\r\nprivilege of keeping a coach, than to pay all at once forty or forty-eight\r\npounds additional price to the coach-maker; or a sum equivalent to what the tax\r\nis likely to cost him during the time he uses the same coach. A service of\r\nplate in the same manner, may last more than a century. It is certainly-easier\r\nfor the consumer to pay five shillings a-year for every hundred ounces of\r\nplate, near one per cent. of the value, than to redeem this long annuity at\r\nfive-and-twenty or thirty years purchase, which would enhance the price at\r\nleast five-and-twenty or thirty per cent. The different taxes which affect\r\nhouses, are certainly more conveniently paid by moderate annual payments, than\r\nby a heavy tax of equal value upon the first building or sale of the house.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was the well-known proposal of Sir Matthew Decker, that all commodities,\r\neven those of which the consumption is either immediate or speedy, should be\r\ntaxed in this manner; the dealer advancing nothing, but the consumer paying a\r\ncertain annual sum for the licence to consume certain goods. The object of his\r\nscheme was to promote all the different branches of foreign trade, particularly\r\nthe carrying trade, by taking away all duties upon importation and exportation,\r\nand thereby enabling the merchant to employ his whole capital and credit in the\r\npurchase of goods and the freight of ships, no part of either being diverted\r\ntowards the advancing of taxes, The project, however, of taxing, in this\r\nmanner, goods of immediate or speedy consumption, seems liable to the four\r\nfollowing very important objections. First, the tax would be more unequal, or\r\nnot so well proportioned to the expense and consumption of the different\r\ncontributors, as in the way in which it is commonly imposed. The taxes upon\r\nale, wine, and spiritous liquors, which are advanced by the dealers, are\r\nfinally paid by the different consumers, exactly in proportion to their\r\nrespective consumption. But if the tax were to be paid by purchasing a licence\r\nto drink those liquors, the sober would, in proportion to his consumption, be\r\ntaxed much more heavily than the drunken consumer. A family which exercised\r\ngreat hospitality, would be taxed much more lightly than one who entertained\r\nfewer guests. Secondly, this mode of taxation, by paying for an annual,\r\nhalf-yearly, or quarterly licence to consume certain goods, would diminish very\r\nmuch one of the principal conveniences of taxes upon goods of speedy\r\nconsumption; the piece-meal payment. In the price of threepence halfpenny,\r\nwhich is at present paid for a pot of porter, the different taxes upon malt,\r\nhops, and beer, together with the extraordinary profit which the brewer charges\r\nfor having advanced than, may perhaps amount to about three halfpence. If a\r\nworkman can conveniently spare those three halfpence, he buys a pot of porter.\r\nIf he cannot, he contents himself with a pint; and, as a penny saved is a penny\r\ngot, he thus gains a farthing by his temperance. He pays the tax piece-meal, as\r\nhe can afford to pay it, and when he can afford to pay it, and every act of\r\npayment is perfectly voluntary, and what he can avoid if he chuses to do so.\r\nThirdly, such taxes would operate less as sumptuary laws. When the licence was\r\nonce purchased, whether the purchaser drunk much or drunk little, his tax would\r\nbe the same. Fourthly, if a workman were to pay all at once, by yearly,\r\nhalf-yearly, or quarterly payments, a tax equal to what he at present pays,\r\nwith little or no inconveniency, upon all the different pots and pints of\r\nporter which he drinks in any such period of time, the sum might frequently\r\ndistress him very much. This mode of taxation, therefore, it seems evident,\r\ncould never, without the most grievous oppression, produce a revenue nearly\r\nequal to what is derived from the present mode without any oppression. In\r\nseveral countries, however, commodities of an immediate or very speedy\r\nconsumption are taxed in this manner. In Holland, people pay so much a-head for\r\na licence to drink tea. I have already mentioned a tax upon bread, which, so\r\nfar as it is consumed in farm houses and country villages, is there levied in\r\nthe same manner.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe duties of excise are imposed chiefly upon goods of home produce, destined\r\nfor home consumption. They are imposed only upon a few sorts of goods of the\r\nmost general use. There can never be any doubt, either concerning the goods\r\nwhich are subject to those duties, or concerning the particular duty which each\r\nspecies of goods is subject to. They fall almost altogether upon what I call\r\nluxuries, excepting always the four duties above mentioned, upon salt, soap,\r\nleather, candles, and perhaps that upon green glass.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe duties of customs are much more ancient than those of excise. They seem to\r\nhave been called customs, as denoting customary payments, which had been in use\r\nfor time immemorial. They appear to have been originally considered as taxes\r\nupon the profits of merchants. During the barbarous times of feudal anarchy,\r\nmerchants, like all the other inhabitants of burghs, were considered as little\r\nbetter than emancipated bondmen, whose persons were despised, and whose gains\r\nwere envied. The great nobility, who had consented that the king should tallage\r\nthe profits of their own tenants, were not unwilling that he should tallage\r\nlikewise those of an order of men whom it was much less their interest to\r\nprotect. In those ignorant times, it was not understood, that the profits of\r\nmerchants are a subject not taxable directly; or that the final payment of all\r\nsuch taxes must fall, with a considerable overcharge, upon the consumers.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe gains of alien merchants were looked upon more unfavourably than those of\r\nEnglish merchants. It was natural, therefore, that those of the former should\r\nbe taxed more heavily than those of the latter. This distinction between the\r\nduties upon aliens and those upon English merchants, which was begun from\r\nignorance, has been continued front the spirit of monopoly, or in order to give\r\nour own merchants an advantage, both in the home and in the foreign market.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWith this distinction, the ancient duties of customs were imposed equally upon\r\nall sorts of goods, necessaries as well its luxuries, goods exported as well as\r\ngoods imported. Why should the dealers in one sort of goods, it seems to have\r\nbeen thought, be more favoured than those in another? or why should the\r\nmerchant exporter be more favoured than the merchant importer?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ancient customs were divided into three branches. The first, and, perhaps,\r\nthe most ancient of all those duties, was that upon wool and leather. It seems\r\nto have been chiefly or altogether an exportation duty. When the woollen\r\nmanufacture came to be established in England, lest the king should lose any\r\npart of his customs upon wool by the exportation of woollen cloths, a like duty\r\nwas imposed upon them. The other two branches were, first, a duty upon wine,\r\nwhich being imposed at so much a-ton, was called a tonnage; and, secondly, a\r\nduty upon all other goods, which being imposed at so much a-pound of their\r\nsupposed value, was called a poundage. In the forty-seventh year of Edward\r\nIII., a duty of sixpence in the pound was imposed upon all goods exported and\r\nimported, except wools, wool-felts, leather, and wines which were subject to\r\nparticular duties. In the fourteenth of Richard II., this duty was raised to\r\none shilling in the pound; but, three years afterwards, it was again reduced to\r\nsixpence. It was raised to eightpence in the second year of Henry IV.; and, in\r\nthe fourth of the same prince, to one shilling. From this time to the ninth\r\nyear of William III., this duty continued at one shilling in the pound. The\r\nduties of tonnage and poundage were generally granted to the king by one and\r\nthe same act of parliament, and were called the subsidy of tonnage and\r\npoundage. The subsidy of poundage having continued for so long a time at one\r\nshilling in the pound, or at five per cent., a subsidy came, in the language of\r\nthe customs, to denote a general duty of this kind of five per cent. This\r\nsubsidy, which is now called the old subsidy, still continues to be levied,\r\naccording to the book of rates established by the twelfth of Charles II. The\r\nmethod of ascertaining, by a book of rates, the value of goods subject to this\r\nduty, is said to be older than the time of James I. The new subsidy, imposed by\r\nthe ninth and tenth of William III., was an additional five per cent. upon the\r\ngreater part of goods. The one-third and the two-third subsidy made up between\r\nthem another five per cent. of which they were proportionable parts. The\r\nsubsidy of 1747 made a fourth five per cent. upon the greater part of goods;\r\nand that of 1759, a fifth upon some particular sorts of goods. Besides those\r\nfive subsidies, a great variety of other duties have occasionally been imposed\r\nupon particular sorts of goods, in order sometimes to relieve the exigencies of\r\nthe state, and sometimes to regulate the trade of the country, according to the\r\nprinciples of the mercantile system.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat system has come gradually more and more into fashion. The old subsidy was\r\nimposed indifferently upon exportation, as well as importation. The four\r\nsubsequent subsidies, as well as the other duties which have since been\r\noccasionally imposed upon particular sorts of goods, have, with a few\r\nexceptions, been laid altogether upon importation. The greater part of the\r\nancient duties which had been imposed upon the exportation of the goods of home\r\nproduce and manufacture, have either been lightened or taken away altogether.\r\nIn most cases, they have been taken away. Bounties have even been given upon\r\nthe exportation of some of them. Drawbacks, too, sometimes of the whole, and,\r\nin most cases, of a part of the duties which are paid upon the importation of\r\nforeign goods, have been granted upon their exportation. Only half the duties\r\nimposed by the old subsidy upon importation, are drawn back upon exportation;\r\nbut the whole of those imposed by the latter subsidies and other imposts are,\r\nupon the greater parts of the goods, drawn back in the same manner. This\r\ngrowing favour of exportation, and discouragement of importation, have suffered\r\nonly a few exceptions, which chiefly concern the materials of some\r\nmanufactures. These our merchants and manufacturers are willing should come as\r\ncheap as possible to themselves, and as dear as possible to their rivals and\r\ncompetitors in other countries. Foreign materials are, upon this account,\r\nsometimes allowed to be imported duty-free; spanish wool, for example, flax,\r\nand raw linen yarn. The exportation of the materials of home produce, and of\r\nthose which are the particular produce of our colonies, has sometimes been\r\nprohibited, and sometimes subjected to higher duties. The exportation of\r\nEnglish wool has been prohibited. That of beaver skins, of beaver wool, and of\r\ngum-senega, has been subjected to higher duties; Great Britain, by the\r\nconquests of Canada and Senegal, having got almost the monopoly of those\r\ncommodities.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the mercantile system has not been very favourable to the revenue of the\r\ngreat body of the people, to the annual produce of the land and labour of the\r\ncountry, I have endeavoured to show in the fourth book of this Inquiry. It\r\nseems not to have been more favourable to the revenue of the sovereign; so far,\r\nat least, as that revenue depends upon the duties of customs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of that system, the importation of several sorts of goods has\r\nbeen prohibited altogether. This prohibition has, in some cases, entirely\r\nprevented, and in others has very much diminished, the importation of those\r\ncommodities, by reducing the importers to the necessity of smuggling. It has\r\nentirely prevented the importation of foreign wollens; and it has very much\r\ndiminished that of foreign silks and velvets, In both cases, it has entirely\r\nannihilated the revenue of customs which might have been levied upon such\r\nimportation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe high duties which have been imposed upon the importation of many different\r\nsorts of foreign goods in order to discourage their consumption in Great\r\nBritain, have, in many cases, served only to encourage smuggling, and, in all\r\ncases, have reduced the revenues of the customs below what more moderate duties\r\nwould have afforded. The saying of Dr. Swift, that in the arithmetic of the\r\ncustoms, two and two, instead of making four, make sometimes only one, holds\r\nperfectly true with regard to such heavy duties, which never could have been\r\nimposed, had not the mercantile system taught us, in many cases, to employ\r\ntaxation as an instrument, not of revenue, but of monopoly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe bounties which are sometimes given upon the exportation of home produce and\r\nmanufactures, and the drawbacks which are paid upon the re-exportation of the\r\ngreater part of foreign goods, have given occasion to many frauds, and to a\r\nspecies of smuggling, more destructive of the public revenue than any other. In\r\norder to obtain the bounty or drawback, the goods, it is well known, are\r\nsometimes shipped, and sent to sea, but soon afterwards clandestinely re-landed\r\nin some other part of the country. The defalcation of the revenue of customs\r\noccasioned by bounties and drawbacks, of which a great part are obtained\r\nfraudulently, is very great. The gross produce of the customs, in the year\r\nwhich ended on the 5th of January 1755, amounted to £5,068,000. The bounties\r\nwhich were paid out of this revenue, though in that year there was no bounty\r\nupon corn, amounted to £167,806. The drawbacks which were paid upon debentures\r\nand certificates, to £2,156,800. Bounties and drawbacks together amounted to\r\n£2,324,600. In consequence of these deductions, the revenue of the customs\r\namounted only to £2,743,400; from which deducting £287,900 for the expense of\r\nmanagement, in salaries and other incidents, the neat revenue of the customs\r\nfor that year comes out to be £2,455,500. The expense of management, amounts,\r\nin this manner, to between five and six per cent. upon the gross revenue of the\r\ncustoms; and to something more than ten per cent. upon what remains of that\r\nrevenue, after deducting what is paid away in bounties and drawbacks.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHeavy duties being imposed upon almost all goods imported, our merchant\r\nimporters smuggle as much, and make entry of as little as they can. Our\r\nmerchant exporters, on the contrary, make entry of more than they export;\r\nsometimes out of vanity, and to pass for great dealers in goods which pay no\r\nduty gain a bounty back. Our exports, in consequence of these different frauds,\r\nappear upon the custom-house books greatly to overbalance our imports, to the\r\nunspeakable comfort of those politicians, who measure the national prosperity\r\nby what they call the balance of trade.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAll goods imported, unless particularly exempted, and such exemptions are not\r\nvery numerous, are liable to some duties of customs. If any goods are imported,\r\nnot mentioned in the book of rates, they are taxed at 4s:9¾d. for every twenty\r\nshillings value, according to the oath of the importer, that is, nearly at five\r\nsubsidies, or five poundage duties. The book of rates is extremely\r\ncomprehensive, and enumerates a great variety of articles, many of them little\r\nused, and, therefore, not well known. It is, upon this account, frequently\r\nuncertain under what article a particular sort of goods ought to be classed,\r\nand, consequently what duty they ought to pay. Mistakes with regard to this\r\nsometimes ruin the custom-house officer, and frequently occasion much trouble,\r\nexpense, and vexation to the importer. In point of perspicuity, precision, and\r\ndistinctness, therefore, the duties of customs are much inferior to those of\r\nexcise.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn order that the greater part of the members of any society should contribute\r\nto the public revenue, in proportion to their respective expense, it does not\r\nseem necessary that every single article of that expense should be taxed. The\r\nrevenue which is levied by the duties of excise is supposed to fall as equally\r\nupon the contributors as that which is levied by the duties of customs; and the\r\nduties of excise are imposed upon a few articles only of the most general used\r\nand consumption. It has been the opinion of many people, that, by proper\r\nmanagement, the duties of customs might likewise, without any loss to the\r\npublic revenue, and with great advantage to foreign trade, be confined to a few\r\narticles only.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe foreign articles, of the most general use and consumption in Great Britain,\r\nseem at present to consist chiefly in foreign wines and brandies; in some of\r\nthe productions of America and the West Indies, sugar, rum, tobacco,\r\ncocoa-nuts, etc. and in some of those of the East Indies, tea, coffee,\r\nchina-ware, spiceries of all kinds, several sorts of piece-goods, etc. These\r\ndifferent articles afford, the greater part of the perhaps, at present, revenue\r\nwhich is drawn from the duties of customs. The taxes which at present subsist\r\nupon foreign manufactures, if you except those upon the few contained in the\r\nforegoing enumeration, have, the greater part of them, been imposed for the\r\npurpose, not of revenue, but of monopoly, or to give our own merchants an\r\nadvantage in the home market. By removing all prohibitions, and by subjecting\r\nall foreign manufactures to such moderate taxes, as it was found from\r\nexperience, afforded upon each article the greatest revenue to the public, our\r\nown workmen might still have a considerable advantage in the home market; and\r\nmany articles, some of which at present afford no revenue to government, and\r\nothers a very inconsiderable one, might afford a very great one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHigh taxes, sometimes by diminishing the consumption of the taxed commodities,\r\nand sometimes by encouraging smuggling frequently afford a smaller revenue to\r\ngovernment than what might be drawn from more moderate taxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the diminution of revenue is the effect of the diminution of consumption,\r\nthere can be but one remedy, and that is the lowering of the tax. When the\r\ndiminution of revenue is the effect of the encouragement given to smuggling, it\r\nmay, perhaps, be remedied in two ways; either by diminishing the temptation to\r\nsmuggle, or by increasing the difficulty of smuggling. The temptation to\r\nsmuggle can be diminished only by the lowering of the tax; and the difficulty\r\nof smuggling can be increased only by establishing that system of\r\nadministration which is most proper for preventing it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe excise laws, it appears, I believe, from experience, obstruct and embarrass\r\nthe operations of the smuggler much more effectually than those of the customs.\r\nBy introducing into the customs a system of administration as similar to that\r\nof the excise as the nature of the different duties will admit, the difficulty\r\nof smuggling might be very much increased. This alteration, it has been\r\nsupposed by many people, might very easily be brought about.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe importer of commodities liable to any duties of customs, it has been said,\r\nmight, at his option, be allowed either to carry them to his own private\r\nwarehouse; or to lodge them in a warehouse, provided either at his own expense\r\nor at that of the public, but under the key of the custom-house officer, and\r\nnever to be opened but in his presence. If the merchant carried them to his own\r\nprivate warehouse, the duties to be immediately paid, and never afterwards to\r\nbe drawn back; and that warehouse to be at all times subject to the visit and\r\nexamination of the custom-house officer, in order to ascertain how far the\r\nquantity contained in it corresponded with that for which the duty had been\r\npaid. If he carried them to the public warehouse, no duty to be paid till they\r\nwere taken out for home consumption. If taken out for exportation, to be\r\nduty-free; proper security being always given that they should be so exported.\r\nThe dealers in those particular commodities, either by wholesale or retail, to\r\nbe at all times subject to the visit and examination of the custom-house\r\nofficer; and to be obliged to justify, by proper certificates, the payment of\r\nthe duty upon the whole quantity contained in their shops or warehouses. What\r\nare called the excise duties upon rum imported, are at present levied in this\r\nmanner; and the same system of administration might, perhaps, be extended to\r\nall duties upon goods imported; provided always that those duties were, like\r\nthe duties of excise, confined to a few sorts of goods of the most general use\r\nand consumption. If they were extended to almost all sorts of goods, as at\r\npresent, public warehouses of sufficient extent could not easily be provided;\r\nand goods of a very delicate nature, or of which the preservation required much\r\ncare and attention, could not safely be trusted by the merchant in any\r\nwarehouse but his own.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, by such a system of administration, smuggling to any considerable extent\r\ncould be prevented, even under pretty high duties; and if every duty was\r\noccasionally either heightened or lowered according as it was most likely,\r\neither the one way or the other, to afford the greatest revenue to the state;\r\ntaxation being always employed as an instrument of revenue, and never of\r\nmonopoly; it seems not improbable that a revenue, at least equal to the present\r\nneat revenue of the customs, might be drawn from duties upon the importation of\r\nonly a few sorts of goods of the most general use and consumption; and that the\r\nduties of customs might thus be brought to the same degree of simplicity,\r\ncertainty, and precision, as those of excise. What the revenue at present loses\r\nby drawbacks upon the re-exportation of foreign goods, which are afterwards\r\nre-landed and consumed at home, would, under this system, be saved altogether.\r\nIf to this saving, which would alone be very considerable, were added the\r\nabolition of all bounties upon the exportation of home produce; in all cases in\r\nwhich those bounties were not in reality drawbacks of some duties of excise\r\nwhich had before been advanced; it cannot well be doubted, but that the neat\r\nrevenue of customs might, after an alteration of this kind, be fully equal to\r\nwhat it had ever been before.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf, by such a change of system, the public revenue suffered no loss, the trade\r\nand manufactures of the country would certainly gain a very considerable\r\nadvantage. The trade in the commodities not taxed, by far the greatest number\r\nwould be perfectly free, and might be carried on to and from all parts of the\r\nworld with every possible advantage. Among those commodities would be\r\ncomprehended all the necessaries of life, and all the materials of manufacture.\r\nSo far as the free importation of the necessaries of life reduced their average\r\nmoney price in the home market, it would reduce the money price of labour, but\r\nwithout reducing in any respect its real recompence. The value of money is in\r\nproportion to the quantity of the necessaries of life which it will purchase.\r\nThat of the necessaries of life is altogether independent of the quantity of\r\nmoney which can be had for them. The reduction in the money price of labour\r\nwould necessarily be attended with a proportionable one in that of all home\r\nmanufactures, which would thereby gain some advantage in all foreign markets.\r\nThe price of some manufactures would be reduced, in a still greater proportion,\r\nby the free importation of the raw materials. If raw silk could be imported\r\nfrom China and Indostan, duty-free, the silk manufacturers in England could\r\ngreatly undersell those of both France and Italy. There would be no occasion to\r\nprohibit the importation of foreign silks and velvets. The cheapness of their\r\ngoods would secure to our own workmen, not only the possession of a home, but a\r\nvery great command of the foreign market. Even the trade in the commodities\r\ntaxed, would be carried on with much more advantage than at present. If those\r\ncommodities were delivered out of the public warehouse for foreign exportation,\r\nbeing in this case exempted from all taxes, the trade in them would be\r\nperfectly free. The carrying trade, in all sorts of goods, would, under this\r\nsystem, enjoy every possible advantage. If these commodities were delivered out\r\nfor home consumption, the importer not being obliged to advance the tax till he\r\nhad an opportunity of selling his goods, either to some dealer, or to some\r\nconsumer, he could always afford to sell them cheaper than if he had been\r\nobliged to advance it at the moment of importation. Under the same taxes, the\r\nforeign trade of consumption, even in the taxed commodities, might in this\r\nmanner be carried on with much more advantage than it is at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt was the object of the famous excise scheme of Sir Robert Walpole, to\r\nestablish, with regard to wine and tobacco, a system not very unlike that which\r\nis here proposed. But though the bill which was then brought into Parliament,\r\ncomprehended those two commodities only, it was generally supposed to be meant\r\nas an introduction to a more extensive scheme of the same kind. Faction,\r\ncombined with the interest of smuggling merchants, raised so violent, though so\r\nunjust a clamour, against that bill, that the minister thought proper to drop\r\nit; and, from a dread of exciting a clamour of the same kind, none of his\r\nsuccessors have dared to resume the project.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe duties upon foreign luxuries, imported for home consumption, though they\r\nsometimes fall upon the poor, fall principally upon people of middling or more\r\nthan middling fortune. Such are, for example, the duties upon foreign wines,\r\nupon coffee, chocolate, tea, sugar, etc.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe duties upon the cheaper luxuries of home produce, destined for home\r\nconsumption, fall pretty equally upon people of all ranks, in proportion to\r\ntheir respective expense. The poor pay the duties upon malt, hops, beer, and\r\nale, upon their own consumption; the rich, upon both their own consumption and\r\nthat of their servants.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe whole consumption of the inferior ranks of people, or of those below the\r\nmiddling rank, it must be observed, is, in every country, much greater, not\r\nonly in quantity, but in value, than that of the middling, and of those above\r\nthe middling rank. The whole expense of the inferior is much greater titan that\r\nof the superior ranks. In the first place, almost the whole capital of every\r\ncountry is annually distributed among the inferior ranks of people, as the\r\nwages of productive labour. Secondly, a great part of the revenue, arising from\r\nboth the rent of land and the profits of stock, is annually distributed among\r\nthe same rank, in the wages and maintenance of menial servants, and other\r\nunproductive labourers. Thirdly, some part of the profits of stock belongs to\r\nthe same rank, as a revenue arising from the employment of their small\r\ncapitals. The amount of the profits annually made by small shopkeepers,\r\ntradesmen, and retailers of all kinds, is everywhere very considerable, and\r\nmakes a very considerable portion of the annual produce. Fourthly and lastly,\r\nsome part even of the rent of land belongs to the same rank; a considerable\r\npart to those who are somewhat below the middling rank, and a small part even\r\nto the lowest rank; common labourers sometimes possessing in property an acre\r\nor two of land. Though the expense of those inferior ranks of people,\r\ntherefore, taking them individually, is very small, yet the whole mass of it,\r\ntaking them collectively, amounts always to by much the largest portion of the\r\nwhole expense of the society; what remains of the annual produce of the land\r\nand labour of the country, for the consumption of the superior ranks, being\r\nalways much less, not only in quantity, but in value. The taxes upon expense,\r\ntherefore, which fall chiefly upon that of the superior ranks of people, upon\r\nthe smaller portion of the annual produce, are likely to be much less\r\nproductive than either those which fall indifferently upon the expense of all\r\nranks, or even those which fall chiefly upon that of the inferior ranks, than\r\neither those which fall indifferently upon the whole annual produce, or those\r\nwhich fall chiefly upon the larger portion of it. The excise upon the materials\r\nand manufacture of home-made fermented and spirituous liquors, is, accordingly,\r\nof all the different taxes upon expense, by far the most productive; and this\r\nbranch of the excise falls very much, perhaps principally, upon the expense of\r\nthe common people. In the year which ended on the 5th of July 1775, the gross\r\nproduce of this branch of the excise amounted to £3,341,837:9:9.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt must always be remembered, however, that it is the luxuries, and not the\r\nnecessary expense of the inferior ranks of people, that ought ever to be taxed.\r\nThe final payment of any tax upon their necessary expense, would fall\r\naltogether upon the superior ranks of people; upon the smaller portion of the\r\nannual produce, and not upon the greater. Such a tax must, in all cases, either\r\nraise the wages of labour, or lessen the demand for it. It could not raise the\r\nwages of labour, without throwing the final payment of the tax upon the\r\nsuperior ranks of people. It could not lessen the demand for labour, without\r\nlessening the annual produce of the land and labour of the country, the fund\r\nupon which all taxes must be finally paid. Whatever might be the state to which\r\na tax of this kind reduced the demand for labour, it must always raise wages\r\nhigher than they otherwise would be in that state; and the final payment of\r\nthis enhancement of wages must, in all cases, fall upon the superior ranks of\r\npeople.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFermented liquors brewed, and spiritous liquors distilled, not for sale, but\r\nfor private use, are not in Great Britain liable to any duties of excise. This\r\nexemption, of which the object is to save private families from the odious\r\nvisit and examination of the tax-gatherer, occasions the burden of those duties\r\nto fall frequently much lighter upon the rich than upon the poor. It is not,\r\nindeed, very common to distil for private use, though it is done sometimes. But\r\nin the country, many middling and almost all rich and great families, brew\r\ntheir own beer. Their strong beer, therefore, costs them eight shillings\r\na-barrel less than it costs the common brewer, who must have his profit upon\r\nthe tax, as well as upon all the other expense which he advances. Such\r\nfamilies, therefore, must drink their beer at least nine or ten shillings\r\na-barrel cheaper than any liquor of the same quality can be drank by the common\r\npeople, to whom it is everywhere more convenient to buy their beer, by little\r\nand little, from the brewery or the ale-house. Malt, in the same manner, that\r\nis made for the use of a private family, is not liable to the visit or\r\nexamination of the tax-gatherer but, in this case the family must compound at\r\nseven shillings and sixpence a-head for the tax. Seven shillings and sixpence\r\nare equal to the excise upon ten bushels of malt; a quantity fully equal to\r\nwhat all the different members of any sober family, men, women, and children,\r\nare, at an average, likely to consume. But in rich and great families, where\r\ncountry hospitality is much practised, the malt liquors consumed by the members\r\nof the family make but a small part of the consumption of the house. Either on\r\naccount of this composition, however, or for other reasons, it is not near so\r\ncommon to malt as to brew for private use. It is difficult to imagine any\r\nequitable reason, why those who either brew or distil for private use should\r\nnot be subject to a composition of the same kind.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA greater revenue than what is at present drawn from all the heavy taxes upon\r\nmalt, beer, and ale, might be raised, it has frequently been said, by a much\r\nlighter tax upon malt; the opportunities of defrauding the revenue being much\r\ngreater in a brewery than in a malt-house; and those who brew for private use\r\nbeing exempted from all duties or composition for duties, which is not the case\r\nwith those who malt for private use.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the porter brewery of London, a quarter of malt is commonly brewed into more\r\nthan two barrels and a-half, sometimes into three barrels of porter. The\r\ndifferent taxes upon malt amount to six shillings a-quarter; those upon strong\r\nale and beer to eight shillings a-barrel. In the porter brewery, therefore, the\r\ndifferent taxes upon malt, beer, and ale, amount to between twenty-six and\r\nthirty shillings upon the produce of a quarter of malt. In the country brewery\r\nfor common country sale, a quarter of malt is seldom brewed into less than two\r\nbarrels of strong, and one barrel of small beer; frequently into two barrels\r\nand a-half of strong beer. The different taxes upon small beer amount to one\r\nshilling and fourpence a-barrel. In the country brewery, therefore, the\r\ndifferent taxes upon malt, beer, and ale, seldom amount to less than\r\ntwenty-three shillings and fourpence, frequently to twenty-six shillings, upon\r\nthe produce of a quarter of malt. Taking the whole kingdom at an average,\r\ntherefore, the whole amount of the duties upon malt, beer, and ale, cannot be\r\nestimated at less than twenty-four or twenty-five shillings upon the produce of\r\na quarter of malt. But by taking off all the different duties upon beer and\r\nale, and by trebling the malt tax, or by raising it from six to eighteen\r\nshillings upon the quarter of malt, a greater revenue, it is said, might be\r\nraised by this single tax, than what is at present drawn from all those heavier\r\ntaxes.\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n In 1772, the old malt tax produced……… £722,023: 11: 11\r\n The additional… £356,776: 7: 9¾\r\n In 1773, the old tax produced…………… £561,627: 3: 7½\r\n The additional… £278,650: 15: 3¾\r\n In 1774, the old tax produced …………. £624,614: 17: 5¾\r\n The additional….£310,745: 2: 8½\r\n In 1775, the old tax produced …………..£657,357: 0: 8¼\r\n The additional….£323,785: 12: 6¼\r\n 4)£3,835,580: 12: 0¾\r\n Average of these four years …………… £958,895: 3: 0\r\n\r\n In 1772, the country excise produced…….£1,243,120: 5: 3\r\n The London brewery 408,260: 7: 2¾\r\n In 1773, the country excise…………….£1,245,808: 3: 3\r\n The London brewery 405,406: 17: 10½\r\n In 1774, the country excise…………….£1,246,373: 14: 5½\r\n The London brewery 320,601: 18: 0¼\r\n In 1775, the country excise…………….£1,214,583: 6: 1¼\r\n The London brewery 463,670: 7: 0¼\r\n 4)£6,547,832: 19: 2¼\r\n Average of these four years ……………£1,636,958: 4: 9½\r\n To which adding the average malt tax…….. 958,895: 3: 0¼\r\n\r\n The whole amount of those different\r\n taxes comes out to be……..£2,595,835: 7: 10\r\n\r\n But, by trebling the malt tax,\r\n or by raising it from six to\r\n eighteen shillings upon the quarter\r\n of malt, that single tax would produce…..£2,876,685: 9: 0\r\n A sum which exceeds the\r\n foregoing by…. 280,832: 1: 3\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nUnder the old malt tax, indeed, is comprehended a tax of four shillings upon\r\nthe hogshead of cyder, and another of ten shillings upon the barrel of mum. In\r\n1774, the tax upon cyder produced only £3,083:6:8. It probably fell somewhat\r\nshort of its usual amount; all the different taxes upon cyder, having, that\r\nyear, produced less than ordinary. The tax upon mum, though much heavier, is\r\nstill less productive, on account of the smaller consumption of that liquor.\r\nBut to balance whatever may be the ordinary amount of those two taxes, there is\r\ncomprehended under what is called the country excise, first, the old excise of\r\nsix shillings and eightpence upon the hogshead of cyder; secondly, a like tax\r\nof six shillings and eightpence upon the hogshead of verjuice; thirdly, another\r\nof eight shillings and ninepence upon the hogshead of vinegar; and, lastly, a\r\nfourth tax of elevenpence upon the gallon of mead or metheglin. The produce of\r\nthose different taxes will probably much more than counterbalance that of the\r\nduties imposed, by what is called the annual malt tax, upon cyder and mum.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nMalt is consumed, not only in the brewery of beer and ale, but in the\r\nmanufacture of low wines and spirits. If the malt tax were to be raised to\r\neighteen shillings upon the quarter, it might be necessary to make some\r\nabatement in the different excises which are imposed upon those particular\r\nsorts of low wines and spirits, of which malt makes any part of the materials.\r\nIn what are called malt spirits, it makes commonly but a third part of the\r\nmaterials; the other two-thirds being either raw barley, or one-third barley\r\nand one-third wheat. In the distillery of malt spirits, both the opportunity\r\nand the temptation to smuggle are much greater than either in a brewery or in a\r\nmalt-house; the opportunity, on account of the smaller bulk and greater value\r\nof the commodity, and the temptation, on account of the superior height of the\r\nduties, which amounted to 3s. 10 2/3d. upon the gallon of spirits. {Though the\r\nduties directly imposed upon proof spirits amount only to 2s. 6d per gallon,\r\nthese, added to the duties upon the low wines, from which they are distilled,\r\namount to 3s 10 2/3d. Both low wines and proof spirits are, to prevent frauds,\r\nnow rated according to what they gauge in the wash.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy increasing the duties upon malt, and reducing those upon the distillery,\r\nboth the opportunities and the temptation to smuggle would be diminished, which\r\nmight occasion a still further augmentation of revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt has for some time past been the policy of Great Britain to discourage the\r\nconsumption of spiritous liquors, on account of their supposed tendency to ruin\r\nthe health and to corrupt the morals of the common people. According to this\r\npolicy, the abatement of the taxes upon the distillery ought not to be so great\r\nas to reduce, in any respect, the price of those liquors. Spiritous liquors\r\nmight remain as dear as ever; while, at the same time, the wholesome and\r\ninvigorating liquors of beer and ale might be considerably reduced in their\r\nprice. The people might thus be in part relieved from one of the burdens of\r\nwhich they at present complain the most; while, at the same time, the revenue\r\nmight be considerably augmented.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe objections of Dr. Davenant to this alteration in the present system of\r\nexcise duties, seem to be without foundation. Those objections are, that the\r\ntax, instead of dividing itself, as at present, pretty equally upon the profit\r\nof the maltster, upon that of the brewer and upon that of the retailer, would\r\nso far as it affected profit, fall altogether upon that of the maltster; that\r\nthe maltster could not so easily get back the amount of the tax in the advanced\r\nprice of his malt, as the brewer and retailer in the advanced price of their\r\nliquor; and that so heavy a tax upon malt might reduce the rent and profit of\r\nbarley land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo tax can ever reduce, for any considerable time, the rate of profit in any\r\nparticular trade, which must always keep its level with other trades in the\r\nneighbourhood. The present duties upon malt, beer, and ale, do not affect the\r\nprofits of the dealers in those commodities, who all get back the tax with an\r\nadditional profit, in the enhanced price of their goods. A tax, indeed, may\r\nrender the goods upon which it is imposed so dear, as to diminish the\r\nconsumption of them. But the consumption of malt is in malt liquors; and a tax\r\nof eighteen shillings upon the quarter of malt could not well render those\r\nliquors dearer than the different taxes, amounting to twenty-four or\r\ntwenty-five shillings, do at present. Those liquors, on the contrary, would\r\nprobably become cheaper, and the consumption of them would be more likely to\r\nincrease than to diminish.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not very easy to understand why it should be more difficult for the\r\nmaltster to get back eighteen shillings in the advanced price of his malt, than\r\nit is at present for the brewer to get back twenty-four or twenty-five,\r\nsometimes thirty shillings, in that of his liquor. The maltster, indeed,\r\ninstead of a tax of six shillings, would be obliged to advance one of eighteen\r\nshilling upon every quarter of malt. But the brewer is at present obliged to\r\nadvance a tax of twenty-four or twenty-five, sometimes thirty shillings, upon\r\nevery quarter of malt which he brews. It could not be more inconvenient for the\r\nmaltster to advance a lighter tax, than it is at present for the brewer to\r\nadvance a heavier one. The maltster does not always keep in his granaries a\r\nstock of malt, which it will require a longer time to dispose of than the stock\r\nof beer and ale which the brewer frequently keeps in his cellars. The former,\r\ntherefore, may frequently get the returns of his money as soon as the latter.\r\nBut whatever inconveniency might arise to the maltster from being obliged to\r\nadvance a heavier tax, it could easily be remedied, by granting him a few\r\nmonths longer credit than is at present commonly given to the brewer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNothing could reduce the rent and profit of barley land, which did not reduce\r\nthe demand for barley. But a change of system, which reduced the duties upon a\r\nquarter of malt brewed into beer and ale, from twenty-four and twenty-five\r\nshillings to eighteen shillings, would be more likely to increase than diminish\r\nthat demand. The rent and profit of barley land, besides, must always be nearly\r\nequal to those of other equally fertile and equally well cultivated land. If\r\nthey were less, some part of the barley land would soon be turned to some other\r\npurpose; and if they were greater, more land would soon be turned to the\r\nraising of barley. When the ordinary price of any particular produce of land is\r\nat what may be called a monopoly price, a tax upon it necessarily reduces the\r\nrent and profit of the land which grows it. A tax upon the produce of those\r\nprecious vineyards, of which the wine falls so much short of the effectual\r\ndemand, that its price is always above the natural proportion to that of the\r\nproduce of other equally fertile and equally well cultivated land, would\r\nnecessarily reduce the rent and profit of those vineyards. The price of the\r\nwines being already the highest that could be got for the quantity commonly\r\nsent to market, it could not be raised higher without diminishing that\r\nquantity; and the quantity could not be diminished without still greater loss,\r\nbecause the lands could not be turned to any other equally valuable produce.\r\nThe whole weight of the tax, therefore, would fall upon the rent and profit;\r\nproperly upon the rent of the vineyard. When it has been proposed to lay any\r\nnew tax upon sugar, our sugar planters have frequently complained that the\r\nwhole weight of such taxes fell not upon the consumer, but upon the producer;\r\nthey never having been able to raise the price of their sugar after the tax\r\nhigher than it was before. The price had, it seems, before the tax, been a\r\nmonopoly price; and the arguments adduced to show that sugar was an improper\r\nsubject of taxation, demonstrated perhaps that it was a proper one; the gains\r\nof monopolists, whenever they can be come at, being certainly of all subjects\r\nthe most proper. But the ordinary price of barley has never been a monopoly\r\nprice; and the rent and profit of barley land have never been above their\r\nnatural proportion to those of other equally fertile and equally well\r\ncultivated land. The different taxes which have been imposed upon malt, beer,\r\nand ale, have never lowered the price of barley; have never reduced the rent\r\nand profit of barley land. The price of malt to the brewer has constantly risen\r\nin proportion to the taxes imposed upon it; and those taxes, together with the\r\ndifferent duties upon beer and ale, have constantly either raised the price,\r\nor, what comes to the same thing, reduced the quality of those commodities to\r\nthe consumer. The final payment of those taxes has fallen constantly upon the\r\nconsumer, and not upon the producer.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe only people likely to suffer by the change of system here proposed, are\r\nthose who brew for their own private use. But the exemption, which this\r\nsuperior rank of people at present enjoy, from very heavy taxes which are paid\r\nby the poor labourer and artificer, is surely most unjust and unequal, and\r\nought to be taken away, even though this change was never to take place. It has\r\nprobably been the interest of this superior order of people, however, which has\r\nhitherto prevented a change of system that could not well fail both to increase\r\nthe revenue and to relieve the people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBesides such duties as those of custom and excise above mentioned, there are\r\nseveral others which affect the price of goods more unequally and more\r\nindirectly. Of this kind are the duties, which, in French, are called peages,\r\nwhich in old Saxon times were called the duties of passage, and which seem to\r\nhave been originally established for the same purpose as our turnpike tolls, or\r\nthe tolls upon our canals and navigable rivers, for the maintenance of the road\r\nor of the navigation. Those duties, when applied to such purposes, are most\r\nproperly imposed according to the bulk or weight of the goods. As they were\r\noriginally local and provincial duties, applicable to local and provincial\r\npurposes, the administration of them was, in most cases, entrusted to the\r\nparticular town, parish, or lordship, in which they were levied; such\r\ncommunities being, in some way or other, supposed to be accountable for the\r\napplication. The sovereign, who is altogether unaccountable, has in many\r\ncountries assumed to himself the administration of those duties; and though he\r\nhas in most cases enhanced very much the duty, he has in many entirely\r\nneglected the application. If the turnpike tolls of Great Britain should ever\r\nbecome one of the resources of government, we may learn, by the example of many\r\nother nations, what would probably be the consequence. Such tolls, no doubt,\r\nare finally paid by the consumer; but the consumer is not taxed in proportion\r\nto his expense, when he pays, not according to the value, but according to the\r\nbulk or weight of what he consumes. When such duties are imposed, not according\r\nto the bulk or weight, but according to the supposed value of the goods, they\r\nbecome properly a sort of inland customs or excise, which obstruct very much\r\nthe most important of all branches of commerce, the interior commerce of the\r\ncountry.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn some small states, duties similar to those passage duties are imposed upon\r\ngoods carried across the territory, either by land or by water, from one\r\nforeign country to another. These are in some countries called transit-duties.\r\nSome of the little Italian states which are situated upon the Po, and the\r\nrivers which run into it, derive some revenue from duties of this kind, which\r\nare paid altogether by foreigners, and which, perhaps, are the only duties that\r\none state can impose upon the subjects of another, without obstruction in any\r\nrespect, the industry or commerce of its own. The most important transit-duty\r\nin the world, is that levied by the king of Denmark upon all merchant ships\r\nwhich pass through the Sound.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes upon luxuries, as the greater part of the duties of customs and\r\nexcise, though they all fall indifferently upon every different species of\r\nrevenue, and are paid finally, or without any retribution, by whoever consumes\r\nthe commodities upon which they are imposed; yet they do not always fall\r\nequally or proportionally upon the revenue of every individual. As every\r\nman’s humour regulates the degree of his consumption, every man\r\ncontributes rather according to his humour, than proportion to his revenue: the\r\nprofuse contribute more, the parsimonious less, than their proper proportion.\r\nDuring the minority of a man of great fortune, he contributes commonly very\r\nlittle, by his consumption, towards the support of that state from whose\r\nprotection he derives a great revenue. Those who live in another country,\r\ncontribute nothing by their consumption towards the support of the government\r\nof that country, in which is situated the source of their revenue. If in this\r\nlatter country there should be no land tax, nor any considerable duty upon the\r\ntransference either of moveable or immoveable property, as is the case in\r\nIreland, such absentees may derive a great revenue from the protection of a\r\ngovernment, to the support of which they do not contribute a single shilling.\r\nThis inequality is likely to be greatest in a country of which the government\r\nis, in some respects, subordinate and dependant upon that of some other. The\r\npeople who possess the most extensive property in the dependant, will, in this\r\ncase, generally chuse to live in the governing country. Ireland is precisely in\r\nthis situation; and we cannot therefore wonder, that the proposal of a tax upon\r\nabsentees should be so very popular in that country. It might, perhaps, be a\r\nlittle difficult to ascertain either what sort, or what degree of absence,\r\nwould subject a man to be taxed as an absentee, or at what precise time the tax\r\nshould either begin or end. If you except, however, this very peculiar\r\nsituation, any inequality in the contribution of individuals which can arise\r\nfrom such taxes, is much more than compensated by the very circumstance which\r\noccasions that inequality; the circumstance that every man’s contribution\r\nis altogether voluntary; it being altogether in his power, either to consume,\r\nor not to consume, the commodity taxed. Where such taxes, therefore, are\r\nproperly assessed, and upon proper commodities, they are paid with less\r\ngrumbling than any other. When they are advanced by the merchant or\r\nmanufacturer, the consumer, who finally pays them, soon comes to confound them\r\nwith the price of the commodities, and almost forgets that he pays any tax.\r\nSuch taxes are, or may be, perfectly certain; or may be assessed, so as to\r\nleave no doubt concerning either what ought to be paid, or when it ought to be\r\npaid; concerning either the quantity or the time of payment. What ever\r\nuncertainty there may sometimes be, either in the duties of customs in Great\r\nBritain, or in other duties of the same kind in other countries, it cannot\r\narise from the nature of those duties, but from the inaccurate or unskilful\r\nmanner in which the law that imposes them is expressed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon luxuries generally are, and always may be, paid piece-meal, or in\r\nproportion as the contributors have occasion to purchase the goods upon which\r\nthey are imposed. In the time and mode of payment, they are, or may be, of all\r\ntaxes the most convenient. Upon the whole, such taxes, therefore, are perhaps\r\nas agreeable to the three first of the four general maxims concerning taxation,\r\nas any other. They offend in every respect against the fourth.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch taxes, in proportion to what they bring into the public treasury of the\r\nstate, always take out, or keep out, of the pockets of the people, more than\r\nalmost any other taxes. They seem to do this in all the four different ways in\r\nwhich it is possible to do it.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFirst, the levying of such taxes, even when imposed in the most judicious\r\nmanner, requires a great number of custom-house and excise officers, whose\r\nsalaries and perquisites are a real tax upon the people, which brings nothing\r\ninto the treasury of the state. This expense, however, it must be acknowledged,\r\nis more moderate in Great Britain than in most other countries. In the year\r\nwhich ended on the 5th of July, 1775, the gross produce of the different\r\nduties, under the management of the commissioners of excise in England,\r\namounted to £5,507,308:18:8¼, which was levied at an expense of little more\r\nthan five and a-half per cent. From this gross produce, however, there must be\r\ndeducted what was paid away in bounties and drawbacks upon the exportation of\r\nexciseable goods, which will reduce the neat produce below five millions. {The\r\nneat produce of that year, after deducting all expenses and allowances,\r\namounted to £4,975,652:19:6.} The levying of the salt duty, and excise duty,\r\nbut under a different management, is much more expensive. The neat revenue of\r\nthe customs does not amount to two millions and a-half, which is levied at an\r\nexpense of more than ten per cent., in the salaries of officers and other\r\nincidents. But the perquisites of custom-house officers are everywhere much\r\ngreater than their salaries; at some ports more than double or triple those\r\nsalaries. If the salaries of officers, and other incidents, therefore, amount\r\nto more than ten per cent. upon the neat revenue of the customs, the whole\r\nexpense of levying that revenue may amount, in salaries and perquisites\r\ntogether, to more than twenty or thirty per cent. The officers of excise\r\nreceive few or no perquisites; and the administration of that branch of the\r\nrevenue being of more recent establishment, is in general less corrupted than\r\nthat of the customs, into which length of time has introduced and authorised\r\nmany abuses. By charging upon malt the whole revenue which is at present levied\r\nby the different duties upon malt and malt liquors, a saving, it is supposed,\r\nof more than £50,000, might be made in the annual expense of the excise. By\r\nconfining the duties of customs to a few sorts of goods, and by levying those\r\nduties according to the excise laws, a much greater saving might probably be\r\nmade in the annual expense of the customs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSecondly, such taxes necessarily occasion some obstruction or discouragement to\r\ncertain branches of industry. As they always raise the price of the commodity\r\ntaxed, they so far discourage its consumption, and consequently its production.\r\nIf it is a commodity of home growth or manufacture, less labour comes to be\r\nemployed in raising and producing it. If it is a foreign commodity of which the\r\ntax increases in this manner the price, the commodities of the same kind which\r\nare made at home may thereby, indeed, gain some advantage in the home market,\r\nand a greater quantity of domestic industry may thereby be turned toward\r\npreparing them. But though this rise of price in a foreign commodity, may\r\nencourage domestic industry in one particular branch, it necessarily\r\ndiscourages that industry in almost every other. The dearer the Birmingham\r\nmanufacturer buys his foreign wine, the cheaper he necessarily sells that part\r\nof his hardware with which, or, what comes to the same thing, with the price of\r\nwhich, he buys it. That part of his hardware, therefore, becomes of less value\r\nto him, and he has less encouragement to work at it. The dearer the consumers\r\nin one country pay for the surplus produce of another, the cheaper they\r\nnecessarily sell that part of their own surplus produce with which, or, what\r\ncomes to the same thing, with the price of which, they buy it. That part of\r\ntheir own surplus produce becomes of less value to them, and they have less\r\nencouragement to increase its quantity. All taxes upon consumable commodities,\r\ntherefore, tend to reduce the quantity of productive labour below what it\r\notherwise would be, either in preparing the commodities taxed, if they are home\r\ncommodities, or in preparing those with which they are purchased, if they are\r\nforeign commodities. Such taxes, too, always alter, more or less, the natural\r\ndirection of national industry, and turn it into a channel always different\r\nfrom, and generally less advantageous, than that in which it would have run of\r\nits own accord.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThirdly, the hope of evading such taxes by smuggling, gives frequent occasion\r\nto forfeitures and other penalties, which entirely ruin the smuggler; a person\r\nwho, though no doubt highly blameable for violating the laws of his country, is\r\nfrequently incapable of violating those of natural justice, and would have\r\nbeen, in every respect, an excellent citizen, had not the laws of his country\r\nmade that a crime which nature never meant to be so. In those corrupted\r\ngovernments, where there is at least a general suspicion of much unnecessary\r\nexpense, and great misapplication of the public revenue, the laws which guard\r\nit are little respected. Not many people are scrupulous about smuggling, when,\r\nwithout perjury, they can find an easy and safe opportunity of doing so. To\r\npretend to have any scruple about buying smuggled goods, though a manifest\r\nencouragement to the violation of the revenue laws, and to the perjury which\r\nalmost always attends it, would, in most countries, be regarded as one of those\r\npedantic pieces of hypocrisy which, instead of gaining credit with anybody,\r\nserve only to expose the person who affects to practise them to the suspicion\r\nof being a greater knave than most of his neighbours. By this indulgence of the\r\npublic, the smuggler is often encouraged to continue a trade, which he is thus\r\ntaught to consider as in some measure innocent; and when the severity of the\r\nrevenue laws is ready to fall upon him, he is frequently disposed to defend\r\nwith violence, what he has been accustomed to regard as his just property. From\r\nbeing at first, perhaps, rather imprudent than criminal, he at last too often\r\nbecomes one of the hardiest and most determined violators of the laws of\r\nsociety. By the ruin of the smuggler, his capital, which had before been\r\nemployed in maintaining productive labour, is absorbed either in the revenue of\r\nthe state, or in that of the revenue officer; and is employed in maintaining\r\nunproductive, to the diminution of the general capital of the society, and of\r\nthe useful industry which it might otherwise have maintained.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nFourthly, such taxes, by subjecting at least the dealers in the taxed\r\ncommodities, to the frequent visits and odious examination of the\r\ntax-gatherers, expose them sometimes, no doubt, to some degree of oppression,\r\nand always to much trouble and vexation; and though vexation, as has already\r\nbeen said, is not strictly speaking expense, it is certainly equivalent to the\r\nexpense at which every man would be willing to redeem himself from it. The laws\r\nof excise, though more effectual for the purpose for which they were\r\ninstituted, are, in this respect, more vexatious than those of the customs.\r\nWhen a merchant has imported goods subject to certain duties of customs; when\r\nhe has paid those duties, and lodged the goods in his warehouse; he is not, in\r\nmost cases, liable to any further trouble or vexation from the custom-house\r\nofficer. It is otherwise with goods subject to duties of excise. The dealers\r\nhave no respite from the continual visits and examination of the excise\r\nofficers. The duties of excise are, upon this account, more unpopular than\r\nthose of the customs; and so are the officers who levy them. Those officers, it\r\nis pretended, though in general, perhaps, they do their duty fully as well as\r\nthose of the customs; yet, as that duty obliges them to be frequently very\r\ntroublesome to some of their neighbours, commonly contract a certain hardness\r\nof character, which the others frequently have not. This observation, however,\r\nmay very probably be the mere suggestion of fraudulent dealers, whose smuggling\r\nis either prevented or detected by their diligence.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe inconveniencies, however, which are, perhaps, in some degree inseparable\r\nfrom taxes upon consumable communities, fall as light upon the people of Great\r\nBritain as upon those of any other country of which the government is nearly as\r\nexpensive. Our state is not perfect, and might be mended; but it is as good, or\r\nbetter, than that of most of our neighbours.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of the notion, that duties upon consumable goods were taxes upon\r\nthe profits of merchants, those duties have, in some countries, been repeated\r\nupon every successive sale of the goods. If the profits of the\r\nmerchant-importer or merchant-manufacturer were taxed, equality seemed to\r\nrequire that those of all the middle buyers, who intervened between either of\r\nthem and the consumer, should likewise be taxed. The famous alcavala of Spain\r\nseems to have been established upon this principle. It was at first a tax of\r\nten per cent. afterwards of fourteen per cent. and it is at present only six\r\nper cent. upon the sale of every sort of property whether moveable or\r\nimmoveable; and it is repeated every time the property is sold. {Memoires\r\nconcernant les Droits, etc. tom. i, p. 15} The levying of this tax requires a\r\nmultitude of revenue officers, sufficient to guard the transportation of goods,\r\nnot only from one province to another, but from one shop to another. It\r\nsubjects, not only the dealers in some sorts of goods, but those in all sorts,\r\nevery farmer, every manufacturer, every merchant and shopkeeper, to the\r\ncontinual visit and examination of the tax-gatherers. Through the greater part\r\nof the country in which a tax of this kind is established, nothing can be\r\nproduced for distant sale. The produce of every part of the country must be\r\nproportioned to the consumption of the neighbourhood. It is to the alcavala,\r\naccordingly, that Ustaritz imputes the ruin of the manufactures of Spain. He\r\nmight have imputed to it, likewise, the declension of agriculture, it being\r\nimposed not only upon manufactures, but upon the rude produce of the land.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the kingdom of Naples, there is a similar tax of three per cent. upon the\r\nvalue of all contracts, and consequently upon that of all contracts of sale. It\r\nis both lighter than the Spanish tax, and the greater part of towns and\r\nparishes are allowed to pay a composition in lieu of it. They levy this\r\ncomposition in what manner they please, generally in a way that gives no\r\ninterruption to the interior commerce of the place. The Neapolitan tax,\r\ntherefore, is not near so ruinous as the Spanish one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe uniform system of taxation, which, with a few exception of no great\r\nconsequence, takes place in all the different parts of the united kingdom of\r\nGreat Britain, leaves the interior commerce of the country, the inland and\r\ncoasting trade, almost entirely free. The inland trade is almost perfectly\r\nfree; and the greater part of goods may be carried from one end of the kingdom\r\nto the other, without requiring any permit or let-pass, without being subject\r\nto question, visit or examination, from the revenue officers. There are a few\r\nexceptions, but they are such as can give no interruption to any important\r\nbranch of inland commerce of the country. Goods carried coastwise, indeed,\r\nrequire certificates or coast-cockets. If you except coals, however, the rest\r\nare almost all duty-free. This freedom of interior commerce, the effect of the\r\nuniformity of the system of taxation, is perhaps one of the principal causes of\r\nthe prosperity of Great Britain; every great country being necessarily the best\r\nand most extensive market for the greater part of the productions of its own\r\nindustry. If the same freedom in consequence of the same uniformity, could be\r\nextended to Ireland and the plantations, both the grandeur of the state, and\r\nthe prosperity of every part of the empire, would probably be still greater\r\nthan at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the different revenue laws which take place in the different\r\nprovinces, require a multitude of revenue officers to surround, not only the\r\nfrontiers of the kingdom, but those of almost each particular province, in\r\norder either to prevent the importation of certain goods, or to subject it to\r\nthe payment of certain duties, to the no small interruption of the interior\r\ncommerce of the country. Some provinces are allowed to compound for the\r\ngabelle, or salt tax; others are exempted from it altogether. Some provinces\r\nare exempted from the exclusive sale of tobacco, which the farmers-general\r\nenjoy through the greater part of the kingdom. The aides, which correspond to\r\nthe excise in England, are very different in different provinces. Some\r\nprovinces are exempted from them, and pay a composition or equivalent. In those\r\nin which they take place, and are in farm, there are many local duties which do\r\nnot extend beyond a particular town or district. The traites, which correspond\r\nto our customs, divide the kingdom into three great parts; first, the provinces\r\nsubject to the tariff of 1664, which are called the provinces of the five great\r\nfarms, and under which are comprehended Picardy, Normandy, and the greater part\r\nof the interior provinces of the kingdom; secondly, the provinces subject to\r\nthe tariff of 1667, which are called the provinces reckoned foreign, and under\r\nwhich are comprehended the greater part of the frontier provinces; and,\r\nthirdly, those provinces which are said to be treated as foreign, or which,\r\nbecause they are allowed a free commerce with foreign countries, are, in their\r\ncommerce with the other provinces of France, subjected to the same duties as\r\nother foreign countries. These are Alsace, the three bishoprics of Mentz, Toul,\r\nand Verdun, and the three cities of Dunkirk, Bayonne, and Marseilles. Both in\r\nthe provinces of the five great farms (called so on account of an ancient\r\ndivision of the duties of customs into five great branches, each of which was\r\noriginally the subject of a particular farm, though they are now all united\r\ninto one), and in those which are said to be reckoned foreign, there are many\r\nlocal duties which do not extend beyond a particular town or district. There\r\nare some such even in the provinces which are said to be treated as foreign,\r\nparticularly in the city of Marseilles. It is unnecessary to observe how much\r\nboth the restraints upon the interior commerce of the country, and the number\r\nof the revenue officers, must be multiplied, in order to guard the frontiers of\r\nthose different provinces and districts which are subject to such different\r\nsystems of taxation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOver and above the general restraints arising from this complicated system of\r\nrevenue laws, the commerce of wine (after corn, perhaps, the most important\r\nproduction of France) is, in the greater part of the provinces, subject to\r\nparticular restraints arising from the favour which has been shown to the\r\nvineyards of particular provinces and districts above those of others. The\r\nprovinces most famous for their wines, it will be found, I believe, are those\r\nin which the trade in that article is subject to the fewest restraints of this\r\nkind. The extensive market which such provinces enjoy, encourages good\r\nmanagement both in the cultivation of their vineyards, and in the subsequent\r\npreparation of their wines.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSuch various and complicated revenue laws are not peculiar to France. The\r\nlittle duchy of Milan is divided into six provinces, in each of which there is\r\na different system of taxation, with regard to several different sorts of\r\nconsumable goods. The still smaller territories of the duke of Parma are\r\ndivided into three or four, each of which has, in the same manner, a system of\r\nits own. Under such absurd management, nothing but the great fertility of the\r\nsoil, and happiness of the climate, could preserve such countries from soon\r\nrelapsing into the lowest state of poverty and barbarism.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTaxes upon consumable commodities may either be levied by an administration, of\r\nwhich the officers are appointed by govermnent, and are immediately accountable\r\nto government, of which the revenue must, in this case, vary from year to year,\r\naccording to the occasional variations in the produce of the tax; or they may\r\nbe let in farm for a rent certain, the farmer being allowed to appoint his own\r\nofficers, who, though obliged to levy the tax in the manner directed by the\r\nlaw, are under his immediate inspection, and are immediately accountable to\r\nhim. The best and most frugal way of levying a tax can never be by farm. Over\r\nand above what is necessary for paying the stipulated rent, the salaries of the\r\nofficers, and the whole expense of administration, the farmer must always draw\r\nfrom the produce of the tax a certain profit, proportioned at least to the\r\nadvance which he makes, to the risk which he runs, to the trouble which he is\r\nat, and to the knowledge and skill which it requires to manage so very\r\ncomplicated a concern. Government, by establishing an administration under\r\ntheir own immediate inspection, of the same kind with that which the farmer\r\nestablishes, might at least save this profit, which is almost always\r\nexorbitant. To farm any considerable branch of the public revenue requires\r\neither a great capital, or a great credit; circumstances which would alone\r\nrestrain the competition for such an undertaking to a very small number of\r\npeople. Of the few who have this capital or credit, a still smaller number have\r\nthe necessary knowledge or experience; another circumstance which restrains the\r\ncompetition still further. The very few who are in condition to become\r\ncompetitors, find it more for their interest to combine together; to become\r\ncopartners, instead of competitors; and, when the farm is set up to auction, to\r\noffer no rent but what is much below the real value. In countries where the\r\npublic revenues are in farm, the farmers are generally the most opulent people.\r\nTheir wealth would alone excite the public indignation; and the vanity which\r\nalmost always accompanies such upstart fortunes, the foolish ostentation with\r\nwhich they commonly display that wealth, excite that indignation still more.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe farmers of the public revenue never find the laws too severe, which punish\r\nany attempt to evade the payment of a tax. They have no bowels for the\r\ncontributors, who are not their subjects, and whose universal bankruptcy, if it\r\nshould happen the day after the farm is expired, would not much affect their\r\ninterest. In the greatest exigencies of the state, when the anxiety of the\r\nsovereign for the exact payment of his revenue is necessarily the greatest,\r\nthey seldom fail to complain, that without laws more rigorous than those which\r\nactually took place, it will be impossible for them to pay even the usual rent.\r\nIn those moments of public distress, their commands cannot be disputed. The\r\nrevenue laws, therefore, become gradually more and more severe. The most\r\nsanguinary are always to be found in countries where the greater part of the\r\npublic revenue is in farm; the mildest, in countries where it is levied under\r\nthe immediate inspection of the sovereign. Even a bad sovereign feels more\r\ncompassion for his people than can ever be expected from the farmers of his\r\nrevenue. He knows that the permanent grandeur of his family depends upon the\r\nprosperity of his people, and he will never knowingly ruin that prosperity for\r\nthe sake of any momentary interest of his own. It is otherwise with the farmers\r\nof his revenue, whose grandeur may frequently be the effect of the ruin, and\r\nnot of the prosperity, of his people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA tax is sometimes not only farmed for a certain rent, but the farmer has,\r\nbesides, the monopoly of the commodity taxed. In France, the duties upon\r\ntobacco and salt are levied in this manner. In such cases, the farmer, instead\r\nof one, levies two exorbitant profits upon the people; the profit of the\r\nfarmer, and the still more exorbitant one of the monopolist. Tobacco being a\r\nluxury, every man is allowed to buy or not to buy as he chuses; but salt being\r\na necessary, every man is obliged to buy of the farmer a certain quantity of\r\nit; because, if he did not buy this quantity of the farmer, he would, it is\r\npresumed, buy it of some smuggler. The taxes upon both commodities are\r\nexorbitant. The temptation to smuggle, consequently, is to many people\r\nirresistible; while, at the same time, the rigour of the law, and the vigilance\r\nof the farmer’s officers, render the yielding to the temptation almost\r\ncertainly ruinous. The smuggling of salt and tobacco sends every year several\r\nhundred people to the galleys, besides a very considerable number whom it sends\r\nto the gibbet. Those taxes, levied in this manner, yield a very considerable\r\nrevenue to government. In 1767, the farm of tobacco was let for twenty-two\r\nmillions five hundred and forty-one thousand two hundred and seventy-eight\r\nlivres a-year; that of salt for thirty-six millions four hundred and ninety-two\r\nthousand four hundred and four livres. The farm, in both cases, was to commence\r\nin 1768, and to last for six years. Those who consider the blood of the people\r\nas nothing, in comparison with the revenue of the prince, may, perhaps, approve\r\nof this method of levying taxes. Similar taxes and monopolies of salt and\r\ntobacco have been established in many other countries, particularly in the\r\nAustrian and Prussian dominions, and in the greater part of the states of\r\nItaly.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the greater part of the actual revenue of the crown is derived from\r\neight different sources; the taille, the capitation, the two vingtiemes, the\r\ngabelles, the aides, the traites, the domaine, and the farm of tobacco. The\r\nfive last are, in the greater part of the provinces, under farm. The three\r\nfirst are everywhere levied by an administration, under the immediate\r\ninspection and direction of government; and it is universally acknowledged,\r\nthat in proportion to what they take out of the pockets of the people, they\r\nbring more into the treasury of the prince than the other five, of which the\r\nadministration is much more wasteful and expensive.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe finances of France seem, in their present state, to admit of three very\r\nobvious reformations. First, by abolishing the taille and the capitation, and\r\nby increasing the number of the vingtiemes, so as to produce an additional\r\nrevenue equal to the amount of those other taxes, the revenue of the crown\r\nmight be preserved; the expense of collection might be much diminished; the\r\nvexation of the inferior ranks of people, which the taille and capitation\r\noccasion, might be entirely prevented; and the superior ranks might not be more\r\nburdened than the greater part of them are at present. The vingtieme, I have\r\nalready observed, is a tax very nearly of the same kind with what is called the\r\nland tax of England. The burden of the taille, it is acknowledged, falls\r\nfinally upon the proprietors of land; and as the greater part of the capitation\r\nis assessed upon those who are subject to the taille, at so much a-pound of\r\nthat other tax, the final payment of the greater part of it must likewise fall\r\nupon the same order of people. Though the number of the vingtiemes, therefore,\r\nwas increased, so as to produce an additional revenue equal to the amount of\r\nboth those taxes, the superior ranks of people might not be more burdened than\r\nthey are at present; many individuals, no doubt, would, on account of the great\r\ninequalities with which the taille is commonly assessed upon the estates and\r\ntenants of different individuals. The interest and opposition of such favoured\r\nsubjects, are the obstacles most likely to prevent this, or any other\r\nreformation of the same kind. Secondly, by rendering the gabelle, the aides,\r\nthe traites, the taxes upon tobacco, all the different customs and excises,\r\nuniform in all the different parts of the kingdom, those taxes might be levied\r\nat much less expense, and the interior commerce of the kingdom might be\r\nrendered as free as that of England. Thirdly, and lastly, by subjecting all\r\nthose taxes to an administration under the immediate inspection and direction\r\nor government, the exorbitant profits of the farmers-general might be added to\r\nthe revenue of the state. The opposition arising from the private interest of\r\nindividuals, is likely to be as effectual for preventing the two last as the\r\nfirst-mentioned scheme of reformation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe French system of taxation seems, in every respect, inferior to the British.\r\nIn Great Britain, ten millions sterling are annually levied upon less than\r\neight millions of people, without its being possible to say that any particular\r\norder is oppressed. From the Collections of the Abbé Expilly, and the\r\nobservations of the author of the Essay upon the Legislation and Commerce of\r\nCorn, it appears probable that France, including the provinces of Lorraine and\r\nBar, contains about twenty-three or twenty-four millions of people; three times\r\nthe number, perhaps, contained in Great Britain. The soil and climate of France\r\nare better than those of Great Britain. The country has been much longer in a\r\nstate of improvement and cultivation, and is, upon that account, better stocked\r\nwith all those things which it requires a long time to raise up and accumulate;\r\nsuch as great towns, and convenient and well-built houses, both in town and\r\ncountry. With these advantages, it might be expected, that in France a revenue\r\nof thirty millions might be levied for the support of the state, with as little\r\ninconvenience as a revenue of ten millions is in Great Britain. In 1765 and\r\n1766, the whole revenue paid into the treasury of France, according to the\r\nbest, though, I acknowledge, very imperfect accounts which I could get of it,\r\nusually run between 308 and 325 millions of livres; that is, it did not amount\r\nto fifteen millions sterling; not the half of what might have been expected,\r\nhad the people contributed in the same proportion to their numbers as the\r\npeople of Great Britain. The people of France, however, it is generally\r\nacknowledged, are much more oppressed by taxes than the people of Great\r\nBritain. France, however, is certainly the great empire in Europe, which, after\r\nthat of Great Britain, enjoys the mildest and most indulgent government.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Holland, the heavy taxes upon the necessaries of life have ruined, it is\r\nsaid, their principal manufacturers, and are likely to discourage, gradually,\r\neven their fisheries and their trade in ship-building. The taxes upon the\r\nnecessaries of life are inconsiderable in Great Britain, and no manufacture has\r\nhitherto been ruined by them. The British taxes which bear hardest on\r\nmanufactures, are some duties upon the importation of raw materials,\r\nparticularly upon that of raw silk. The revenue of the States-General and of\r\nthe different cities, however, is said to amount to more than five millions two\r\nhundred and fifty thousand pounds sterling; and as the inhabitants of the\r\nUnited Provinces cannot well be supposed to amount to more than a third part of\r\nthose of Great Britain, they must, in proportion to their number, be much more\r\nheavily taxed.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAfter all the proper subjects of taxation have been exhausted, if the\r\nexigencies of the state still continue to require new taxes, they must be\r\nimposed upon improper ones. The taxes upon the necessaries of life, therefore,\r\nmay be no impeachment of the wisdom of that republic, which, in order to\r\nacquire and to maintain its independency, has, in spite of its great frugality,\r\nbeen involved in such expensive wars as have obliged it to contract great\r\ndebts. The singular countries of Holland and Zealand, besides, require a\r\nconsiderable expense even to preserve their existence, or to prevent their\r\nbeing swallowed up by the sea, which must have contributed to increase\r\nconsiderably the load of taxes in those two provinces. The republican form of\r\ngovernment seems to be the principal support of the present grandeur of\r\nHolland. The owners of great capitals, the great mercantile families, have\r\ngenerally either some direct share, or some indirect influence, in the\r\nadministration of that government. For the sake of the respect and authority\r\nwhich they derive from this situation, they are willing to live in a country\r\nwhere their capital, if they employ it themselves, will bring them less profit,\r\nand if they lend it to another, less interest; and where the very moderate\r\nrevenue which they can draw from it will purchase less of the necessaries and\r\nconveniencies of life than in any other part of Europe. The residence of such\r\nwealthy people necessarily keeps alive, in spite of all disadvantages, a\r\ncertain degree of industry in the country. Any public calamity which should\r\ndestroy the republican form of government, which should throw the whole\r\nadministration into the hands of nobles and of soldiers, which should\r\nannihilate altogether the importance of those wealthy merchants, would soon\r\nrender it disagreeable to them to live in a country where they were no longer\r\nlikely to be much respected. They would remove both their residence and their\r\ncapital to some other country, and the industry and commerce of Holland would\r\nsoon follow the capitals which supported them.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\r\n\u003cdiv class=\"chapter\"\u003e\r\n\r\n\u003ch2\u003e\u003ca id=\"chap38\"\u003e\u003c/a\u003eCHAPTER III.\u003cbr\u003e\r\nOF PUBLIC DEBTS.\u003c/h2\u003e\r\n\r\n\u003cp\u003e\r\nIn that rude state of society which precedes the extension of commerce and the\r\nimprovement of manufactures; when those expensive luxuries, which commerce and\r\nmanufactures can alone introduce, are altogether unknown; the person who\r\npossesses a large revenue, I have endeavoured to show in the third book of this\r\nInquiry, can spend or enjoy that revenue in no other way than by maintaining\r\nnearly as many people as it can maintain. A large revenue may at all times be\r\nsaid to consist in the command of a large quantity of the necessaries of life.\r\nIn that rude state of things, it is commonly paid in a large quantity of those\r\nnecessaries, in the materials of plain food and coarse clothing, in corn and\r\ncattle, in wool and raw hides. When neither commerce nor manufactures furnish\r\nany thing for which the owner can exchange the greater part of those materials\r\nwhich are over and above his own consumption, he can do nothing with the\r\nsurplus, but feed and clothe nearly as many people as it will feed and clothe.\r\nA hospitality in which there is no luxury, and a liberality in which there is\r\nno ostentation, occasion, in this situation of things, the principal expenses\r\nof the rich and the great. But these I have likewise endeavoured to show, in\r\nthe same book, are expenses by which people are not very apt to ruin\r\nthemselves. There is not, perhaps, any selfish pleasure so frivolous, of which\r\nthe pursuit has not sometimes ruined even sensible men. A passion for\r\ncock-fighting has ruined many. But the instances, I believe, are not very\r\nnumerous, of people who have been ruined by a hospitality or liberality of this\r\nkind; though the hospitality of luxury, and the liberality of ostentation have\r\nruined many. Among our feudal ancestors, the long time during which estates\r\nused to continue in the same family, sufficiently demonstrates the general\r\ndisposition of people to live within their income. Though the rustic\r\nhospitality, constantly exercised by the great landholders, may not, to us in\r\nthe present times, seem consistent with that order which we are apt to consider\r\nas inseparably connected with good economy; yet we must certainly allow them to\r\nhave been at least so far frugal, as not commonly to have spent their whole\r\nincome. A part of their wool and raw hides, they had generally an opportunity\r\nof selling for money. Some part of this money, perhaps, they spent in\r\npurchasing the few objects of vanity and luxury, with which the circumstances\r\nof the times could furnish them; but some part of it they seem commonly to have\r\nhoarded. They could not well, indeed, do any thing else but hoard whatever\r\nmoney they saved. To trade, was disgraceful to a gentleman; and to lend money\r\nat interest, which at that time was considered as usury, and prohibited by law,\r\nwould have been still more so. In those times of violence and disorder,\r\nbesides, it was convenient to have a hoard of money at hand, that in case they\r\nshould be driven from their own home, they might have something of known value\r\nto carry with them to some place of safety. The same violence which made it\r\nconvenient to hoard, made it equally convenient to conceal the hoard. The\r\nfrequency of treasure-trove, or of treasure found, of which no owner was known,\r\nsufficiently demonstrates the frequency, in those times, both of hoarding and\r\nof concealing the hoard. Treasure-trove was then considered as an important\r\nbranch of the revenue of the sovereign. All the treasure-trove of the kingdom\r\nwould scarce, perhaps, in the present times, make an important branch of the\r\nrevenue of a private gentleman of a good estate.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same disposition, to save and to hoard, prevailed in the sovereign, as well\r\nas in the subjects. Among nations, to whom commerce and manufacture are little\r\nknown, the sovereign, it has already been observed in the Fourth book, is in a\r\nsituation which naturally disposes him to the parsimony requisite for\r\naccumulation. In that situation, the expense, even of a sovereign, cannot be\r\ndirected by that vanity which delights in the gaudy finery of a court. The\r\nignorance of the times affords but few of the trinkets in which that finery\r\nconsists. Standing armies are not then necessary; so that the expense, even of\r\na sovereign, like that of any other great lord can be employed in scarce any\r\nthing but bounty to his tenants, and hospitality to his retainers. But bounty\r\nand hospitality very seldom lead to extravagance; though vanity almost always\r\ndoes. All the ancient sovereigns of Europe, accordingly, it has already been\r\nobserved, had treasures. Every Tartar chief, in the present times, is said to\r\nhave one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a commercial country, abounding with every sort of expensive luxury, the\r\nsovereign, in the same manner as almost all the great proprietors in his\r\ndominions, naturally spends a great part of his revenue in purchasing those\r\nluxuries. His own and the neighbouring countries supply him abundantly with all\r\nthe costly trinkets which compose the splendid, but insignificant, pageantry of\r\na court. For the sake of an inferior pageantry of the same kind, his nobles\r\ndismiss their retainers, make their tenants independent, and become gradually\r\nthemselves as insignificant as the greater part of the wealthy burghers in his\r\ndominions. The same frivolous passions, which influence their conduct,\r\ninfluence his. How can it be supposed that he should be the only rich man in\r\nhis dominions who is insensible to pleasures of this kind? If he does not, what\r\nhe is very likely to do, spend upon those pleasures so great a part of his\r\nrevenue as to debilitate very much the defensive power of the state, it cannot\r\nwell be expected that he should not spend upon them all that part of it which\r\nis over and above what is necessary for supporting that defensive power. His\r\nordinary expense becomes equal to his ordinary revenue, and it is well if it\r\ndoes not frequently exceed it. The amassing of treasure can no longer be\r\nexpected; and when extraordinary exigencies require extraordinary expenses, he\r\nmust necessarily call upon his subjects for an extraordinary aid. The present\r\nand the late king of Prussia are the only great princes of Europe, who, since\r\nthe death of Henry IV. of France, in 1610, are supposed to have amassed any\r\nconsiderable treasure. The parsimony which leads to accumulation has become\r\nalmost as rare in republican as in monarchical governments. The Italian\r\nrepublics, the United Provinces of the Netherlands, are all in debt. The canton\r\nof Berne is the single republic in Europe which has amassed any considerable\r\ntreasure. The other Swiss republics have not. The taste for some sort of\r\npageantry, for splendid buildings, at least, and other public ornaments,\r\nfrequently prevails as much in the apparently sober senate-house of a little\r\nrepublic, as in the dissipated court of the greatest king.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe want of parsimony, in time of peace, imposes the necessity of contracting\r\ndebt in time of war. When war comes, there is no money in the treasury, but\r\nwhat is necessary for carrying on the ordinary expense of the peace\r\nestablishment. In war, an establishment of three or four times that expense\r\nbecomes necessary for the defence of the state; and consequently, a revenue\r\nthree or four times greater than the peace revenue. Supposing that the\r\nsovereign should have, what he scarce ever has, the immediate means of\r\naugmenting his revenue in proportion to the augmentation of his expense; yet\r\nstill the produce of the taxes, from which this increase of revenue must be\r\ndrawn, will not begin to come into the treasury, till perhaps ten or twelve\r\nmonths after they are imposed. But the moment in which war begins, or rather\r\nthe moment in which it appears likely to begin, the army must be augmented, the\r\nfleet must be fitted out, the garrisoned towns must be put into a posture of\r\ndefence; that army, that fleet, those garrisoned towns, must be furnished with\r\narms, ammunition, and provisions. An immediate and great expense must be\r\nincurred in that moment of immediate danger, which will not wait for the\r\ngradual and slow returns of the new taxes. In this exigency, government can\r\nhave no other resource but in borrowing.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe same commercial state of society which, by the operation of moral causes,\r\nbrings government in this manner into the necessity of borrowing, produces in\r\nthe subjects both an ability and an inclination to lend. If it commonly brings\r\nalong with it the necessity of borrowing, it likewise brings with it the\r\nfacility of doing so.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA country abounding with merchants and manufacturers, necessarily abounds with\r\na set of people through whose hands, not only their own capitals, but the\r\ncapitals of all those who either lend them money, or trust them with goods,\r\npass as frequently, or more frequently, than the revenue of a private man, who,\r\nwithout trade or business, lives upon his income, passes through his hands. The\r\nrevenue of such a man can regularly pass through his hands only once in a year.\r\nBut the whole amount of the capital and credit of a merchant, who deals in a\r\ntrade of which the returns are very quick, may sometimes pass through his hands\r\ntwo, three, or four times in a year. A country abounding with merchants and\r\nmanufacturers, therefore, necessarily abounds with a set of people, who have it\r\nat all times in their power to advance, if they chuse to do so, a very large\r\nsum of money to government. Hence the ability in the subjects of a commercial\r\nstate to lend.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nCommerce and manufactures can seldom flourish long in any state which does not\r\nenjoy a regular administration of justice; in which the people do not feel\r\nthemselves secure in the possession of their property; in which the faith of\r\ncontracts is not supported by law; and in which the authority of the state is\r\nnot supposed to be regularly employed in enforcing the payment of debts from\r\nall those who are able to pay. Commerce and manufactures, in short, can seldom\r\nflourish in any state, in which there is not a certain degree of confidence in\r\nthe justice of government. The same confidence which disposes great merchants\r\nand manufacturers upon ordinary occasions, to trust their property to the\r\nprotection of a particular government, disposes them, upon extraordinary\r\noccasions, to trust that government with the use of their property. By lending\r\nmoney to government, they do not even for a moment diminish their ability to\r\ncarry on their trade and manufactures; on the contrary, they commonly augment\r\nit. The necessities of the state render government, upon most occasions willing\r\nto borrow upon terms extremely advantageous to the lender. The security which\r\nit grants to the original creditor, is made transferable to any other creditor;\r\nand from the universal confidence in the justice of the state, generally sells\r\nin the market for more than was originally paid for it. The merchant or monied\r\nman makes money by lending money to government, and instead of diminishing,\r\nincreases his trading capital. He generally considers it as a favour,\r\ntherefore, when the administration admits him to a share in the first\r\nsubscription for a new loan. Hence the inclination or willingness in the\r\nsubjects of a commercial state to lend.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe government of such a state is very apt to repose itself upon this ability\r\nand willingness of its subjects to lend it their money on extraordinary\r\noccasions. It foresees the facility of borrowing, and therefore dispenses\r\nitself from the duty of saving.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn a rude state of society, there are no great mercantile or manufacturing\r\ncapitals. The individuals, who hoard whatever money they can save, and who\r\nconceal their hoard, do so from a distrust of the justice of government; from a\r\nfear, that if it was known that they had a hoard, and where that hoard was to\r\nbe found, they would quickly be plundered. In such a state of things, few\r\npeople would be able, and nobody would be willing to lend their money to\r\ngovernment on extraordinary exigencies. The sovereign feels that he must\r\nprovide for such exigencies by saving, because he foresees the absolute\r\nimpossibility of borrowing. This foresight increases still further his natural\r\ndisposition to save.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe progress of the enormous debts which at present oppress, and will in the\r\nlong-run probably ruin, all the great nations of Europe, has been pretty\r\nuniform. Nations, like private men, have generally begun to borrow upon what\r\nmay be called personal credit, without assigning or mortgaging any particular\r\nfund for the payment of the debt; and when this resource has failed them, they\r\nhave gone on to borrow upon assignments or mortgages of particular funds.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat is called the unfunded debt of Great Britain, is contracted in the former\r\nof those two ways. It consists partly in a debt which bears, or is supposed to\r\nbear, no interest, and which resembles the debts that a private man contracts\r\nupon account; and partly in a debt which bears interest, and which resembles\r\nwhat a private man contracts upon his bill or promissory-note. The debts which\r\nare due, either for extraordinary services, or for services either not provided\r\nfor, or not paid at the time when they are performed; part of the\r\nextraordinaries of the army, navy, and ordnance, the arrears of subsidies to\r\nforeign princes, those of seamen’s wages, etc. usually constitute a debt\r\nof the first kind. Navy and exchequer bills, which are issued sometimes in\r\npayment of a part of such debts, and sometimes for other purposes, constitute a\r\ndebt of the second kind; exchequer bills bearing interest from the day on which\r\nthey are issued, and navy bills six months after they are issued. The bank of\r\nEngland, either by voluntarily discounting those bills at their current value,\r\nor by agreeing with government for certain considerations to circulate\r\nexchequer bills, that is, to receive them at par, paying the interest which\r\nhappens to be due upon them, keeps up their value, and facilitates their\r\ncirculation, and thereby frequently enables government to contract a very large\r\ndebt of this kind. In France, where there is no bank, the state bills (billets\r\nd’etat {See Examen des Reflections Politiques sur les Finances.}) have\r\nsometimes sold at sixty and seventy per cent. discount. During the great\r\nrecoinage in king William’s time, when the bank of England thought proper\r\nto put a stop to its usual transactions, exchequer bills and tallies are said\r\nto have sold from twenty-five to sixty per cent. discount; owing partly, no\r\ndoubt, to the supposed instability of the new government established by the\r\nRevolution, but partly, too, to the want of the support of the bank of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen this resource is exhausted, and it becomes necessary, in order to raise\r\nmoney, to assign or mortgage some particular branch of the public revenue for\r\nthe payment of the debt, government has, upon different occasions, done this in\r\ntwo different ways. Sometimes it has made this assignment or mortgage for a\r\nshort period of time only, a year, or a few years, for example; and sometimes\r\nfor perpetuity. In the one case, the fund was supposed sufficient to pay,\r\nwithin the limited time, both principal and interest of the money borrowed. In\r\nthe other, it was supposed sufficient to pay the interest only, or a perpetual\r\nannuity equivalent to the interest, government being at liberty to redeem, at\r\nany time, this annuity, upon paying back the principal sum borrowed. When money\r\nwas raised in the one way, it was said to be raised by anticipation; when in\r\nthe other, by perpetual funding, or, more shortly, by funding.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, the annual land and malt taxes are regularly anticipated\r\nevery year, by virtue of a borrowing clause constantly inserted into the acts\r\nwhich impose them. The bank of England generally advances at an interest,\r\nwhich, since the Revolution, has varied from eight to three per cent., the sums\r\nof which those taxes are granted, and receives payment as their produce\r\ngradually comes in. If there is a deficiency, which there always is, it is\r\nprovided for in the supplies of the ensuing year. The only considerable branch\r\nof the public revenue which yet remains unmortgaged, is thus regularly spent\r\nbefore it comes in. Like an improvident spendthrift, whose pressing occasions\r\nwill not allow him to wait for the regular payment of his revenue, the state is\r\nin the constant practice of borrowing of its own factors and agents, and of\r\npaying interest for the use of its own money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the reign of king William, and during a great part of that of queen Anne,\r\nbefore we had become so familiar as we are now with the practice of perpetual\r\nfunding, the greater part of the new taxes were imposed but for a short period\r\nof time (for four, five, six, or seven years only), and a great part of the\r\ngrants of every year consisted in loans upon anticipations of the produce of\r\nthose taxes. The produce being frequently insufficient for paying, within the\r\nlimited term, the principal and interest of the money borrowed, deficiencies\r\narose; to make good which, it became necessary to prolong the term.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1697, by the 8th of William III., c. 20, the deficiencies of several taxes\r\nwere charged upon what was then called the first general mortgage or fund,\r\nconsisting of a prolongation to the first of August 1706, of several different\r\ntaxes, which would have expired within a shorter term, and of which the produce\r\nwas accumulated into one general fund. The deficiencies charged upon this\r\nprolonged term amounted to £5,160,459: 14: 9½.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1701, those duties, with some others, were still further prolonged, for the\r\nlike purposes, till the first of August 1710, and were called the second\r\ngeneral mortgage or fund. The deficiencies charged upon it amounted to\r\n£2,055,999: 7: 11½.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1707, those duties were still further prolonged, as a fund for new loans, to\r\nthe first of August 1712, and were called the third general mortgage or fund.\r\nThe sum borrowed upon it was £983,254:11:9¼.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1708, those duties were all (except the old subsidy of tonnage and poundage,\r\nof which one moiety only was made a part of this fund, and a duty upon the\r\nimportation of Scotch linen, which had been taken off by the articles of union)\r\nstill further continued, as a fund for new loans, to the first of August 1714,\r\nand were called the fourth general mortgage or fund. The sum borrowed upon it\r\nwas £925,176:9:2¼.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1709, those duties were all (except the old subsidy of tonnage and\r\npoundage, which was now left out of this fund altogether) still further\r\ncontinued, for the same purpose, to the first of August 1716, and were called\r\nthe fifth general mortgage or fund. The sum borrowed upon it was £922,029:6s.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1710, those duties were again prolonged to the first of August 1720, and\r\nwere called the sixth general mortgage or fund. The sum borrowed upon it was\r\n£1,296,552:9:11¾.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1711, the same duties (which at this time were thus subject to four\r\ndifferent anticipations), together with several others, were continued for\r\never, and made a fund for paying the interest of the capital of the South-sea\r\ncompany, which had that year advanced to government, for paying debts, and\r\nmaking good deficiencies, the sum of £9,177,967:15:4d, the greatest loan which\r\nat that time had ever been made.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBefore this period, the principal, so far as I have been able to observe, the\r\nonly taxes, which, in order to pay the interest of a debt, had been imposed for\r\nperpetuity, were those for paying the interest of the money which had been\r\nadvanced to government by the bank and East-India company, and of what it was\r\nexpected would be advanced, but which was never advanced, by a projected land\r\nbank. The bank fund at this time amounted to £3,375,027:17:10½, for which was\r\npaid an annuity or interest of £206,501:15:5d. The East-India fund amounted to\r\n£3,200,000, for which was paid an annuity or interest of £160,000; the bank\r\nfund being at six per cent., the East-India fund at five per cent. interest.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1715, by the first of George I., c. 12, the different taxes which had been\r\nmortgaged for paying the bank annuity, together with several others, which, by\r\nthis act, were likewise rendered perpetual, were accumulated into one common\r\nfund, called the aggregate fund, which was charged not only with the payment of\r\nthe bank annuity, but with several other annuities and burdens of different\r\nkinds. This fund was afterwards augmented by the third of George I., c.8., and\r\nby the fifth of George I., c. 3, and the different duties which were then added\r\nto it were likewise rendered perpetual.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn 1717, by the third of George I., c. 7, several other taxes were rendered\r\nperpetual, and accumulated into another common fund, called the general fund,\r\nfor the payment of certain annuities, amounting in the whole to £724,849:6:10½.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn consequence of those different acts, the greater part of the taxes, which\r\nbefore had been anticipated only for a short term of years were rendered\r\nperpetual, as a fund for paying, not the capital, but the interest only, of the\r\nmoney which had been borrowed upon them by different successive anticipations.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nHad money never been raised but by anticipation, the course of a few years\r\nwould have liberated the public revenue, without any other attention of\r\ngovernment besides that of not overloading the fund, by charging it with more\r\ndebt than it could pay within the limited term, and not of anticipating a\r\nsecond time before the expiration of the first anticipation. But the greater\r\npart of European governments have been incapable of those attentions. They have\r\nfrequently overloaded the fund, even upon the first anticipation; and when this\r\nhappened not to be the case, they have generally taken care to overload it, by\r\nanticipating a second and a third time, before the expiration of the first\r\nanticipation. The fund becoming in this manner altogether insufficient for\r\npaying both principal and interest of the money borrowed upon it, it became\r\nnecessary to charge it with the interest only, or a perpetual annuity equal to\r\nthe interest; and such improvident anticipations necessarily gave birth to the\r\nmore ruinous practice of perpetual funding. But though this practice\r\nnecessarily puts off the liberation of the public revenue from a fixed period,\r\nto one so indefinite that it is not very likely ever to arrive; yet, as a\r\ngreater sum can, in all cases, be raised by this new practice than by the old\r\none of anticipation, the former, when men have once become familiar with it,\r\nhas, in the great exigencies of the state, been universally preferred to the\r\nlatter. To relieve the present exigency, is always the object which principally\r\ninterests those immediately concerned in the administration of public affairs.\r\nThe future liberation of the public revenue they leave to the care of\r\nposterity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the reign of queen Anne, the market rate of interest had fallen from six\r\nto five per cent.; and, in the twelfth year of her reign, five per cent. was\r\ndeclared to be the highest rate which could lawfully be taken for money\r\nborrowed upon private security. Soon after the greater part of the temporary\r\ntaxes of Great Britain had been rendered perpetual, and distributed into the\r\naggregate, South-sea, and general funds, the creditors of the public, like\r\nthose of private persons, were induced to accept of five per cent. for the\r\ninterest of their money, which occasioned a saving of one per cent. upon the\r\ncapital of the greater part or the debts which had been thus funded for\r\nperpetuity, or of one-sixth of the greater part of the annuities which were\r\npaid out of the three great funds above mentioned. This saving left a\r\nconsiderable surplus in the produce of the different taxes which had been\r\naccumulated into those funds, over and above what was necessary for paying the\r\nannuities which were now charged upon them, and laid the foundation of what has\r\nsince been called the sinking fund. In 1717, it amounted to £523,454:7:7½. In\r\n1727, the interest of the greater part of the public debts was still further\r\nreduced to four per cent.; and, in 1753 and 1757, to three and a-half, and\r\nthree per cent., which reductions still further augmented the sinking fund.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA sinking fund, though instituted for the payment of old, facilitates very much\r\nthe contracting of new debts. It is a subsidiary fund, always at hand, to be\r\nmortgaged in aid of any other doubtful fund, upon which money is proposed to be\r\nraised in any exigency of the state. Whether the sinking fund of Great Britain\r\nhas been more frequently applied to the one or to the other of those two purposes,\r\nwill sufficiently appear by and by.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBesides those two methods of borrowing, by anticipations and by a perpetual\r\nfunding, there are two other methods, which hold a sort of middle place between\r\nthem; these are, that of borrowing upon annuities for terms of years, and that\r\nof borrowing upon annuities for lives.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the reigns of king William and queen Anne, large sums were frequently\r\nborrowed upon annuities for terms of years, which were sometimes longer and\r\nsometimes shorter. In 1695, an act was passed for borrowing one million upon an\r\nannuity of fourteen per cent., or £140,000 a-year, for sixteen years. In 1691,\r\nan act was passed for borrowing a million upon annuities for lives, upon terms\r\nwhich, in the present times, would appear very advantageous; but the\r\nsubscription was not filled up. In the following year, the deficiency was made\r\ngood, by borrowing upon annuities for lives, at fourteen per cent. or a little\r\nmore than seven years purchase. In 1695, the persons who had purchased those\r\nannuities were allowed to exchange them for others of ninety-six years, upon\r\npaying into the exchequer sixty-three pounds in the hundred; that is, the\r\ndifference between fourteen per cent. for life, and fourteen per cent. for\r\nninety-six years, was sold for sixty-three pounds, or for four and a-half years\r\npurchase. Such was the supposed instability of government, that even these\r\nterms procured few purchasers. In the reign of queen Anne, money was, upon\r\ndifferent occasions, borrowed both upon annuities for lives, and upon annuities\r\nfor terms of thirty-two, of eighty-nine, of ninety-eight, and of ninety-nine\r\nyears. In 1719, the proprietors of the annuities for thirty-two years were\r\ninduced to accept, in lieu of them, South-sea stock to the amount of eleven and\r\na-half years purchase of the annuities, together with an additional quantity of\r\nstock, equal to the arrears which happened then to be due upon them. In 1720,\r\nthe greater part of the other annuities for terms of years, both long and\r\nshort, were subscribed into the same fund. The long annuities, at that time,\r\namounted to £666,821: 8:3½ a-year. On the 5th of January 1775, the remainder of\r\nthem, or what was not subscribed at that time, amounted only to £136,453:12:8d.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the two wars which began in 1739 and in 1755, little money was borrowed,\r\neither upon annuities for terms of years, or upon those for lives. An annuity\r\nfor ninety-eight or ninety-nine years, however, is worth nearly as much as a\r\nperpetuity, and should therefore, one might think, be a fund for borrowing\r\nnearly as much. But those who, in order to make family settlements, and to\r\nprovide for remote futurity, buy into the public stocks, would not care to\r\npurchase into one of which the value was continually diminishing; and such\r\npeople make a very considerable proportion, both of the proprietors and\r\npurchasers of stock. An annuity for a long term of years, therefore, though its\r\nintrinsic value may be very nearly the same with that of a perpetual annuity,\r\nwill not find nearly the same number of purchasers. The subscribers to a new\r\nloan, who mean generally to sell their subscription as soon as possible, prefer\r\ngreatly a perpetual annuity, redeemable by parliament, to an irredeemable\r\nannuity, for a long term of years, of only equal amount. The value of the\r\nformer may be supposed always the same, or very nearly the same; and it makes,\r\ntherefore, a more convenient transferable stock than the latter.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the two last-mentioned wars, annuities, either for terms of years or for\r\nlives, were seldom granted, but as premiums to the subscribers of a new loan,\r\nover and above the redeemable annuity or interest, upon the credit of which the\r\nloan was supposed to be made. They were granted, not as the proper fund upon\r\nwhich the money was borrowed, but as an additional encouragement to the lender.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAnnuities for lives have occasionally been granted in two different ways;\r\neither upon separate lives, or upon lots of lives, which, in French, are called\r\ntontines, from the name of their inventor. When annuities are granted upon\r\nseparate lives, the death of every individual annuitant disburdens the public\r\nrevenue, so far as it was affected by his annuity. When annuities are granted\r\nupon tontines, the liberation of the public revenue does not commence till the\r\ndeath of all the annuitants comprehended in one lot, which may sometimes\r\nconsist of twenty or thirty persons, of whom the survivors succeed to the\r\nannuities of all those who die before them; the last survivor succeeding to the\r\nannuities of the whole lot. Upon the same revenue, more money can always be\r\nraised by tontines than by annuities for separate lives. An annuity, with a\r\nright of survivorship, is really worth more than an equal annuity for a\r\nseparate life; and, from the confidence which every man naturally has in his\r\nown good fortune, the principle upon which is founded the success of all\r\nlotteries, such an annuity generally sells for something more than it is worth.\r\nIn countries where it is usual for government to raise money by granting\r\nannuities, tontines are, upon this account, generally preferred to annuities\r\nfor separate lives. The expedient which will raise most money, is almost always\r\npreferred to that which is likely to bring about, in the speediest manner, the\r\nliberation of the public revenue.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, a much greater proportion of the public debts consists in annuities\r\nfor lives than in England. According to a memoir presented by the parliament of\r\nBourdeaux to the king, in 1764, the whole public debt of France is estimated at\r\ntwenty-four hundred millions of livres; of which the capital, for which\r\nannuities for lives had been granted, is supposed to amount to three hundred\r\nmillions, the eighth part of the whole public debt. The annuities themselves\r\nare computed to amount to thirty millions a-year, the fourth part of one\r\nhundred and twenty millions, the supposed interest of that whole debt. These\r\nestimations, I know very well, are not exact; but having been presented by so\r\nvery respectable a body as approximations to the truth, they may, I apprehend,\r\nbe considered as such. It is not the different degrees of anxiety in the two\r\ngovernments of France and England for the liberation of the public revenue,\r\nwhich occasions this difference in their respective modes of borrowing; it\r\narises altogether from the different views and interests of the lenders.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn England, the seat of government being in the greatest mercantile city in the\r\nworld, the merchants are generally the people who advance money to government.\r\nBy advancing it, they do not mean to diminish, but, on the contrary, to\r\nincrease their mercantile capitals; and unless they expected to sell, with some\r\nprofit, their share in the subscription for a new loan, they never would\r\nsubscribe. But if, by advancing their money, they were to purchase, instead of\r\nperpetual annuities, annuities for lives only, whether their own or those of\r\nother people, they would not always be so likely to sell them with a profit.\r\nAnnuities upon their own lives they would always sell with loss; because no man\r\nwill give for an annuity upon the life of another, whose age and state of\r\nhealth are nearly the same with his own, the same price which he would give for\r\none upon his own. An annuity upon the life of a third person, indeed, is, no\r\ndoubt, of equal value to the buyer and the seller; but its real value begins to\r\ndiminish from the moment it is granted, and continues to do so, more and more,\r\nas long as it subsists. It can never, therefore, make so convenient a\r\ntransferable stock as a perpetual annuity, of which the real value may be\r\nsupposed always the same, or very nearly the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn France, the seat of government not being in a great mercantile city,\r\nmerchants do not make so great a proportion of the people who advance money to\r\ngovernment. The people concerned in the finances, the farmers-general, the\r\nreceivers of the taxes which are not in farm, the court-bankers, etc. make the\r\ngreater part of those who advance their money in all public exigencies. Such\r\npeople are commonly men of mean birth, but of great wealth, and frequently of\r\ngreat pride. They are too proud to marry their equals, and women of quality\r\ndisdain to marry them. They frequently resolve, therefore, to live bachelors;\r\nand having neither any families of their own, nor much regard for those of\r\ntheir relations, whom they are not always very fond of acknowledging, they\r\ndesire only to live in splendour during their own time, and are not unwilling\r\nthat their fortune should end with themselves. The number of rich people,\r\nbesides, who are either averse to marry, or whose condition of life renders it\r\neither improper or inconvenient for them to do so, is much greater in France\r\nthan in England. To such people, who have little or no care for posterity,\r\nnothing can be more convenient than to exchange their capital for a revenue,\r\nwhich is to last just as long, and no longer, than they wish it to do.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe ordinary expense of the greater part of modern governments, in time of\r\npeace, being equal, or nearly equal, to their ordinary revenue, when war comes,\r\nthey are both unwilling and unable to increase their revenue in proportion to\r\nthe increase of their expense. They are unwilling, for fear of offending the\r\npeople, who, by so great and so sudden an increase of taxes, would soon be\r\ndisgusted with the war; and they are unable, from not well knowing what taxes\r\nwould be sufficient to produce the revenue wanted. The facility of borrowing\r\ndelivers them from the embarrassment which this fear and inability would\r\notherwise occasion. By means of borrowing, they are enabled, with a very\r\nmoderate increase of taxes, to raise, from year to year, money sufficient for\r\ncarrying on the war; and by the practice of perpetual funding, they are\r\nenabled, with the smallest possible increase of taxes, to raise annually the\r\nlargest possible sum of money. In great empires, the people who live in the\r\ncapital, and in the provinces remote from the scene of action, feel, many of\r\nthem, scarce any inconveniency from the war, but enjoy, at their ease, the\r\namusement of reading in the newspapers the exploits of their own fleets and\r\narmies. To them this amusement compensates the small difference between the\r\ntaxes which they pay on account of the war, and those which they had been\r\naccustomed to pay in time of peace. They are commonly dissatisfied with the\r\nreturn of peace, which puts an end to their amusement, and to a thousand\r\nvisionary hopes of conquest and national glory, from a longer continuance of\r\nthe war.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe return of peace, indeed, seldom relieves them from the greater part of the\r\ntaxes imposed during the war. These are mortgaged for the interest of the debt\r\ncontracted, in order to carry it on. If, over and above paying the interest of\r\nthis debt, and defraying the ordinary expense of government, the old revenue,\r\ntogether with the new taxes, produce some surplus revenue, it may, perhaps, be\r\nconverted into a sinking fund for paying off the debt. But, in the first place,\r\nthis sinking fund, even supposing it should be applied to no other purpose, is\r\ngenerally altogether inadequate for paying, in the course of any period during\r\nwhich it can reasonably be expected that peace should continue, the whole debt\r\ncontracted during the war; and, in the second place, this fund is almost always\r\napplied to other purposes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe new taxes were imposed for the sole purpose of paying the interest of the\r\nmoney borrowed upon them. If they produce more, it is generally something which\r\nwas neither intended nor expected, and is, therefore, seldom very considerable.\r\nSinking funds have generally arisen, not so much from any surplus of the taxes\r\nwhich was over and above what was necessary for paying the interest or annuity\r\noriginally charged upon them, as from a subsequent reduction of that interest;\r\nthat of Holland in 1655, and that of the ecclesiastical state in 1685, were\r\nboth formed in this manner. Hence the usual insufficiency of such funds.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the most profound peace, various events occur, which require an\r\nextraordinary expense; and government finds it always more convenient to defray\r\nthis expense by misapplying the sinking fund, than by imposing a new tax. Every\r\nnew tax is immediately felt more or less by the people. It occasions always\r\nsome murmur, and meets with some opposition. The more taxes may have been\r\nmultiplied, the higher they may have been raised upon every different subject\r\nof taxation; the more loudly the people complain of every new tax, the more\r\ndifficult it becomes, too, either to find out new subjects of taxation, or to\r\nraise much higher the taxes already imposed upon the old. A momentary\r\nsuspension of the payment of debt is not immediately felt by the people, and\r\noccasions neither murmur nor complaint. To borrow of the sinking fund is always\r\nan obvious and easy expedient for getting out of the present difficulty. The\r\nmore the public debts may have been accumulated, the more necessary it may have\r\nbecome to study to reduce them; the more dangerous, the more ruinous it may be\r\nto misapply any part of the sinking fund; the less likely is the public debt to\r\nbe reduced to any considerable degree, the more likely, the more certainly, is\r\nthe sinking fund to be misapplied towards defraying all the extraordinary\r\nexpenses which occur in time of peace. When a nation is already overburdened\r\nwith taxes, nothing but the necessities of a new war, nothing but either the\r\nanimosity of national vengeance, or the anxiety for national security, can\r\ninduce the people to submit, with tolerable patience, to a new tax. Hence the\r\nusual misapplication of the sinking fund.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn Great Britain, from the time that we had first recourse to the ruinous\r\nexpedient of perpetual funding, the reduction of the public debt, in time of\r\npeace, has never borne any proportion to its accumulation in time of war. It\r\nwas in the war which began in 1668, and was concluded by the treaty of Ryswick,\r\nin 1697, that the foundation of the present enormous debt of Great Britain was\r\nfirst laid.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOn the 31st of December 1697, the public debts of Great Britain, funded and\r\nunfunded, amounted to £21,515,742:13:8½. A great part of those debts had been\r\ncontracted upon short anticipations, and some part upon annuities for lives; so\r\nthat, before the 31st of December 1701, in less than four years, there had\r\npartly been paid off; and partly reverted to the public, the sum of\r\n£5,121,041:12:0¾d; a greater reduction of the public debt than has ever since\r\nbeen brought about in so short a period of time. The remaining debt, therefore,\r\namounted only to £16,394,701:1:7¼d.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the war which began in 1702, and which was concluded by the treaty of\r\nUtrecht, the public debts were still more accumulated. On the 31st of December\r\n1714, they amounted to £53,681,076:5:6½. The subscription into the South-sea\r\nfund, of the short and long annuities, increased the capital of the public\r\ndebt; so that, on the 31st of December 1722, it amounted to £55,282,978:1:3\r\n5/6. The reduction of the debt began in 1723, and went on so slowly, that, on\r\nthe 31st of December 1739, during seventeen years-of profound peace, the whole\r\nsum paid off was no more than £8,328,554:17:11 3/12, the capital of the public\r\ndebt, at that time, amounting to £46,954,623:3:4 7/12.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Spanish war, which began in 1739, and the French war which soon followed\r\nit, occasioned a further increase of the debt, which, on the 31st of December\r\n1748, after the war had been concluded by the treaty of Aix-la-Chapelle,\r\namounted to £78,293,313:1:10¾. The most profound peace, of 17 years\r\ncontinuance, had taken no more than £8,328,354, 17:11¼ from it. A war, of less\r\nthan nine years continuance, added £31,338,689:18: 6 1/6 to it. {See James\r\nPostlethwaite’s History of the Public Revenue.}\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nDuring the administration of Mr. Pelham, the interest of the public debt was\r\nreduced, or at least measures were taken for reducing it, from four to three\r\nper cent.; the sinking fund was increased, and some part of the public debt was\r\npaid off. In 1755, before the breaking out of the late war, the funded debt of\r\nGreat Britain amounted to £72,289,675. On the 5th of January 1763, at the\r\nconclusion of the peace, the funded debt amounted debt to £122,603,336:8:2¼.\r\nThe unfunded debt has been stated at £13,927,589:2:2. But the expense\r\noccasioned by the war did not end with the conclusion of the peace; so that,\r\nthough on the 5th of January 1764, the funded debt was increased (partly by a\r\nnew loan, and partly by funding a part of the unfunded debt) to\r\n£129,586,789:10:1¾, there still remained (according to the very well informed\r\nauthor of Considerations on the Trade and Finances of Great Britain) an\r\nunfunded debt, which was brought to account in that and the following year, of\r\n£9,975,017: 12:2 15/44d. In 1764, therefore, the public debt of Great Britain,\r\nfunded and unfunded together, amounted, according to this author, to\r\n£139,561,807:2:4. The annuities for lives, too, which had been granted as\r\npremiums to the subscribers to the new loans in 1757, estimated at fourteen\r\nyears purchase, were valued at £472,500; and the annuities for long terms of\r\nyears, granted as premiums likewise, in 1761 and 1762, estimated at\r\ntwenty-seven and a-half years purchase, were valued at £6,826,875. During a\r\npeace of about seven years continuance, the prudent and truly patriotic\r\nadministration of Mr. Pelham was not able to pay off an old debt of six\r\nmillions. During a war of nearly the same continuance, a new debt of more than\r\nseventy-five millions was contracted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nOn the 5th of January 1775, the funded debt of Great Britain amounted to\r\n£124,996,086, 1:6¼d. The unfunded, exclusive of a large civil-list debt, to\r\n£4,150,236:3:11 7/8. Both together, to £129,146,322:5:6. According to this\r\naccount, the whole debt paid off, during eleven years of profound peace,\r\namounted only to £10,415,476:16:9 7/8. Even this small reduction of debt,\r\nhowever, has not been all made from the savings out of the ordinary revenue of\r\nthe state. Several extraneous sums, altogether independent of that ordinary\r\nrevenue, have contributed towards it. Amongst these we may reckon an additional\r\nshilling in the pound land tax, for three years; the two millions received from\r\nthe East-India company, as indemnification for their territorial acquisitions;\r\nand the one hundred and ten thousand pounds received from the bank for the\r\nrenewal of their charter. To these must be added several other sums, which, as\r\nthey arose out of the late war, ought perhaps to be considered as deductions\r\nfrom the expenses of it. The principal are,\r\n\u003c/p\u003e\r\n\r\n\u003cdiv class=\u0027pre\u0027\u003e\r\n The produce of French prizes………….. £690,449: 18: 9\r\n Composition for French prisoners……… 670,000: 0: 0\r\n\r\n What has been received from the sale\r\n of the ceded islands……………………. 95,500: 0: 0\r\n\r\n Total, ……………………………….£1,455,949: 18: 9\r\n\u003c/div\u003e\r\n\r\n\u003cp\u003e\r\nIf we add to this sum the balance of the earl of Chatham’s and Mr.\r\nCalcraft’s accounts, and other army savings of the same kind, together\r\nwith what has been received from the bank, the East-India company, and the\r\nadditional shilling in the pound land tax, the whole must be a good deal more\r\nthan five millions. The debt, therefore, which, since the peace, has been paid\r\nout of the savings from the ordinary revenue of the state, has not, one year\r\nwith another, amounted to half a million a-year. The sinking fund has, no\r\ndoubt, been considerably augmented since the peace, by the debt which had been\r\npaid off, by the reduction of the redeemable four per cents to three per cents,\r\nand by the annuities for lives which have fallen in; and, if peace were to\r\ncontinue, a million, perhaps, might now be annually spared out of it towards\r\nthe discharge of the debt. Another million, accordingly, was paid in the course\r\nof last year; but at the same time, a large civil-list debt was left unpaid,\r\nand we are now involved in a new war, which, in its progress, may prove as\r\nexpensive as any of our former wars. {It has proved more expensive than any one\r\nof our former wars, and has involved us in an additional debt of more than one\r\nhundred millions. During a profound peace of eleven years, little more than ten\r\nmillions of debt was paid; during a war of seven years, more than one hundred\r\nmillions was contracted.} The new debt which will probably be contracted before\r\nthe end of the next campaign, may, perhaps, be nearly equal to all the old debt\r\nwhich has been paid off from the savings out of the ordinary revenue of the\r\nstate. It would be altogether chimerical, therefore, to expect that the public\r\ndebt should ever be completely discharged, by any savings which are likely to\r\nbe made from that ordinary revenue as it stands at present.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe public funds of the different indebted nations of Europe, particularly\r\nthose of England, have, by one author, been represented as the accumulation of\r\na great capital, superadded to the other capital of the country, by means of\r\nwhich its trade is extended, its manufactures are multiplied, and its lands\r\ncultivated and improved, much beyond what they could have been by means of that\r\nother capital only. He does not consider that the capital which the first\r\ncreditors of the public advanced to government, was, from the moment in which\r\nhe advanced it, a certain portion of the annual produce, turned away from\r\nserving in the function of a capital, to serve in that of a revenue; from\r\nmaintaining productive labourers, to maintain unproductive ones, and to be\r\nspent and wasted, generally in the course of the year, without even the hope of\r\nany future reproduction. In return for the capital which they advanced, they\r\nobtained, indeed, an annuity of the public funds, in most cases, of more than\r\nequal value. This annuity, no doubt, replaced to them their capital, and\r\nenabled them to carry on their trade and business to the same, or, perhaps, to\r\na greater extent than before; that is, they were enabled, either to borrow of\r\nother people a new capital, upon the credit of this annuity or, by selling it,\r\nto get from other people a new capital of their own, equal, or superior, to\r\nthat which they had advanced to government. This new capital, however, which\r\nthey in this manner either bought or borrowed of other people, must have\r\nexisted in the country before, and must have been employed, as all capitals\r\nare, in maintaining productive labour. When it came into the hands of those who\r\nhad advanced their money to government, though it was, in some respects, a new\r\ncapital to them, it was not so to the country, but was only a capital withdrawn\r\nfrom certain employments, in order to be turned towards others. Though it\r\nreplaced to them what they had advanced to government, it did not replace it to\r\nthe country. Had they not advanced this capital to government, there would have\r\nbeen in the country two capitals, two portions of the annual produce, instead\r\nof one, employed in maintaining productive labour.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, for defraying the expense of government, a revenue is raised within the\r\nyear, from the produce of free or unmortgaged taxes, a certain portion of the\r\nrevenue of private people is only turned away from maintaining one species of\r\nunproductive labour, towards maintaining another. Some part of what they pay in\r\nthose taxes, might, no doubt, have been accumulated into capital, and\r\nconsequently employed in maintaining productive labour; but the greater part\r\nwould probably have been spent, and consequently employed in maintaining\r\nunproductive labour. The public expense, however, when defrayed in this manner,\r\nno doubt hinders, more or less, the further accumulation of new capital; but it\r\ndoes not necessarily occasion the destruction of any actually-existing capital.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen the public expense is defrayed by funding, it is defrayed by the annual\r\ndestruction of some capital which had before existed in the country; by the\r\nperversion of some portion of the annual produce which had before been destined\r\nfor the maintenance of productive labour, towards that of unproductive labour.\r\nAs in this case, however, the taxes are lighter than they would have been, had\r\na revenue sufficient for defraying the same expense been raised within the\r\nyear; the private revenue of individuals is necessarily less burdened, and\r\nconsequently their ability to save and accumulate some part of that revenue\r\ninto capital, is a good deal less impaired. If the method of funding destroys\r\nmore old capital, it, at the same time, hinders less the accumulation or\r\nacquisition of new capital, than that of defraying the public expense by a\r\nrevenue raised within the year. Under the system of funding, the frugality and\r\nindustry of private people can more easily repair the breaches which the waste\r\nand extravagance of government may occasionally make in the general capital of\r\nthe society.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is only during the continuance of war, however, that the system of funding\r\nhas this advantage over the other system. Were the expense of war to be\r\ndefrayed always by a revenue raised within the year, the taxes from which that\r\nextraordinary revenue was drawn would last no longer than the war. The ability\r\nof private people to accumulate, though less during the war, would have been\r\ngreater during the peace, than under the system of funding. War would not\r\nnecessarily have occasioned the destruction of any old capitals, and peace\r\nwould have occasioned the accumulation of many more new. Wars would, in\r\ngeneral, be more speedily concluded, and less wantonly undertaken. The people\r\nfeeling, during continuance of war, the complete burden of it, would soon grow\r\nweary of it; and government, in order to humour them, would not be under the\r\nnecessity of carrying it on longer than it was necessary to do so. The\r\nforesight of the heavy and unavoidable burdens of war would hinder the people\r\nfrom wantonly calling for it when there was no real or solid interest to fight\r\nfor. The seasons during which the ability of private people to accumulate was\r\nsomewhat impaired, would occur more rarely, and be of shorter continuance.\r\nThose, on the contrary, during which that ability was in the highest vigour\r\nwould be of much longer duration than they can well be under the system of\r\nfunding.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen funding, besides, has made a certain progress, the multiplication of taxes\r\nwhich it brings along with it, sometimes impairs as much the ability of private\r\npeople to accumulate, even in time of peace, as the other system would in time\r\nof war. The peace revenue of Great Britain amounts at present to more than ten\r\nmillions a-year. If free and unmortgaged, it might be sufficient, with proper\r\nmanagement, and without contracting a shilling of new debt, to carry on the\r\nmost vigorous war. The private revenue of the inhabitants of Great Britain is\r\nat present as much incumbered in time of peace, their ability to accumulate is\r\nas much impaired, as it would have been in the time of the most expensive war,\r\nhad the pernicious system of funding never been adopted.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the payment of the interest of the public debt, it has been said, it is the\r\nright hand which pays the left. The money does not go out of the country. It is\r\nonly a part of the revenue of one set of the inhabitants which is transferred\r\nto another; and the nation is not a farthing the poorer. This apology is\r\nfounded altogether in the sophistry of the mercantile system; and, after the\r\nlong examination which I have already bestowed upon that system, it may,\r\nperhaps, be unnecessary to say anything further about it. It supposes, besides,\r\nthat the whole public debt is owing to the inhabitants of the country, which\r\nhappens not to be true; the Dutch, as well as several other foreign nations,\r\nhaving a very considerable share in our public funds. But though the whole debt\r\nwere owing to the inhabitants of the country, it would not, upon that account,\r\nbe less pernicious.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nLand and capital stock are the two original sources of all revenue, both\r\nprivate and public. Capital stock pays the wages of productive labour, whether\r\nemployed in agriculture, manufactures, or commerce. The management of those two\r\noriginal sources of revenue belongs to two different sets of people; the\r\nproprietors of land, and the owners or employers of capital stock.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe proprietor of land is interested, for the sake of his own revenue, to keep\r\nhis estate in as good condition as he can, by building and repairing his\r\ntenants houses, by making and maintaining the necessary drains and inclosures,\r\nand all those other expensive improvements which it properly belongs to the\r\nlandlord to make and maintain. But, by different land taxes, the revenue of the\r\nlandlord may be so much diminished, and, by different duties upon the\r\nnecessaries and conveniencies of life, that diminished revenue may be rendered\r\nof so little real value, that he may find himself altogether unable to make or\r\nmaintain those expensive improvements. When the landlord, however, ceases to do\r\nhis part, it is altogether impossible that the tenant should continue to do\r\nhis. As the distress of the landlord increases, the agriculture of the country\r\nmust necessarily decline.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen, by different taxes upon the necessaries and conveniencies of life, the\r\nowners and employers of capital stock find, that whatever revenue they derive\r\nfrom it, will not, in a particular country, purchase the same quantity of those\r\nnecessaries and conveniencies which an equal revenue would in almost any other,\r\nthey will be disposed to remove to some other. And when, in order to raise\r\nthose taxes, all or the greater part of merchants and manufacturers, that is,\r\nall or the greater part of the employers of great capitals, come to be\r\ncontinually exposed to the mortifying and vexatious visits of the\r\ntax-gatherers, this disposition to remove will soon be changed into an actual\r\nremoving. The industry of the country will necessarily fall with the removal of\r\nthe capital which supported it, and the ruin of trade and manufactures will\r\nfollow the declension of agriculture.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nTo transfer from the owners of those two great sources of revenue, land, and\r\ncapital stock, from the persons immediately interested in the good condition of\r\nevery particular portion of land, and in the good management of every\r\nparticular portion of capital stock, to another set of persons (the creditors\r\nof the public, who have no such particular interest), the greater part of the\r\nrevenue arising from either, must, in the long-run, occasion both the neglect\r\nof land, and the waste or removal of capital stock. A creditor of the public\r\nhas, no doubt, a general interest in the prosperity of the agriculture,\r\nmanufactures, and commerce of the country; and consequently in the good\r\ncondition of its land, and in the good management of its capital stock. Should\r\nthere be any general failure or declension in any of these things, the produce\r\nof the different taxes might no longer be sufficient to pay him the annuity or\r\ninterest which is due to him. But a creditor of the public, considered merely\r\nas such, has no interest in the good condition of any particular portion of\r\nland, or in the good management of any particular portion of capital stock. As\r\na creditor of the public, he has no knowledge of any such particular portion.\r\nHe has no inspection of it. He can have no care about it. Its ruin may in some\r\ncases be unknown to him, and cannot directly affect him.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe practice of funding has gradually enfeebled every state which has adopted\r\nit. The Italian republics seem to have begun it. Genoa and Venice, the only two\r\nremaining which can pretend to an independent existence, have both been\r\nenfeebled by it. Spain seems to have learned the practice from the Italian\r\nrepublics, and (its taxes being probably less judicious than theirs) it has, in\r\nproportion to its natural strength, been-still more enfeebled. The debts of\r\nSpain are of very old standing. It was deeply in debt before the end of the\r\nsixteenth century, about a hundred years before England owed a shilling.\r\nFrance, notwithstanding all its natural resources, languishes under an\r\noppressive load of the same kind. The republic of the United Provinces is as\r\nmuch enfeebled by its debts as either Genoa or Venice. Is it likely that, in\r\nGreat Britain alone, a practice, which has brought either weakness or\r\ndissolution into every other country, should prove altogether innocent?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe system of taxation established in those different countries, it may be\r\nsaid, is inferior to that of England. I believe it is so. But it ought to be\r\nremembered, that when the wisest government has exhausted all the proper\r\nsubjects of taxation, it must, in cases of urgent necessity, have recourse to\r\nimproper ones. The wise republic of Holland has, upon some occasions, been\r\nobliged to have recourse to taxes as inconvenient as the greater part of those\r\nof Spain. Another war, begun before any considerable liberation of the public\r\nrevenue had been brought about, and growing in its progress as expensive as the\r\nlast war, may, from irresistible necessity, render the British system of\r\ntaxation as oppressive as that of Holland, or even as that of Spain. To the\r\nhonour of our present system of taxation, indeed, it has hitherto given so\r\nlittle embarrassment to industry, that, during the course even of the most\r\nexpensive wars, the frugality and good conduct of individuals seem to have been\r\nable, by saving and accumulation, to repair all the breaches which the waste\r\nand extravagance of government had made in the general capital of the society.\r\nAt the conclusion of the late war, the most expensive that Great Britain ever\r\nwaged, her agriculture was as flourishing, her manufacturers as numerous and as\r\nfully employed, and her commerce as extensive, as they had ever been before.\r\nThe capital, therefore, which supported all those different branches of\r\nindustry, must have been equal to what it had ever been before. Since the\r\npeace, agriculture has been still further improved; the rents of houses have\r\nrisen in every town and village of the country, a proof of the increasing\r\nwealth and revenue of the people; and the annual amount of the greater part of\r\nthe old taxes, of the principal branches of the excise and customs, in\r\nparticular, has been continually increasing, an equally clear proof of an\r\nincreasing consumption, and consequently of an increasing produce, which could\r\nalone support that consumption. Great Britain seems to support with ease, a\r\nburden which, half a century ago, nobody believed her capable of supporting,\r\nLet us not, however, upon this account, rashly conclude that she is capable of\r\nsupporting any burden; nor even be too confident that she could support,\r\nwithout great distress, a burden a little greater than what has already been\r\nlaid upon her.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhen national debts have once been accumulated to a certain degree, there is\r\nscarce, I believe, a single instance of their having been fairly and completely\r\npaid. The liberation of the public revenue, if it has ever been brought about\r\nat all, has always been brought about by a bankruptcy; sometimes by an avowed\r\none, though frequently by a pretended payment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe raising of the denomination of the coin has been the most usual expedient\r\nby which a real public bankruptcy has been disguised under the appearance of a\r\npretended payment. If a sixpence, for example, should, either by act of\r\nparliament or royal proclamation, be raised to the denomination of a shilling,\r\nand twenty sixpences to that of a pound sterling; the person who, under the old\r\ndenomination, had borrowed twenty shillings, or near four ounces of silver,\r\nwould, under the new, pay with twenty sixpences, or with something less than\r\ntwo ounces. A national debt of about a hundred and twenty-eight millions, near\r\nthe capital of the funded and unfunded debt of Great Britain, might, in this\r\nmanner, be paid with about sixty-four millions of our present money. It would,\r\nindeed, be a pretended payment only, and the creditors of the public would\r\nreally be defrauded of ten shillings in the pound of what was due to them. The\r\ncalamity, too, would extend much further than to the creditors of the public,\r\nand those of every private person would suffer a proportionable loss; and this\r\nwithout any advantage, but in most cases with a great additional loss, to the\r\ncreditors of the public. If the creditors of the public, indeed, were generally\r\nmuch in debt to other people, they might in some measure compensate their loss\r\nby paying their creditors in the same coin in which the public had paid them.\r\nBut in most countries, the creditors of the public are, the greater part of\r\nthem, wealthy people, who stand more in the relation of creditors than in that\r\nof debtors, towards the rest of their fellow citizens. A pretended payment of\r\nthis kind, therefore, instead of alleviating, aggravates, in most cases, the\r\nloss of the creditors of the public; and, without any advantage to the public,\r\nextends the calamity to a great number of other innocent people. It occasions a\r\ngeneral and most pernicious subversion of the fortunes of private people;\r\nenriching, in most cases, the idle and profuse debtor, at the expense of the\r\nindustrious and frugal creditor; and transporting a great part of the national\r\ncapital from the hands which were likely to increase and improve it, to those\r\nwho are likely to dissipate and destroy it. When it becomes necessary for a\r\nstate to declare itself bankrupt, in the same manner as when it becomes\r\nnecessary for an individual to do so, a fair, open, and avowed bankruptcy, is\r\nalways the measure which is both least dishonourable to the debtor, and least\r\nhurtful to the creditor. The honour of a state is surely very poorly provided\r\nfor, when, in order to cover the disgrace of a real bankruptcy, it has recourse\r\nto a juggling trick of this kind, so easily seen through, and at the same time\r\nso extremely pernicious.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAlmost all states, however, ancient as well as modern, when reduced to this\r\nnecessity, have, upon some occasions, played this very juggling trick. The\r\nRomans, at the end of the first Punic war, reduced the As, the coin or\r\ndenomination by which they computed the value of all their other coins, from\r\ncontaining twelve ounces of copper, to contain only two ounces; that is, they\r\nraised two ounces of copper to a denomination which had always before expressed\r\nthe value of twelve ounces. The republic was, in this manner, enabled to pay\r\nthe great debts which it had contracted with the sixth part of what it really\r\nowed. So sudden and so great a bankruptcy, we should in the present times be\r\napt to imagine, must have occasioned a very violent popular clamour. It does\r\nnot appear to have occasioned any. The law which enacted it was, like all other\r\nlaws relating to the coin, introduced and carried through the assembly of the\r\npeople by a tribune, and was probably a very popular law. In Rome, as in all\r\nother ancient republics, the poor people were constantly in debt to the rich\r\nand the great, who, in order to secure their votes at the annual elections,\r\nused to lend them money at exorbitant interest, which, being never paid, soon\r\naccumulated into a sum too great either for the debtor to pay, or for any body\r\nelse to pay for him. The debtor, for fear of a very severe execution, was\r\nobliged, without any further gratuity, to vote for the candidate whom the\r\ncreditor recommended. In spite of all the laws against bribery and corruption,\r\nthe bounty of the candidates, together with the occasional distributions of\r\ncoin which were ordered by the senate, were the principal funds from which,\r\nduring the latter times of the Roman republic, the poorer citizens derived\r\ntheir subsistence. To deliver themselves from this subjection to their\r\ncreditors, the poorer citizens were continually calling out, either for an\r\nentire abolition of debts, or for what they called new tables; that is, for a\r\nlaw which should entitle them to a complete acquittance, upon paying only a\r\ncertain proportion of their accumulated debts. The law which reduced the coin\r\nof all denominations to a sixth part of its former value, as it enabled them to\r\npay their debts with a sixth part of what they really owed, was equivalent to\r\nthe most advantageous new tables. In order to satisfy the people, the rich and\r\nthe great were, upon several different occasions, obliged to consent to laws,\r\nboth for abolishing debts, and for introducing new tables; and they probably\r\nwere induced to consent to this law, partly for the same reason, and partly\r\nthat, by liberating the public revenue, they might restore vigour to that\r\ngovernment, of which they themselves had the principal direction. An operation\r\nof this kind would at once reduce a debt of £128,000,000 to £21,333,333:6:8. In\r\nthe course of the second Punic war, the As was still further reduced, first,\r\nfrom two ounces of copper to one ounce, and afterwards from one ounce to half\r\nan ounce; that is, to the twenty-fourth part of its original value. By\r\ncombining the three Roman operations into one, a debt of a hundred and\r\ntwenty-eight millions of our present money, might in this manner be reduced all\r\nat once to a debt of £5,333,333:6:8. Even the enormous debt of Great Britain\r\nmight in this manner soon be paid.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy means of such expedients, the coin of, I believe, all nations, has been\r\ngradually reduced more and more below its original value, and the same nominal\r\nsum has been gradually brought to contain a smaller and a smaller quantity of\r\nsilver.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNations have sometimes, for the same purpose, adulterated the standard of their\r\ncoin; that is, have mixed a greater quantity of alloy in it. If in the pound\r\nweight of our silver coin, for example, instead of eighteen penny-weight,\r\naccording to the present standard, there were mixed eight ounces of alloy; a\r\npound sterling, or twenty shillings of such coin, would be worth little more\r\nthan six shillings and eightpence of our present money. The quantity of silver\r\ncontained in six shillings and eightpence of our present money, would thus be\r\nraised very nearly to the denomination of a pound sterling. The adulteration of\r\nthe standard has exactly the same effect with what the French call an\r\naugmentation, or a direct raising of the denomination of the coin.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nAn augmentation, or a direct raising of the denomination of the coin, always\r\nis, and from its nature must be, an open and avowed operation. By means of it,\r\npieces of a smaller weight and bulk are called by the same name, which had\r\nbefore been given to pieces of a greater weight and bulk. The adulteration of\r\nthe standard, on the contrary, has generally been a concealed operation. By\r\nmeans of it, pieces are issued from the mint, of the same denomination, and, as\r\nnearly as could be contrived, of the same weight, bulk, and appearance, with\r\npieces which had been current before of much greater value. When king John of\r\nFrance, {See Du Cange Glossary, voce Moneta; the Benedictine Edition.} in order\r\nto pay his debts, adulterated his coin, all the officers of his mint were sworn\r\nto secrecy. Both operations are unjust. But a simple augmentation is an\r\ninjustice of open violence; whereas an adulteration is an injustice of\r\ntreacherous fraud. This latter operation, therefore, as soon as it has been\r\ndiscovered, and it could never be concealed very long, has always excited much\r\ngreater indignation than the former. The coin, after any considerable\r\naugmentation, has very seldom been brought back to its former weight; but after\r\nthe greatest adulterations, it has almost always been brought back to its\r\nformer fineness. It has scarce ever happened, that the fury and indignation of\r\nthe people could otherwise be appeased.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the end of the reign of Henry VIII., and in the beginning of that of Edward\r\nVI., the English coin was not only raised in its denomination, but adulterated\r\nin its standard. The like frauds were practised in Scotland during the minority\r\nof James VI. They have occasionally been practised in most other countries.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThat the public revenue of Great Britain can never be completely liberated, or\r\neven that any considerable progress can ever be made towards that liberation,\r\nwhile the surplus of that revenue, or what is over and above defraying the\r\nannual expense of the peace establishment, is so very small, it seems\r\naltogether in vain to expect. That liberation, it is evident, can never be\r\nbrought about, without either some very considerable augmentation of the public\r\nrevenue, or some equally considerable reduction of the public expense.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA more equal land tax, a more equal tax upon the rent of houses, and such\r\nalterations in the present system of customs and excise as those which have\r\nbeen mentioned in the foregoing chapter, might, perhaps, without increasing the\r\nburden of the greater part of the people, but only distributing the weight of\r\nit more equally upon the whole, produce a considerable augmentation of revenue.\r\nThe most sanguine projector, however, could scarce flatter himself, that any\r\naugmentation of this kind would be such as could give any reasonable hopes,\r\neither of liberating the public revenue altogether, or even of making such\r\nprogress towards that liberation in time of peace, as either to prevent or to\r\ncompensate the further accumulation of the public debt in the next war.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy extending the British system of taxation to all the different provinces of\r\nthe empire, inhabited by people either of British or European extraction, a\r\nmuch greater augmentation of revenue might be expected. This, however, could\r\nscarce, perhaps, be done, consistently with the principles of the British\r\nconstitution, without admitting into the British parliament, or, if you will,\r\ninto the states-general of the British empire, a fair and equal representation\r\nof all those different provinces; that of each province bearing the same\r\nproportion to the produce of its taxes, as the representation of Great Britain\r\nmight bear to the produce of the taxes levied upon Great Britain. The private\r\ninterest of many powerful individuals, the confirmed prejudices of great bodies\r\nof people, seem, indeed, at present, to oppose to so great a change, such\r\nobstacles as it may be very difficult, perhaps altogether impossible, to\r\nsurmount. Without, however, pretending to determine whether such a union be\r\npracticable or impracticable, it may not, perhaps, be improper, in a\r\nspeculative work of this kind, to consider how far the British system of\r\ntaxation might be applicable to all the different provinces of the empire; what\r\nrevenue might be expected from it, if so applied; and in what manner a general\r\nunion of this kind might be likely to affect the happiness and prosperity of\r\nthe different provinces comprehended within it. Such a speculation, can, at\r\nworst, be regarded but as a new Utopia, less amusing, certainly, but no more\r\nuseless and chimerical than the old one.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe land-tax, the stamp duties, and the different duties of customs and excise,\r\nconstitute the four principal branches of the British taxes.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIreland is certainly as able, and our American and West India plantations more\r\nable, to pay a land tax, than Great Britain. Where the landlord is subject\r\nneither to tythe nor poor’s rate, he must certainly be more able to pay\r\nsuch a tax, than where he is subject to both those other burdens. The tythe,\r\nwhere there is no modus, and where it is levied in kind, diminishes more what\r\nwould otherwise be the rent of the landlord, than a land tax which really\r\namounted to five shillings in the pound. Such a tythe will be found, in most\r\ncases, to amount to more than a fourth part of the real rent of the land, or of\r\nwhat remains after replacing completely the capital of the farmer, together\r\nwith his reasonable profit. If all moduses and all impropriations were taken\r\naway, the complete church tythe of Great Britain and Ireland could not well be\r\nestimated at less than six or seven millions. If there was no tythe either in\r\nGreat Britain or Ireland, the landlords could afford to pay six or seven\r\nmillions additional land tax, without being more burdened than a very great\r\npart of them are at present. America pays no tythe, and could, therefore, very\r\nwell afford to pay a land tax. The lands in America and the West Indies,\r\nindeed, are, in general, not tenanted nor leased out to farmers. They could\r\nnot, therefore, be assessed according to any rent roll. But neither were the\r\nlands of Great Britain, in the 4th of William and Mary, assessed according to\r\nany rent roll, but according to a very loose and inaccurate estimation. The\r\nlands in America might be assessed either in the same manner, or according to\r\nan equitable valuation, in consequence of an accurate survey, like that which\r\nwas lately made in the Milanese, and in the dominions of Austria, Prussia, and\r\nSardinia.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nStamp duties, it is evident, might be levied without any variation, in all\r\ncountries where the forms of law process, and the deeds by which property, both\r\nreal and personal, is transferred, are the same, or nearly the same.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe extension of the custom-house laws of Great Britain to Ireland and the\r\nplantations, provided it was accompanied, as in justice it ought to be, with an\r\nextension of the freedom of trade, would be in the highest degree advantageous\r\nto both. All the invidious restraints which at present oppress the trade of\r\nIreland, the distinction between the enumerated and non-enumerated commodities\r\nof America, would be entirely at an end. The countries north of Cape Finisterre\r\nwould be as open to every part of the produce of America, as those south of\r\nthat cape are to some parts of that produce at present. The trade between all\r\nthe different parts of the British empire would, in consequence of this\r\nuniformity in the custom-house laws, be as free as the coasting trade of Great\r\nBritain is at present. The British empire would thus afford, within itself, an\r\nimmense internal market for every part of the produce of all its different\r\nprovinces. So great an extension of market would soon compensate, both to\r\nIreland and the plantations, all that they could suffer from the increase of\r\nthe duties of customs.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe excise is the only part of the British system of taxation, which would\r\nrequire to be varied in any respect, according as it was applied to the\r\ndifferent provinces of the empire. It might be applied to Ireland without any\r\nvariation; the produce and consumption of that kingdom being exactly of the\r\nsame nature with those of Great Britain. In its application to America and the\r\nWest Indies, of which the produce and consumption are so very different from\r\nthose of Great Britain, some modification might be necessary, in the same\r\nmanner as in its application to the cyder and beer counties of England.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nA fermented liquor, for example, which is called beer, but which, as it is made\r\nof molasses, bears very little resemblance to our beer, makes a considerable\r\npart of the common drink of the people in America. This liquor, as it can be\r\nkept only for a few days, cannot, like our beer, be prepared and stored up for\r\nsale in great breweries; but every private family must brew it for their own\r\nuse, in the same manner as they cook their victuals. But to subject every\r\nprivate family to the odious visits and examination of the tax-gatherers, in\r\nthe same manner as we subject the keepers of ale-houses and the brewers for\r\npublic sale, would be altogether inconsistent with liberty. If, for the sake of\r\nequality, it was thought necessary to lay a tax upon this liquor, it might be\r\ntaxed by taxing the material of which it is made, either at the place of\r\nmanufacture, or, if the circumstances of the trade rendered such an excise\r\nimproper, by laying a duty upon its importation into the colony in which it was\r\nto be consumed. Besides the duty of one penny a-gallon imposed by the British\r\nparliament upon the importation of molasses into America, there is a provincial\r\ntax of this kind upon their importation into Massachusetts Bay, in ships\r\nbelonging to any other colony, of eight-pence the hogshead; and another upon\r\ntheir importation from the northern colonies into South Carolina, of five-pence\r\nthe gallon. Or, if neither of these methods was found convenient, each family\r\nmight compound for its consumption of this liquor, either according to the\r\nnumber of persons of which it consisted, in the same manner as private families\r\ncompound for the malt tax in England; or according to the different ages and\r\nsexes of those persons, in the same manner as several different taxes are\r\nlevied in Holland; or, nearly as Sir Matthew Decker proposes, that all taxes\r\nupon consumable commodities should be levied in England. This mode of taxation,\r\nit has already been observed, when applied to objects of a speedy consumption,\r\nis not a very convenient one. It might be adopted, however, in cases where no\r\nbetter could be done.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nSugar, rum, and tobacco, are commodities which are nowhere necessaries of life,\r\nwhich are become objects of almost universal consumption, and which are,\r\ntherefore, extremely proper subjects of taxation. If a union with the colonies\r\nwere to take place, those commodities might be taxed, either before they go out\r\nof the hands of the manufacturer or grower; or, if this mode of taxation did\r\nnot suit the circumstances of those persons, they might be deposited in public\r\nwarehouses, both at the place of manufacture, and at all the different ports of\r\nthe empire, to which they might afterwards be transported, to remain there,\r\nunder the joint custody of the owner and the revenue officer, till such time as\r\nthey should be delivered out, either to the consumer, to the merchant-retailer\r\nfor home consumption, or to the merchant-exporter; the tax not to be advanced\r\ntill such delivery. When delivered out for exportation, to go duty-free, upon\r\nproper security being given, that they should really be exported out of the\r\nempire. These are, perhaps, the principal commodities, with regard to which the\r\nunion with the colonies might require some considerable change in the present\r\nsystem of British taxation.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nWhat might be the amount of the revenue which this system of taxation, extended\r\nto all the different provinces of the empire, might produce, it must, no doubt,\r\nbe altogether impossible to ascertain with tolerable exactness. By means of\r\nthis system, there is annually levied in Great Britain, upon less than eight\r\nmillions of people, more than ten millions of revenue. Ireland contains more\r\nthan two millions of people, and, according to the accounts laid before the\r\ncongress, the twelve associated provinces of America contain more than three.\r\nThose accounts, however, may have been exaggerated, in order, perhaps, either\r\nto encourage their own people, or to intimidate those of this country; and we\r\nshall suppose, therefore, that our North American and West Indian colonies,\r\ntaken together, contain no more than three millions; or that the whole British\r\nempire, in Europe and America, contains no more than thirteen millions of\r\ninhabitants. If, upon less than eight millions of inhabitants, this system of\r\ntaxation raises a revenue of more than ten millions sterling; it ought, upon\r\nthirteen millions of inhabitants, to raise a revenue of more than sixteen\r\nmillions two hundred and fifty thousand pounds sterling. From this revenue,\r\nsupposing that this system could produce it, must be deducted the revenue\r\nusually raised in Ireland and the plantations, for defraying the expense of the\r\nrespective civil governments. The expense of the civil and military\r\nestablishment of Ireland, together with the interest of the public debt,\r\namounts, at a medium of the two years which ended March 1775, to something less\r\nthan seven hundred and fifty thousand pounds a year. By a very exact account of\r\nthe revenue of the principal colonies of America and the West Indies, it\r\namounted, before the commencement of the present disturbances, to a hundred and\r\nforty-one thousand eight hundred pounds. In this account, however, the revenue\r\nof Maryland, of North Carolina, and of all our late acquisitions, both upon the\r\ncontinent, and in the islands, is omitted; which may, perhaps, make a\r\ndifference of thirty or forty thousand pounds. For the sake of even numbers,\r\ntherefore, let us suppose that the revenue necessary for supporting the civil\r\ngovernment of Ireland and the plantations may amount to a million. There would\r\nremain, consequently, a revenue of fifteen millions two hundred and fifty\r\nthousand pounds, to be applied towards defraying the general expense of the\r\nempire, and towards paying the public debt. But if, from the present revenue of\r\nGreat Britain, a million could, in peaceable times, be spared towards the\r\npayment of that debt, six millions two hundred and fifty thousand pounds could\r\nvery well be spared from this improved revenue. This great sinking fund, too,\r\nmight be augmented every year by the interest of the debt which had been\r\ndischarged the year before; and might, in this manner, increase so very\r\nrapidly, as to be sufficient in a few years to discharge the whole debt, and\r\nthus to restore completely the at-present debilitated and languishing vigour of\r\nthe empire. In the meantime, the people might be relieved from some of the most\r\nburdensome taxes; from those which are imposed either upon the necessaries of\r\nlife, or upon the materials of manufacture. The labouring poor would thus be\r\nenabled to live better, to work cheaper, and to send their goods cheaper to\r\nmarket. The cheapness of their goods would increase the demand for them, and\r\nconsequently for the labour of those who produced them. This increase in the\r\ndemand for labour would both increase the numbers, and improve the\r\ncircumstances of the labouring poor. Their consumption would increase, and,\r\ntogether with it, the revenue arising from all those articles of their\r\nconsumption upon which the taxes might be allowed to remain.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe revenue arising from this system of taxation, however, might not\r\nimmediately increase in proportion to the number of people who were subjected\r\nto it. Great indulgence would for some time be due to those provinces of the\r\nempire which were thus subjected to burdens to which they had not before been\r\naccustomed; and even when the same taxes came to be levied everywhere as\r\nexactly as possible, they would not everywhere produce a revenue proportioned\r\nto the numbers of the people. In a poor country, the consumption of the\r\nprincipal commodities subject to the duties of customs and excise, is very\r\nsmall; and in a thinly inhabited country, the opportunities of smuggling are\r\nvery great. The consumption of malt liquors among the inferior ranks of people\r\nin Scotland is very small; and the excise upon malt, beer, and ale, produces\r\nless there than in England, in proportion to the numbers of the people and the\r\nrate of the duties, which upon malt is different, on account of a supposed\r\ndifference of quality. In these particular branches of the excise, there is\r\nnot, I apprehend, much more smuggling in the one country than in the other. The\r\nduties upon the distillery, and the greater part of the duties of customs, in\r\nproportion to the numbers of people in the respective countries, produce less\r\nin Scotland than in England, not only on account of the smaller consumption of\r\nthe taxed commodities, but of the much greater facility of smuggling. In\r\nIreland, the inferior ranks of people are still poorer than in Scotland, and\r\nmany parts of the country are almost as thinly inhabited. In Ireland,\r\ntherefore, the consumption of the taxed commodities might, in proportion to the\r\nnumber of the people, be still less than in Scotland, and the facility of\r\nsmuggling nearly the same. In America and the West Indies, the white people,\r\neven of the lowest rank, are in much better circumstances than those of the\r\nsame rank in England; and their consumption of all the luxuries in which they\r\nusually indulge themselves, is probably much greater. The blacks, indeed, who\r\nmake the greater part of the inhabitants, both of the southern colonies upon\r\nthe continent and of the West India islands, as they are in a state of slavery,\r\nare, no doubt, in a worse condition than the poorest people either in Scotland\r\nor Ireland. We must not, however, upon that account, imagine that they are\r\nworse fed, or that their consumption of articles which might be subjected to\r\nmoderate duties, is less than that even of the lower ranks of people in\r\nEngland. In order that they may work well, it is the interest of their master\r\nthat they should be fed well, and kept in good heart, in the same manner as it\r\nis his interest that his working cattle should be so. The blacks, accordingly,\r\nhave almost everywhere their allowance of rum, and of molasses or spruce-beer,\r\nin the same manner as the white servants; and this allowance would not probably\r\nbe withdrawn, though those articles should be subjected to moderate duties. The\r\nconsumption of the taxed commodities, therefore, in proportion to the number of\r\ninhabitants, would probably be as great in America and the West Indies as in\r\nany part of the British empire. The opportunities of smuggling, indeed, would\r\nbe much greater; America, in proportion to the extent of the country, being\r\nmuch more thinly inhabited than either Scotland or Ireland. If the revenue,\r\nhowever, which is at present raised by the different duties upon malt and malt\r\nliquors, were to be levied by a single duty upon malt, the opportunity of\r\nsmuggling in the most important branch of the excise would be almost entirely\r\ntaken away; and if the duties of customs, instead of being imposed upon almost\r\nall the different articles of importation, were confined to a few of the most\r\ngeneral use and consumption, and if the levying of those duties were subjected\r\nto the excise laws, the opportunity of smuggling, though not so entirely taken\r\naway, would be very much diminished. In consequence of those two apparently\r\nvery simple and easy alterations, the duties of customs and excise might\r\nprobably produce a revenue as great, in proportion to the consumption of the\r\nmost thinly inhabited province, as they do at present, in proportion to that of\r\nthe most populous.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe Americans, it has been said, indeed, have no gold or silver money, the\r\ninterior commerce of the country being carried on by a paper currency; and the\r\ngold and silver, which occasionally come among them, being all sent to Great\r\nBritain, in return for the commodities which they receive from us. But without\r\ngold and silver, it is added, there is no possibility of paying taxes. We\r\nalready get all the gold and silver which they have. How is it possible to draw\r\nfrom them what they have not?\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe present scarcity of gold and silver money in America, is not the effect of\r\nthe poverty of that country, or of the inability of the people there to\r\npurchase those metals. In a country where the wages of labour are so much\r\nhigher, and the price of provisions so much lower than in England, the greater\r\npart of the people must surely have wherewithal to purchase a greater quantity,\r\nif it were either necessary or convenient for them to do so. The scarcity of\r\nthose metals, therefore, must be the effect of choice, and not of necessity.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is for transacting either domestic or foreign business, that gold or silver\r\nmoney is either necessary or convenient.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe domestic business of every country, it has been shewn in the second book of\r\nthis Inquiry, may, at least in peaceable times, be transacted by means of a\r\npaper currency, with nearly the same degree of conveniency as by gold and\r\nsilver money. It is convenient for the Americans, who could always employ with\r\nprofit, in the improvement of their lands, a greater stock than they can easily\r\nget, to save as much as possible the expense of so costly an instrument of\r\ncommerce as gold and silver; and rather to employ that part of their surplus\r\nproduce which would be necessary for purchasing those metals, in purchasing the\r\ninstruments of trade, the materials of clothing, several parts of household\r\nfurniture, and the iron work necessary for building and extending their\r\nsettlements and plantations; in purchasing not dead stock, but active and\r\nproductive stock. The colony governments find it for their interest to supply\r\nthe people with such a quantity of paper money as is fully sufficient, and\r\ngenerally more than sufficient, for transacting their domestic business. Some\r\nof those governments, that of Pennsylvania, particularly, derive a revenue from\r\nlending this paper money to their subjects, at an interest of so much per cent.\r\nOthers, like that of Massachusetts Bay, advance, upon extraordinary\r\nemergencies, a paper money of this kind for defraying the public expense; and\r\nafterwards, when it suits the conveniency of the colony, redeem it at the\r\ndepreciated value to which it gradually falls. In 1747, {See Hutchinson’s\r\nHistory of Massachusetts Bay vol. ii. page 436 et seq.} that colony paid in\r\nthis manner the greater part of its public debts, with the tenth part of the\r\nmoney for which its bills had been granted. It suits the conveniency of the\r\nplanters, to save the expense of employing gold and silver money in their\r\ndomestic transactions; and it suits the conveniency of the colony governments,\r\nto supply them with a medium, which, though attended with some very\r\nconsiderable disadvantages, enables them to save that expense. The redundancy\r\nof paper money necessarily banishes gold and silver from the domestic\r\ntransactions of the colonies, for the same reason that it has banished those\r\nmetals from the greater part of the domestic transactions in Scotland; and in\r\nboth countries, it is not the poverty, but the enterprizing and projecting\r\nspirit of the people, their desire of employing all the stock which they can\r\nget, as active and productive stock, which has occasioned this redundancy of\r\npaper money.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the exterior commerce which the different colonies carry on with Great\r\nBritain, gold and silver are more or less employed, exactly in proportion as\r\nthey are more or less necessary. Where those metals are not necessary, they\r\nseldom appear. Where they are necessary, they are generally found.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the commerce between Great Britain and the tobacco colonies, the British\r\ngoods are generally advanced to the colonists at a pretty long credit, and are\r\nafterwards paid for in tobacco, rated at a certain price. It is more convenient\r\nfor the colonists to pay in tobacco than in gold and silver. It would be more\r\nconvenient for any merchant to pay for the goods which his correspondents had\r\nsold to him, in some other sort of goods which he might happen to deal in, than\r\nin money. Such a merchant would have no occasion to keep any part of his stock\r\nby him unemployed, and in ready money, for answering occasional demands. He\r\ncould have, at all times, a larger quantity of goods in his shop or warehouse,\r\nand he could deal to a greater extent. But it seldom happens to be convenient\r\nfor all the correspondents of a merchant to receive payment for the goods which\r\nthey sell to him, in goods of some other kind which he happens to deal in. The\r\nBritish merchants who trade to Virginia and Maryland, happen to be a particular\r\nset of correspondents, to whom it is more convenient to receive payment for the\r\ngoods which they sell to those colonies in tobacco, than in gold and silver.\r\nThey expect to make a profit by the sale of the tobacco; they could make none\r\nby that of the gold and silver. Gold and silver, therefore, very seldom appear\r\nin the commerce between Great Britain and the tobacco colonies. Maryland and\r\nVirginia have as little occasion for those metals in their foreign, as in their\r\ndomestic commerce. They are said, accordingly, to have less gold and silver\r\nmoney than any other colonies in America. They are reckoned, however, as\r\nthriving, and consequently as rich, as any of their neighbours.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the northern colonies, Pennsylvania, New York, New Jersey, the four\r\ngovernments of New England, etc. the value of their own produce which they\r\nexport to Great Britain is not equal to that of the manufactures which they\r\nimport for their own use, and for that of some of the other colonies, to which\r\nthey are the carriers. A balance, therefore, must be paid to the mother-country\r\nin gold and silver and this balance they generally find.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIn the sugar colonies, the value of the produce annually exported to Great\r\nBritain is much greater than that of all the goods imported from thence. If the\r\nsugar and rum annually sent to the mother-country were paid for in those\r\ncolonies, Great Britain would be obliged to send out, every year, a very large\r\nbalance in money; and the trade to the West Indies would, by a certain species\r\nof politicians, be considered as extremely disadvantageous. But it so happens,\r\nthat many of the principal proprietors of the sugar plantations reside in Great\r\nBritain. Their rents are remitted to them in sugar and rum, the produce of\r\ntheir estates. The sugar and rum which the West India merchants purchase in\r\nthose colonies upon their own account, are not equal in value to the goods\r\nwhich they annually sell there. A balance, therefore, must necessarily be paid\r\nto them in gold and silver, and this balance, too, is generally found.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe difficulty and irregularity of payment from the different colonies to Great\r\nBritain, have not been at all in proportion to the greatness or smallness of\r\nthe balances which were respectively due from them. Payments have, in general,\r\nbeen more regular from the northern than from the tobacco colonies, though the\r\nformer have generally paid a pretty large balance in money, while the latter\r\nhave either paid no balance, or a much smaller one. The difficulty of getting\r\npayment from our different sugar colonies has been greater or less in\r\nproportion, not so much to the extent of the balances respectively due from\r\nthem, as to the quantity of uncultivated land which they contained; that is, to\r\nthe greater or smaller temptation which the planters have been under of\r\nover-trading, or of undertaking the settlement and plantation of greater\r\nquantities of waste land than suited the extent of their capitals. The returns\r\nfrom the great island of Jamaica, where there is still much uncultivated land,\r\nhave, upon this account, been, in general, more irregular and uncertain than\r\nthose from the smaller islands of Barbadoes, Antigua, and St.\r\nChristopher’s, which have, for these many years, been completely\r\ncultivated, and have, upon that account, afforded less field for the\r\nspeculations of the planter. The new acquisitions of Grenada, Tobago, St.\r\nVincent’s, and Dominica, have opened a new field for speculations of this\r\nkind; and the returns from those islands have of late been as irregular and\r\nuncertain as those from the great island of Jamaica.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not, therefore, the poverty of the colonies which occasions, in the\r\ngreater part of them, the present scarcity of gold and silver money. Their\r\ngreat demand for active and productive stock makes it convenient for them to\r\nhave as little dead stock as possible, and disposes them, upon that account, to\r\ncontent themselves with a cheaper, though less commodious instrument of\r\ncommerce, than gold and silver. They are thereby enabled to convert the value\r\nof that gold and silver into the instruments of trade, into the materials of\r\nclothing, into household furniture, and into the iron work necessary for\r\nbuilding and extending their settlements and plantations. In those branches of\r\nbusiness which cannot be transacted without gold and silver money, it appears,\r\nthat they can always find the necessary quantity of those metals; and if they\r\nfrequently do not find it, their failure is generally the effect, not of their\r\nnecessary poverty, but of their unnecessary and excessive enterprise. It is not\r\nbecause they are poor that their payments are irregular and uncertain, but\r\nbecause they are too eager to become excessively rich. Though all that part of\r\nthe produce of the colony taxes, which was over and above what was necessary\r\nfor defraying the expense of their own civil and military establishments, were\r\nto be remitted to Great Britain in gold and silver, the colonies have\r\nabundantly wherewithal to purchase the requisite quantity of those metals. They\r\nwould in this case be obliged, indeed, to exchange a part of their surplus\r\nproduce, with which they now purchase active and productive stock, for dead\r\nstock. In transacting their domestic business, they would be obliged to employ\r\na costly, instead of a cheap instrument of commerce; and the expense of\r\npurchasing this costly instrument might damp somewhat the vivacity and ardour\r\nof their excessive enterprise in the improvement of land. It might not,\r\nhowever, be necessary to remit any part of the American revenue in gold and\r\nsilver. It might be remitted in bills drawn upon, and accepted by, particular\r\nmerchants or companies in Great Britain, to whom a part of the surplus produce\r\nof America had been consigned, who would pay into the treasury the American\r\nrevenue in money, after having themselves received the value of it in goods;\r\nand the whole business might frequently be transacted without exporting a\r\nsingle ounce of gold or silver from America.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIt is not contrary to justice, that both Ireland and America should contribute\r\ntowards the discharge of the public debt of Great Britain. That debt has been\r\ncontracted in support of the government established by the Revolution; a\r\ngovernment to which the protestants of Ireland owe, not only the whole\r\nauthority which they at present enjoy in their own country, but every security\r\nwhich they possess for their liberty, their property, and their religion; a\r\ngovernment to which several of the colonies of America owe their present\r\ncharters, and consequently their present constitution; and to which all the\r\ncolonies of America owe the liberty, security, and property, which they have\r\never since enjoyed. That public debt has been contracted in the defence, not of\r\nGreat Britain alone, but of all the different provinces of the empire. The\r\nimmense debt contracted in the late war in particular, and a great part of that\r\ncontracted in the war before, were both properly contracted in defence of\r\nAmerica.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nBy a union with Great Britain, Ireland would gain, besides the freedom of\r\ntrade, other advantages much more important, and which would much more than\r\ncompensate any increase of taxes that might accompany that union. By the union\r\nwith England, the middling and inferior ranks of people in Scotland gained a\r\ncomplete deliverance from the power of an aristocracy, which had always before\r\noppressed them. By a union with Great Britain, the greater part of people of\r\nall ranks in Ireland would gain an equally complete deliverance from a much\r\nmore oppressive aristocracy; an aristocracy not founded, like that of Scotland,\r\nin the natural and respectable distinctions of birth and fortune, but in the\r\nmost odious of all distinctions, those of religious and political prejudices;\r\ndistinctions which, more than any other, animate both the insolence of the\r\noppressors, and the hatred and indignation of the oppressed, and which commonly\r\nrender the inhabitants of the same country more hostile to one another than\r\nthose of different countries ever are. Without a union with Great Britain, the\r\ninhabitants of Ireland are not likely, for many ages, to consider themselves as\r\none people.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nNo oppressive aristocracy has ever prevailed in the colonies. Even they,\r\nhowever, would, in point of happiness and tranquillity, gain considerably by a\r\nunion with Great Britain. It would, at least, deliver them from those\r\nrancourous and virulent factions which are inseparable from small democracies,\r\nand which have so frequently divided the affections of their people, and\r\ndisturbed the tranquillity of their governments, in their form so nearly\r\ndemocratical. In the case of a total separation from Great Britain, which,\r\nunless prevented by a union of this kind, seems very likely to take place,\r\nthose factions would be ten times more virulent than ever. Before the\r\ncommencement of the present disturbances, the coercive power of the\r\nmother-country had always been able to restrain those factions from breaking\r\nout into any thing worse than gross brutality and insult. If that coercive\r\npower were entirely taken away, they would probably soon break out into open\r\nviolence and bloodshed. In all great countries which are united under one\r\nuniform government, the spirit of party commonly prevails less in the remote\r\nprovinces than in the centre of the empire. The distance of those provinces\r\nfrom the capital, from the principal seat of the great scramble of faction and\r\nambition, makes them enter less into the views of any of the contending\r\nparties, and renders them more indifferent and impartial spectators of the\r\nconduct of all. The spirit of party prevails less in Scotland than in England.\r\nIn the case of a union, it would probably prevail less in Ireland than in\r\nScotland; and the colonies would probably soon enjoy a degree of concord and\r\nunanimity, at present unknown in any part of the British empire. Both Ireland\r\nand the colonies, indeed, would be subjected to heavier taxes than any which\r\nthey at present pay. In consequence, however, of a diligent and faithful\r\napplication of the public revenue towards the discharge of the national debt,\r\nthe greater part of those taxes might not be of long continuance, and the\r\npublic revenue of Great Britain might soon be reduced to what was necessary for\r\nmaintaining a moderate peace-establishment.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nThe territorial acquisitions of the East India Company, the undoubted right of\r\nthe Crown, that is, of the state and people of Great Britain, might be rendered\r\nanother source of revenue, more abundant, perhaps, than all those already\r\nmentioned. Those countries are represented as more fertile, more extensive,\r\nand, in proportion to their extent, much richer and more populous than Great\r\nBritain. In order to draw a great revenue from them, it would not probably be\r\nnecessary to introduce any new system of taxation into countries which are\r\nalready sufficiently, and more than sufficiently, taxed. It might, perhaps, be\r\nmore proper to lighten than to aggravate the burden of those unfortunate\r\ncountries, and to endeavour to draw a revenue from them, not by imposing new\r\ntaxes, but by preventing the embezzlement and misapplication of the greater\r\npart of those which they already pay.\r\n\u003c/p\u003e\r\n\r\n\u003cp\u003e\r\nIf it should be found impracticable for Great Britain to draw any considerable\r\naugmentation of revenue from any of the resources above mentioned, the only\r\nresource which can remain to her, is a diminution of her expense. In the mode\r\nof collecting and in that of expending the public revenue, though in both there\r\nmay be still room for improvement, Great Britain seems to be at least as\r\neconomical as any of her neighbours. The military establishment which she\r\nmaintains for her own defence in time of peace, is more moderate than that of\r\nany European state, which can pretend to rival her either in wealth or in\r\npower. None of these articles, therefore, seem to admit of any considerable\r\nreduction of expense. The expense of the peace-establishment of the colonies\r\nwas, before the commencement of the present disturbances, very considerable,\r\nand is an expense which may, and, if no revenue can be drawn from them, ought\r\ncertainly to be saved altogether. This constant expense in time of peace,\r\nthough very great, is insignificant in comparison with what the defence of the\r\ncolonies has cost us in time of war. The last war, which was undertaken\r\naltogether on account of the colonies, cost Great Britain, it has already been\r\nobserved, upwards of ninety millions. The Spanish war of 1739 was principally\r\nundertaken on their account; in which, and in the French war that was the\r\nconsequence of it, Great Britain, spent upwards of forty millions; a great part\r\nof which ought justly to be charged to the colonies. In those two wars, the\r\ncolonies cost Great Britain much more than double the sum which the national\r\ndebt amounted to before the commencement of the first of them. Had it not been\r\nfor those wars, that debt might, and probably would by this time, have been\r\ncompletely paid; and had it not been for the colonies, the former of those wars\r\nmight not, and the latter certainly would not, have been undertaken. It was\r\nbecause the colonies were supposed to be provinces of the British Empire, that\r\nthis expense was laid out upon them. But countries which contribute neither\r\nrevenue nor military force towards the support of the empire, cannot be\r\nconsidered as provinces. They may, perhaps, be considered as appendages, as a\r\nsort of splendid and shewy equipage of the empire. But if the empire can no\r\nlonger support the expense of keeping up this equipage, it ought certainly to\r\nlay it down; and if it cannot raise its revenue in proportion to its expense,\r\nit ought at least to accommodate its expense to its revenue. If the colonies,\r\nnotwithstanding their refusal to submit to British taxes, are still to be\r\nconsidered as provinces of the British empire, their defence, in some future\r\nwar, may cost Great Britain as great an expense as it ever has done in any\r\nformer war. The rulers of Great Britain have, for more than a century past,\r\namused the people with the imagination that they possessed a great empire on\r\nthe west side of the Atlantic. This empire, however, has hitherto existed in\r\nimagination only. It has hitherto been, not an empire, but the project of an\r\nempire; not a gold mine, but the project of a gold mine; a project which has\r\ncost, which continues to cost, and which, if pursued in the same way as it has\r\nbeen hitherto, is likely to cost, immense expense, without being likely to\r\nbring any profit; for the effects of the monopoly of the colony trade, it has\r\nbeen shewn, are to the great body of the people, mere loss instead of profit.\r\nIt is surely now time that our rulers should either realize this golden dream,\r\nin which they have been indulging themselves, perhaps, as well as the people;\r\nor that they should awake from it themselves, and endeavour to awaken the\r\npeople. If the project cannot be completed, it ought to be given up. If any of\r\nthe provinces of the British empire cannot be made to contribute towards the\r\nsupport of the whole empire, it is surely time that Great Britain should free\r\nherself from the expense of defending those provinces in time of war, and of\r\nsupporting any part of their civil or military establishment in time of peace;\r\nand endeavour to accommodate her future views and designs to the real\r\nmediocrity of her circumstances.\r\n\u003c/p\u003e\r\n\r\n\u003c/div\u003e\u003c!–end chapter–\u003e\r\n\u003c/article\u003e"}],"SectionSequence":["Back Link","Work Title","Deck","Author","Period","Era","Composition","Region","Terra Avita","Terra Avita Region","Modern Country","Original Title","Language","Primary Discipline","Secondary Discipline","Tradition","Full Versions","Core Thesis","Classification","Arguments","Influence","Significance","Full Text"],"Counts":{"ContextCards":3,"GeoCards":4,"DisciplineCards":2,"Links":11,"Sections":23,"Styles":3,"Scripts":1}}