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An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith

Part 4 out of 19

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sugar islands. Though, from the preference given in those colonies to
the cultivation of tobacco above that of corn, it would appear that
the effectual demand of Europe for tobacco is not completely supplied,
it probably is more nearly so than that for sugar; and though the
present price of tobacco is probably more than sufficient to pay the
whole rent, wages, and profit, necessary for preparing and bringing it
to market, according to the rate at which they are commonly paid in
corn land, it must not be so much more as the present price of sugar.
Our tobacco planters, accordingly, have shewn the same fear of the
superabundance of tobacco, which the proprietors of the old vineyards
in France have of the superabundance of wine. By act of assembly, they
have restrained its cultivation to six thousand plants, supposed to
yield a thousand weight of tobacco, for every negro between sixteen
and sixty years of age. Such a negro, over and above this quantity of
tobacco, can manage, they reckon, four acres of Indian corn. To
prevent the market from being overstocked, too, they have sometimes,
in plentiful years, we are told by Dr Douglas {Douglas's Summary,vol.
ii. p. 379, 373.} (I suspect he has been ill informed), burnt a
certain quantity of tobacco for every negro, in the same manner as the
Dutch are said to do of spices. If such violent methods are necessary
to keep up the present price of tobacco, the superior advantage of its
culture over that of corn, if it still has any, will not probably be
of long continuance.

It is in this manner that the rent of the cultivated land, of which
the produce is human food, regulates the rent of the greater part of
other cultivated land. No particular produce can long afford less,
because the land would immediately be turned to another use; and if
any particular produce commonly affords more, it is because the
quantity of land which can be fitted for it is too small to supply the
effectual demand.

In Europe, corn is the principal produce of land, which serves
immediately for human food. Except in particular situations,
therefore, the rent of corn land regulates in Europe that of all other
cultivated land. Britain need envy neither the vineyards of France,
nor the olive plantations of Italy. Except in particular situations,
the value of these is regulated by that of corn, in which the
fertility of Britain is not much inferior to that of either of those
two countries.

If, in any country, the common and favourite vegetable food of the
people should be drawn from a plant of which the most common land,
with the same, or nearly the same culture, produced a much greater
quantity than the most fertile does of corn; the rent of the landlord,
or the surplus quantity of food which would remain to him, after
paying the labour, and replacing the stock of the farmer, together
with its ordinary profits, would necessarily be much greater. Whatever
was the rate at which labour was commonly maintained in that country,
this greater surplus could always maintain a greater quantity of it,
and, consequently, enable the landlord to purchase or command a
greater quantity of it. The real value of his rent, his real power and
authority, his command of the necessaries and conveniencies of life
with which the labour of other people could supply him, would
necessarily be much greater.

A rice field produces a much greater quantity of food than the most
fertile corn field. Two crops in the year, from thirty to sixty
bushels each, are said to be the ordinary produce of an acre. Though
its cultivation, therefore, requires more labour, a much greater
surplus remains after maintaining all that labour. In those rice
countries, therefore, where rice is the common and favourite vegetable
food of the people, and where the cultivators are chiefly maintained
with it, a greater share of this greater surplus should belong to the
landlord than in corn countries. In Carolina, where the planters, as
in other British colonies, are generally both farmers and landlords,
and where rent, consequently, is confounded with profit, the
cultivation of rice is found to be more profitable than that of corn,
though their fields produce only one crop in the year, and though,
from the prevalence of the customs of Europe, rice is not there the
common and favourite vegetable food of the people.

A good rice field is a bog at all seasons, and at one season a bog
covered with water. It is unfit either for corn, or pasture, or
vineyard, or, indeed, for any other vegetable produce that is very
useful to men; and the lands which are fit for those purposes are not
fit for rice. Even in the rice countries, therefore, the rent of rice
lands cannot regulate the rent of the other cuitivated land which can
never be turned to that produce.

The food produced by a field of potatoes is not inferior in quantity
to that produced by a field of rice, and much superior to what is
produced by a field of wheat. Twelve thousand weight of potatoes from
an acre of land is not a greater produce than two thousand weight of
wheat. The food or solid nourishment, indeed, which can be drawn from
each of those two plants, is not altogether in proportion to their
weight, on account of the watery nature of potatoes. Allowing,
however, half the weight of this root to go to water, a very large
allowance, such an acre of potatoes will still produce six thousand
weight of solid nourishment, three times the quantity produced by the
acre of wheat. An acre of potatoes is cultivated with less expense
than an acre of wheat; the fallow, which generally precedes the sowing
of wheat, more than compensating the hoeing and other extraordinary
culture which is always given to potatoes. Should this root ever
become in any part of Europe, like rice in some rice countries, the
common and favourite vegetable food of the people, so as to occupy the
same proportion of the lands in tillage, which wheat and other sorts
of grain for human food do at present, the same quantity of cultivated
land would maintain a much greater number of people; and the labourers
being generally fed with potatoes, a greater surplus would remain
after replacing all the stock, and maintaining all the labour employed
in cultivation. A greater share of this surplus, too, would belong to
the landlord. Population would increase, and rents would rise much
beyond what they are at present.

The land which is fit for potatoes, is fit for almost every other
useful vegetable. If they occupied the same proportion of cultivated
land which corn does at present, they would regulate, in the same
manner, the rent of the greater part of other cultivated land.

In some parts of Lancashire, it is pretended, I have been told, that
bread of oatmeal is a heartier food for labouring people than wheaten
bread, and I have frequently heard the same doctrine held in Scotland.
I am, however, somewhat doubtful of the truth of it. The common people
in Scotland, who are fed with oatmeal, are in general neither so
strong nor so handsome as the same rank of people in England, who are
fed with wheaten bread. They neither work so well, nor look so well;
and as there is not the same difference between the people of fashion
in the two countries, experience would seem to shew, that the food of
the common people in Scotland is not so suitable to the human
constitution as that of their neighbours of the same rank in England.
But it seems to be otherwise with potatoes. The chairmen, porters, and
coal-heavers in London, and those unfortunate women who live by
prostitution, the strongest men and the most beautiful women perhaps
in the British dominions, are said to be, the greater part of them,
from the lowest rank of people in Ireland, who are generally fed with
this root. No food can afford a more decisive proof of its nourishing
quality, or of its being peculiarly suitable to the health of the
human constitution.

It is difficult to preserve potatoes through the year, and impossible
to store them like corn, for two or three years together. The fear of
not being able to sell them before they rot, discourages their
cultivation, and is, perhaps, the chief obstacle to their ever
becoming in any great country, like bread, the principal vegetable
food of all the different ranks of the people.

PART II. -- Of the Produce of Land, which sometimes does, and
sometimes does not, afford Rent.

Human food seems to be the only produce of land, which always and
necessarily affords some rent to the landlord. Other sorts of produce
sometimes may, and sometimes may not, according to different
circumstances.

After food, clothing and lodging are the two great wants of mankind.

Land, in its original rude state, can afford the materials of clothing
and lodging to a much greater number of people than it can feed. In
its improved state, it can sometimes feed a greater number of people
than it can supply with those materials; at least in the way in which
they require them, and are willing to pay for them. In the one state,
therefore, there is always a superabundance of these materials, which
are frequently, upon that account, of little or no value. In the
other, there is often a scarcity, which necessarily augments their
value. In the one state, a great part of them is thrown away as
useless and the price of what is used is considered as equal only to
the labour and expense of fitting it for use, and can, therefore,
afford no rent to the landlord. In the other, they are all made use
of, and there is frequently a demand for more than can be had.
Somebody is always willing to give more for every part of them, than
what is sufficient to pay the expense of bringing them to market.
Their price, therefore, can always afford some rent to the landlord.

The skins of the larger animals were the original materials of
clothing. Among nations of hunters and shepherds, therefore, whose
food consists chiefly in the flesh of those animals, everyman, by
providing himself with food, provides himself with the materials of
more clothing than he can wear. If there was no foreign commerce, the
greater part of them would be thrown away as things of no value. This
was probably the case among the hunting nations of North America,
before their country was discovered by the Europeans, with whom they
now exchange their surplus peltry, for blankets, fire-arms, and
brandy, which gives it some value. In the present commercial state of
the known world, the most barbarous nations, I believe, among whom
land property is established, have some foreign commerce of this kind,
and find among their wealthier neighbours such a demand for all the
materials of clothing, which their land produces, and which can
neither be wrought up nor consumed at home, as raises their price
above what it costs to send them to those wealthier neighbours. It
affords, therefore, some rent to the landlord. When the greater part
of the Highland cattle were consumed on their own hills, the
exportation of their hides made the most considerable article of the
commerce of that country, and what they were exchanged for afforded
some addition to the rent of the Highland estates. The wool of
England, which in old times, could neither be consumed nor wrought up
at home, found a market in the then wealthier and more industrious
country of Flanders, and its price afforded something to the rent of
the land which produced it. In countries not better cultivated than
England was then, or than the Highlands of Scotland are now, and which
had no foreign commerce, the materials of clothing would evidently be
so superabundant, that a great part of them would be thrown away as
useless, and no part could afford any rent to the landlord.

The materials of lodging cannot always be transported to so great a
distance as those of clothing, and do not so readily become an object
of foreign commerce. When they are superabundant in the country which
produces them, it frequently happens, even in the present commercial
state of the world, that they are of no value to the landlord. A good
stone quarry in the neighbourhood of London would afford a
considerable rent. In many parts of Scotland and Wales it affords
none. Barren timber for building is of great value in a populous and
well-cultivated country, and the land which produces it affords a
considerable rent. But in many parts of North America, the landlord
would be much obliged to any body who would carry away the greater
part of his large trees. In some parts of the Highlands of Scotland,
the bark is the only part of the wood which, for want of roads and
water-carriage, can be sent to market; the timber is left to rot upon
the ground. When the materials of lodging are so superabundant, the
part made use of is worth only the labour and expense of fitting it
for that use. It affords no rent to the landlord, who generally grants
the use of it to whoever takes the trouble of asking it. The demand of
wealthier nations, however, sometimes enables him to get a rent for
it. The paving of the streets of London has enabled the owners of some
barren rocks on the coast of Scotland to draw a rent from what never
afforded any before. The woods of Norway, and of the coasts of the
Baltic, find a market in many parts of Great Britain, which they could
not find at home, and thereby afford some rent to their proprietors.

Countries are populous, not in proportion to the number of people whom
their produce can clothe and lodge, but in proportion to that of those
whom it can feed. When food is provided, it is easy to find the
necessary clothing and lodging. But though these are at hand, it may
often be difficult to find food. In some parts of the British
dominions, what is called a house may be built by one day's labour of
one man. The simplest species of clothing, the skins of animals,
require somewhat more labour to dress and prepare them for use. They
do not, however, require a great deal. Among savage or barbarous
nations, a hundredth, or little more than a hundredth part of the
labour of the whole year, will be sufficient to provide them with such
clothing and lodging as satisfy the greater part of the people. All
the other ninety-nine parts are frequently no more than enough to
provide them with food.

But when, by the improvement and cultivation of land, the labour of
one family can provide food for two, the labour of half the society
becomes sufficient to provide food for the whole. The other half,
therefore, or at least the greater part of them, can be employed in
providing other things, or in satisfying the other wants and fancies
of mankind. Clothing and lodging, household furniture, and what is
called equipage, are the principal objects of the greater part of
those wants and fancies. The rich man consumes no more food than his
poor neighbour. In quality it may be very different, and to select and
prepare it may require more labour and art; but in quantity it is very
nearly the same. But compare the spacious palace and great wardrobe of
the one, with the hovel and the few rags of the other, and you will be
sensible that the difference between their clothing, lodging, and
household furniture, is almost as great in quantity as it is in
quality. The desire of food is limited in every man by the narrow
capacity of the human stomach; but the desire of the conveniencies and
ornaments of building, dress, equipage, and household furniture, seems
to have no limit or certain boundary. Those, therefore, who have the
command of more food than they themselves can consume, are always
willing to exchange the surplus, or, what is the same thing, the price
of it, for gratifications of this other kind. What is over and above
satisfying the limited desire, is given for the amusement of those
desires which cannot be satisfied, but seem to be altogether endless.
The poor, in order to obtain food, exert themselves to gratify those
fancies of the rich; and to obtain it more certainly, they vie with
one another in the cheapness and perfection of their work. The number
of workmen increases with the increasing quantity of food, or with the
growing improvement and cultivation of the lands; and as the nature of
their business admits of the utmost subdivisions of labour, the
quantity of materials which they can work up, increases in a much
greater proportion than their numbers. Hence arises a demand for every
sort of material which human invention can employ, either usefully or
ornamentally, in building, dress, equipage, or household furniture;
for the fossils and minerals contained in the bowels of the earth, the
precious metals, and the precious stones.

Food is, in this manner, not only the original source of rent, but
every other part of the produce of land which afterwards affords rent,
derives that part of its value from the improvement of the powers of
labour in producing food, by means of the improvement and cultivation
of land.

Those other parts of the produce of land, however, which afterwards
afford rent, do not afford it always. Even in improved and cultivated
countries, the demand for them is not always such as to afford a
greater price than what is sufficient to pay the labour, and replace,
together with its ordinary profits, the stock which must be employed
in bringing them to market. Whether it is or is not such, depends upon
different circumstances.

Whether a coal mine, for example, can afford any rent, depends partly
upon its fertility, and partly upon its situation.

A mine of any kind may be said to be either fertile or barren,
according as the quantity of mineral which can be brought from it by a
certain quantity of labour, is greater or less than what can be
brought by an equal quantity from the greater part of other mines of
the same kind.

Some coal mines, advantageously situated, cannot be wrought on account
of their barrenness. The produce does not pay the expense. They can
afford neither profit nor rent.

There are some, of which the produce is barely sufficient to pay the
labour, and replace, together with its ordinary profits, the stock
employed in working them. They afford some profit to the undertaker of
the work, but no rent to the landlord. They can be wrought
advantageously by nobody but the landlord, who, being himself the
undertaker of the work, gets the ordinary profit of the capital which
he employs in it. Many coal mines in Scotland are wrought in this
manner, and can be wrought in no other. The landlord will allow nobody
else to work them without paying some rent, and nobody can afford to
pay any.

Other coal mines in the same country, sufficiently fertile, cannot be
wrought on account of their situation. A quantity of mineral,
sufficient to defray the expense of working, could be brought from the
mine by the ordinary, or even less than the ordinary quantity of
labour: but in an inland country, thinly inhabited, and without either
good roads or water-carriage, this quantity could not be sold.

Coals are a less agreeable fuel than wood: they are said too to be
less wholesome. The expense of coals, therefore, at the place where
they are consumed, must generally be somewhat less than that of wood.

The price of wood, again, varies with the state of agriculture, nearly
in the same manner, and exactly for the same reason, as the price of
cattle. In its rude beginnings, the greater part of every country is
covered with wood, which is then a mere incumbrance, of no value to
the landlord, who would gladly give it to any body for the cutting. As
agriculture advances, the woods are partly cleared by the progress of
tillage, and partly go to decay in consequence of the increased number
of cattle. These, though they do not increase in the same proportion
as corn, which is altogether the acquisition of human industry, yet
multiply under the care and protection of men, who store up in the
season of plenty what may maintain them in that of scarcity; who,
through the whole year, furnish them with a greater quantity of food
than uncultivated nature provides for them; and who, by destroying and
extirpating their enemies, secure them in the free enjoyment of all
that she provides. Numerous herds of cattle, when allowed to wander
through the woods, though they do not destroy the old trees, hinder
any young ones from coming up; so that, in the course of a century or
two, the whole forest goes to ruin. The scarcity of wood then raises
its price. It affords a good rent; and the landlord sometimes finds
that he can scarce employ his best lands more advantageously than in
growing barren timber, of which the greatness of the profit often
compensates the lateness of the returns. This seems, in the present
times, to be nearly the state of things in several parts of Great
Britain, where the profit of planting is found to be equal to that of
either corn or pasture. The advantage which the landlord derives from
planting can nowhere exceed, at least for any considerable time, the
rent which these could afford him; and in an inland country, which is
highly cuitivated, it will frequently not fall much short of this
rent. Upon the sea-coast of a well-improved country, indeed, if coals
can conveniently be had for fuel, it may sometimes be cheaper to bring
barren timber for building from less cultivated foreign countries than
to raise it at home. In the new town of Edinburgh, built within these
few years, there is not, perhaps, a single stick of Scotch timber.

Whatever may be the price of wood, if that of coals is such that the
expense of a coal fire is nearly equal to that of a wood one we may be
assured, that at that place, and in these circumstances, the price of
coals is as high as it can be. It seems to be so in some of the inland
parts of England, particularly in Oxfordshire, where it is usual, even
in the fires of the common people, to mix coals and wood together, and
where the difference in the expense of those two sorts of fuel cannot,
therefore, be very great. Coals, in the coal countries, are everywhere
much below this highest price. If they were not, they could not bear
the expense of a distant carriage, either by land or by water. A small
quantity only could be sold; and the coal masters and the coal
proprietors find it more for their interest to sell a great quantity
at a price somewhat above the lowest, than a small quantity at the
highest. The most fertile coal mine, too, regulates the price of coals
at all the other mines in its neighbourhood. Both the proprietor and
the undertaker of the work find, the one that he can get a greater
rent, the other that he can get a greater profit, by somewhat
underselling all their neighbours. Their neighbours are soon obliged
to sell at the same price, though they cannot so well afford it, and
though it always diminishes, and sometimes takes away altogether, both
their rent and their profit. Some works are abandoned altogether;
others can afford no rent, and can be wrought only by the proprietor.

The lowest price at which coals can be sold for any considerable time,
is, like that of all other commodities, the price which is barely
sufficient to replace, together with its ordinary profits, the stock
which must be employed in bringing them to market. At a coal mine for
which the landlord can get no rent, but, which he must either work
himself or let it alone altogether, the price of coals must generally
be nearly about this price.

Rent, even where coals afford one, has generally a smaller share in
their price than in that of most other parts of the rude produce of
land. The rent of an estate above ground, commonly amounts to what is
supposed to be a third of the gross produce; and it is generally a
rent certain and independent of the occasional variations in the crop.
In coal mines, a fifth of the gross produce is a very great rent, a
tenth the common rent; and it is seldom a rent certain, but depends
upon the occasional variations in the produce. These are so great,
that in a country where thirty years purchase is considered as a
moderate price for the property of a landed estate, ten years purchase
is regarded as a good price for that of a coal mine.

The value of a coal mine to the proprietor, frequently depends as much
upon its situation as upon its fertility. That of a metallic mine
depends more upon its fertility, and less upon its situation. The
coarse, and still more the precious metals, when separated from the
ore, are so valuable, that they can generally bear the expense of a
very long land, and of the most distant sea carriage. Their market is
not confined to the countries in the neighbourhood of the mine, but
extends to the whole world. The copper of Japan makes an article of
commerce in Europe; the iron of Spain in that of Chili and Peru. The
silver of Peru finds its way, not only to Europe, but from Europe to
China.

The price of coals in Westmoreland or Shropshire can have little
effect on their price at Newcastle; and their price in the Lionnois
can have none at all. The productions of such distant coal mines can
never be brought into competition with one another. But the
productions of the most distant metallic mines frequently may, and in
fact commonly are.

The price, therefore, of the coarse, and still more that of the
precious metals, at the most fertile mines in the world, must
necessarily more or less affect their price at every other in it. The
price of copper in Japan must have some influence upon its price at
the copper mines in Europe. The price of silver in Peru, or the
quantity either of labour or of other goods which it will purchase
there, must have some influence on its price, not only at the silver
mines of Europe, but at those of China. After the discovery of the
mines of Peru, the silver mines of Europe were, the greater part of
them, abandoned. The value of silver was so much reduced, that their
produce could no longer pay the expense of working them, or replace,
with a profit, the food, clothes, lodging, and other necessaries which
were consumed in that operation. This was the case, too, with the
mines of Cuba and St. Domingo, and even with the ancient mines of
Peru, after the discovery of those of Potosi.

The price of every metal, at every mine, therefore, being regulated in
some measure by its price at the most fertile mine in the world that
is actually wrought, it can, at the greater part of mines, do very
little more than pay the expense of working, and can seldom afford a
very high rent to the landlord. Rent accordingly, seems at the greater
part of mines to have but a small share in the price of the coarse,
and a still smaller in that of the precious metals. Labour and profit
make up the greater part of both.

A sixth part of the gross produce may be reckoned the average rent of
the tin mines of Cornwall, the most fertile that are known in the
world, as we are told by the Rev. Mr. Borlace, vice-warden of the
stannaries. Some, he says, afford more, and some do not afford so
much. A sixth part of the gross produce is the rent, too, of several
very fertile lead mines in Scotland.

In the silver mines of Peru, we are told by Frezier and Ulloa, the
proprietor frequently exacts no other acknowledgment from the
undertaker of the mine, but that he will grind the ore at his mill,
paying him the ordinary multure or price of grinding. Till 1736,
indeed, the tax of the king of Spain amounted to one fifth of the
standard silver, which till then might be considered as the real rent
of the greater part of the silver mines of Peru, the richest which
have been known in the world. If there had been no tax, this fifth
would naturally have belonged to the landlord, and many mines might
have been wrought which could not then be wrought, because they could
not afford this tax. The tax of the duke of Cornwall upon tin is
supposed to amount to more than five per cent. or one twentieth part
of the value; and whatever may be his proportion, it would naturally,
too, belong to the proprietor of the mine, if tin was duty free. But
if you add one twentieth to one sixth, you will find that the whole
average rent of the tin mines of Cornwall, was to the whole average
rent of the silver mines of Peru, as thirteen to twelve. But the
silver mines of Peru are not now able to pay even this low rent; and
the tax upon silver was, in 1736, reduced from one fifth to one tenth.
Even this tax upon silver, too, gives more temptation to smuggling
than the tax of one twentieth upon tin; and smuggling must be much
easier in the precious than in the bulky commodity. The tax of the
king of Spain, accordingly, is said to be very ill paid, and that of
the duke of Cornwall very well. Rent, therefore, it is probable, makes
a greater part of the price of tin at the most fertile tin mines than
it does of silver at the most fertile silver mines in the world. After
replacing the stock employed in working those different mines,
together with its ordinary profits, the residue which remains to the
proprietor is greater, it seems, in the coarse, than in the precious
metal.

Neither are the profits of the undertakers of silver mines commonly
very great in Peru. The same most respectable and well-informed authors
acquaint us, that when any person undertakes to work a new mine in
Peru, he is universally looked upon as a man destined to bankruptcy
and ruin, and is upon that account shunned and avoided by every
body. Mining, it seems, is considered there in the same light as here,
as a lottery, in which the prizes do not compensate the blanks, though
the greatness of some tempts many adventurers to throw away their
fortunes in such unprosperous projects.

As the sovereign, however, derives a considerable part of his revenue
from the produce of silver mines, the law in Peru gives every possible
encouragement to the discovery and working of new ones. Whoever
discovers a new mine, is entitled to measure off two hundred and
forty-six feet in length, according to what he supposes to be the
direction of the vein, and half as much in breadth. He becomes
proprietor of this portion of the mine, and can work it without paving
any acknowledgment to the landlord. The interest of the duke of
Cornwall has given occasion to a regulation nearly of the same kind in
that ancient dutchy. In waste and uninclosed lands, any person who
discovers a tin mine may mark out its limits to a certain extent,
which is called bounding a mine. The bounder becomes the real
proprietor of the mine, and may either work it himself, or give it in
lease to another, without the consent of the owner of the land, to
whom, however, a very small acknowledgment must be paid upon working
it. In both regulations, the sacred rights of private property are
sacrificed to the supposed interests of public revenue.

The same encouragement is given in Peru to the discovery and working
of new gold mines; and in gold the king's tax amounts only to a
twentieth part of the standard rental. It was once a fifth, and
afterwards a tenth, as in silver; but it was found that the work could
not bear even the lowest of these two taxes. If it is rare, however,
say the same authors, Frezier and Ulloa, to find a person who has made
his fortune by a silver, it is still much rarer to find one who has
done so by a gold mine. This twentieth part seems to be the whole rent
which is paid by the greater part of the gold mines of Chili and Peru.
Gold, too, is much more liable to be smuggled than even silver; not
only on account of the superior value of the metal in proportion to
its bulk, but on account of the peculiar way in which nature produces
it. Silver is very seldom found virgin, but, like most other metals,
is generally mineralized with some other body, from which it is
impossible to separate it in such quantities as will pay for the
expense, but by a very laborious and tedious operation, which cannot
well be carried on but in work-houses erected for the purpose, and,
therefore, exposed to the inspection of the king's officers. Gold, on
the contrary, is almost always found virgin. It is sometimes found in
pieces of some bulk; and, even when mixed, in small and almost
insensible particles, with sand, earth, and other extraneous bodies,
it can be separated from them by a very short and simple operation,
which can be carried on in any private house by any body who is
possessed of a small quantity of mercury. If the king's tax,
therefore, is but ill paid upon silver, it is likely to be much worse
paid upon gold; and rent must make a much smaller part of the price of
gold than that of silver.

The lowest price at which the precious metals can be sold, or the
smallest quantity of other goods for which they can be exchanged,
during any considerable time, is regulated by the same principles
which fix the lowest ordinary price of all other goods. The stock
which must commonly be employed, the food, clothes, and lodging, which
must commonly be consumed in bringing them from the mine to the
market, determine it. It must at least be sufficient to replace that
stock, with the ordinary profits.

Their highest price, however, seems not to be necessarily determined
by any thing but the actual scarcity or plenty of these metals
themselves. It is not determined by that of any other commodity, in
the same manner as the price of coals is by that of wood, beyond which
no scarcity can ever raise it. Increase the scarcity of gold to a
certain degree, and the smallest bit of it may become more precious
than a diamond, and exchange for a greater quantity of other goods.

The demand for those metals arises partly from their utility, and
partly from their beauty. If you except iron, they are more useful
than, perhaps, any other metal. As they are less liable to rust and
impurity, they can more easily be kept clean; and the utensils, either
of the table or the kitchen, are often, upon that account, more
agreeable when made of them. A silver boiler is more cleanly than a
lead, copper, or tin one; and the same quality would render a gold
boiler still better than a silver one. Their principal merit, however,
arises from their beauty, which renders them peculiarly fit for the
ornaments of dress and furniture. No paint or dye can give so splendid
a colour as gilding. The merit of their beauty is greatly enhanced by
their scarcity. With the greater part of rich people, the chief
enjoyment of riches consists in the parade of riches; which, in their
eye, is never so complete as when they appear to possess those
decisive marks of opulence which nobody can possess but themselves. In
their eyes, the merit of an object, which is in any degree either
useful or beautiful, is greatly enhanced by its scarcity, or by the
great labour which it requires to collect any considerable quantity of
it; a labour which nobody can afford to pay but themselves. Such
objects they are willing to purchase at a higher price than things
much more beautiful and useful, but more common. These qualities of
utility, beauty, and scarcity, are the original foundation of the high
price of those metals, or of the great quantity of other goods for
which they can everywhere be exchanged. This value was antecedent to,
and independent of their being employed as coin, and was the quality
which fitted them for that employment. That employment, however, by
occasioning a new demand, and by diminishing the quantity which could
be employed in any other way, may have afterwards contributed to keep
up or increase their value.

The demand for the precious stones arises altogether from their
beauty. They are of no use but as ornaments; and the merit of their
beauty is greatly enhanced by their scarcity, or by the difficulty and
expense of getting them from the mine. Wages and profit accordingly
make up, upon most occasions, almost the whole of the high price. Rent
comes in but for a very small share, frequently for no share; and the
most fertile mines only afford any considerable rent. When Tavernier,
a jeweller, visited the diamond mines of Golconda and Visiapour, he
was informed that the sovereign of the country, for whose benefit they
were wrought, had ordered all of them to be shut up except those which
yielded the largest and finest stones. The other, it seems, were to
the proprietor not worth the working.

As the prices, both of the precious metals and of the precious stones,
is regulated all over the world by their price at the most fertile
mine in it, the rent which a mine of either can afford to its
proprietor is in proportion, not to its absolute, but to what may be
called its relative fertility, or to its superiority over other mines
of the same kind. If new mines were discovered, as much superior to
those of Potosi, as they were superior to those of Europe, the value
of silver might be so much degraded as to render even the mines of
Potosi not worth the working. Before the discovery of the Spanish West
Indies, the most fertile mines in Europe may have afforded as great a
rent to their proprietors as the richest mines in Peru do at present.
Though the quantity of silver was much less, it might have exchanged
for an equal quantity of other goods, and the proprietor's share might
have enabled him to purchase or command an equal quantity either of
labour or of commodities.

The value, both of the produce and of the rent, the real revenue which
they afforded, both to the public and to the proprietor, might have
been the same.

The most abundant mines, either of the precious metals, or of the
precious stones, could add little to the wealth of the world. A
produce, of which the value is principally derived from its scarcity,
is necessarily degraded by its abundance. A service of plate, and the
other frivolous ornaments of dress and furniture, could be purchased
for a smaller quantity of commodities; and in this would consist the
sole advantage which the world could derive from that abundance.

It is otherwise in estates above ground. The value, both of their
produce and of their rent, is in proportion to their absolute, and not
to their relative fertility. The land which produces a certain
quantity of food, clothes, and lodging, can always feed, clothe, and
lodge, a certain number of people; and whatever may be the proportion
of the landlord, it will always give him a proportionable command of
the labour of those people, and of the commodities with which that
labour can supply him. The value of the most barren land is not
diminished by the neighbourhood of the most fertile. On the contrary,
it is generally increased by it. The great number of people maintained
by the fertile lands afford a market to many parts of the produce of
the barren, which they could never have found among those whom their
own produce could maintain.

Whatever increases the fertility of land in producing food, increases
not only the value of the lands upon which the improvement is
bestowed, but contributes likewise to increase that of many other
lands, by creating a new demand for their produce. That abundance of
food, of which, in consequence of the improvement of land, many people
have the disposal beyond what they themselves can consume, is the
great cause of the demand, both for the precious metals and the
precious stones, as well as for every other conveniency and ornament
of dress, lodging, household furniture, and equipage. Food not only
constitutes the principal part of the riches of the world, but it is
the abundance of food which gives the principal part of their value to
many other sorts of riches. The poor inhabitants of Cuba and St.
Domingo, when they were first discovered by the Spaniards, used to
wear little bits of gold as ornaments in their hair and other parts of
their dress. They seemed to value them as we would do any little
pebbles of somewhat more than ordinary beauty, and to consider them as
just worth the picking up, but not worth the refusing to any body who
asked them, They gave them to their new guests at the first request,
without seeming to think that they had made them any very valuable
present. They were astonished to observe the rage of the Spaniards to
obtain them; and had no notion that there could anywhere be a country
in which many people had the disposal of so great a superfluity of
food; so scanty always among themselves, that, for a very small
quantity of those glittering baubles, they would willingly give as
much as might maintain a whole family for many years. Could they have
been made to understand this, the passion of the Spaniards would not
have surprised them.

PART III. -- Of the variations in the Proportion between the
respective Values of that sort of Produce which always affords Rent,
and of that which sometimes does, and sometimes does not, afford Rent.

The increasing abundance of food, in consequence of the increasing
improvement and cultivation, must necessarily increase the demand for
every part of the produce of land which is not food, and which can be
applied either to use or to ornament. In the whole progress of
improvement, it might, therefore, be expected there should be only one
variation in the comparative values of those two different sorts of
produce. The value of that sort which sometimes does, and sometimes
does not afford rent, should constantly rise in proportion to that
which always affords some rent. As art and industry advance, the
materials of clothing and lodging, the useful fossils and materials of
the earth, the precious metals and the precious stones, should
gradually come to be more and more in demand, should gradually
exchange for a greater and a greater quantity of food; or, in other
words, should gradually become dearer and dearer. This, accordingly,
has been the case with most of these things upon most occasions, and
would have been the case with all of them upon all occasions, if
particular accidents had not, upon some occasions, increased the
supply of some of them in a still greater proportion than the demand.

The value of a free-stone quarry, for example, will necessarily
increase with the increasing improvement and population of the country
round about it, especially if it should be the only one in the
neighbourhood. But the value of a silver mine, even though there
should not be another within a thousand miles of it, will not
necessarily increase with the improvement of the country in which it
is situated. The market for the produce of a free-stone quarry can
seldom extend more than a few miles round about it, and the demand
must generally be in proportion to the improvement and population of
that small district; but the market for the produce of a silver mine
may extend over the whole known world. Unless the world in general.
therefore, be advancing in improvement and population, the demand for
silver might not be at all increased by the improvement even of a
large country in the neighbourhood of the mine. Even though the world
in general were improving, yet if, in the course of its improvements,
new mines should be discovered, much more fertile than any which had
been known before, though the demand for silver would necessarily
increase, yet the supply might increase in so much a greater
proportion, that the real price of that metal might gradually fall;
that is, any given quantity, a pound weight of it, for example, might
gradually purchase or command a smaller and a smaller quantity of
labour, or exchange for a smaller and a smaller quantity of corn, the
principal part of the subsistence of the labourer.

The great market for silver is the commercial and civilized part of
the world.

If, by the general progress of improvement, the demand of this market
should increase, while, at the same time, the supply did not increase
in the same proportion, the value of silver would gradually rise in
proportion to that of corn. Any given quantity of silver would
exchange for a greater and a greater quantity of corn; or, in other
words, the average money price of corn would gradually become cheaper
and cheaper.

If, on the contrary, the supply, by some accident, should increase,
for many years together, in a greater proportion than the demand, that
metal would gradually become cheaper and cheaper; or, in other words,
the average money price of corn would, in spite of all improvements,
gradually become dearer and dearer.

But if, on the other hand, the supply of that metal should increase
nearly in the same proportion as the demand, it would continue to
purchase or exchange for nearly the same quantity of corn; and the
average money price of corn would, in spite of all improvements.
continue very nearly the same.

These three seem to exhaust all the possible combinations of events
which can happen in the progress of improvement; and during the course
of the four centuries preceding the present, if we may judge by what
has happened both in France and Great Britain, each of those three
different combinations seems to have taken place in the European
market, and nearly in the same order, too, in which I have here set
them down.

Digression concerning the Variations in the value of Silver during the
Course of the Four last Centuries.

First Period. -- In 1350, and for some time before, the average price
of the quarter of wheat in England seems not to have been estimated
lower than four ounces of silver, Tower weight, equal to about twenty
shillings of our present money. From this price it seems to have
fallen gradually to two ounces of silver, equal to about ten shillings
of our present money, the price at which we find it estimated in the
beginning of the sixteenth century, and at which it seems to have
continued to be estimated till about 1570.

In 1350, being the 25th of Edward III. was enacted what is called the
Statute of Labourers. In the preamble, it complains much of the
insolence of servants, who endeavoured to raise their wages upon their
masters. It therefore ordains, that all servants and labourers should,
for the future, be contented with the same wages and liveries
(liveries in those times signified not only clothes, but provisions)
which they had been accustomed to receive in the 20th year of the
king, and the four preceding years; that, upon this account, their
livery-wheat should nowhere be estimated higher than tenpence
a-bushel, and that it should always be in the option of the master to
deliver them either the wheat or the money. Tenpence: a-bushel,
therefore, had, in the 25th of Edward III. been reckoned a very
moderate price of wheat, since it required a particular statute to
oblige servants to accept of it in exchange for their usual livery of
provisions; and it had been reckoned a reasonable price ten years
before that, or in the 16th year of the king, the term to which the
statute refers. But in the 16th year of Edward III. tenpence contained
about half an ounce of silver, Tower weight, and was nearly equal to
half-a-crown of our present money. Four ounces of silver, Tower
weight, therefore, equal to six shillings and eightpence of the money
of those times, and to near twenty shillings of that of the present,
must have been reckoned a moderate price for the quarter of eight
bushels.

This statute is surely a better evidence of what was reckoned, in
those times, a moderate price of grain, than the prices of some
particular years, which have generally been recorded by historians and
other writers, on account of their extraordinary dearness or
cheapness, and from which, therefore, it is difficult to form any
judgment concerning what may have been the ordinary price. There are,
besides, other reasons for believing that, in the beginning of the
fourteenth century, and for some time before, the common price of
wheat was not less than four ounces of silver the quarter, and that of
other grain in proportion.

In 1309, Ralph de Born, prior of St Augustine's, Canterbury, gave a
feast upon his installation-day, of which William Thorn has preserved,
not only the bill of fare, but the prices of many particulars. In that
feast were consumed, 1st, fifty-three quarters of wheat, which cost
nineteen pounds, or seven shillings, and twopence a-quarter, equal to
about one-and-twenty shillings and sixpence of our present money;
2dly, fifty-eight quarters of malt, which cost seventeen pounds ten
shillings, or six shillings a-quarter, equal to about eighteen
shillings of our present money; 3dly, twenty quarters of oats, which
cost four pounds, or four shillings a-quarter, equal to about twelve
shillings of our present money. The prices of malt and oats seem here
to lie higher than their ordinary proportion to the price of wheat.

These prices are not recorded, on account of their extraordinary
dearness or cheapness, but are mentioned accidentally, as the prices
actually paid for large quantities of grain consumed at a feast, which
was famous for its magnificence.

In 1262, being the 51st of Henry III. was revived an ancient statute,
called the assize of bread and ale, which, the king says in the
preamble, had been made in the times of his progenitors, some time
kings of England. It is probably, therefore, as old at least as the
time of his grandfather, Henry II. and may have been as old as the
Conquest. It regulates the price of bread according as the prices of
wheat may happen to be, from one shilling to twenty shillings the
quarter of the money of those times. But statutes of this kind are
generally presumed to provide with equal care for all deviations from
the middle price, for those below it, as well as for those above it.
Ten shillings, therefore, containing six ounces of silver, Tower
weight, and equal to about thirty shillings of our present money,
must, upon this supposition, have been reckoned the middle price of
the quarter of wheat when this statute was first enacted, and must
have continued to be so in the 51st of Henry III. We cannot,
therefore, be very wrong in supposing that the middle price was not
less than one-third of the highest price at which this statute
regulates the price of bread, or than six shillings and eightpence of
the money of those times, containing four ounces of silver, Tower
weight.

From these different facts, therefore, we seem to have some reason to
conclude that, about the middle of the fourteenth century, and for a
considerable time before, the average or ordinary price of the quarter
of wheat was not supposed to be less than four ounces of silver, Tower
weight.

From about the middle of the fourteenth to the beginning of the
sixteenth century, what was reckoned the reasonable and moderate, that
is, the ordinary or average price of wheat, seems to have sunk
gradually to about one half of this price; so as at last to have
fallen to about two ounces of silver, Tower weight, equal to about ten
shillings of our present money. It continued to be estimated at this
price till about 1570.

In the household book of Henry, the fifth earl of Northumberland,
drawn up in 1512 there are two different estimations of wheat. In one
of them it is computed at six shilling and eightpence the quarter, in
the other at five shillings and eightpence only. In 1512, six
shillings and eightpence contained only two ounces of silver, Tower
weight, and were equal to about ten shillings of our present money.

From the 25th of Edward III. to the beginning of the reign of
Elizabeth, during the space of more than two hundred years, six
shillings and eightpence, it appears from several different statutes,
had continued to be considered as what is called the moderate and
reasonable, that is, the ordinary or average price of wheat. The
quantity of silver, however, contained in that nominal sum was, during
the course of this period, continually diminishing in consequence of
some alterations which were made in the coin. But the increase of the
value of silver had, it seems, so far compensated the diminution of
the quantity of it contained in the same nominal sum, that the
legislature did not think it worth while to attend to this
circumstance.

Thus, in 1436, it was enacted, that wheat might be exported without a
licence when the price was so low as six shillings and eightpence: and
in 1463, it was enacted, that no wheat should be imported if the price
was not above six shillings and eightpence the quarter: The
legislature had imagined, that when the price was so low, there could
be no inconveniency in exportation, but that when it rose higher, it
became prudent to allow of importation. Six shillings and eightpence,
therefore, containing about the same quantity of silver as thirteen
shillings and fourpence of our present money (one-third part less than
the same nominal sum contained in the time of Edward III), had, in
those times, been considered as what is called the moderate and
reasonable price of wheat.

In 1554, by the 1st and 2nd of Philip and Mary, and in 1558, by the
1st of Elizabeth, the exportation of wheat was in the same manner
prohibited, whenever the price of the quarter should exceed six
shillings and eightpence, which did not then contain two penny worth
more silver than the same nominal sum does at present. But it had soon
been found, that to restrain the exportation of wheat till the price
was so very low, was, in reality, to prohibit it altogether. In 1562,
therefore, by the 5th of Elizabeth, the exportation of wheat was
allowed from certain ports, whenever the price of the quarter should
not exceed ten shillings, containing nearly the same quantity of
silver as the like nominal sum does at present. This price had at this
time, therefore, been considered as what is called the moderate and
reasonable price of wheat. It agrees nearly with the estimation of the
Northumberland book in 1512.

That in France the average price of grain was, in the same manner,
much lower in the end of the fifteenth and beginning of the sixteenth
century, than in the two centuries preceding, has been observed both
by Mr Dupré de St Maur, and by the elegant author of the Essay on the
Policy of Grain. Its price, during the same period, had probably sunk
in the same manner through the greater part of Europe.

This rise in the value of silver, in proportion to that of corn, may
either have been owing altogether to the increase of the demand for
that metal, in consequence of increasing improvement and cultivation,
the supply, in the mean time, continuing the same as before; or, the
demand continuing the same as before, it may have been owing
altogether to the gradual diminution of the supply: the greater part
of the mines which were then known in the world being much exhausted,
and, consequently, the expense of working them much increased; or it
may have been owing partly to the one, and partly to the other of
those two circumstances. In the end of the fifteenth and beginning of
the sixteenth centuries, the greater part of Europe was approaching
towards a more settled from of government than it had enjoyed for
several ages before. The increase of security would naturally increase
industry and improvement; and the demand for the precious metals, as
well as for every other luxury and ornament, would naturally increase
with the increase of riches. A greater annual produce would require a
greater quantity of coin to circulate it; and a greater number of rich
people would require a greater quantity of plate and other ornaments
of silver. It is natural to suppose, too, that the greater part of the
mines which then supplied the European market with silver might be a
good deal exhausted, and have become more expensive in the working.
They had been wrought, many of them, from the time of the Romans.

It has been the opinion, however, of the greater part of those who
have written upon the prices of commodities in ancient times, that,
from the Conquest, perhaps from the invasion of Julius Caesar, till
the discovery of the mines of America, the value of silver was
continually diminishing. This opinion they seem to have been led into,
partly by the observations which they had occasion to make upon the
prices both of corn and of some other parts of the rude produce of
land, and partly by the popular notion, that as the quantity of silver
naturally increases in every country with the increase of wealth, so
its value diminishes as it quantity increases.

In their observations upon the prices of corn, three different
circumstances seem frequently to have misled them.

First, in ancient times, almost all rents were paid in kind; in a
certain quantity of corn, cattle, poultry, etc. It sometimes happened,
however, that the landlord would stipulate, that he should be at
liberty to demand of the tenant, either the annual payment in kind or
a certain sum of money instead of it. The price at which the payment
in kind was in this manner exchanged for a certain sum of money, is in
Scotland called the conversion price. As the option is always in the
landlord to take either the substance or the price, it is necessary,
for the safety of the tenant, that the conversion price should rather
be below than above the average market price. In many places,
accordingly, it is not much above one half of this price. Through the
greater part of Scotland this custom still continues with regard to
poultry, and in some places with regard to cattle. It might probably
have continued to take place, too, with regard to corn, had not the
institution of the public fiars put an end to it. These are annual
valuations, according to the judgment of an assize, of the average
price of all the different sorts of grain, and of all the different
qualities of each, according to the actual market price in every
different county. This institution rendered it sufficiently safe for
the tenant, and much more convenient for the landlord, to convert, as
they call it, the corn rent, rather at what should happen to be the
price of the fiars of each year, than at any certain fixed price. But
the writers who have collected the prices of corn in ancient times
seem frequently to have mistaken what is called in Scotland the
conversion price for the actual market price. Fleetwood acknowledges,
upon one occasion, that he had made this mistake. As he wrote his
book, however, for a particular purpose, he does not think proper to
make this acknowledgment till after transcribing this conversion price
fifteen times. The price is eight shillings the quarter of wheat. This
sum in 1423, the year at which he begins with it, contained the same
quantity of silver as sixteen shillings of our present money. But in
1562, the year at which he ends with it, it contained no more than the
same nominal sum does at present.

Secondly, they have been misled by the slovenly manner in which some
ancient statutes of assize had been sometimes transcribed by lazy
copiers, and sometimes, perhaps, actually composed by the legislature.

The ancient statutes of assize seem to have begun always with
determining what ought to be the price of bread and ale when the price
of wheat and barley were at the lowest; and to have proceeded
gradually to determine what it ought to be, according as the prices of
those two sorts of grain should gradually rise above this lowest
price. But the transcribers of those statutes seem frequently to have
thought it sufficient to copy the regulation as far as the three or
four first and lowest prices; saving in this manner their own labour,
and judging, I suppose, that this was enough to show what proportion
ought to be observed in all higher prices.

Thus, in the assize of bread and ale, of the 51st of Henry III. the
price of bread was regulated according to the different prices of
wheat, from one shilling to twenty shillings the quarter of the money
of those times. But in the manuscripts from which all the different
editions of the statutes, preceding that of Mr Ruffhead, were printed,
the copiers had never transcribed this regulation beyond the price of
twelve shillings. Several writers, therefore, being misled by this
faulty transcription, very naturally conclude that the middle price,
or six shillings the quarter, equal to about eighteen shillings of our
present money, was the ordinary or average price of wheat at that
time.

In the statute of Tumbrel and Pillory, enacted nearly about the same
time, the price of ale is regulated according to every sixpence rise
in the price of barley, from two shillings, to four shillings the
quarter. That four shillings, however, was not considered as the
highest price to which barley might frequently rise in those times,
and that these prices were only given as an example of the proportion
which ought to be observed in all other prices, whether higher or
lower, we may infer from the last words of the statute: "Et sic
deinceps crescetur vel diminuetur per sex denarios." The expression is
very slovenly, but the meaning is plain enough, "that the price of ale
is in this manner to be increased or diminished according to every
sixpence rise or fall in the price of barley." In the composition of
this statute, the legislature itself seems to have been as negligent
as the copiers were in the transcription of the other.

In an ancient manuscript of the Regiam Majestatem, an old Scotch law
book, there is a statute of assize, in which the price of bread is
regulated according to all the different prices of wheat, from
tenpence to three shillings the Scotch boll, equal to about half an
English quarter. Three shillings Scotch, at the time when this assize
is supposed to have been enacted, were equal to about nine shillings
sterling of our present money Mr Ruddiman seems {See his Preface to
Anderson's Diplomata Scotiae.} to conclude from this, that three
shillings was the highest price to which wheat ever rose in those
times, and that tenpence, a shilling, or at most two shillings, were
the ordinary prices. Upon consulting the manuscript, however, it
appears evidently, that all these prices are only set down as examples
of the proportion which ought to be observed between the respective
prices of wheat and bread. The last words of the statute are "reliqua
judicabis secundum praescripta, habendo respectum ad pretium bladi." --
"You shall judge of the remaining cases, according to what is above
written, having respect to the price of corn."

Thirdly, they seem to have been misled too, by the very low price at
which wheat was sometimes sold in very ancient times; and to have
imagined, that as its lowest price was then much lower than in later
times its ordinary price must likewise have been much lower. They
might have found, however, that in those ancient times its highest
price was fully as much above, as its lowest price was below any thing
that had ever been known in later times. Thus, in 1270, Fleetwood
gives us two prices of the quarter of wheat. The one is four pounds
sixteen shillings of the money of those times, equal to fourteen
pounds eight shillings of that of the present; the other is six pounds
eight shillings, equal to nineteen pounds four shillings of our
present money. No price can be found in the end of the fifteenth, or
beginning of the sixteenth century, which approaches to the
extravagance of these. The price of corn, though at all times liable
to variation varies most in those turbulent and disorderly societies,
in which the interruption of all commerce and communication hinders
the plenty of one part of the country from relieving the scarcity of
another. In the disorderly state of England under the Plantagenets,
who governed it from about the middle of the twelfth till towards the
end of the fifteenth century, one district might be in plenty, while
another, at no great distance, by having its crop destroyed, either by
some accident of the seasons, or by the incursion of some neighbouring
baron, might be suffering all the horrors of a famine; and yet if the
lands of some hostile lord were interposed between them, the one might
not be able to give the least assistance to the other. Under the
vigorous administration of the Tudors, who governed England during the
latter part of the fifteenth, and through the whole of the sixteenth
century, no baron was powerful enough to dare to disturb the public
security.

The reader will find at the end of this chapter all the prices of
wheat which have been collected by Fleetwood, from 1202 to 1597, both
inclusive, reduced to the money of the present times, and digested,
according to the order of time, into seven divisions of twelve years
each. At the end of each division, too, he will find the average price
of the twelve years of which it consists. In that long period of time,
Fleetwood has been able to collect the prices of no more than eighty
years; so that four years are wanting to make out the last twelve
years. I have added, therefore, from the accounts of Eton college, the
prices of 1598, 1599, 1600, and 1601. It is the only addition which I
have made. The reader will see, that from the beginning of the
thirteenth till after the middle of the sixteenth century, the average
price of each twelve years grows gradually lower and lower; and that
towards the end of the sixteenth century it begins to rise again. The
prices, indeed, which Fleetwood has been able to collect, seem to have
been those chiefly which were remarkable for extraordinary dearness or
cheapness; and I do not pretend that any very certain conclusion can
be drawn from them. So far, however, as they prove any thing at all,
they confirm the account which I have been endeavouring to give.
Fleetwood himself, however, seems, with most other writers, to have
believed, that, during all this period, the value of silver, in
consequence of its increasing abundance, was continually diminishing.
The prices of corn, which he himself has collected, certainly do not
agree with this opinion. They agree perfectly with that of Mr Dupré de
St Maur, and with that which I have been endeavouring to explain.
Bishop Fleetwood and Mr Dupré de St Maur are the two authors who seem
to have collected, with the greatest diligence and fidelity, the
prices of things in ancient times. It is some what curious that,
though their opinions are so very different, their facts, so far as
they relate to the price of corn at least, should coincide so very
exactly.

It is not, however, so much from the low price of corn, as from that
of some other parts of the rude produce of land, that the most
judicious writers have inferred the great value of silver in those
very ancient times. Corn, it has been said, being a sort of
manufacture, was, in those rude ages, much dearer in proportion than
the greater part of other commodities; it is meant, I suppose, than
the greater part of unmanufactured commodities, such as cattle,
poultry, game of all kinds, etc. That in those times of poverty and
barbarism these were proportionably much cheaper than corn, is
undoubtedly true. But this cheapness was not the effect of the high
value of silver, but of the low value of those commodities. It was not
because silver would in such times purchase or represent a greater
quantity of labour, but because such commodities would purchase or
represent a much smaller quantity than in times of more opulence and
improvement. Silver must certainly be cheaper in Spanish America than
in Europe; in the country where it is produced, than in the country to
which it is brought, at the expense of a long carriage both by land
and by sea, of a freight, and an insurance. One-and-twenty pence
halfpenny sterling, however, we are told by Ulloa, was, not many years
ago, at Buenos Ayres, the price of an ox chosen from a herd of three
or four hundred. Sixteen shillings sterling, we are told by Mr Byron,
was the price of a good horse in the capital of Chili. In a country
naturally fertile, but of which the far greater part is altogether
uncultivated, cattle, poultry, game of all kinds, etc. as they can be
acquired with a very small quantity of labour, so they will purchase
or command but a very small quantity. The low money price for which
they may be sold, is no proof that the real value of silver is there
very high, but that the real value of those commodities is very low.

Labour, it must always be remembered, and not any particular
commodity, or set of commodities, is the real measure of the value
both of silver and of all other commodities.

But in countries almost waste, or but thinly inhabited, cattle,
poultry, game of all kinds, etc. as they are the spontaneous
productions of Nature, so she frequently produces them in much greater
quantities than the consumption of the inhabitants requires. In such a
state of things, the supply commonly exceeds the demand. In different
states of society, in different states of improvement, therefore, such
commodities will represent, or be equivalent, to very different
quantities of labour.

In every state of society, in every stage of improvement, corn is the
production of human industry. But the average produce of every sort of
industry is always suited, more or less exactly, to the average
consumption; the average supply to the average demand. In every
different stage of improvement, besides, the raising of equal
quantities of corn in the same soil and climate, will, at an average,
require nearly equal quantities of labour; or, what comes to the same
thing, the price of nearly equal quantities; the continual increase of
the productive powers of labour, in an improved state of cultivation,
being more or less counterbalanced by the continual increasing price
of cattle, the principal instruments of agriculture. Upon all these
accounts, therefore, we may rest assured, that equal quantities of
corn will, in every state of society, in every stage of improvement,
more nearly represent, or be equivalent to, equal quantities of
labour, than equal quantities of any other part of the rude produce of
land. Corn, accordingly, it has already been observed, is, in all the
different stages of wealth and improvement, a more accurate measure of
value than any other commodity or set of commodities. In all those
different stages, therefore, we can judge better of the real value of
silver, by comparing it with corn, than by comparing it with any other
commodity or set of commodities.

Corn, besides, or whatever else is the common and favourite vegetable
food of the people, constitutes, in every civilized country, the
principal part of the subsistence of the labourer. In consequence of
the extension of agriculture, the land of every country produces a
much greater quantity of vegetable than of animal food, and the
labourer everywhere lives chiefly upon the wholesome food that is
cheapest and most abundant. Butcher's meat, except in the most
thriving countries, or where labour is most highly rewarded, makes but
an insignificant part of his subsistence; poultry makes a still
smaller part of it, and game no part of it. In France, and even in
Scotland, where labour is somewhat better rewarded than in France, the
labouring poor seldom eat butcher's meat, except upon holidays, and
other extraordinary occasions. The money price of labour, therefore,
depends much more upon the average money price of corn, the
subsistence of the labourer, than upon that of butcher's meat, or of
any other part of the rude produce of land. The real value of gold and
silver, therefore, the real quantity of labour which they can purchase
or command, depends much more upon the quantity of corn which they can
purchase or command, than upon that of butcher's meat, or any other
part of the rude produce of land.

Such slight observations, however, upon the prices either of corn or
of other commodities, would not probably have misled so many
intelligent authors, had they not been influenced at the same time by
the popular notion, that as the quantity of silver naturally increases
in every country with the increase of wealth, so its value diminishes
as its quantity increases. This notion, however, seems to be
altogether groundless.

The quantity of the precious metals may increase in any country from
two different causes; either, first, from the increased abundance of
the mines which supply it; or, secondly, from the increased wealth of
the people, from the increased produce of their annual labour. The
first of these causes is no doubt necessarily connected with the
diminution of the value of the precious metals; but the second is not.

When more abundant mines are discovered, a greater quantity of the
precious metals is brought to market; and the quantity of the
necessaries and conveniencies of life for which they must be exchanged
being the same as before, equal quantities of the metals must be
exchanged for smaller quantities of commodities. So far, therefore, as
the increase of the quantity of the precious metals in any country
arises from the increased abundance of the mines, it is necessarily
connected with some diminution of their value.

When, on the contrary, the wealth of any country increases, when the
annual produce of its labour becomes gradually greater and greater, a
greater quantity of coin becomes necessary in order to circulate a
greater quantity of commodities: and the people, as they can afford
it, as they have more commodities to give for it, will naturally
purchase a greater and a greater quantity of plate. The quantity of
their coin will increase from necessity; the quantity of their plate
from vanity and ostentation, or from the same reason that the quantity
of fine statues, pictures, and of every other luxury and curiosity, is
likely to increase among them. But as statuaries and painters are not
likely to be worse rewarded in times of wealth and prosperity, than in
times of poverty and depression, so gold and silver are not likely to
be worse paid for.

The price of gold and silver, when the accidental discovery of more
abundant mines does not keep it down, as it naturally rises with the
wealth of every country; so, whatever be the state of the mines, it is
at all times naturally higher in a rich than in a poor country. Gold
and silver, like all other commodities, naturally seek the market
where the best price is given for them, and the best price is commonly
given for every thing in the country which can best afford it. Labour,
it must be remembered, is the ultimate price which is paid for every
thing; and in countries where labour is equally well rewarded, the
money price of labour will be in proportion to that of the subsistence
of the labourer. But gold and silver will naturally exchange for a
greater quantity of subsistence in a rich than in a poor country; in a
country which abounds with subsistence, than in one which is but
indifferently supplied with it. If the two countries are at a great
distance, the difference may be very great; because, though the metals
naturally fly from the worse to the better market, yet it may be
difficult to transport them in such quantities as to bring their price
nearly to a level in both. If the countries are near, the difference
will be smaller, and may sometimes be scarce perceptible; because in
this case the transportation will be easy. China is a much richer
country than any part of Europe, and the difference between the price
of subsistence in China and in Europe is very great. Rice in China is
much cheaper than wheat is any where in Europe. England is a much
richer country than Scotland, but the difference between the money
price of corn in those two countries is much smaller, and is but just
perceptible. In proportion to the quantity or measure, Scotch corn
generally appears to be a good deal cheaper than English; but, in
proportion to its quality, it is certainly somewhat dearer. Scotland
receives almost every year very large supplies from England, and every
commodity must commonly be somewhat dearer in the country to which it
is brought than in that from which it comes. English corn, therefore,
must be dearer in Scotland than in England; and yet in proportion to
its quality, or to the quantity and goodness of the flour or meal
which can be made from it, it cannot commonly be sold higher there
than the Scotch corn which comes to market in competition with it.

The difference between the money price of labour in China and in
Europe, is still greater than that between the money price of
subsistence; because the real recompence of labour is higher in Europe
than in China, the greater part of Europe being in an improving state,
while China seems to be standing still. The money price of labour is
lower in Scotland than in England, because the real recompence of
labour is much lower: Scotland, though advancing to greater wealth,
advances much more slowly than England. The frequency of emigration
from Scotland, and the rarity of it from England, sufficiently prove
that the demand for labour is very different in the two countries. The
proportion between the real recompence of labour in different
countries, it must be remembered, is naturally regulated, not by their
actual wealth or poverty, but by their advancing, stationary, or
declining condition.

Gold and silver, as they are naturally of the greatest value among the
richest, so they are naturally of the least value among the poorest
nations. Among savages, the poorest of all nations, they are scarce of
any value.

In great towns, corn is always dearer than in remote parts of the
country. This, however, is the effect, not of the real cheapness of
silver, but of the real dearness of corn. It does not cost less labour
to bring silver to the great town than to the remote parts of the
country; but it costs a great deal more to bring corn.

In some very rich and commercial countries, such as Holland and the
territory of Genoa, corn is dear for the same reason that it is dear
in great towns. They do not produce enough to maintain their
inhabitants. They are rich in the industry and skill of their
artificers and manufacturers, in every sort of machinery which can
facilitate and abridge labour; in shipping, and in all the other
instruments and means of carriage and commerce: but they are poor in
corn, which, as it must be brought to them from distant countries,
must, by an addition to its price, pay for the carriage from those
countries. It does not cost less labour to bring silver to Amsterdam
than to Dantzic; but it costs a great deal more to bring corn. The
real cost of silver must be nearly the same in both places; but that
of corn must be very different. Diminish the real opulence either of
Holland or of the territory of Genoa, while the number of their
inhabitants remains the same; diminish their power of supplying
themselves from distant countries; and the price of corn, instead of
sinking with that diminution in the quantity of their silver, which
must necessarily accompany this declension, either as its cause or as
its effect, will rise to the price of a famine. When we are in want of
necessaries, we must part with all superfluities, of which the value,
as it rises in times of opulence and prosperity, so it sinks in times
of poverty and distress. It is otherwise with necessaries. Their real
price, the quantity of labour which they can purchase or command,
rises in times of poverty and distress, and sinks in times of opulence
and prosperity, which are always times of great abundance; for they
could not otherwise be times of opulence and prosperity. Corn is a
necessary, silver is only a superfluity.

Whatever, therefore, may have been the increase in the quantity of the
precious metals, which, during the period between the middle of the
fourteenth and that of the sixteenth century, arose from the increase
of wealth and improvement, it could have no tendency to diminish their
value, either in Great Britain, or in my other part of Europe. If
those who have collected the prices of things in ancient times,
therefore, had, during this period, no reason to infer the diminution
of the value of silver from any observations which they had made upon
the prices either of corn, or of other commodities, they had still
less reason to infer it from any supposed increase of wealth and
improvement.

Second Period. -- But how various soever may have been the opinions of
the learned concerning the progress of the value of silver during the
first period, they are unanimous concerning it during the second.

From about 1570 to about 1640, during a period of about seventy years,
the variation in the proportion between the value of silver and that
of corn held a quite opposite course. Silver sunk in its real value,
or would exchange for a smaller quantity of labour than before; and
corn rose in its nominal price, and, instead of being commonly sold
for about two ounces of silver the quarter, or about ten shillings of
our present money, came to be sold for six and eight ounces of silver
the quarter, or about thirty and forty shillings of our present money.

The discovery of the abundant mines of America seems to have been the
sole cause of this diminution in the value of silver, in proportion to
that of corn. It is accounted for, accordingly, in the same manner by
every body; and there never has been any dispute, either about the
fact, or about the cause of it. The greater part of Europe was, during
this period, advancing in industry and improvement, and the demand for
silver must consequently have been increasing; but the increase of the
supply had, it seems, so far exceeded that of the demand, that the
value of that metal sunk considerably. The discovery of the mines of
America, it is to be observed, does not seem to have had any very
sensible effect upon the prices of things in England till after 1570;
though even the mines of Potosi had been discovered more than twenty
years before.

From 1595 to 1620, both inclusive, the average price of the quarter of
nine bushels of the best wheat, at Windsor market, appears, from the
accounts of Eton college, to have been £ 2:1:6 9/13. From which sum,
neglecting the fraction, and deducting a ninth, or 4s. 7 1/3d., the
price of the quarter of eight bushels comes out to have been £ 1:16:10
2/3. And from this sum, neglecting likewise the fraction, and
deducting a ninth, or 4s. 1 1/9d., for the difference between the
price of the best wheat and that of the middle wheat, the price of the
middle wheat comes out to have been about £ 1:12:8 8/9, or about six
ounces and one-third of an ounce of silver.

From 1621 to 1636, both inclusive, the average price of the same
measure of the best wheat, at the same market, appears, from the same
accounts, to have been £ 2:10s.; from which, making the like
deductions as in the foregoing case, the average price of the quarter
of eight bushels of middle wheat comes out to have been £ 1:19:6, or
about seven ounces and two-thirds of an ounce of silver.

Third Period. --Between 1630 and 1640, or about 1636, the effect of
the discovery of the mines of America, in reducing the value of
silver, appears to have been completed, and the value of that metal
seems never to have sunk lower in proportion to that of corn than it
was about that time. It seems to have risen somewhat in the course of
the present century, and it had probably begun to do so, even some
time before the end of the last.

From 1637 to 1700, both inclusive, being the sixty-four last years of
the last century the average price of the quarter of nine bushels of
the best wheat, at Windsor market, appears, from the same accounts, to
have been £ 2:11:0 1/3, which is only 1s. 0 1/3d. dearer than it had
been during the sixteen years before. But, in the course of these
sixty-four years, there happened two events, which must have produced
a much greater scarcity of corn than what the course of the season is
would otherwise have occasioned, and which, therefore, without
supposing any further reduction in the value of silver, will much more
than account for this very small enhancement of price.

The first of these events was the civil war, which, by discouraging
tillage and interrupting commerce, must have raised the price of corn
much above what the course of the seasons would otherwise have
occasioned. It must have had this effect, more or less, at all the
different markets in the kingdom, but particularly at those in the
neighbourhood of London, which require to be supplied from the
greatest distance. In 1648, accordingly, the price of the best wheat,
at Windsor market, appears, from the same accounts, to have been £
4:5s., and, in 1649, to have been £ 4, the quarter of nine bushels.
The excess of those two years above £ 2:10s. (the average price of the
sixteen years preceding 1637 is £ 3:5s., which, divided among the
sixty four last years of the last century, will alone very nearly
account for that small enhancement of price which seems to have taken
place in them.) These, however, though the highest, are by no means the
only high prices which seem to have been occasioned by the civil wars.

The second event was the bounty upon the exportation of corn, granted
in 1688. The bounty, it has been thought by many people, by
encouraging tillage, may, in a long course of years, have occasioned a
greater abundance, and, consequently, a greater cheapness of corn in
the home market, than what would otherwise have taken place there. How
far the bounty could produce this effect at any time I shall examine
hereafter: I shall only observe at present, that between 1688 and
1700, it had not time to produce any such effect. During this short
period, its only effect must have been, by encouraging the exportation
of the surplus produce of every year, and thereby hindering the
abundance of one year from compensating the scarcity of another, to
raise the price in the home market. The scarcity which prevailed in
England, from 1693 to 1699, both inclusive, though no doubt
principally owing to the badness of the seasons, and, therefore,
extending through a considerable part of Europe, must have been
somewhat enhanced by the bounty. In 1699, accordingly, the further
exportation of corn was prohibited for nine months.

There was a third event which occurred in the course of the same
period, and which, though it could not occasion any scarcity of corn,
nor, perhaps, any augmentation in the real quantity of silver which
was usually paid for it, must necessarily have occasioned some
augmentation in the nominal sum. This event was the great debasement of
the silver coin, by clipping and wearing. This evil had begun in the
reign of Charles II. and had gone on continually increasing till 1695;
at which time, as we may learn from Mr Lowndes, the current silver
coin was, at an average, near five-and-twenty per cent. below its
standard value. But the nominal sum which constitutes the market price
of every commodity is necessarily regulated, not so much by the
quantity of silver, which, according to the standard, ought to be
contained in it, as by that which, it is found by experience, actually
is contained in it. This nominal sum, therefore, is necessarily higher
when the coin is much debased by clipping and wearing, than when near
to its standard value.

In the course of the present century, the silver coin has not at any
time been more below its standard weight than it is at present. But
though very much defaced, its value has been kept up by that of the
gold coin, for which it is exchanged. For though, before the late
recoinage, the gold coin was a good deal defaced too, it was less so
than the silver. In 1695, on the contrary, the value of the silver
coin was not kept up by the gold coin; a guinea then commonly
exchanging for thirty shillings of the worn and clipt silver. Before
the late recoinage of the gold, the price of silver bullion was seldom
higher than five shillings and sevenpence an ounce, which is but
fivepence above the mint price. But in 1695, the common price of
silver bullion was six shillings and fivepence an ounce, {Lowndes's
Essay on the Silver Coin, 68.} which is fifteen pence above the mint
price. Even before the late recoinage of the gold, therefore, the
coin, gold and silver together, when compared with silver bullion, was
not supposed to be more than eight per cent. below its standard value,
In 1695, on the contrary, it had been supposed to be near
five-and-twenty per cent. below that value. But in the beginning of
the present century, that is, immediately after the great recoinage in
King William's time, the greater part of the current silver coin must
have been still nearer to its standard weight than it is at present.
In the course of the present century, too, there has been no great
public calamity, such as a civil war, which could either discourage
tillage, or interrupt the interior commerce of the country. And though
the bounty which has taken place through the greater part of this
century, must always raise the price of corn somewhat higher than it
otherwise would be in the actual state of tillage; yet, as in the
course of this century, the bounty has had full time to produce all
the good effects commonly imputed to it to encourage tillage, and
thereby to increase the quantity of corn in the home market, it may,
upon the principles of a system which I shall explain and examine
hereafter, be supposed to have done something to lower the price of
that commodity the one way, as well as to raise it the other. It is by
many people supposed to have done more. In the sixty-four years of the
present century, accordingly, the average price of the quarter of nine
bushels of the best wheat, at Windsor market, appears, by the accounts
of Eton college, to have been £ 2:0:6 10/32, which is about ten
shillings and sixpence, or more than five-and-twenty percent. cheaper
than it had been during the sixty-four last years of the last century;
and about nine shillings and sixpence cheaper than it had been during
the sixteen years preceding 1636, when the discovery of the abundant
mines of America may be supposed to have produced its full effect; and
about one shilling cheaper than it had been in the twenty-six years
preceding 1620, before that discovery can well be supposed to have
produced its full effect. According to this account, the average price
of middle wheat, during these sixty-four first years of the present
century, comes out to have been about thirty-two shillings the quarter
of eight bushels.

The value of silver, therefore, seems to have risen somewhat in
proportion to that of corn during the course of the present century,
and it had probably begun to do so even some time before the end of
the last.

In 1687, the price of the quarter of nine bushels of the best wheat,
at Windsor market, was £ 1:5:2, the lowest price at which it had ever
been from 1595.

In 1688, Mr Gregory King, a man famous for his knowledge in matters of
this kind, estimated the average price of wheat, in years of moderate
plenty, to be to the grower 3s. 6d. the bushel, or eight-and-twenty
shillings the quarter. The grower's price I understand to be the same
with what is sometimes called the contract price, or the price at
which a farmer contracts for a certain number of years to deliver a
certain quantity of corn to a dealer. As a contract of this kind saves
the farmer the expense and trouble of marketing, the contract price is
generally lower than what is supposed to be the average market price.
Mr King had judged eight-and-twenty shillings the quarter to be at
that time the ordinary contract price in years of moderate plenty.
Before the scarcity occasioned by the late extraordinary course of bad
seasons, it was, I have been assured, the ordinary contract price in
all common years.

In 1688 was granted the parliamentary bounty upon the exportation of
corn. The country gentlemen, who then composed a still greater
proportion of the legislature than they do at present, had felt that
the money price of corn was falling. The bounty was an expedient to
raise it artificially to the high price at which it had frequently
been sold in the times of Charles I. and II. It was to take place,
therefore, till wheat was so high as fortyeight shillings the quarter;
that is, twenty shillings, or 5-7ths dearer than Mr King had, in that
very year, estimated the grower's price to be in times of moderate
plenty. If his calculations deserve any part of the reputation which
they have obtained very universally, eight-and-forty shillings the
quarter was a price which, without some such expedient as the bounty,
could not at that time be expected, except in years of extraordinary
scarcity. But the government of King William was not then fully
settled. It was in no condition to refuse anything to the country
gentlemen, from whom it was, at that very time, soliciting the first
establishment of the annual land-tax,

The value of silver, therefore, in proportion to that of corn, had
probably risen somewhat before the end of the last century; and it
seems to have continued to do so during the course of the greater part
of the present, though the necessary operation of the bounty must have
hindered that rise from being so sensible as it otherwise would have
been in the actual state of tillage.

In plentiful years, the bounty, by occasioning an extraordinary
exportation, necessarily raises the price of corn above what it
otherwise would be in those years. To encourage tillage, by keeping up
the price of corn, even in the most plentiful years, was the avowed
end of the institution.

In years of great scarcity, indeed, the bounty has generally been
suspended. It must, however, have had some effect upon the prices of
many of those years. By the extraordinary exportation which it
occasions in years of plenty, it must frequently hinder the plenty of
one year from compensating the scarcity of another.

Both in years of plenty and in years of scarcity, therefore, the
bounty raises the price of corn above what it naturally would be in
the actual state of tillage. If during the sixty-four first years of
the present century, therefore, the average price has been lower than
during the sixty-four last years of the last century, it must, in the
same state of tillage, have been much more so, had it not been for
this operation of the bounty.

But, without the bounty, it may be said the state of tillage would not
have been the same. What may have been the effects of this institution
upon the agriculture of the country, I shall endeavour to explain
hereafter, when I come to treat particularly of bounties. I shall only
observe at present, that this rise in the value of silver, in
proportion to that of corn, has not been peculiar to England. It has
been observed to have taken place in France during the same period,
and nearly in the same proportion, too, by three very faithful,
diligent, and laborious collectors of the prices of corn, Mr Dupré de
St Maur, Mr Messance, and the author of the Essay on the Police of
Grain. But in France, till 1764, the exportation of grain was by law
prohibited; and it is somewhat difficult to suppose, that nearly the
same diminution of price which took place in one country,
notwithstanding this prohibition, should, in another, be owing to the
extraordinary encouragement given to exportation.

It would be more proper, perhaps, to consider this variation in the
average money price of corn as the effect rather of some gradual rise
in the real value of silver in the European market, than of any fall
in the real average value of corn. Corn, it has already been observed,
is, at distant periods of time, a more accurate measure of value than
either silver or, perhaps, any other commodity. When, after the
discovery of the abundant mines of America, corn rose to three and
four times its former money price, this change was universally
ascribed, not to any rise in the real value of corn, but to a fall in
the real value of silver. If, during the sixty-four first years of the
present century, therefore, the average money price of corn has fallen
somewhat below what it had been during the greater part of the last
century, we should, in the same manner, impute this change, not to any
fall in the real value of corn, but to some rise in the real value of
silver in the European market.

The high price of corn during these ten or twelve years past, indeed,
has occasioned a suspicion that the real value of silver still
continues to fall in the European market. This high price of corn,
however, seems evidently to have been the effect of the extraordinary
unfavourableness of the seasons, and ought, therefore, to be regarded,
not as a permanent, but as a transitory and occasional event. The
seasons, for these ten or twelve years past, have been unfavourable
through the greater part of Europe; and the disorders of Poland have
very much increased the scarcity in all those countries, which, in
dear years, used to be supplied from that market. So long a course of
bad seasons, though not a very common event, is by no means a singular
one; and whoever has inquired much into the history of the prices of
corn in former times, will be at no loss to recollect several other
examples of the same kind. Ten years of extraordinary scarcity,
besides, are not more wonderful than ten years of extraordinary
plenty. The low price of corn, from 1741 to 1750, both inclusive, may
very well be set in opposition to its high price during these last
eight or ten years. From 1741 to 1750, the average price of the
quarter of nine bushels of the best wheat, at Windsor market, it
appears from the accounts of Eton college, was only £ 1:13:9 4/5,
which is nearly 6s.3d. below the average price of the sixty-four first
years of the present century. The average price of the quarter of
eight bushels of middle wheat comes out, according to this account, to
have been, during these ten years, only £ 1:6:8.

Between 1741 and 1750, however, the bounty must have hindered the
price of corn from falling so low in the home market as it naturally
would have done. During these ten years, the quantity of all sorts of
grain exported, it appears from the custom-house books, amounted to no
less than 8,029,156 quarters, one bushel. The bounty paid for this
amounted to £ 1,514,962:17:4 1/2. In 1749, accordingly, Mr Pelham, at
that time prime minister, observed to the house of commons, that, for
the three years preceding, a very extraordinary sum had been paid as
bounty for the exportation of corn. He had good reason to make this
observation, and in the following year he might have had still better.
In that single year, the bounty paid amounted to no less than £
324,176:10:6. {See Tracts on the Corn Trade, Tract 3,} It is
unnecessary to observe how much this forced exportation must have
raised the price of corn above what it otherwise would have been in
the home market.

At the end of the accounts annexed to this chapter the reader will
find the particular account of those ten years separated from the
rest. He will find there, too, the particular account of the preceding
ten years, of which the average is likewise below, though not so much
below, the general average of the sixty-four first years of the
century. The year 1740, however, was a year of extraordinary scarcity.
These twenty years preceding 1750 may very well be set in opposition
to the twenty preceding 1770. As the former were a good deal below the
general average of the century, notwithstanding the intervention of
one or two dear years; so the latter have been a good deal above it,
notwithstanding the intervention of one or two cheap ones, of 1759,
for example. If the former have not been as much below the general
average as the latter have been above it, we ought probably to impute
it to the bounty. The change has evidently been too sudden to be
ascribed to any change in the value of silver, which is always slow
and gradual. The suddenness of the effect can be accounted for only by
a cause which can operate suddenly, the accidental variations of the
seasons.

The money price of labour in Great Britain has, indeed, risen during
the course of the present century. This, however, seems to be the
effect, not so much of any diminution in the value of silver in the
European market, as of an increase in the demand for labour in Great
Britain, arising from the great, and almost universal prosperity of
the country. In France, a country not altogether so prosperous, the
money price of labour has, since the middle of the last century, been
observed to sink gradually with the average money price of corn. Both
in the last century and in the present, the day wages of common labour
are there said to have been pretty uniformly about the twentieth part
of the average price of the septier of wheat; a measure which contains
a little more than four Winchester bushels. In Great Britain, the real
recompence of labour, it has already been shewn, the real quantities
of the necessaries and conveniencies of life which are given to the
labourer, has increased considerably during the course of the present
century. The rise in its money price seems to have been the effect,
not of any diminution of the value of silver in the general market of
Europe, but of a rise in the real price of labour, in the particular
market of Great Britain, owing to the peculiarly happy circumstances
of the country.

For some time after the first discovery of America, silver would
continue to sell at its former, or not much below its former price.
The profits of mining would for some time be very great, and much
above their natural rate. Those who imported that metal into Europe,
however, would soon find that the whole annual importation could not
be disposed of at this high price. Silver would gradually exchange for
a smaller and a smaller quantity of goods. Its price would sink
gradually lower and lower, till it fell to its natural price; or to
what was just sufficient to pay, according to their natural rates, the
wages of the labour, the profits of the stock, and the rent of the
land, which must be paid in order to bring it from the mine to the
market. In the greater part of the silver mines of Peru, the tax of
the king of Spain, amounting to a tenth of the gross produce, eats up,
it has already been observed, the whole rent of the land. This tax was
originally a half; it soon afterwards fell to a third, then to a
fifth, and at last to a tenth, at which late it still continues. In
the greater part of the silver mines of Peru, this, it seems, is all
that remains, after replacing the stock of the undertaker of the work,
together with its ordinary profits; and it seems to be universally
acknowledged that these profits, which were once very high, are now as
low as they can well be, consistently with carrying on the works.

The tax of the king of Spain was reduced to a fifth of the registered
silver in 1504 {Solorzano, vol, ii.}, one-and-forty years before 1545,
the date of the discovery of the mines of Potosi. In the course of
ninety years, or before 1636, these mines, the most fertile in all
America, had time sufficient to produce their full effect, or to
reduce the value of silver in the European market as low as it could
well fall, while it continued to pay this tax to the king of Spain.
Ninety years is time sufficient to reduce any commodity, of which
there is no monopoly, to its natural price, or to the lowest price at
which, while it pays a particular tax, it can continue to be sold for
any considerable time together.

The price of silver in the European market might, perhaps, have fallen
still lower, and it might have become necessary either to reduce the
tax upon it, not only to one-tenth, as in 1736, but to one twentieth,
in the same manner as that upon gold, or to give up working the
greater part of the American mines which are now wrought. The gradual
increase of the demand for silver, or the gradual enlargement of the
market for the produce of the silver mines of America, is probably the
cause which has prevented this from happening, and which has not only
kept up the value of silver in the European market, but has perhaps
even raised it somewhat higher than it was about the middle of the
last century.

Since the first discovery of America, the market for the produce of
its silver mines has been growing gradually more and more extensive.

First, the market of Europe has become gradually more and more
extensive. Since the discovery of America, the greater part of Europe
has been much improved. England, Holland, France, and Germany; even
Sweden, Denmark, and Russia, have all advanced considerably, both in
agriculture and in manufactures. Italy seems not to have gone
backwards. The fall of Italy preceded the conquest of Peru. Since that
time it seems rather to have recovered a little. Spain and Portugal,
indeed, are supposed to have gone backwards. Portugal, however, is but
a very small part of Europe, and the declension of Spain is not,
perhaps, so great as is commonly imagined. In the beginning of the
sixteenth century, Spain was a very poor country, even in comparison
with France, which has been so much improved since that time. It was
the well known remark of the emperor Charles V. who had travelled so
frequently through both countries, that every thing abounded in
France, but that every thing was wanting in Spain. The increasing
produce of the agriculture and manufactures of Europe must necessarily
have required a gradual increase in the quantity of silver coin to
circulate it; and the increasing number of wealthy individuals must
have required the like increase in the quantity of their plate and
other ornaments of silver.

Secondly, America is itself a new market, for the produce of its own
silver mines; and as its advances in agriculture, industry, and
population, are much more rapid than those of the most thriving
countries in Europe, its demand must increase much more rapidly. The
English colonies are altogether a new market, which, partly for coin,
and partly for plate, requires a continual augmenting supply of silver
through a great continent where there never was any demand before. The
greater part, too, of the Spanish and Portuguese colonies, are
altogether new markets. New Granada, the Yucatan, Paraguay, and the
Brazils, were, before discovered by the Europeans, inhabited by savage
nations, who had neither arts nor agriculture. A considerable degree
of both has now been introduced into all of them. Even Mexico and
Peru, though they cannot be considered as altogether new markets, are
certainly much more extensive ones than they ever were before. After
all the wonderful tales which have been published concerning the
splendid state of those countries in ancient times, whoever reads,
with any degree of sober judgment, the history of their first
discovery and conquest, will evidently discern that, in arts,
agriculture, and commerce, their inhabitants were much more ignorant
than the Tartars of the Ukraine are at present. Even the Peruvians,
the more civilized nation of the two, though they made use of gold and
silver as ornaments, had no coined money of any kind. Their whole
commerce was carried on by barter, and there was accordingly scarce
any division of labour among them. Those who cultivated the ground,
were obliged to build their own houses, to make their own household
furniture, their own clothes, shoes, and instruments of agriculture.
The few artificers among them are said to have been all maintained by
the sovereign, the nobles, and the priests, and were probably their
servants or slaves. All the ancient arts of Mexico and Peru have never
furnished one single manufacture to Europe. The Spanish armies, though
they scarce ever exceeded five hundred men, and frequently did not
amount to half that number, found almost everywhere great difficulty
in procuring subsistence. The famines which they are said to have
occasioned almost wherever they went, in countries, too, which at the
same time are represented as very populous and well cultivated,
sufficiently demonstrate that the story of this populousness and high
cultivation is in a great measure fabulous. The Spanish colonies are
under a government in many respects less favourable to agriculture,
improvement, and population, than that of the English colonies. They
seem, however, to be advancing in all those much more rapidly than any
country in Europe. In a fertile soil and happy climate, the great
abundance and cheapness of land, a circumstance common to all new
colonies, is, it seems, so great an advantage, as to compensate many
defects in civil government. Frezier, who visited Peru in 1713,
represents Lima as containing between twenty-five and twenty-eight
thousand inhabitants. Ulloa, who resided in the same country between
1740 and 1746, represents it as containing more than fifty thousand.
The difference in their accounts of the populousness of several other
principal towns of Chili and Peru is nearly the same; and as there
seems to be no reason to doubt of the good information of either, it
marks an increase which is scarce inferior to that of the English
colonies. America, therefore, is a new market for the produce of its
own silver mines, of which the demand must increase much more rapidly
than that of the most thriving country in Europe.

Thirdly, the East Indies is another market for the produce of the
silver mines of America, and a market which, from the time of the
first discovery of those mines, has been continually taking off a
greater and a greater quantity of silver. Since that time, the direct
trade between America and the East Indies, which is carried on by
means of the Acapulco ships, has been continually augmenting, and the
indirect intercourse by the way of Europe has been augmenting in a
still greater proportion. During the sixteenth century, the Portuguese
were the only European nation who carried on any regular trade to the
East Indies. In the last years of that century, the Dutch began to
encroach upon this monopoly, and in a few years expelled them from
their principal settlements in India. During the greater part of the
last century, those two nations divided the most considerable part of
the East India trade between them; the trade of the Dutch continually
augmenting in a still greater proportion than that of the Portuguese
declined. The English and French carried on some trade with India in
the last century, but it has been greatly augmented in the course of
the present. The East India trade of the Swedes and Danes began in the
course of the present century. Even the Muscovites now trade regularly
with China, by a sort of caravans which go over land through Siberia
and Tartary to Pekin. The East India trade of all these nations, if we
except that of the French, which the last war had well nigh
annihilated, has been almost continually augmenting. The increasing
consumptions of East India goods in Europe is, it seems, so great, as
to afford a gradual increase of employment to them all. Tea, for
example, was a drug very little used in Europe, before the middle of
the last century. At present, the value of the tea annually imported
by the English East India company, for the use of their own
countrymen, amounts to more than a million and a half a year; and even
this is not enough; a great deal more being constantly smuggled into
the country from the ports of Holland, from Gottenburgh in Sweden, and
from the coast of France, too, as long as the French East India
company was in prosperity. The consumption of the porcelain of China,
of the spiceries of the Moluccas, of the piece goods of Bengal, and of
innumerable other articles, has increased very nearly in a like
proportion. The tonnage, accordingly, of all the European shipping
employed in the East India trade, at any one time during the last
century, was not, perhaps, much greater than that of the English East
India company before the late reduction of their shipping.

But in the East Indies, particularly in China and Indostan, the value
of the precious metals, when the Europeans first began to trade to
those countries, was much higher than in Europe; and it still
continues to be so. In rice countries, which generally yield two,
sometimes three crops in the year, each of them more plentiful than
any common crop of corn, the abundance of food must be much greater
than in any corn country of equal extent. Such countries are
accordingly much more populous. In them, too, the rich, having a
greater superabundance of food to dispose of beyond what they
themselves can consume, have the means of purchasing a much greater
quantity of the labour of other people. The retinue of a grandee in
China or Indostan accordingly is, by all accounts, much more numerous
and splendid than that of the richest subjects in Europe. The same
superabundance of food, of which they have the disposal, enables them
to give a greater quantity of it for all those singular and rare
productions which nature furnishes but in very small quantities; such
as the precious metals and the precious stones, the great objects of
the competition of the rich. Though the mines, therefore, which
supplied the Indian market, had been as abundant as those which
supplied the European, such commodities would naturally exchange for a
greater quantity of food in India than in Europe. But the mines which
supplied the Indian market with the precious metals seem to have been
a good deal less abundant, and those which supplied it with the
precious stones a good deal more so, than the mines which supplied the
European. The precious metals, therefore, would naturally exchange in
India for a somewhat greater quantity of the precious stones, and for
a much greater quantity of food than in Europe. The money price of
diamonds, the greatest of all superfluities, would be somewhat lower,
and that of food, the first of all necessaries, a great deal lower in
the one country than in the other. But the real price of labour, the
real quantity of the necessaries of life which is given to the
labourer, it has already been observed, is lower both in China and
Indostan, the two great markets of India, than it is through the
greater part of Europe. The wages of the labourer will there purchase
a smaller quantity of food: and as the money price of food is much
lower in India than in Europe, the money price of labour is there
lower upon a double account; upon account both of the small quantity
of food which it will purchase, and of the low price of that food. But
in countries of equal art and industry, the money price of the greater
part of manufactures will be in proportion to the money price of
labour; and in manufacturing art and industry, China and Indostan,
though inferior, seem not to be much inferior to any part of Europe.
The money price of the greater part of manufactures, therefore, will
naturally be much lower in those great empires than it is anywhere in
Europe. Through the greater part of Europe, too, the expense of
land-carriage increases very much both the real and nominal price of
most manufactures. It costs more labour, and therefore more money, to
bring first the materials, and afterwards the complete manufacture to
market. In China and Indostan, the extent and variety of inland
navigations save the greater part of this labour, and consequently of
this money, and thereby reduce still lower both the real and the
nominal price of the greater part of their manufactures. Upon all
these accounts, the precious metals are a commodity which it always
has been, and still continues to be, extremely advantageous to carry
from Europe to India. There is scarce any commodity which brings a
better price there; or which, in proportion to the quantity of labour
and commodities which it costs in Europe, will purchase or command a
greater quantity of labour and commodities in India. It is more
advantageous, too, to carry silver thither than gold; because in
China, and the greater part of the other markets of India, the
proportion between fine silver and fine gold is but as ten, or at most
as twelve to one; whereas in Europe it is as fourteen or fifteen to
one. In China, and the greater part of the other markets of India,
ten, or at most twelve ounces of silver, will purchase an ounce of
gold; in Europe, it requires from fourteen to fifteen ounces. In the
cargoes, therefore, of the greater part of European ships which sail
to India, silver has generally been one of the most valuable articles.
It is the most valuable article in the Acapulco ships which sail to
Manilla. The silver of the new continent seems, in this manner, to be
one of the principal commodities by which the commerce between the two
extremities of the old one is carried on; and it is by means of it, in
a great measure, that those distant parts of the world are connected
with one another.

In order to supply so very widely extended a market, the quantity of
silver annually brought from the mines must not only be sufficient to
support that continued increase, both of coin and of plate, which is
required in all thriving countries; but to repair that continual waste
and consumption of silver which takes place in all countries where
that metal is used.

The continual consumption of the precious metals in coin by wearing,
and in plate both by wearing and cleaning, is very sensible; and in
commodities of which the use is so very widely extended, would alone
require a very great annual supply. The consumption of those metals in
some particular manufactures, though it may not perhaps be greater
upon the whole than this gradual consumption, is, however, much more
sensible, as it is much more rapid. In the manufactures of Birmingham
alone, the quantity of gold and silver annually employed in gilding
and plating, and thereby disqualified from ever afterwards appearing
in the shape of those metals, is said to amount to more than fifty
thousand pounds sterling. We may from thence form some notion how
great must be the annual consumption in all the different parts of the
world, either in manufactures of the same kind with those of
Birmingham, or in laces, embroideries, gold and silver stuffs, the
gilding of books, furniture, etc. A considerable quantity, too, must
be annually lost in transporting those metals from one place to
another both by sea and by land. In the greater part of the
governments of Asia, besides, the almost universal custom of
concealing treasures in the bowels of the earth, of which the
knowledge frequently dies with the person who makes the concealment,
must occasion the loss of a still greater quantity.

The quantity of gold and silver imported at both Cadiz and Lisbon
(including not only what comes under register, but what may be
supposed to be smuggled) amounts, according to the best accounts, to
about six millions sterling a-year.

According to Mr Meggens {Postscript to the Universal Merchant p. 15
and 16. This postscript was not printed till 1756, three years after
the publication of the book, which has never had a second edition. The
postscript is, therefore, to be found in few copies; it corrects
several errors in the book.}, the annual importation of the precious
metals into Spain, at an average of six years, viz. from 1748 to 1753,
both inclusive, and into Portugal, at an average of seven years, viz.
from 1747 to 1753, both inclusive, amounted in silver to 1,101,107
pounds weight, and in gold to 49,940 pounds weight. The silver, at
sixty two shillings the pound troy, amounts to £ 3,413,431:10s.
sterling. The gold, at forty-four guineas and a half the pound troy,
amounts to £ 2,333,446:14s. sterling. Both together amount to £
5,746,878:4s. sterling. The account of what was imported under
register, he assures us, is exact. He gives us the detail of the
particular places from which the gold and silver were brought, and of
the particular quantity of each metal, which, according to the
register, each of them afforded. He makes an allowance, too, for the
quantity of each metal which, he supposes, may have been smuggled. The
great experience of this judicious merchant renders his opinion of
considerable weight.

According to the eloquent, and sometimes well-informed, author of the
Philosophical and Political History of the Establishment of the
Europeans in the two Indies, the annual importation of registered gold
and silver into Spain, at an average of eleven years, viz. from 1754
to 1764, both inclusive, amounted to 13,984,185 3/5 piastres of ten
reals. On account of what may have been smuggled, however, the whole
annual importation, he supposes, may have amounted to seventeen
millions of piastres, which, at 4s. 6d. the piastre, is equal to £
3,825,000 sterling. He gives the detail, too, of the particular places
from which the gold and silver were brought, and of the particular
quantities of each metal, which according to the register, each of
them afforded. He informs us, too, that if we were to judge of the
quantity of gold annually imported from the Brazils to Lisbon, by the
amount of the tax paid to the king of Portugal, which it seems, is
one-fifth of the standard metal, we might value it at eighteen
millions of cruzadoes, or forty-five millions of French livres, equal
to about twenty millions sterling. On account of what may have been
smuggled, however, we may safely, he says, add to this sum an eighth
more, or £ 250,000 sterling, so that the whole will amount to £
2,250,000 sterling. According to this account, therefore, the whole
annual importation of the precious metals into both Spain and
Portugal, mounts to about £ 6,075,000 sterling.

Several other very well authenticated, though manuscript accounts, I
have been assured, agree in making this whole annual importation
amount, at an average, to about six millions sterling; sometimes a
little more, sometimes a little less.

The annual importation of the precious metals into Cadiz and Lisbon,
indeed, is not equal to the whole annual produce of the mines of
America. Some part is sent annually by the Acapulco ships to Manilla;
some part is employed in a contraband trade, which the Spanish
colonies carry on with those of other European nations; and some part,
no doubt, remains in the country. The mines of America, besides, are
by no means the only gold and silver mines in the world. They, are,
however, by far the most abundant. The produce of all the other mines
which are known is insignificant, it is acknowledged, in comparison
with their's; and the far greater part of their produce, it is
likewise acknowledged, is annually imported into Cadiz and Lisbon. But
the consumption of Birmingham alone, at the rate of fifty thousand
pounds a-year, is equal to the hundred-and-twentieth part of this
annual importation, at the rate of six millions a-year. The whole

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